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NEW ISSUE – Book Entry Only Rating: S&P “A+!A-I”
See “RATING”
In the opinion of Squire, Sanders & Dempsey L.L.P., Bond Counsel, under existing law (i) assuming compliance with certain
covenants, interest on the Bonds is excluded from gross income for federal income tax purposes and is not treated as an item oftax preference for
purposes of the altemative minimum tax imposed on individuals and corporations under the Intemal Revenue Code of 1986 as amended (the
“Code”), and (ii) the interest on the Bonds, and any profit made on their sale, exchange or other disposition, are exempt from the Ohio personal
income tax, the Ohio commercial activity tax, the net income base of the Ohio corporate franchise tax and municipal and school district income
taxes in Ohio. The interest may be subject to certain federal taxes imposed on certain corporations, including the corporate altemative minimum
tax on a portion ofthat interest. (For ajUrther discussion ofthe tax aspects ofthis issue, see “TAX MATTERS’~.
$13,795,000
STATEOFOmO
(OmO HIGHER EDUCATIONAL FACILITY COMMISSION)
HIGHER EDUCATIONAL FACILITY
VARIABLE RATE REVENUE BONDS
(ANTIOCH UNIVERSITY 2006 PROJECT)
Dated: Date ofIssuance CUSIP: 67756BRB8 Due: February 1, 2029
The Bonds will be issuable as fully registered bonds in Authorized Denominations as provided in the Trust Agreement securing the
Bonds. Principal of and premium, if any, on the Bonds will be payable at the Cleveland, Ohio corporate trust office of the trustee, presently U.S.
Bank National Association, a national banking association. The Bonds will be issued initially under a book entry system, registered in the name
of Cede & Co., as registered bondholder and nominee for The Depository Trust Company (“DTC”). DTC or its agent will act as securities
depository for the Bonds. Purchasers of the Bonds will not receive certificates representing their interest in the Bonds.
The offering price of the Bonds is 100% of the principal amount thereof. From the date of initial delivery the interest rate on the
Bonds will be the Weekly Variable Rate, which will be adjusted weekly by the Remarketing Agent, initially, B.C. Ziegler and Company. The
interest rate on the Bonds will continue to be the Weekly Interest Rate unless and until the interest rate on the Bonds is converted to an Other
Interest Rate or a Fixed Interest Rate. While the Bonds bear interest at a Weekly Interest Rate, interest is payable on the first Business Day of
each month commencing April 3, 2006. See “THE BONDS – Interest Rates”.
Holders during a Weekly Rate Period have the right to demand that their Bonds be purchased at par plus accrued interest on any
Business Day upon written notice to U.S. Bank National Association, as Tender Agent, not later than the seventh day prior to the purchase date
specified in that notice.
The Bonds, when, as and if issued, will be special obligations of the State of Ohio (the “State”) issued by the Ohio Higher Educational
Facility Commission (the “Commission”) and will be payable solely from the revenues and other money pledged and assigned by the Trust
Agreement, and further secured by a Guaranty Agreement between Antioch University (the “University”) and the Trustee (the “Guaranty”). The
revenues and other pledged and assigned moneys under the Trust Agreement include the payments required to be made by the University under a
Lease (the “Lease”) between the Commission and the University.
THE BONDS DO NOT REPRESENT OR CONSTITUTE A DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE
COMMISSION OR THE STATE, WILL NOT BE SECURED BY AN OBLIGATION OR PLEDGE OF ANY MONEY RAISED BY
TAXATION, AND DO NOT GRANT TO THE HOLDERS ANY RIGHTS TO HAVE THE STATE LEVY ANY TAXES OR
APPROPRIATE FUNDS FOR THE PAYMENT OF DEBT SERVICE ON THE BONDS.
Principal and purchase price of and premium, if any, and interest on the Bonds are payable solely from revenues and other money
assigned, or in which a security interest is granted, by the Trust Agreement, including rental payments received by the Commission under the
Lease and from funds drawn by the Trustee under an Irrevocable Direct Pay Letter of Credit (the “Letter of Credit”) expiring on February 16,
2011 issued by
NATIONAL CITY BANK
The Bonds are subject to optional, extraordinary optional and mandatory redemption as described herein, including optional
redemption required of the University under the Reimbursement Agreement, as defmed herein. See “THE BONDS – Redemption Provisions”
herein.
THIS COVER PAGE INCLUDES CERTAIN INFORMATION FOR REFERENCE ONLY AND IS NOT A SUMMARY OF
MATTERS SET FORTH HEREIN. INVESTORS SHOULD READ THE ENTIRE OFFERING CIRCULAR TO OBTAIN INFORMATION
ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.
The Bonds are offered, subject to prior sale, when, as and if issued by the Commission and accepted by B.C. Zeigler and Company
(the “Underwriter”), and subject to, among other things, the opinion of Squire, Sanders & Dempsey L.L.P., Bond Counsel, on certain legal
matters. Certain legal matters will be passed upon for the Underwriter by its counsel Thompson Hine LLP, for the Bank by its counsel Charles
Spain, Esq., and for the University by its co-counsel, Hawkins Delafield & Wood LLP and Martin, Brown, Hull & Harper, P.L.L. See “LEGAL
MATTERS”. Delivery of the Bonds to DTC or its agent is expected on or about March 3, 2006 against payment therefor.
ZIEGLERCAPITALMARKETSGROUP
a division of B.C.Ziegler and Company
This Offering Circular has been prepared in connection with the original offering for the sale of the Bonds. The information contained
in this Offering Circular speaks only as of its date.
February 21, 2006
REGARDING THIS OFFERING CIRCULAR
This Offering Circular does not constitute an offering of any security other than the original offering of the
Bonds identified on the cover hereof. No person has been authorized to give any information or to make any
representations other than those contained in this Offering Circular and, if given or made, such information or
representations must not be relied upon as having been authorized by the University, the Commission, the
Underwriter or any other person or entity. This Offering Circular does not constitute an offer to sell ora solicitation
of an offer to buy, and there shall not be any sale of the Bonds by any person, in any jurisdiction in which it is
unlawful to make such offer, solicitation or sale. The information and expression of opinions herein are subject to
change without notice and neither the delivery of this Offering Circular nor the sale of any of the Bonds shall, under
any circumstances, create any implication that the information herein is correct as of any time subsequent to the date
hereof.
Information herein has been obtained from the University and other sources believed to be reliable, but it is
not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by, the Commission
or the Underwriter.
Upon issuance, the Bonds will not be registered by the Commission under the Securities Act of 1933, as
amended, or any state securities law, and will not be listed on any stock or other securities exchange. Neither the
Securities and Exchange Commission nor any other federal, state or other governmental entity or agency will have
passed upon the accuracy or adequacy of this Offering Circular or, other than the Commission (to the extent
described herein) approved the Bonds for sale.
(i)
TABLE OF CONTENTS
REGARDINGTHIS OFFERINGCIRCULAR i
TABLE OF CONTENTS ii
INTRODUCTION 1
THE BONDS 2
General 2
InterestRate 3
Book Entry Only System 5
Revision of Book Entry System;ReplacementBonds 7
RedemptionProvisions 8
MandatoryTenderlPurchase 9
OptionalTender 10
Remarketingof Bonds 11
Sourcesof Paymentand Security 12
THE UNIVERSITy 13
THE COMMISSION 13
THE PROJECT 14
SOURCES AND USES OF FUNDS 14
Sourcesof Funds 14
Uses of Funds 14
DOCUMENTDESCRIPTIONS 15
DEFINITIONS 15
THE LETTEROF CREDIT 24
AlternateLetterof Credit 25
THE REIMBURSEMENTAGREEMENT 26
Issuanceof Letterof Creditand ReimbursementAgreement 26
Fees and Expenses 26
CertainCovenantsof the University 26
OptionalRedemptionof Bonds 27
Eventsof Default and Remedies 27
Amendment 28
THE LEASE 28
Term of Lease 28
Commencementand Completionof the Project 28
Rentals 28
Absolute Obligationto Pay Rental Payments 29
PrepaymentUnderthe Lease 29
Maintenanceof Tuition, Fees and Charges 29
Maintenanceand Insurance 29
Annual FinancialStatements 30
Merger,Consolidationor Transferof Assets 30
Indemnificationof the Commission 31
University’s Optionsto TerminateLease 31
Assignmentand Subleasing 32
Events of Default 32
Remedies on Default 33
Amendmentsof the Lease 33
(ii)
THE TRUST AGREEMENT :.; 34
Security 34
Use of Bond Proceeds 34
Bond Fund 34
Improvement Fund and Issuance Expenses Fund 35
Escrow Funds 36
Rebate Funds 37
Investment of Funds 37
Assignment and Security 37
Defeasance 37
Events of Default 38
Acceleration 39
Other Remedies 39
Right of Holders and Bank to Direct Proceedings 39
Rights and Remedies of Holders 39
Waivers of Events ofDefault. 40
Applications of Money Received Pursuant to Right of Action Taken 40
Supplemental Trust Agreements 40
Discharge of Lien 42
The Trustee 42
Remarketing Agent 43
Extent of Commission’s Covenants – No Personal Liability 43
THE GUARANTY AGREEMENT 43
THE TAX AGREEMENT 44
Rebate Fund 44
ENFORCEABILITY OF REMEDIES 44
ABSENCE OF MATERIAL LITIGATION 45
UNDERWRITING 45
ELIGffiILITY UNDER OHIO LAW FOR INVESTMENT AND AS SECURITY FOR THE DEPOSIT
OF PUBLIC FUNDS 45
TAX MATTERS 46
LEGAL MATTERS 46
TRANSCRIPT AND CLOSING DOCUMENTS 47
RATING : 47
CONCLUDING STATEMENT 47
Appendix A – Certain Information Regarding Antioch University
Appendix B – Certain Information Regarding National City Bank
Appendix C – Proposed Form of Bond Counsel Opinion of Squire, Sanders & Dempsey L.L.P.
(iii)
(THIS PAGE INTENTIONALLY LEFT BLANK)
$13,795,000
STATEOFOmO
(OHIO HIGHER EDUCATIONAL FACILITY COMMISSION)
mGHER EDUCATIONAL FACILITY
V~LERATEREVENUEBONDS
(ANTIOCH UNIVERSITY 2006 PROJECT)
INTRODUCTION
This Offering Circular, including the cover page, table of contents page and the Appendices, is provided to
furnish information in connection with the issuance by the Ohio Higher Educational Facility Commission (the
“Commission”) of $13,795,000 principal amount of State of Ohio (Ohio Higher Educational Facility Commission)
Higher Educational Facility Variable Rate Revenue Bonds (Antioch University 2006 Project) (the “Bonds”). The
Bonds are being issued pursuant to a Trust Agreement dated as of February 1, 2006 (the “Trust Agreement”)
between the Commission and U.S. Bank: National Association, as Trustee (the “Trustee”). The Bonds will be dated
as of the date of issuance, will mature as set forth on the cover page, and will be subject to redemption prior to
maturity as described under “THE BONDS – Redemption Provisions”.
Capitalized terms used herein shall have the same meanings as given to them under “DEFINITIONS”
unless otherwise defined herein or where the context would clearly indicate otherwise.
The proceeds of the sale of the Bonds will be used to provide funds to pay project costs as defmed in
Section 3377.01 of the Ohio Revised Code, including costs relating to acquiring, constructing, renovating,
improving, equipping and furnishing a new building for Antioch University’s (the “University”) adult non-residential
campus in Yellow Springs, Ohio known as “Antioch University McGregor” and other related facilities, including
facilities for graduate and adult education, and acquiring the site thereof (the “2006 Project”), to refund a portion of
the State of Ohio Higher Educational Facility Variable Rate Demand Revenue Bonds (Pooled Financing 1997
Program) which were previously issued in part to fund University educational facilities consisting of (i) the
renovation and remodeling of Spalt Hall and the International Center, (ii) the renovation and remodeling of
President and West Dormitories, (iii) the construction of the New Dormitory, and (iv) the renovation of the heating
plant including new boilers, all together with the necessary appurtenances thereto (the” 1997 Project”) and to refund
a portion of the State of Ohio Variable Rate Demand Revenue Bonds (Pooled Financing 2000 Program), Series C,
which were previously issued in part to fund the acquiring and installing of telephone switch equipment, data and
telephone network, computers and related applications, equipment and facilities, mail processor, residence hall,
laboratory and classroom furniture and equipment, tractor, passenger van, records archive project, upgrading of
lighting systems and transformer, and renovation and improvements of conference rooms, residence halls (including
air conditioning), roofs of certain buildings, drives, parking, walkways and landscape and utility systems (the “2000
Project” and together with the 1997 Project and 2006 Project, the “Project”). Pursuant to a Base Lease dated as of
February I, 2006 (the “Base Lease”) between the University and the Commission, the University will lease the
Project to the Commission. The Project is to be leased back to the University pursuant to a Lease dated as of
February I, 2006 (the “Lease”) between the Commission and the University. The University is required to make
rental payments under the Lease (the “Rental Payments”) in amounts sufficient to pay the principal of and premium,
if any, and interest (collectively, the “debt service”) on the Bonds, whether at maturity, upon acceleration or upon
redemption. In the Lease, the University has agreed to purchase all interests of the Commission in the Project after
all of the debt service on the Bonds has been paid. The Commission’s rights under the Lease, including the Rental
Payments to be made by the University (but excluding Unassigned Rights), will be assigned to the Trustee pursuant
to the Assignment of Rights under Lease, dated as of February 1,2006 (the “Assignment”). The Bonds are secured
by the Guaranty Agreement, dated as of February 1, 2006 between the University and the Trustee (the “Guaranty
Agreement”), by which the University unconditionally guarantees the payment of the Bonds.
Concurrently with, and as a condition to, the issuance of the Bonds, the University has caused to be
delivered to the Trustee an irrevocable direct pay letter of credit (the “Letter of Credit”) of National City Bank:, a
national banking association (the “Bank”). See “THE LEITER OF CREDIT” and Appendix B. The Trustee is
entitled under the Letter of Credit to draw up to the total of the following amounts (the “Stated Amount”), upon the
terms and conditions set forth in the Letter of Credit: (a) the outstanding principal amount of the Bonds (i) to enable
the Trustee to pay the principal amount of the Bonds when due at maturity, upon redemption or upon acceleration
-1-
and (ii) to enable the Tender Agent (initially U.S. Bank National Association) (the “Tender Agent”) to pay the
principal portion of the purchase price of Bonds tendered to it and not remarketed, plus (b) an amount equal to
interest to accrue at 10% (the “Maximum Rate”) on the outstanding Bonds for 45 days (i) to enable the Trustee to
pay the interest on the Bonds when due and (ii) to enable the Trustee to pay the portion, if any, of the purchase price
of Bonds tendered to it and not remarketed equal to the accrued interest on such Bonds.
To provide for the issuance of the Letter of Credit, the University and the Bank have entered into a
Reimbursement Agreement dated as of February 1, 2006 (the “Reimbursement Agreement”), pursuant to which the
University is obligated to reimburse the Bank for all drawings made under the Letter of Credit.
The Bonds are special obligations of the State of Ohio (the “State”) and the debt service on the Bonds will
be payable solely from the revenues to be derived by the Commission from its lease of the Project, all as provided in
the Lease and the Trust Agreement, including the Rental Payments and certain other amounts, as hereinafter
described under “THE BONDS – Sources of Payment and Security” and “THE LETTER OF CREDIT”. The Bonds
are secured by the Trust Agreement, in which the Commission assigns to the Trustee all of the Commission’s rights
with respect to the Revenues (including Rental Payments) and the money and investments in the Bond Fund and
certain other rights of the Commission under the Lease, as further described under “THE BONDS – Sources of
Payment and Security”.
The Bonds are being offered primarily on the basis of the financial strength of the Bank and not on
the basis of the financial strength of the University or other security.
The Bonds will be purchased by the Trustee, as Tender Agent (a) upon demand by the registered owners
thereof (the “Holders”), on the purchase date, as specified herein under “THE BONDS – Optional Tender”, and
(b) upon (i) the expiration of the Letter of Credit (except after a Conversion Date), (ii) the conversion of the rate of
interest that the Bonds bear to an Other Interest Rate or a Fixed Interest Rate or, if the Bonds bear interest in an
Other Rate Period, conversion of the Computation Period in accordance with the Trust Agreement, or
(iii) replacement of the Letter of Credit with an Alternate Letter of Credit, all as defined herein under “THE BONDS
– Mandatory Tender”. The initial Letter of Credit expires on February 16,2011 (the “Stated Expiration Date”). The
Trust Agreement provides for the remarketing by the Remarketing Agent, initially B.C. Ziegler and Company (the
“Remarketing Agent”), of the Bonds tendered by the Holders thereof. See “THE BONDS – Remarketing of Bonds”.
Brief descriptions of the Commission, the University, the Bonds, the Lease, the Letter of Credit, the
Reimbursement Agreement, the Trust Agreement, the Guaranty Agreement and the Tax Agreement are included in
this Offering Circular. The descriptions herein of the Bonds, the Lease, the Letter of Credit, the Reimbursement
Agreement, the Trust Agreement, the Guaranty Agreement, the Tax Agreement and references, excerpts and
descriptions of all other documents referred to herein do not purport to be complete statements of the provisions of
such documents and are qualified in their entirety by reference to each such document. Reference is made to the
originals of all such documents for full and complete statements of all matters of fact relating to the Bonds, the
security for the payment of the Bonds, and the rights and remedies of Bondholders. All descriptions are further
qualified in their entirety by reference to laws and principles of equity relating to or affecting the enforcement of
creditors’ rights. Copies of the above described documents are available for inspection during the initial offering
period at B.C. Zeigler and Company d/b/a Zeigler Capital Markets Group, One South Wacker Drive, Suite 3080,
Chicago, Illinois (the “Underwriter”) and thereafter at the corporate trust office of the Trustee.
THE BONDS
General
The Bonds will be issued as fully registered Bonds without coupons in book entry form registered in the
name of Cede & Co. as registered bondholder and nominee for The Depository Trust Company (“DTC”). The
Bonds will be dated the date of their initial delivery and will bear interest from the most recent date to which interest
has been paid or provided for or, if no interest has been paid as duly provided, from the date of their delivery to the
original purchaser thereof. The Bonds will mature on February 1, 2029, subject to optional, mandatory and
extraordinary optional redemption prior to maturity as described under “THE BONDS – Redemption Provisions”.
The Bonds are issuable in denominations of $100,000 or any greater integral multiple of $5,000 prior to conversion
-2-
to a Fixed Interest Rate and after conversion to a Fixed Interest Rate, the Bonds are issuable in denominations of
$5,000 and any greater integral multiple thereof. The Bonds will be authorized and issued by the State acting by and
through the Commission under the provisions of the Act and pursuant to a resolution adopted by the Commission.
See “THE COMMISSION”.
When the Bonds are in book entry fonn, principal of and any premium on the Bonds will be payable in
immediately available funds by the Trustee to the registered owner (DTC or its successor depository or nominee),
and interest will be payable on the Interest Payment Date described below in immediately available funds wired by
the Trustee to the registered owner as of the Regular Record Date applicable to that Interest Payment Date. The
Regular Record Date is (i) with respect to any Bond bearing interest at an Other Rate, the close of business on the
seventh day immediately preceding an Interest Payment Date applicable to that Bond, (ii) with respect to any Bond
bearing interest at the Weekly Interest Rate, the Business Day immediately preceding an Interest Payment Date
applicable to that Bond, and (iii) with respect to any Bond bearing interest at a Fixed Interest Rate, every January 15
and July 15.
When the Bonds are not in book entry fonn, the principal of the Bonds will be payable at the designated
office of the Trustee and interest on the Bonds will be paid by check or draft mailed on the Interest Payment Date
described below to the registered owner as of the Regular Record Date. Interest on Bonds bearing interest in an
Interest Rate Period other than the Fixed Rate Period will, upon one Business Day’s prior written request of the
Holder thereof, be paid in immediately available funds by wire transfer or deposit in accordance with instructions
provided by such Holder to the Trustee. In the event of a default in the payment of interest on any Bond when due,
the Trustee may establish a special record date with respect to that payment of interest when money becomes
available for such payment.
The “designated office” of the Trustee will be initially the corporate trust office of the Trustee located in
Cleveland, Ohio, and will remain so until a different office is designated by the Trustee and written notice thereof
given by the Trustee to the Tender Agent, the Bondholders, the Commission, the University and the Bank. The
“designated office” of the Tender Agent will be initially the office of the Tender Agent located in Cleveland, Ohio,
and will remain so until a different office is designated by the Tender Agent and written notice thereof is given by
the Tender Agent to the Trustee, the Bondholders, the Commission, the University and the Bank.
Any act required to be done by a certain time is to be done as of that time in Ohio.
Interest Rate
The interest rates to be borne by the Bonds are described below. The Bonds will initially bear interest at a
Weekly Variable Rate, but that rate may be converted to an Other Interest Rate or to a Fixed Interest Rate, as
described below.
Weekly Variable Rate. During any Weekly Rate Period, the Bonds shall bear interest at the rate per year
established as follows, computed on the basis of a 365- or 366-day year, as applicable, for the actual number of days
elapsed. Commencing on the date of issuance, interest on the Bonds bearing interest at the Weekly Variable Rate
will be payable on each Interest Payment Date for the period from the prior Interest Payment Date (or date of initial
delivery) through the calendar day preceding the Interest Payment Date. From the date of issuance and delivery of
the Bonds to and including the first Interest Adjustment Date, the Bonds shall bear interest at the interest rate
established by the Remarketing Agent as the rate that, based upon current transactions in comparable securities in
which the Remarketing Agent is involved or of which it is aware and prevailing financial market conditions, would
be the interest rate necessary to enable the Remarketing Agent to sell the Bonds at a price equal to the principal
amount thereof, plus accrued interest thereon. Thereafter, the Remarketing Agent is required to determine the
interest rate on the Bonds on such basis on each Interest Adjustment Date (generally, each Wednesday) and such
rate shall become effective commencing on Thursday of such week through the following Wednesday. If, for any
reason, the Remarketing Agent fails to make or announce such determination on such Interest Adjustment Date or if
an Interest Adjustment Date does not occur during any calendar week, the rate to take effect on Thursday of such
week will be a rate equal to the previously detennined Weekly Variable Rate. In no event shall the interest rate on
the Bonds exceed the Maximum Interest Rate.
-3-
Other Interest Rate. At the request of the University with the consent of the Bank, the Interest Rate
Period may be changed to an Other Rate Period and the interest rate on the Bonds will be converted to an Other
Interest Rate. During any Other Rate Period, the Bonds shall bear interest at a rate of interest per year, established
as set forth below, computed on the basis of a 360-day year of twelve 3D-day months and payable on each Interest
Payment Date. The duration of the Other Rate Period shall be six months or consist of integral multiples of six
months and shall be determined by the Remarketing Agent on each Interest Adjustment Date, effective on the first
day of the next Computation Period. The interest rate on the Bonds determined by the Remarketing Agent is
required to be the interest rate that, if borne by the Bonds, would, based upon current transactions in comparable
securities in which the Remarketing Agent is involved or of which it is aware and prevailing fmancial market
conditions, be the interest rate necessary to enable the Remarketing Agent to sell the Bonds in the secondary market
at a price equal to the principal amount thereof plus accrued interest thereon. If, for any reason, the Remarketing
Agent fails to make or announce such determination on such Interest Adjustment Date, the interest rate to take effect
on the first day of the next Computation Period shall be a rate equal to the previously determined rate. In no event
shall the interest rate on the Bonds exceed the Maximum Interest Rate.
During both the Weekly Rate Period and any Other Rate Period, the Remarketing Agent is required to
announce the rate so determined by telephonic or electronic notice to the Trustee and the University (confirmed in
writing) on each Interest Adjustment Date. Notice of the interest rate so determined is required to be sent by the
Trustee upon request to the Commission, any paying agent, the Bank and the Holders. If notice of the interest rate is
not sent to all of the Holders of the Bonds, it shall be either (i) sent by the Trustee only to the Holders requesting
such notice or (ii) made available to all Holders who telephone the Remarketing Agent and request it. The interest
rate on the Bonds so determined is conclusive and binding upon the Holders.
Fixed Interest Rate. At the request of the University with the consent of the Bank (if the Letter of Credit
is to remain in effect), the interest rate on. the Bonds may be converted to a Fixed Interest Rate until maturity, with
interest payable on eaeh Interest Payment Date, and computed on the basis of a 360-day year of twelve 3D-day
months. The University must provide a written direction to any paying agent, the Trustee, the Bank, the
Commission and the Remarketing Agent specifying the date of conversion (which must be an Interest Payment Date
not less than 60 days, or such shorter period agreed to by the Trustee, the Remarketing Agent and the University,
from the date the University gives such direction and which Interest Payment Date must be the last Interest Payment
Date of a Computation Period if the current interest period is an Other Rate Period) and the date the Fixed Interest
Rate shall be established (which shall not be fewer than 10 Business Days prior to the date of conversion). Such
direction must be accompanied by consent of the Bank, a statement as to whether the Letter of Credit will remain in
effect after conversion, written confirmation from the Bank that on or prior to the date of conversion the Stated
Amount of the Letter of Credit shall be increased to include 205 days’ accrued interest on the Bonds at the Fixed
Interest Rate if the Letter of Credit is to remain in effect following conversion, and an opinion of nationally
recognized bond counsel stating that the conversion to the Fixed Interest Rate is authorized or permitted by the Trust
Agreement and that conversion to the Fixed Interest Rate will not adversely affect the exclusion from gross income
of the interest on the Bonds for federal income tax purposes.
Following receipt of the University’s direction, the Remarketing Agent is required to determine, on the date
specified by the University for such determination, the Fixed Interest Rate as the interest rate that, if borne by the
Bonds, would, based upon current transactions in comparable securities in which the Remarketing Agent is involved
or of which it is aware and prevailing financial market conditions, be the interest rate necessary to enable the
Remarketing Agent to sell at a price equal to the principal amount thereof plus accrued interest on all the then
outstanding Bonds. Such determination by the Remarketing Agent is conclusive and is required to be the Fixed
Interest Rate for the Bonds commencing with the Interest Payment Date, which is the date of conversion until
maturity. The Commission has the right to deliver replacement Bonds bearing the Fixed Interest Rate with deletion
of such terms as are no longer applicable to the Bonds.
The Trustee is required to give notice by mail to the Holders of the Bonds to be converted not fewer than
30 days prior to the date of conversion to the Fixed Interest Rate. Such notice must state (i) that the interest rate on
the Bonds is scheduled to be converted to a Fixed Interest Rate and to what extent a Letter of Credit will be in effect
subsequent to conversion, (ii) the effective date of the Fixed Interest Rate, (iii) the date the Fixed Interest Rate is
scheduled to be determined, (iv) the minimum Authorized Denomination of the Bonds, (v) that subsequent to such
effective date the Holder will no longer have the right to require purchase of Bonds by the Tender Agent as
-4-
described under “THE BONDS – Optional Tender” and (vi) that all outstanding Bonds not purchased by the Tender
Agent prior to the effective date of the Fixed Interest Rate will be purchased by the Tender Agent on the effective
date of the Fixed Interest Rate at a purchase price of par plus accrued interest, if any. That notice is required to be
given by registered or certified mail to the Holders whose names appear on the Register as of the date preceding the
date of the mailing of such notice.
Conversion to Weekly Rate Period or Other Rate Period or to a New Computation Period. Upon
receipt by any paying agent, the Trustee, the Bank, the Commission and the Remarketing Agent of a direction from
the University (i) specifying the date a Weekly Rate Period or Other Rate Period is to be established or the date the
Computation Period is to be changed (which must be an Interest Payment Date at least 60 days, or such shorter
period agreed to by the Trustee, the Remarketing Agent and the University, from the date the University gives such
direction and which Interest Payment Date must be the last Interest Payment Date of a Computation Period if the
current interest period is an Other Rate Period) and (ii) if an Other Rate Period is specified, setting forth the
Computation Period for that Other Rate Period, the Remarketing Agent is required to compute the applicable interest
rate as described above. Such direction must be accompanied by an opinion of nationally recognized bond counsel
stating that such conversion is authorized or permitted by the Trust Agreement and that conversion to a Weekly Rate
Period or an Other Rate Period (including an Other Rate Period that follows an Other Rate Period) or change in the
Computation Period in accordance with the provisions of the Trust Agreement will not adversely affect the
exclusion from gross income of the interest on the Bonds for federal income tax purposes.
Upon such direction, the Trustee is required to give notice by mail to the Holders of the Bonds not fewer
than 30 days prior to the date of conversion. Such notice must state (i) that the interest period on the Bonds is
scheduled to be converted to a Weekly Rate Period or an Other Rate Period or a different Computation Period for an
Other Rate Period, (ii) the effective date of such conversion and whether the new period is a Weekly Rate Period or
an Other Rate Period (including, in the case of an Other Rate Period, the new Computation Period), (iii) that the
effective date of such conversion will be an Interest Payment Date on which interest will be paid at the applicable
rate theretofore prevailing, (iv) that thereafter interest will be determined on the basis of the new Weekly Rate
Period or Other Rate Period, as applicable, (v) the manner in which the Bonds are subject to optional tender as
provided in the Trust Agreement, and (vi) that all outstanding Bonds not purchased by the Tender Agent prior to the
effective date of the new Interest Rate Period or the new Computation Period will be purchased by the Tender Agent
on the effective date of the new Interest Rate Period or the new Computation Period at a price of par plus accrued
interest, if any. Such notice is required to be given by registered or certified mail to the Holders of the Bonds whose
names appear on the Register as of the date preceding the date of the mailing of such notice.
The determination of any interest rate by the Remarketing Agent is binding and conclusive upon the
Holders of the Bonds, the Commission, the University, the Bank, the Trustee, and the Remarketing Agent.
Book Entry Only System
Beneficial Owners of the Bonds will not receive or have the right to receive physical delivery of the
Bonds of such series and will not be or be considered to be, and will not have any rights as, Holders of the
Bonds under the Trust Agreement.
The following information on the Book-Entry System applicable to the Bonds has been supplied by DTC.
The University, the Commission, the Underwriter and the Trustee do not make any representations, warranties or
guarantees with respect to the accuracy or completeness of this information and have no responsibility for the
accuracy thereof.
DTC will act as Depository for the Bonds. The Bonds will be issued as securities registered in the name of
Cede & Co. (DTC’s partnership nominee), or such other name as may be requested by an authorized representative
ofDTC. One fully-registered bond certificate will be issued in the aggregate principal amount and will be deposited
withDTC.
DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York
Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a “clearing corporation” within the meaning ofthe New York Uniform Commercial Code,
-5-
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 2 million issues of US. and non-US. equity issues, corporate and
municipal debt issues, and money market instruments from over 85 countries that DTC’s participants (“Direct
Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales
and other securities transactions in deposited securities, through electronic computerized book-entry transfers and
pledges between Direct Participant’s 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, in turn, is owned by a number of Direct Participants of
DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation,
MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC,
also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC,
and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such
as both US. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear
through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect
Participants”). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are
on file with the Securities and Exchange Commission. More information about DTC can be found at
www.dtcc.com.
Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond
(“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners
will not receive written confirmation from DTC of their purchase, but Beneficial Owners are 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 the Bonds except in the event that use of the Book-Entry
System for the Bonds purchased by such Book-Entry Interest Owner 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 DTC. The deposit of
Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect
only the identity of the Direct Participants to whose accounts such Bonds are credited, which mayor 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.
Redemption notices will be sent to Cede & Co. If less than all of the Bonds are being redeemed, DTC’s
practice is to determine by lot the amount of interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the
Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the Commission as soon as possible after the
applicable regular record date. The Omnibus Proxy assigns Cede & Co.’ s consenting or voting rights to those Direct
Participants to whose accounts the Bonds entitled to consent or vote, as applicable, are credited on the applicable
regular record date (identified in a listing attached to the Omnibus Proxy).
Bond Service Charges on the Bonds will be paid to Cede & Co., or other such nominee as may be
requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts, upon
DTC’s receipt of funds and corresponding detail information from the Commission or the Trustee, on the payable
date in accordance with their respective holdings shown on DTC’s records. Payments by Direct or Indirect
Participants to Beneficial Owners will be governed by standing instructions and customary practices, as in the case
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with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the
responsibility of such Direct or Indirect Participant and not of DTC, the Trustee or the Commission, subject to any
statutory or regulatory requirements as may be in effect from time to time. Payment of Bond Service Charges to
Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the
responsibility of the Commission and the Trustee, as applicable. Disbursement of such payments to the Beneficial
Owners shall 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 the Commission or the Trustee. Also, the Commission may determine that continuation of a
securities depository/book-entry relationship is not in the best interests of the Holders of the Bonds. Under such
circumstances, in the event that a successor Depository is not obtained, bond certificates are required to be and will
be printed and delivered. See “BOOK-ENTRY ONLY SYSTEM – Revision of Book-Entry System; Replacement
Bonds” below.
The University, the Commission and the Registrar have no responsibility or liability for any aspects of the
records or notices relating to, or payments made on account of, book entry interest ownership, or for maintaining,
supervising or reviewing any records relating to that ownership.
The University and the Commission can not and do not give any assurances that DTC, DTC Participants,
Indirect Participants or others will distribute to the book entry interest owners payments of debt service on the
Bonds made to DTC as the registered owner, or any redemption or other notices, or that they will do so on a timely
basis, or that DTC will serve and act in a manner described in this Offering Circular.
Revision of Book Entry System; Replacement Bonds
The Trust Agreement provides for the issuance and delivery of fully registered Bonds (the “Replacement
Bonds”) directly to owners of Bonds other than DTC only in the event that DTC determines not to continue to act as
securities depository for the Bonds.
If DTC determines not to continue to act as a Depository for the Bonds held in a book entry system, the
Commission may attempt to have established a securities depository/book entry system relationship with another
Depository in connection with the Bonds. Upon the written request of the University for the removal or replacement
of the Depository, and upon 30 days’ written notice to the Depository and the Trustee, the Commission may remove
or replace the Depository. In either such case, if the Commission does not or is unable to so establish such a
relationship with another Depository, the Commission and the Trustee, after the Trustee has made provision for
notification of the owners of book entry interests by appropriate notice to the then Depository and the University,
shall permit withdrawal of the Bonds from the Depository and shall authenticate and deliver Bond certificates in
fully registered form to the assignees of the Depository or its nominee. If the event is not the result of Commission
action or inaction (including action at the request of the University), such withdrawal, authentication and delivery
shall be at the cost and expense (including costs of printing or otherwise preparing and delivering such replacement
Bonds) of the University.
In the event that the Book Entry System is discontinued, the principal, premium, if any, and interest on the
Bonds will be payable in the manner described above in the third paragraph under “THE BONDS – General”, and
the following provisions would apply. Bonds will be exchangeable for fully registered Replacement Bonds of
Authorized Denominations in an aggregate principal amount not exceeding the unmatured and unredeemed principal
amount of such Bonds and bearing interest at the same rate and maturing on the same date or dates. Replacement
Bonds will be transferable at the designated office of the Trustee or any Authenticating Agent, as defined in the
Trust Agreement, without charge (except any tax, fee, or other governmental charge required to be paid). Exchange
or transfer of then redeemable Replacement Bonds is not required to be made (i) during the 10 days preceding the
date of a selection of Replacement Bonds to be redeemed or (ii) of a particular Replacement Bond selected for
redemption (in whole or part).
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Redemption Provisions
The Bonds are callable for redemption in the circumstances and in the manner described below.
Mandatory Sinking Fund Redemption. Prior to conversion to an Other Interest Rate or a Fixed Interest
Rate, the Bonds are not subject to mandatory sinking fund requirements. Following conversion to an Other Interest
Rate or a Fixed Interest Rate, the Bonds are subject to mandatory redemption pursuant to mandatory sinking fund
requirements, at a redemption price of 100% of the principal amount redeemed plus interest accrued to the
redemption date, at the applicable interest rate, to the redemption dates as provided in the Trust Agreement.
Extraordinary Optional Redemption. The Bonds are subject to extraordinary redemption prior to
maturity on any date by and at the option of the Commission, at the direction of the University, at a redemption price
of 100% of the principal amount redeemed, plus interest accrued to the redemption date: (i) in whole upon the
occurrence of any of the events described in Section 12.2 of the Lease and the exercise by the University of its
option to terminate the Lease as provided in that Section and (ii) in part (in any Authorized Denomination) in the
event of condemnation of the Project or any part thereof to the extent provided in Section 6.3 of the Lease.
Optional Redemption. During a Weekly Rate Period, the Bonds are subject to redemption, in whole on
any date, or in part (in any Authorized Denomination provided that any unredeemed portion of a Bond will be in an
Authorized Denomination) on any Interest Payment Date, at the option of the Commission, upon the direction of the
University, at a redemption price equal to 100% of the principal amount of the Bonds so redeemed, plus accrued
interest to the redemption date.
During an Other Rate Period, provided that no Event of Default under the Trust Agreement shall occur and
be continuing, the Bonds are subject to redemption in whole or in part (in any Authorized Denomination provided
that any unredeemed portion of a Bond will be in an Authorized Denomination) on the final Interest Payment Date
of any Computation Period, at the option of the Commission, upon the direction of the University, at a redemption
price equal to 100% of the principal amount of the Bonds so redeemed, plus accrued interest to the redemption date.
Prior to conversion to a Fixed Interest Rate, the University has agreed with the Bank in its
Reimbursement Agreement to optionally redeem the Bonds on the dates and in the amounts specified in the
Reimbursement Agreement. The University and the Bank may change the optional redemption schedule at
any time as provided in the Reimbursement Agreement.
During the Fixed Rate Period, provided no Event of Default under the Trust Agreement shall occur and be
continuing, the Bonds are subject to redemption at the option of the Commission, at the direction of the University,
in whole on any date or in part (in any Authorized Denomination provided that any unredeemed portion of a Bond
will be in an Authorized Denomination) on any Interest Payment Date; provided, however, that the Bonds are not
redeemable during the No Call Period shown below (the “No Call Period”), which begins on the first day of the
Fixed Rate Period. On and after the Interest Payment Date that ends the No Call Period (or the next Interest
Payment Date if the No Call Period does not end on an Interest Payment Date), the Bonds are redeemable at the
percentage of their principal amount shown in the Initial Premium column plus interest accrued to the redemption
date. The premium shall decline semiannually by the amount shown in the “Semiannual Reduction in Premium”
column until the Bonds are redeemable without premium in the year or portion of a year indicated in the “No
Premium” column and for any later years or periods in the Fixed Rate Period.
Fixed Rate Period
Equal to
or Greater
Than
9 Years
7 Years
5 Years
But Less
Than
N/A
9 Years
7 Years
No Call
Period
5 Years
4 Years
3 Years
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Initial
Premium
102%
101%
101%
Semiannual
Reduction
in Premium
1/2%
1/2%
1/2%
No Premium
8th Year
6th Year
5th Year
If the Fixed Rate Period is greater than two years but less than five years, the Bonds are redeemable at
100% of their principal amount in the final year of the Fixed Rate Period and at 100Y2% of their principal amount
during the next-to-last year of the Fixed Rate Period and are nonredeemable before that time. If the Fixed Rate
Period is equal to or less than two years, the Bonds are redeemable only in the final year of the Fixed Rate Period at
100% of their principal amount.
If a Letter of Credit is then in effect, the Trustee is not permitted to draw on the Letter of Credit to pay any
premium due upon optional redemption. Any premium payable while the Bonds are secured by the Letter of Credit
may be paid only from funds held in the Redemption Premium Account of the Bond Fund and only upon the
University’s delivery to the Trustee an opinion of nationally recognized bankruptcy counsel to the effect that such
payment will not constitute voidable preferences under the U.S. Bankruptcy Code in the event a petition in
bankruptcy is subsequently filed by or against the University or the Commission. At the election of the University,
the Bonds may not be secured by a Letter of Credit during a Fixed Rate Period.
If optional redemption at a redemption price exceeding 100% of the principal amount to be redeemed is to
take place on any applicable mandatory sinking fund redemption date, the Bonds, or portions thereof, to be
redeemed by optional redemption shall be selected by lot prior to the selection by lot of the Bonds to be redeemed
on the same date by operation of the mandatory sinking fund redemption provisions.
Notice of Redemption, Partial Redemption and Payments. Notice of redemption with respect to the
Bonds is to be given by the Trustee on behalf of the Commission to the Holder of each Bond being redeemed at least
30 days prior to the redemption date by first-class mail, postage prepaid, addressed to such Holder at the Holder’s
address as it appears upon the register maintained by the Registrar (the “Register”) on the seventh day preceding that
mailing. Failure to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for
the redemption of any Bond.
When less than the entire unmatured portion of the Bonds is called for redemption at one time, or if fewer
than all of the outstanding Bonds of a single maturity are to be redeemed, the selection of Bonds to be redeemed, or
portions thereof in Authorized Denominations, is to be made in such manner as determined by the Trustee in
accordance with the Trust Agreement; provided that, if less than all of an Outstanding Bond of one maturity in a
book entry system is to be called for redemption, the Trustee will give notice to DTC or the nominee of DTC that is
the Holder of such Bond, and the selection of the beneficial interests in that Bond to be redeemed will be at the sole
discretion of DTC and its participants. If any Bonds are held by the Trustee for the benefit of the Bank, such Bonds
will be redeemed first.
The Trustee is required to draw upon the Letter of Credit an amount sufficient to pay the principal amount
of the Bonds to be redeemed and any accrued interest thereon.
If any Bonds are not presented for payment at the date fixed for their redemption and the funds for such
payment are available therefor, the Holders of such Bonds will thereafter be restricted exclusively to the funds
available for that payment for the satisfaction of any claim relating to such Bonds. Any such funds remaining
unclaimed for four years after becoming due and payable shall be first applied to the payment of any fees, charges
and expenses owing to the Trustee and then shall be paid to the Bank to the extent any money is due it pursuant to
the Reimbursement Agreement and finally any remainder will be paid to the University, and the Holders are
thereafter entitled to look only to the University for payment from such funds as were received by either the Bank or
the University.
Mandatory TenderlPurchase
Mandatory Purchase Upon Expiration of Letter of Credit or Conversion of Interest Rate Period or
Replacement of Letter of Credit with an Alternate Letter of Credit. The Bonds are subject to mandatory purchase
by the Tender Agent on behalf of the University in whole at a purchase price of 100% of the principal amount thereof
(i) on the Interest Payment Date next preceding the expiration date of the Letter of Credit, unless the term of the Letter of
Credit has been extended (except after a Conversion Date); (ii) on the Interest Payment Date that is the effective date ofa
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conversion to a different Interest Rate Period or if the Bonds bear interest in an Other Rate Period, upon conversion of
the Computation Period; or (iii) on the Interest Payment Date preceding the replacement of the Letter of Credit with an
Alternate Letter of Credit provided pursuant to the Trust Agreement. Following a conversion to a Fixed Interest Rate,
the Bonds will not be subject to mandatory purchase.
Notice of any mandatory purchase pursuant to the preceding paragraph shall be given by the Trustee by fIrst
class mail, postage prepaid, at least 30 days prior to the date fIxed for purchase, to each Holder at the address shown on
the Register on the seventh business day preceding that mailing. Failure to receive notice by mailing, or any defect in
that notice, as to any Bond shall not affect the validity of the proceeding for the purchase of any other Bond.
Notice of any mandatory purchase of Bonds held under a Book-Entry System will be sent by the Trustee only
to DTC or its nominee as registered owner. Notice of mandatory purchase to the book-entry interest owners is the
responsibility ofDTC, Direct Participants and Indirect Participants. Any failure ofDTC to advise any Direct Participant,
or of any Direct Participant or any Indirect Participant to notify the book-entry interest owners, of any such notice and its
content or effect will not affect the validity of any proceedings for the mandatory purchase of the Bonds. See “THE
BONDS – Book-Entry Only System” herein.
Upon notice of any mandatory purchase, each Holder must undertake to deliver all Bonds to the Tender Agent
at or prior to 9:30 a.m., at the designated office of the Tender Agent, two Business Days prior to the mandatory purchase
date. The Remarketing Agent is required to offer for sale and use its best efforts to remarket the Bonds. That
remarketing must be carried out in the same manner as described herein under “THE BONDS- Remarketing of Bonds”
for optional purchases of Bonds.
IF A HOLDER FAILS TO DELIVER ANY BONDS ON OR PRIOR TO THE APPLICABLE TENDER
DATE, SUCH UNTENDERED BONDS SHALL BE DEEMED TO HAVE BEEN PROPERLY TENDERED FOR
PURCHASE TO THE TENDER AGENT AND, TO THE EXTENT THAT THERE SHALL BE ON DEPOSIT WITH
THE TENDER AGENT AND AVAILABLE THEREFOR AN AMOUNT SUFFICIENT TO PAY THE PURCHASE
PRICE THEREOF, SUCH UNTENDERED BONDS SHALL ON SUCH PURCHASE DATE CEASE TO BEAR
INTEREST AND NO LONGER SHALL BE CONSIDERED TO BE OUTSTANDING UNDER THE TRUST
AGREEMENT.
The Tender Agent is required to hold money drawn by the Trustee under the Letter of Credit or received upon
remarketing or otherwise provided for such purchase of any untendered Bonds for a period of seven days, without
liability for interest thereon, for the benefIt of the former Holder of the Bonds, who shall for such period be restricted
exclusively to such money for such claim of whatever nature on his part under the Trust Agreement or on, or with
respect to, such Bond. At the end of such seven-day period, the Tender Agent is required to deliver such money to the
Trustee, who shall hold that money in accordance with the Trust Agreement.
Optional Tender
During any Weekly Rate Period, any Bonds owned by a Holder will be purchased by the Tender Agent, but
only from the sources described below under “THE BONDS – Remarketing of Bonds”, on the demand of the Holder
thereof (other than the University), on any Business Day at a purchase price equal to 100% of the principal amount
thereof plus (if such Business Day is not an Interest Payment Date) accrued interest to the date of purchase, upon
delivery to the Tender Agent at its designated office of a demand for purchase properly completed and signed that states
(i) the principal amount of such Bonds that will be delivered for purchase, (ii) the date on which such Bonds shall be
purchased, which date shall be a Business Day not prior to the seventh day next succeeding the date of delivery of such
demand for purchase, (iii) that the demand for purchase is an irrevocable request, (iv) that the Holder will undertake to
deliver the Bonds to the Tender Agent at or prior to 9:30 a.m., at the designated office of the Tender Agent two Business
Days prior to the date on which purchase is demanded and (v) the name of the Holder of such Bonds and the bond
number and CUSIP number thereof. By delivering such notice, the Holder irrevocably agrees to deliver such Bonds to
the designated office of the Tender Agent at or prior to 9:30 a.m., two Business Days prior to the date specifIed in the
demand for purchase. In the case of a Bond or portion thereof to be purchased prior to an Interest Payment Date and
after the Regular Record Date in respect thereof, if the Holder is other than a Depository or its nominee, the Holder
shall deliver a due bill, in form satisfactory to the Tender Agent, for interest due on such Interest Payment Date.
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During any Other Rate Period, any Bonds owned by a Holder will be purchased by the Tender Agent, but only
from the sources described in “THE BONDS- Remarketing of Bonds” on the demand of the Holder thereof (other than
the University), on any Tender Date at a purchase price equal to 100% of the principal amount thereof (plus accrued
interest to the Tender Date if such Tender Date is not an Interest Payment Date), upon delivery to the Tender Agent at its
designated office not later than 4:00 p.m., on or before the tenth Business Day prior to such Tender Date of a demand for
purchase properly completed and signed that states (i) the principal amount of such Bonds that will be delivered for
purchase, (ii) that the demand for purchase is an irrevocable request, (iii) that the Holder will undertake to deliver the
Bonds to the Tender Agent at or prior to 9:30 a.m., at the designated office of the Tender Agent, two Business Days prior
to such Tender Date and (iv) the name of the Holder of such Bonds and the bond number and CUSIP number thereof.
By delivering such notice the Holder irrevocably agrees to deliver such Bonds to the designated office of the Tender
Agent at or prior to 9:30 a.m., at the designated office of the Tender Agent, two Business Days prior to such Tender
Date.
The Tender Agent will determine, in its sole discretion, whether a Bond that has been tendered for purchase
conforms in all respects to the description thereof set forth in the demand for purchase.
IF THE HOLDER MAKING SUCH ELECTION TO TENDER BONDS SHALL FAIL TO DELIVER SUCH
BONDS DESCRIBED IN SUCH TENDER NOTICE TO THE TENDER AGENT ON OR BEFORE THE
APPLICABLE TENDER DATE, THE UNTENDERED BONDS SHALL BE DEEMED TO HAVE BEEN
PROPERLY TENDERED FOR PURCHASE AND, TO THE EXTENT THAT THERE SHALL BE ON DEPOSIT
WITH THE TENDER AGENT AND AVAILABLE THEREFOR AN AMOUNT SUFFICIENT TO PAY THE
PURCHASE PRICE THEREOF, SUCH UNTENDERED BONDS SHALL ON SUCH PURCHASE DATE CEASE
TO BEAR INTEREST AND NO LONGER SHALL BE CONSIDERED TO BE OUTSTANDING UNDER THE
TRUST AGREEMENT.
The Tender Agent is required to hold money drawn by the Trustee under the Letter of Credit or received upon
remarketing or otherwise provided for such purchase of any untendered Bonds for a period of seven days, without
liability or interest thereon, for the benefit of the former Holder of the Bond, who shall for such period be restricted
exclusively to such money for such claim of whatever nature on his part under the Trust Agreement or on, or with
respect to, such Bond. At the end of such seven-day period, the Tender Agent will deliver such money to the Trustee,
who shall hold that money in accordance with the Trust Agreement.
Remarketing of Bonds
Upon receipt of notice from the Tender Agent of its receipt of a demand for purchase of any Bond (or
authorized portion) as described in “THE BONDS – Optional Tender”, the Remarketing Agent shall offer for sale and
use its best efforts to sell such Bond (other than to the University or the Commission) at a purchase price equal to 100%
of the principal amount thereof plus accrued interest thereon. The Remarketing Agent shall direct any person to whom a
Bond is remarketed pursuant to this paragraph to deliver the purchase price therefor in immediately available funds to the
Tender Agent at its Cleveland, Ohio office on or before 9:30 a.m., on the settlement date (which must be a Business
Day) arranged by the Remarketing Agent and agreed to by the person purchasing such Bond (or authorized portion
thereot).
On the Business Day a Bond (or authorized portion) is to be purchased pursuant to a tender, the Tender Agent
shall, to the extent those funds are available, purchase such Bond (or authorized portion) from the Holder at a purchase
price equal to the principal amount thereof (plus accrued interest, if any, to the date of purchase if such date is not an
Interest Payment Date) (i) first from any money available from the proceeds of remarketing such Bond, other than a
remarketing to the Commission, the University or any guarantor of the Bonds (other than the Bank) or any guarantor of
the University’s obligations to reimburse the Bank or any “insider” of any of them as that term is defmed in
Section 101(30) of the U.S. Bankruptcy Code or (ii) second from money representing a drawing by the Trustee under the
Letter of Credit and (iii) third from any other sources available for such purchase, whether from the University or
otherwise.
Any Bond purchased by the Tender Agent and remarketed by the Remarketing Agent from the date notice of a
mandatory purchase upon establishment of a Fixed Interest Rate is given by the Trustee through the effective date of the
Fixed Interest Rate shall not be remarketed except to a buyer who agrees at the time of such purchase either (i) to accept
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the Fixed Interest Rate when the Fixed Interest Rate becomes effective, with notice having been given as to whether and
to what extent a Letter of Credit will be in effect during the Fixed Rate Period or (ii) to require purchase of the Bonds by
the Tender Agent pursuant to the optional tender provisions described above under “THE BONDS-Optional Tender” on
the effective date of the Fixed Interest Rate. Any Bond purchased by the Tender Agent and remarketed by the
Remarketing Agent from the date notice of a conversion to an Other Rate Period or new Computation Period is given by
the Trustee through the effective date of the Other Rate Period or new Computation Period shall not be remarketed
except to a buyer who agrees at the time of such purchase to accept the new interest rate when the Other Rate Period or
new Computation Period becomes effective. Any Bond purchased by the Tender Agent and remarketed by the
Remarketing Agent from the date of notice of the expiration of the Letter of Credit is given shall not be remarketed
except to a buyer who has been informed that the Bonds will no longer be secured by a Letter of Credit and, if
applicable, that any former rating on the Bonds has been reduced or withdrawn.
The Bonds do not provide for a tender option and rernarketingduring a Fixed Rate Period, and in the case of an
Other Rate Period, an optional tender will only be made effective on the first day of any Computation Period. At the
election of the University, the Bonds may not be secured by a Letter of Credit during a Fixed Rate Period. Generally,
there shall be no rernarketing of Bonds if the Trustee shall have notified the Remarketing Agent that there has occurred
and is continuing a default or an Event of Default under the Trust Agreement.
Sources of Payment and Security
The debt service on the Bonds is payable from the Revenues, including primarily the Rental Payments to be
derived by the Commission under the Lease, and the money, securities and funds and accounts to be held by the
Trustee (including investment earnings) available for that purpose under the Trust Agreement including money
received by the Trustee from draws under the Letter of Credit.
In order to secure the payment of the debt service on the Bonds and the performance of the obligations
contained in the Trust Agreement and the Bonds, the Commission will assign to the Trustee all its right, title and
interest in and to (i) the Revenues, (ii) the Lease, except for the Unassigned Rights, (iii) the proceeds of the Bonds
and the Guaranty Agreement and any other real or personal property conveyed, mortgaged, pledged, assigned or
transferred by the Commission or by anyone on its behalf, and (iv) all money and investments in the Bond Fund
including money received by the Trustee from draws under the Letter of Credit.
Under existing law, the remedies specified by the Trust Agreement, the Letter of Credit, the Lease and the
Guaranty Agreement may not be readily available or may be limited. A court may decide not to order the specific
performance of the covenants contained in these documents. The various legal opinions to be delivered concurrently
with the delivery of the Bonds will be qualified as to the enforceability of the various legal instruments by
limitations imposed by State and federal laws, rulings and decisions affecting remedies and by bankruptcy,
reorganization or other laws affecting the enforcement of creditors’ rights or the application of general principles of
equity.
The enforceability of the liens of the Lease and the Trust Agreement may be subject to subordination or
prior claims in certain instances other than bankruptcy proceedings. For a discussion of examples of possible
limitations on enforceability and of possible subordination or prior claims see “ENFORCEABILITY OF
REMEDIES”.
The Project has been and is being specifically constructed and equipped for the benefit of the University for
use in its educational programs, and may be subject to practical restrictions that may limit the use thereof by others.
Therefore, in the event of a default, the Trustee’s ability to lease the Project to third parties would be limited. The
rentals, if any, might thus be adversely affected. There is no assurance that, should an event of default occur, the
proceeds from the lease or other disposition of the Project would be sufficient to allow payment in full of the Bonds.
Also, as noted in “THE LEASE – Events of Default”, the Commission has the right, upon default under the Lease to
sublease the Project. The Lease covers only a portion of the campus of the University, and the University’s
buildings are generally special-use buildings, so that it may be difficult for the Commission to obtain rentals on
subleasing adequate to pay the debt service on the Bonds. In the event of a default by the Bank under the Letter of
Credit, no insurance proceeds from the Federal Deposit Insurance Corporation or any other governmental agency,
instrumentality or authority would be available to pay bondholders.
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The University is subject to the same competitive pressures that affect other private institutes, colleges and
universities. Changing demographics and demand may mean a smaller pool of University-bound persons from
which to draw entering classes. Greater competition for students together with rising tuition may mean that the
University will need to increase its financial aid packages to attract and retain students or that it may face fewer
students and decreased revenues. Attracting and keeping qualified administrators and faculty may mean higher
expenditures for salaries and administrative costs. Each of these factors can have an impact on the revenues of the
University.
The Bonds are being offered primarily on the basis of the fmancial strength of the Bank and not on
the basis of the financial strength of the University or other security.
THE BONDS DO NOT REPRESENT OR CONSTITUTE A DEBT OR PLEDGE OF THE FAITH
AND CREDIT OF THE COMMISSION OR THE STATE, WILL NOT BE SECURED BY AN
OBLIGATION OR PLEDGE OF ANY MONEY RAISED BY TAXATION, AND DO NOT GRANT TO
THE HOLDERS ANY RIGHTS TO HAVE THE STATE OR ANY POLITICAL SUBDIVISION THEREOF
LEVY ANY TAXES OR APPROPRIATE ANY FUNDS FOR THE PAYMENT OF THE DEBT SERVICE
ON THE BONDS.
THE UNIVERSITY
The University provides programs of study leading to Bachelors, Masters and Doctorate degrees. The
University is a multi-campus university system. The original college, Antioch College in Yellow Springs, Ohio,
was founded in 1852 as a College of Liberal Arts and Sciences. Antioch University has evolved into a national
multi-campus university serving more than 4,000 students with campuses in California, New Hampshire, Ohio and
Washington. A more extensive description of the University is set forth in Appendix A attached hereto.
THE COMMISSION
The Commission is a body both corporate and politic constituting an agency and instrumentality of the
State. It was created in 1968 by, and exists under, Chapter 3377 of the Ohio Revised Code. The Commission was
established to enhance educational opportunities for the people of the State and to alleviate the pressing demands
upon tax supported institutes and universities by enhancing the availability, efficiency and economy of educational
facilities for private institutes and universities by facilitating or achieving the lower costs of the fmancing or
refinancing of such educational facilities.
The Commission is authorized, among other things, to issue revenue bonds of the State to provide funds for
acquiring, constructing, equipping and furnishing educational facilities that are leased to private institutes, colleges
or universities, as well as for refunding outstanding bonds previously issued for educational facilities. Each issue of
bonds is secured by a pledge and assignment of the payments received by the Commission pursuant to the lease of
the applicable educational facilities and may be secured by a mortgage on such facilities. In each lease, the institute,
college or university has the option to purchase the Commission’s interest in the facilities prior to the termination of
the leases and the institute, college or university agrees to purchase that interest in those facilities at the leases
termination, in each case after provision has been made for the retirement or redemption of all the bonds issued for
such facilities. The Commission does not make any grants and has access to capital improvement funds only
through issuance of revenue bonds.
The Commission may lease projects to private, nonprofit institutions of higher education that hold effective
certificates of authorization issued by the Ohio Board of Regents, but not to institutions whose principal educational
activity is preparing students for religious or ecclesiastical fields. The Commission may acquire and lease any
facility that is academic, administrative, or auxiliary thereto, other than facilities used exclusively as a place for
devotional activities.
The Commission consists of nine members including the Chancellor of the Ohio Board of Regents or a
designee of the Chancellor, an ex officio member. The other eight members are appointed to overlapping eight-year
terms by the Governor with the advice and consent of the State Senate. The Chairman is designated by the
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Governor, and the other officers, including the Vice Chairman, the Secretary and the Assistant Secretary are elected
by the members from their own number. The members of the Commission receive no compensation for their
services but are entitled to reimbursement for their actual and necessary expenses. The Commission’s office is
located in Columbus, Ohio. The Commission does not have any employees. The Ohio Board of Regents provides
staffing assistance to the Commission when necessary.
THE PROJECT
The Bonds are being issued to provide funds to pay “project costs” as defined in Section 3377.01 of the
Revised Code, including costs relating to acquiring, constructing, renovating, improving, equipping and furnishing a
new building for the University’s adult non-residential campus in Yellow Springs, Ohio known as “Antioch
University McGregor” and other related facilities, including facilities for graduate and adult education, and
acquiring the site thereof (the “2006 Project”), to refund a portion of the State of Ohio Higher Educational Facility
Variable Rate Demand Revenue Bonds (Pooled Financing 1997 Program) which were previously issued in part to
fund University educational facilities consisting of (i) the renovation and remodeling of Spalt Hall and the
International Center, (ii) the renovation and remodeling of President and West Dormitories, (iii) the construction of
the New Dormitory, and (iv) the renovation of the heating plant including new boilers, all together with the
necessary appurtenances thereto (the “1997 Project”) and to refund a portion of the State of Ohio Variable Rate
Demand Revenue Bonds (Pooled Financing 2000 Program), Series C, which were previously issued in part to fund
the acquiring and installing of telephone switch equipment, data and telephone network, computers and related
applications, equipment and facilities, mail processor, residence hall, laboratory and classroom furniture and
equipment, tractor, passenger van, records archive project, upgrading of lighting systems and transformer, and
renovation and improvements of conference rooms, residence halls (including air conditioning), roofs of certain
buildings, drives, parking, walkways and landscape and utility systems (the “2000 Project” and together with the
1997 Project and 2006 Project, the “Project”), and for such other uses as are permitted by the Act and the Lease.
SOURCES AND USES OF FUNDS
The proceeds expected to be received from the sale of the Bonds (exclusive of accrued interest) and their
expected application is as follows:
Sources of Funds
Principal Amount of Bonds
Uses of Funds
Deposit to Improvement Fund (1)
Deposit to 1997 Bond Account for refunding of the 1997 Bonds
Deposit to 2000 Bond Account for refunding of the 2000 Bonds
Underwriter’s Discount and Issuance Expenses (2)
Total Uses
$ 13,795,000,00
$ 11,281,065.86
292,701.37
1,468,553.42
752,679.35
$ 13,795,000.00
(1) Includes costs of the 2006 Project and any capitalized interest.
(2) Includes printing, legal and Trustee fees, initial Letter of Credit fees and other costs.
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DOCUMENT DESCRIPTIONS
The following descriptions of provisions of the documents are only brief outlines of some of the provisions
thereof, and do not purport to summarize or describe all of the provisions thereof Reference is made to the Letter of
Credit and the Lease, the Trust Agreement, the Guaranty Agreement and the Tax Agreement relating to the Bonds.
DEFINITIONS
“Act” means Chapter 3377 and Sections 9.98 to 9.983 of the Revised Code.
“Additional Payments” means the amounts required to be paid by the University pursuant to the
provisions of Section 3.2 of the Lease.
“Alternate Letter of Credit” means an irrevocable direct pay letter of credit issued by a commercial bank,
the terms of which shall in all material respects be the same as the letter of credit delivered contemporaneously with
the original delivery of the Bonds (except as to expiration date) and which is otherwise in accordance with the
requirements of Section 3.6 of the Lease.
“Assignment” means the Assignment of Rights Under Lease, dated as of even date with the Trust
Agreement, from the Commission, as assignor, to the Trustee, as assignee, as amended or supplemented from time
to time.
“Authenticating Agent” means the Trustee and the Registrar and any other bank, trust company or Person
designated as an Authenticating Agent for the Bonds by or in accordance with Section 6.13 of the Trust Agreement,
each of which shall be a transfer agent registered in accordance with Section 17A(c) of the Securities Exchange Act
of 1934, as amended.
“Authorized Denominations” means $100,000 and any greater integral multiple of $5,000 prior to
conversion to a Fixed Interest Rate and after conversion to a Fixed Interest Rate means $5,000 and any greater
integral multiple thereof
“Bank” means National City Bank, in its capacity as issuer of the Letter of Credit, or the issuer of an
Alternate Letter of Credit.
“Base Lease” means the Base Lease, dated as of even date with the Trust Agreement, between the
University, as lessor, and the Commission, as lessee, as duly amended or supplemented from time to time.
“Bond Counsel” means any attorney or firm of attorneys of nationally recognized standing on the subject
of municipal bonds acceptable to the Commission.
“Bond Documents” means the Base Lease, the Lease, the Trust Agreement, the Assignment, the Guaranty
Agreement, the Remarketing Agreement, the Tax Agreement and the Bond Purchase Agreement.
“Bond Fund” means the Bond Fund created under the Trust Agreement and held by the Trustee.
“Bond Legislation” means the resolution adopted by the Commission providing for the issuance of the
Bonds and approving the Lease, Base Lease, the Assignment, the Trust Agreement and related matters, as that
resolution may from time to time be amended or supplemented.
“Bond Pledge Agreement” means the Bond Pledge Agreement dated as of even date with the Trust
Agreement, among the Bank, the University and the Trustee, pursuant to which the University has pledged to the
Bank Pledged Bonds that the Trustee will hold for the benefit of the Bank.
“Bond Purchase Agreement” means as to the Bonds, the Bond Purchase Agreement entered into by and
among the Commission, the University and the Original Purchaser, providing for the purchase of the Bonds.
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“Bond Service Charges” means, for any period or payable at any time, the principal of (whether on an
Interest Payment Date, at stated maturity, by mandatory sinking fund redemption, if any, by acceleration or
otherwise) and premium, if any, and interest on the Bonds for that period or due and payable at that time as the case
maybe.
“Bonds” or “Bond” means the $13,795,000 State of Ohio (Ohio Higher Educational Facility Commission)
Higher Educational Facility Variable Rate Revenue Bonds (Antioch University 2006 Project) issued by the
Commission pursuant to the Trust Agreement, including any portion thereof or any beneficial interest therein, as
applicable.
“Book entry form” or “book entry system” means, with respect to the Bonds, a form or system, as
applicable, under which (i) the ownership of beneficial interests in Bonds and Bond Service Charges may be
transferred only through a book entry and (ii) physical Bond certificates in fully registered form are registered only
in the name of a Depository or its nominee as Holder, with the physical Bond certificates “immobilized” in the
custody of the Depository. The book entry system is maintained by and is the responsibility of the Depository and is
not the responsibility of the Commission or the Trustee. The book entry is the record that identifies, and records the
transfer of the interests of, the owners of beneficial (book entry) interests in the Bonds.
“Business Day” means any day other than (i) a Saturday or Sunday, (ii) a day on which banking
institutions in the city or cities in which (A) the office of the Bank at which documentation for payment under the
Letter of Credit is to be presented or (B) the principal offices of the Trustee, the paying agent or the Remarketing
Agent are located, are authorized by law or executive order to close or (iii) a day on which the Depository is closed.
“Code” means the Internal Revenue Code of 1986, the Regulations (whether temporary or final) under that
Code or the statutory predecessor of that Code, and any amendments of, or successor provisions to, the foregoing
and any official rulings, announcements, notices, procedures and judicial determinations regarding any of the
foregoing, all as and to the extent applicable. Unless otherwise indicated, reference to a section of the Code includes
any applicable successor section or provision and such applicable Regulations, rulings, announcements, notices,
procedures and determinations pertinent to that section.
“Commission” means the Ohio Higher Educational Facility Commission, a body both corporate and
politic, constituting an agency or instrumentality of the State.
“Computation Period” means during any Other Rate Period, the six month period or integral multiples
thereof elected pursuant to the Trust Agreement during which the interest rate will not be subject to adjustment.
“Conversion Date” means the date that is the effective date of the Fixed Interest Rate.
“Default” means any circumstance that, with the passage of time or the giving of notice or both, would
constitute an “Event of Default” under the applicable Bond Document.
“Defeasance Account” means the Defeasance Account in the Bond Fund created under the Trust
Agreement.
“Defeasance Obligations” means
(a) Noncallable Direct Obligations; or
(b) certificates or receipts representing direct ownership of future interest or principal
payments on direct obligations of, or obligations fully guaranteed by, the United States of America or any
of its agencies or instrumentalities the obligations of which are backed by the full faith and credit of the
United States of America, which obligations are noncallable and (i) are held by a custodian in safekeeping
on behalf of the holder of such receipts and (ii) are rated or assessed in the highest category for long-term
debt by a Rating Service then maintaining a rating on the Bonds; or
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(c) obligations of any state or any political subdivision of any state, other than the
Commission, which are rated in the highest category for long-term debt by a Rating Service, the interest on
which is excluded from gross income for federal income tax purposes and the full and timely payment of
the principal of and any premium and the interest on which is fully and unconditionally payable from
obligations of the character described in (a) or (b) above.
“Depository” means The Depository Trust Company (a limited purpose trust company), New York, New
York, until any successor Depository shall have become such pursuant to the applicable provisions of the Trust
Agreement and, thereafter, “Depository” shall mean the successor Depository. Any Depository shall be a securities
depository that is a clearing agency under federal law operating and maintaining, with its participants or otherwise, a
book entry system to record ownership of beneficial interests in Bonds or Bond Service Charges, and to effect
transfer of Bonds, in a book entry form.
“Direct Obligations” means direct obligations of the United States of America (whether in certificated or
book-entry form), and securities the timely payment of the principal of and interest on which is fully and
unconditionally guaranteed by the United States of America, provided that the full faith and credit of the United
States of America must be pledged to any such direct obligation or guarantee.
“Eligible Investments” means, to the extent permitted by law:
(a) Direct Obligations;
(b) direct obligations and fully guaranteed certificates of beneficial interest of the Export-
Import Bank of the United States; senior debt obligations of the Federal Home Loan Banks; certificates of
beneficial ownership of the Rural Economic Community Development Administration (formerly Farmers
Home Administration (“FmHA”»; participation certificates and senior debt obligations of the Federal
Home Loan Mortgage Corporation (“FHLMCs”) rated, at the time of purchase, “Aaa” by Moody’s and
“AAA” by Standard and Poor’s; debentures of the Federal Housing Administration; mortgage-backed
securities (except stripped mortgage securities that are valued greater than par on the portion of unpaid
principal at the time of purchase) and senior debt obligations of the Federal National Mortgage Association
(“FNMAs”) rated, at the time of purchase, “Aaa” by Moody’s and “AAA” by Standard & Poor’s;
participation certificates of the General Services Administration; guaranteed mortgage-backed securities
and guaranteed pass-through obligations of the Government National Mortgage Association (“GNMAs”);
senior debt obligations of the Student Loan Marketing Association; project notes, local authority bonds,
new communities debentures and U.S. public housing notes and bonds of the U.S. Department of
Housing & Urban Development; guaranteed Title Xl financings of the U.S. Maritime Administration; and
Resolution Funding Corporation obligations;
(c) direct obligations of any state of the United States of America or any subdivision or
agency thereof whose long-term, unsecured, uninsured and unguaranteed general obligation debt is rated, at
the time of purchase, “Aa” or better by Moody’s and “AA” or better by Standard & Poor’s, or any
obligation fully and unconditionally guaranteed by any state, subdivision or agency whose long-term,
unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, “Aa” or
better by Moody’s and “AA” or better by Standard & Poor’s;
(d) commercial paper (having original maturities of not more than 270 days) rated, at the
time of purchase, “Prime-I” or better by Moody’s and “A-I” or better by Standard & Poor’s;
(e) unsecured certificates of deposit, time deposits or bankers acceptances (in each case
having maturities of not more than 360 days) of any domestic bank (including the Trustee or the Bank and
any bank affiliated with the Trustee or the Bank) including a branch office of a foreign bank, which branch
office is located in the United States, provided that legal opinions are received to the effect that full and
timely payment of such deposit or similar obligation is enforceable against the principal office or any
branch of such bank, which, at the time of purchase, has a short-term “Bank Deposit” rating of “Prime-I” or
“A-3” or better by Moody’s and a “Short-Term CD” rating of “A-I” or better by Standard & Poor’s;
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(f) deposits of any bank or savings and loan association (including the Trustee or the Bank
and any bank affiliated with the Trustee or the Bank) that has combined capital, surplus and undivided
profits of not less than $30,000,000, provided that such deposits are continuously and fully insured by the
Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation (“FDIC”);
(g) investments in money-market funds (including those for which the Trustee or any of its
affiliates provide services for a fee, whether as an investment advisor, custodian, transfer agent, registrar,
sponsor, distributor, manager or otherwise) registered under the Federal Investment Company Act of 1940,
whose shares are registered under the Federal Securities Act of 1933, rated “AAAm,” “AAAm-G” or
“AAm” or the equivalent by Moody’s or Standard & Poor’s, provided that if such money-market funds of
the Trustee are not rated, such funds shall be invested only in Direct Obligations;
(h) repurchase agreements collateralized by Direct Obligations, GNMAs, FNMAs or
FHLMCs (the “Collateral Securities”) with any registered broker/dealer subject to the jurisdiction of the
Securities Investors’ Protection Corporation or any commercial bank whose deposits are insured by the
FDIC (including the Trustee or any broker/dealer affiliated with the Trustee), if such broker/dealer or bank
has an uninsured, unsecured and unguaranteed obligation, at the time of purchase, rated “Prime-I” or “A3”
or better by Moody’s, and “A-I” or “A” or better by Standard & Poor’s, provided that:
(i) a master repurchase agreement or other specific written repurchase agreement
governs the transaction;
(ii) the Collateral Securities are held free and clear of any lien by the Trustee (as
may be evidenced by an opinion of counsel acceptable to the Trustee) or an independent third
party acting solely as agent (“Agent”) for the Trustee, and such third party is (1) a Federal Reserve
Bank or (2) a bank that is a member of the FDIC and that has combined capital, surplus and
undivided profits of not less than $50 million, and the Trustee shall have received written
confirmation from such third party that it holds such securities, free and clear of any lien, as agent
for the Trustee;
(iii) the Trustee receives an optmon of counsel acceptable to the Trustee that a
perfected first security interest under the Uniform Commercial Code is created in, or book entry
procedures prescribed at 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. are followed with
respect to, the Collateral Securities for the benefit of the Trustee;
(iv) the repurchase agreement has a term of 30 days or less, and the Trustee or the
Agent will value the collateral securities no less frequently than weekly and will liquidate the
collateral securities if any deficiency in the required collateral percentage is not restored within
two Business Days of such valuation; and
(v) the fair market value of the Collateral Securities in relation to the amount of the
repurchase obligation, including principal and interest, is equal to at least 104%, provided that it
shall be 105% if the Collateral Securities are FNMAs or FHLMCs;
(i) investment agreements with a bank, insurance company or other provider (including the
Trustee or any affiliate of the Trustee) that has an unsecured, uninsured and unguaranteed obligation (or
claims-paying ability) rated “A3” or better by Moody’s and “A-” or better by Standard & Poor’s at the time
of purchase, or is a lead bank of a parent bank holding company with an uninsured, unsecured and
unguaranteed obligation meeting such rating requirements, provided that:
(i) interest is paid at least semiannually at a fixed rate during the entire term of the
agreement, consistent with bond payment dates;
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(ii) money invested thereunder may be withdrawn without any penalty, premium or
charge upon not more than one day’s notice (provided such notice may be amended or canceled at
any time prior to the withdrawal date);
(iii) the agreement is not subordinated to any other obligations of such bank,
insurance company or other provider;
(iv) the same guaranteed interest rate will be paid on any future deposits made to
restore the reserve to its required amount; and
(v) the Trustee receives an opinion of counsel that such agreement is an enforceable
obligation of such banks, insurance company or other provider;
(;) corporate notes or bonds rated, at the time of purchase, “A” or better by Moody’s and “A”
or better by Standard & Poor’s;
(k) such other investments as may be permitted under State and federal law, provided that
such investments shall be made only for the purpose of preventing any Bonds from becoming “arbitrage
bonds” under Section 148 of the Code, and provided further that prior to such investment, the Trustee or
University Representative, as the case may be, shall have obtained the written opinion of Bond Counsel
that such investment will not affect the exclusion of interest on the Bonds from gross income for federal
income tax purposes.
Investments or deposits in certificates of deposit or in investment contracts shall not be made without complying
with Treasury Regulations § 1.148-5(d)(6) (ii) and (iii), respectively, or with any successor provisions thereto or
other similar applicable provisions. In determining whether the rating assigned by a Rating Service to an investment
complies with the rating categories provided in this definition of Eligible Investments, the rating category shall be
determined at the time of investment without regard to any numerical or plus or minus modifier, unless otherwise
expressly provided above.
“Escrow Fund” means the Escrow Fund created under the Trust Agreement and held by the Trustee.
“Event of Default” means an Event of Default as defined in the applicable Bond Document.
“Executive” means the Chairman, Vice Chairman, Secretary or Assistant Secretary of the Commission.
“Fixed Interest Rate” means the fixed nonfloating annual interest rate on the Bonds established in
accordance with the Trust Agreement.
“Fixed Rate Period” means, as to the Bonds, the Fixed Rate Period as provided for in the Trust
Agreement.
“Guaranty Agreement” means the Guaranty Agreement, dated as of even date with the Trust Agreement,
between the University and the Trustee, as amended or supplemented from time to time.
“Holder” or “Holder of a Bond” means the Person in whose name a Bond is registered on the Register.
“Improvement Fund” means the Improvement Fund created under the Trust Agreement.
“Interest Adjustment Date” means (i) during any Weekly Rate Period, (a) Wednesday of each calendar
week effective Thursday through the Wednesday of the next calendar week or (b) any other date on which an
adjustment of the interest rate on the Bonds is required, in the judgment of the Remarketing Agent, in order to
permit the Remarketing Agent to remarket the Bonds at par and (ii) in connection with any Other Rate Period, the
twelfth Business Day prior to the beginning of the Computation Period.
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“Interest Payment Date” means, (i) as to the Bonds during a Weekly Rate Period or Other Rate Period,
the ftrst Business Day of each month commencing April 3, 2006, and (ii) as to the Bonds during a Fixed Rate
Period, each February 1 and August 1, or the next succeeding Business Day if such day is not a Business Day.
“Interest Rate Period” means either the Weekly Rate Period, Other Rate Period or Fixed Rate Period.
“Issuance Date” means the date of initial delivery of the Bonds by the Commission to the Original
Purchaser in exchange for the purchase price of the Bonds.
“Issuance Expenses Fund” means the Issuance Expenses Fund created under the Trust Agreement.
“Lease” means the Lease, dated as of even date with the Trust Agreement, between the Commission, as
lessor, and the University, as lessee, as amended or supplemented from time to time.
“Letter of Credit” means the irrevocable direct-pay letter of credit issued by the Bank and delivered to the
Trustee on the date of delivery of the Bonds substantially in the form attached to the Reimbursement Agreement, or
any Alternate Letter of Credit.
“Letter of Credit Account” means the Letter of Credit Account created within the Bond Fund pursuant to
the Trust Agreement.
“LOC Draw Account” means the LaC Draw Account created under the Trust Agreement.
“Maximum Rate” or “Maximum Interest Rate” means, prior to the Conversion Date 10% per year and
upon and after the Conversion Date, the Fixed Interest Rate.
“1997 Bond Account” means the 1997 Bond Account created within the Escrow Fund pursuant to Section
5.01 of the Trust Agreement.
“1997 Bonds” means the State of Ohio Higher Educational Facility Variable Rate Demand Revenue
Bonds (Pooled Financing 1997 Program).
“1997 Lease” means the Lease dated as of June I, 1997 between the Commission and the University, as
amended, relating to the issuance of the 1997 Bonds.
“1997 Project” means the “Project,” as deftned in the 1997 Lease, being the portion of the Project
ftnanced with the 1997 Bonds, generally consisting of (i) the renovation and remodeling of Spalt Hall and the
International Center, (ii) the renovation and remodeling of President and West Dormitories, (iii) the construction of
the New Dormitory, and (iv) the renovation of the heating plant including new boilers, all together with the
necessary appurtenances thereto.
“1997 Trust Agreement” means the Trust Indenture dated as of June 1, 1997 between the Commission
and the Trustee, as trustee (the “1997 Trustee”).
“Original Purchaser” means, as to the Bonds, B.C. Ziegler and Company.
“Other Interest Rate” means the interest rate on the Bonds that is not a Weekly Variable Rate or a Fixed
Rate established in accordance with the Trust Agreement.
“Other Rate Period” means, as to the Bonds, any interest rate period other than a Weekly Rate Period or a
Fixed Rate Period, as provided for in the Trust Agreement.
“Outstanding Bonds,” “Bonds outstanding” or “outstanding” as applied to Bonds means, as of the
applicable date, all Bonds that have been authenticated and delivered, or are being delivered, by the Trustee under
the Trust Agreement, except:
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(a) Bonds cancelled upon surrender, exchange or transfer, or cancelled because of payment
or redemption on or prior to that date;
(b) Bonds, or the portion thereof, for the payment, redemption or purchase for cancellation of
which sufficient money shall have been deposited and credited with the Trustee or any paying agents on or
prior to that date for that purpose (whether upon or prior to the maturity or redemption date of those
Bonds); provided that, if any of those Bonds are to be redeemed prior to their maturity, notice of that
redemption shall have been given or arrangements satisfactory to the Trustee shall have been made for
giving notice of that redemption, or waiver by the affected Holders of that notice satisfactory in form to the
Trustee shall have been filed with the Trustee;
(c) Bonds, or the portion thereof, that are deemed to have been paid and discharged or
caused to have been paid and discharged pursuant to the provisions of the Trust Agreement; and
(d)
Agreement.
Bonds in lieu of which others have been authenticated under Section 3.02 of the Trust
“Permitted Encumbrances” means, as to any Lease and as of any particular time,
(a) the Base Lease, the Lease and any sublease of the Project authorized by the Lease;
(b) liens for ad valorem taxes, governmental charges and special assessments not then
delinquent, or if then delinquent, being contested in accordance with the Lease;
(c) utility, access and other easements and rights-of-way, mineral rights, restrictions and
exceptions that an architect certifies will not interfere with or impair the operations being or to be
conducted on the Project (or if no operations are being conducted thereon, the operations for which the
Project was designed or last modified);
(d) security interests, mortgages, easements, restrictions and other encumbrances existing as
of the date of delivery of the Base Lease;
(e) purchase money mortgages, purchase money security interests and other liens or interests
to the extent permitted by the Lease or the Reimbursement Agreement;
(f) minor defects, irregularities, encumbrances, easements, rights-of-way and clouds on title
of a nature that exist nonnally with respect to properties of a character similar to that of the Project and
that, in the opinion of an architect or Independent Counsel, in the aggregate do not affect materially and
adversely the value or marketable title of the Project or impair materially the property affected thereby for
the purpose for which it was acquired or is held;
(g) liens resulting from governmental regulations on the use of the Project; and
(h) the 1997 Lease and the 2000 Lease, including Base Leases identified in such leases and
any other lien, mortgage, security interest or other encumbrance identified in Exhibit F to the Lease or
otherwise permitted by the Lease and the Trust Agreement.
“Person” or words importing persons mean firms, associations, partnerships (including without limitation,
general and limited partnerships), limited liability companies, joint ventures, societies, estates, trusts, corporations,
public or governmental bodies, other legal entities and natural persons.
“Pledged Bonds” means Pledged Bonds as defined in the Trust Agreement.
“Principal Maturity Date” means February 1,2029.
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“Project” means collectively, the 1997 Project, the 2000 Project and the 2006 Project.
“Project Facilities” means, as to any Lease, the educational facilities generally identified in Exhibit A of
that Lease, including any additions, improvements, modifications, substitutions and renewals thereof, and further
includes any other facilities designated in writing by the University to be part of the Project Facilities as are
permitted by the Act and the Lease.
“Project Site” means the real estate described in Exhibit B of the Lease, together with any additions
thereto and less any removals therefrom, in the manner and to the extent provided in the Lease and the Trust
Agreement.
“Purchase Fund” means the Purchase Fund created under the Trust Agreement and held by the Trustee.
“Rating Service” means Moody’s Investors Service (“Moody’s”) or Standard & Poor’s Ratings Services
(“Standard & Poor’s” or “S&P”) or Fitch Ratings (“Fitch”), each of New York, New York, or their successors, or if
either shall be dissolved or no longer assigning credit ratings to long-term debt, then any other nationally recognized
entity assigning credit ratings to long-term debt designated by an Executive.
“Rebate Fund” means the Rebate Fund created under the Trust Agreement.
“Record Date” or “Regular Record Date” means(i) with respect to any Bond bearing interest at an Other
Rate, the close of business on the seventh day immediately preceding an Interest Payment Date applicable to that
Bond, (ii) with respect to any Bond bearing interest at the Weekly Interest Rate, the Business Day immediately
preceding an Interest Payment Date applicable to that Bond, and (iii) with respect to any Bond bearing interest at a
Fixed Interest Rate, every July 15 and January 15.
“Redemption Premium Account” means the Redemption Premium Account created under the Trust
Agreement.
“Register” means the books kept and maintained by the Registrar for the registration and transfer of Bonds
pursuant to the Trust Agreement.
“Registrar” means the Trustee, until a successor Registrar shall have become such pursuant to applicable
provisions of the Trust Agreement; each Registrar shall be a transfer agent registered in accordance with
Section 17A(c) of the Securities Exchange Act of 1934, as amended.
“Reimbursement Agreement” means the Reimbursement Agreement, dated as of the same date as this
Trust Agreement, between the Bank and the University, as amended or supplemented from time to time.
“Reimbursement Agreement” shall also mean the reimbursement or similar agreement relating to an Alternate Letter
of Credit, entered into between the University and the provider of such Alternate Letter of Credit.
“Remarketing Agent” means initially B.c. Ziegler and Company, or any successor Remarketing Agent
meeting the qualifications set forth in the Trust Agreement and designated from time to time to act as Remarketing
Agent pursuant to the Trust Agreement.
“Remarketing Agreement” means the Remarketing Agreement, dated as of even date with the Trust
Agreement, between the University and the Remarketing Agent, as amended or supplemented from time to time.
“Rental Payment Date” means the Business Day next preceding an Interest Payment Date.
“Rental Payments” means the amounts required to be paid by the University to the Trustee pursuant to the
Lease and the Assignment.
“Revenues” means (a) Rental Payments, (b) amounts held in, or for the credit of, the Special Funds, (c) all
other rentals, revenue, income, charges and money received or to be received by the Commission, or the Trustee for
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the account of the Commission, from the lease, sale or other disposition of the Project, and (d) all income and profit
from the investment of the Rental Payments and the Special Funds and such other money. The term “Revenues”
does not include any money or investments in the Rebate Fund or the Issuance Expenses Fund.
“Special Funds” means, collectively, the Improvement Fund, the Bond Fund, and any other funds or
accounts permitted by, established under or identified in the Trust Agreement or the Bond Legislation, except the
Rebate Fund and the Issuance Expenses Fund.
“Special Record Date” means, with respect to any Bond, the date established by the Trustee in connection
with the payment of overdue interest on that Bond pursuant to the Trust Agreement.
“State” means the State of Ohio.
“Stated Amount” means the Stated Amount of the Letter of Credit as provided in the Reimbursement
Agreement, which may be reduced and reinstated from time to time as provided in the Reimbursement Agreement,
or by the terms of the Letter of Credit.
“Stated Expiration Date” means the expiration date stated in the Letter of Credit, initially February 16,
2011.
“Supplemental Credit Facility” means a credit facility, lease or arrangement in addition to the Letter of
Credit, including, without limitation, a bond insurance policy, collateral arrangement, surety bond, standby
placement lease or similar arrangement the purpose of which is to enhance the credit of the Bonds in order to obtain
or maintain a rating on the Bonds.
“Tax Agreement” means the Tax Certificate and Agreement, dated the date of delivery and issuance of
the Bonds, by and between the University, the Trustee and the Commission, as amended or supplemented from time
to time.
“Tender Agent” mean, initially u.s. Bank National Association, and any successor Tender Agent as
determined or designated under or pursuant to the Trust Agreement.
“Tender Date” means the first day of any Computation Period during an Other Rate Period.
“Termination Date” means the earlier of (a) the effective date of cancellation or termination of the Lease
by the University pursuant to the provisions of the Lease or (b) the termination of the Lease by the Commission,
subject to reinstatement, both pursuant to the provisions of the Lease.
“Trust Agreement” means the Trust Agreement dated as of February 1, 2006, securing the Bonds,
between the Commission and the Trustee, as amended or supplemented from time to time.
“Trustee” means the Trustee under the Trust Agreement, originally U.S. Bank National Association.
“2000 Bond Account” means the 2000 Bond Account created with the Escrow Fund pursuant to Section
5.01 of the Trust Agreement.
“2000 Bonds” means the State of Ohio Higher Educational Facility Variable Rate Demand Revenue
Bonds (Pooled Financing 2000 Program) Series C.
“2000 Lease” means the Lease dated as of June 1, 2000 between the Commission and the University,
relating to the issuance of the 2000 Bonds.
“2000 Project” means the “Project,” as defined in the 2000 Lease, being the portion of the Project
financed with the proceeds of the 2000 Bonds, generally consisting of acquiring and installing telephone switch
equipment, data and telephone network, computers and related applications, equipment and facilities, mail
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processor, residence hall, laboratory and classroom furniture and equipment, tractor, passenger van, records archive
project, upgrading of lighting systems and transformer, and renovation and improvements of conference room,
residence halls (including air conditioning), roofs of certain buildings, drives, parking, walkways and landscape and
utility systems.
“2000 Trust Agreement” means the Trust Indenture dated as of June I, 2000 between the Commission
and the Trustee, as trustee (the “2000 Trustee”).
“2006 Project” means the Project Facilities and the Project Site, including, as applicable, the interests of
the Commission in and to the Project, and constituting a “project” as defined by the Act.
“Unassigned Rights” means the rights of the Commission under the Lease that are not assigned to the
Trustee, consisting of the rights of the Commission (i) to receive Additional Payments, (ii) to be held harmless and
to be indemnified, (iii) to be reimbursed for reasonable attorney’s fees and expenses, to the extent permitted by law,
(iv) to give or withhold consent to amendments of the Lease and (v) to enforce those rights.
“Underwriter” means B.c. Ziegler and Company.
“University” means Antioch University, an Ohio nonprofit corporation and an educational institution, as
defined in the Act, and its lawful successors and assigns, including without limitation any surviving, resulting or
transferee corporation or entity, as permitted under the Lease.
“University Account” means the University Account created within the Bond Fund pursuant to the Trust
Agreement.
“Weekly Rate Period” means, as to the Bonds, the period from and including the Issuance Date to the
date preceding the first day of an Other Rate Period or the Fixed Rate Period, whichever comes first, and any other
Weekly Rate Period provided for in the Trust Agreement.
“Weekly Variable Rate” means a floating weekly interest rate on the Bonds established and adjusted in
accordance with the Trust Agreement.
THE LETTER OF CREDIT
Thefollowing describes certain provisions ofthe Letter ofCredit. Reference is made to the Letter ofCredit
for detailed provisions thereof See also Appendix B regarding the Bank.
The Letter of Credit will be held by the Trustee. The Letter of Credit is an irrevocable obligation of the
Bank to pay the Trustee up to the total of the following amounts (the “Stated Amount”), upon the terms and
conditions set forth in the Letter of Credit: (a) the outstanding principal amount of the Bonds (i) to enable the
Trustee to pay the principal amount of the Bonds when due at maturity, upon redemption or acceleration and (ii) to
enable the Tender Agent to pay the principal portion of the purchase price of Bonds tendered to it and not
remarketed, plus (b) an amount equal to interest to accrue at 10% per year (the “Maximum Rate”) on the outstanding
Bonds for 45 days (i) to enable the Trustee to pay the interest on the Bonds when due and (ii) to enable the Tender
Agent to pay the portion, if any, of the purchase price of Bonds tendered to it and not remarketed equal to the
accrued interest on such Bonds. THE LETTER OF CREDIT DOES NOT SECURE THE PAYMENT OF ANY
REDEMPTION PREMIUM ON THE BONDS.
Pursuant to the Trust Agreement, the Trustee is required to draw upon the Letter of Credit in the following
circumstances:
(a) to make timely payment of the principal of and interest on the Bonds;
(b) to make timely payment of the redemption price of such Bonds called for redemption;
and
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(c) to make timely payment of the purchase price of such Bonds required to be purchased by
the Tender Agent, as the result of a mandatory purchase or an optional tender, to the extent remarketing
proceeds are not available for such purpose, pursuant to the provisions of the Trust Agreement.
The Letter of Credit will expire upon the earliest to occur of the following (the “Termination Date”): (i) the
honoring by the Bank of the final draw thereunder; (ii) receipt by the Bank of certification by the Trustee that no
Bonds remain outstanding under the Trust Agreement; (iii) receipt by the Bank of notice from the Trustee of the
acceptance and receipt by the Trustee of an effective Alternate Letter of Credit meeting the requirements of the
Indenture; (iv) the 15th day succeeding a Conversion Date if the University has elected not to otherwise provide for a
Letter of Credit subsequent to conversion to a Fixed Interest Rate and the Bank has consented to such conversion; or
(v) the close of business on the Stated Expiration Date.
The Stated Amount of the Letter of Credit and the amounts available to be drawn to pay principal of the
Bonds or to pay the principal portion of the purchase price for any Bonds will be reduced automatically without
notice by amounts drawn under the Letter of Credit for the payment of principal when due on the Bonds or to pay
the principal portion of the purchase price of any Bonds. The Stated Amount of the Letter of Credit will be
reinstated with respect to a drawing for the principal portion of the purchase price of Bonds upon the receipt by the
Bank from the Trustee of remarketing proceeds (other than from draws on the Letter of Credit) deposited in the
Bond Fund pursuant to a remarketing of the Bonds for the sole purpose of reimbursing the Bank or upon
certification that the Trustee or Tender Agent is holding said amount of money or Pledged Bonds are delivered to
the Trustee for the benefit of the Bank. The Stated Amount and the amounts available to be drawn for the payment
of interest will be reduced automatically, without notice, by the amount of any such payment of interest. The
amount reduced will be reinstated in an amount sufficient to provide interest coverage equal to 110 days at the
Maximum Rate for the then outstanding principal amount of the Bonds, unless the Bank sends written notice to the
Trustee stating that the Stated Amount will not be reinstated in respect of such interest.
Alternate Letter of Credit
The Trust Agreement provides that, except as prohibited, restricted, limited or conditioned by the
provisions of the Reimbursement Agreement, the University at its option may cause to be delivered to the Trustee,
as a replacement for the initial Letter of Credit, an Alternate Letter of Credit.
The University may, at any time, but in no event later than 45 days prior to the Interest Payment Date
preceding the date on which the Letter of Credit by its terms will expire, at its option (i) provide for an extension of
the expiration date of the Letter of Credit or (ii) provide for the delivery to the Trustee of an Alternate Letter of
Credit, to be effective on an Interest Payment Date, which has terms which are the same in all materials respects
(except as to expiration date) as the existing Letter of Credit. The extension of a Letter of Credit or an Alternate
Letter of Credit must have an expiration date of not earlier than 364 days from the current expiration date of the
Letter of Credit then in effect (or maturity) and expire at least 15 days after an Interest Payment Date. As a
condition to the issuance of an Alternate Letter of Credit, the Trustee must receive an opinion of counsel to the
issuer of the Alternate Letter of Credit that the Alternate Letter of Credit is legal, valid and binding, an opinion of
nationally recognized bond counsel stating that the issuance of the Alternate Letter of Credit in accordance with the
provisions of the Trust Agreement will not adversely affect the exclusion from gross income of the interest on the
Bonds for federal income tax purposes and written confirmation from a rating service, if the Bonds are then rated,
that the proposed substitution of the Alternate Letter of Credit will not reduce or cause the withdrawal of the then
current rating on the Bonds.
The Bank does not control, either directly or indirectly through one or more intermediaries, the University.
“Control” for this purpose has the meaning given to such term in Section 2(a)(9) of the Investment Company Act of
1940, as amended and interpreted by the Securities and Exchange Commission.
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THE UNIVERSITY IS NOT OBLIGATED TO MAINTAIN THE LETTER OF CREDIT OR AN
ALTERNATE LETTER OF CREDIT AFTER FEBRUARY 16,2011. ALL BONDS, HOWEVER, WILL BE
SUBJECT TO MANDATORY PURCHASE ON THE INTEREST PAYMENT DATE NEXT PRECEDING THE
EXPlRA nON DATE OF THE LETTER OF CREDIT (EXCEPT AFTER A CONVERSION TO A FIXED
INTEREST RATE).
THE REIMBURSEMENT AGREEMENT
The following describes certain provisions of the Reimbursement Agreement between the University and
the Bank pursuant to which the Letter of Credit is issued. Reference is made to the Reimbursement Agreement for
the detailed provisions thereof
Issuance of Letter of Credit and Reimbursement Agreement
Under the Reimbursement Agreement, the Bank will agree to issue the Letter of Credit to the Trustee
concurrently with the issuance and delivery of the Bonds. The issuance of the Letter of Credit is subject to the
satisfaction of certain conditions set forth in the Reimbursement Agreement, including the receipt by the Bank of
various certifications or documents from the University, the Commission and the Trustee and the delivery of certain
legal documents.
Pursuant to the terms of the Reimbursement Agreement, the University will agree to pay to the Bank, on or
before the date of any drawing under the Letter of Credit, all amounts that are drawn under the Letter of Credit with
respect to the Bonds, together with interest, if any, on such amounts at the rate specified in the Reimbursement
Agreement.
Fees and Expenses
Under the Reimbursement Agreement, the University will agree to pay to the Bank an issuance fee, certain
annual fees that are fixed or based on the Stated Amount, including any amounts that are reinstatable on such date,
certain draw fees, fees upon transfer of the Letter of Credit, and charges and expenses in connection the
Reimbursement Agreement.
Certain Covenants of the University
The University, subject to specific provisions in the Reimbursement Agreement, will covenant in the
Reimbursement Agreement, among other things, to (a) preserve and maintain its existence as an Ohio nonprofit
corporation duly qualified to transact business in the State of Ohio, (b) comply in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any government authority, (c) at all reasonable
times, permit the Bank or any agents or representatives thereof to examine and make copies of and abstracts from
the financial books and records and to visit the properties of the University, (d) keep proper books or record and
account, in which full and correct entries shall be made, (e) (i) furnish to the Bank notice of an event of default or
potential event of default under the Reimbursement Agreement, (ii) furnish to the Bank financial statements, (t)
maintain all fixed assets and equipment in good working order and condition, (g) give the Bank prompt written
notice whenever certain litigation or proceedings are brought against the University and (h) the University shall keep
the Bank informed and provide pertinent information regarding the progress of the University’s current and future
capital projects. In addition, the Reimbursement Agreement provides that the University will covenant not to (a)
enter into or consent to any amendment of the transaction documents without the prior written consent of the Bank,
(b) request a disbursement from the project fund if an event of default shall have occurred and be continuing, (c)
suffer or permit its fixed charge coverage ration to be less than a prescribed amount, (d) suffer of permit its total
bank debt to be greater than a prescribed amount or (e) suffer or permit liens or other encumbrances upon the
property referred to as the University’s McGregor Campus, other than those in favor of the Bank or any permitted
encumbrances. No assurance can be given as to the ability of the University to comply with such covenants.
Failure to so comply could, at the option of the Bank, result in acceleration of the Bonds. See “THE TRUST
AGREEMENT – Acceleration”.
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Optional Redemption of Bonds
The University will agree in the Reimbursement Agreement to cause the Bonds to be redeemed annually at
the times and in the amounts set forth in its Reimbursement Agreement. See “THE BONDS – Optional
Redemption”.
Events of Default and Remedies
The Reimbursement Agreement specifies numerous Events of Default, including the following:
(a) the University shall fail to pay when due the commitment fee or the amount of any draw
under the Letter of Credit and such amount shall remain unpaid for five days after the University’s receipt
of written notice from Bank; or
(b) the University shall fail to pay when due any other amount, cost, expense or tax specified
in the Reimbursement Agreement, and such amount shall remain unpaid for five days after the University’s
receipt of written notice from the Bank; or
(c) any representation or warranty made by the University pursuant to the Reimbursement
Agreement or in any certificate, financial or other statement furnished by the University pursuant to the
Reimbursement Agreement shall prove to have been incorrect in any material respect when made and
would result in a material adverse change in the financial position of the University, or the University shall
fail to perform or observe any term, covenant or agreement contained in the Reimbursement Agreement
and such adverse change or failure to perform shall remain in effect for a period of thirty days after the
University’s receipt of written notice from the Bank; or
(d) the University shall fail to perform or observe any other term, covenant or agreement
contained in the Reimbursement Agreement, or in the Letter of Credit or the Bond Pledge Agreement
(collectively, the “Letter of Credit Documents”) and any such failure which can be remedied shall remain
unremedied for 30 days after written notice thereof shall have been given to the University by the Bank;
provided, however, such cure period may be extended for a reasonable period of time (up to 60 additional
days) if the University has commenced and is diligently pursuing a cure; or
(e) final uninsured judgment for the payment of money shall be rendered against the
University, in excess of a specified amount, and such judgment shall remain unpaid or undischarged for a
period of ninety consecutive days during which execution shall not be effectively stayed;
(f) the University shall: (i) admit in writing its inability to pay its debts generally as they
become due; (ii) have an order for relief entered in any case commenced by it under the federal bankruptcy
laws, as now or hereafter in effect; (iii) commence a proceeding under any federal or state bankruptcy,
insolvency, reorganization or similar law, or have such a proceeding commenced against it and either have
an order of insolvency or reorganization entered against it or have the proceeding remain undismissed and
unstayed for ninety days; (iv) make an assignment for the benefit of creditors; or (v) have a receiver or
trustee appointed for it or for the whole or any substantial part of its property. The declaration of an event
of default under this subsection and the exercise of remedies upon any such declaration shall be subject to
any applicable limitations of federal bankruptcy law affecting or precluding such declaration of exercise
during the pendency of or immediately following any bankruptcy, liquidation, or reorganization
proceedings;
(g) the occurrence of an “event of default” or an “event of default” under the Bonds, the Trust
Agreement, the Lease, the Bond Purchase Agreement, the Remarketing Agreement or the Letter of Credit
Documents, subject to any applicable cure or grace periods contained therein;
(h) the occurrence of an “event of default” by the University under any other document or
instrument for funded indebtedness which has not been cured as provided for therein.
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Upon the occurrence and continuation of any Event of Default described above, the Bank may, in its sole
discretion, but shall not be obligated to (i) by notice to the University and the Trustee, declare a default under the
Reimbursement Agreement and direct the Trustee to accelerate payment of the Bonds and (ii) pursue any other
remedy permitted to the Bank under the Reimbursement Agreement, the Letter of Credit Documents or the Bonds,
the Trust Agreement, the Lease, the Bond Purchase Agreement, the Remarketing Agreement or otherwise.
Upon the occurrence of an Event of Default under any Reimbursement Agreement, the Bank may
implement any remedies available to it under the Bond Documents and the Reimbursement Agreement,
including without limitation directing the acceleration of the Bonds. Thus, if there is an Event of Default
under the Reimbursement Agreement, the Bank may cause the Bonds to be paid prior to maturity.
The University’s obligations under the Reimbursement Agreement are not secured by any security
agreements or mortgages on property of the University. However, any mortgage or security agreements which may
in the future secure the University’s obligations under the Reimbursement Agreement will be for the sole benefit and
security of the Bank and ,will not be for the benefit or security of the Trustee or the Holders.
Amendment
The Reimbursement Agreement may be amended by the University and the Bank without the consent of
the Commission or the Trustee.
THE LEASE
The following describes certain provisions of the Lease. Reference is made to the Lease for the detailed
provisions thereof
Term of Lease
The Commission will lease the Project from the University under the Base Lease. The Commission, in
turn, will lease the Project back to the University under the Lease. The term of the Lease and Base Lease will begin
on the Issuance Date and terminate upon the payment or provision for payment of the Bonds. The Lease may be
terminated earlier in connection with the exercise by the Trustee of remedies upon the occurrence of an Event of
Default. See “THE LEASE – Events of Default”.
Commencement and Completion of the Project
The University agrees to undertake and to continue with due diligence the renovation, remodeling,
equipping and improvement of the Project Facilities on the Project Site and to complete the Project as promptly as is
feasible in all material respects in accordance with all legal requirements. The University has agreed to supply any
funds required for completion of the Project that are not available from the proceeds of the Bonds. Any such
payments by the University will not affect or serve to reduce the Rental Payments to be made by it under the Lease.
Rentals
The University is obligated in the Lease to pay Rental Payments and to pay other expenses and
disbursements of the Trustee and the Commission, defined in the Lease as “Additional Payments.”
Rental Payments are payable to the Trustee for the account of the Commission on or before each Rental
Payment Date during the term of the Lease in an amount equal to the amount that, when added to the balance then in
the Bond Fund and available therefor, will be sufficient to pay the debt service on the Bonds on the next Interest
Payment Date.
In any event, the amount of the Rental Payments made under the Lease must be sufficient to pay the total
amount of the debt service on the Bonds as and when due, whether at stated maturity, by redemption or upon
acceleration. The Lease serves the purpose of securing the debt service on the Bonds, while satisfying the
-28-
requirements of the Act pursuant to which Bonds are issued. The University shall be entitled to a credit against the
Rental Payments next required to be paid (and such Rental Payment shall be deemed to have been made) for deposit
in the Bond Fund with respect to the Bonds on any date equal to the amount drawn and received by the Trustee
under the Letter of Credit for the payment of the corresponding payment of Bond Service Charges to the extent that
the balance then in the Bond Fund and available for that purpose is in excess of the amount required (l) for payment
of Bonds theretofore matured or called for redemption, (2) for payment of past due interest in all cases where such
Bonds have not been presented for payment, and (3) to be deposited in the Bond Fund for use for other than
payment of the principal of, premium, if any, and interest on the Bonds (whether at maturity or by redemption) on
the next succeeding Interest Payment Date.
Absolute Obligation to Pay Rental Payments
The obligation of the University to make Rental Payments and Additional Payments pursuant to the Lease
is an absolute and unconditional general contractual obligation of the University and will survive any termination of
the Lease until such time as all of the Bonds and interest and any premium thereon and any Additional Payments
have been paid in full or provision therefor is made. The University agrees to pay such obligations from its general
funds or any other money legally available to it in the manner and at the time provided in the Lease. The University
will make Rental Payments and Additional Payments without abatement, diminution or deduction regardless of any
cause or circumstances whatsoever, including but not limited to, any defense, set-off, recoupment or counterclaims
that the University may have or assert against the State, the Commission, the Trustee, the Bank or the Remarketing
Agent or any other person, or any change in the tax or other laws or administrative rulings of or administrative
actions by or under authority of the United States of America or of the State, or any damage to, destruction of or
exercise of eminent domain with regard to the Project.
Prepayment Under the Lease
The University is given options in the Lease to prepay the amounts payable thereunder. Such prepayment
options correspond to the optional redemption provisions of the Bonds. The University is obligated under the Lease
to prepay the amounts payable thereunder in full upon the occurrence of certain events. See “THE BONDS
Redemption Provisions”.
Maintenance of Tuition, Fees and Charges
So long as any Bonds are outstanding the University covenants and agrees to operate all its educational
facilities, including the Project, on a revenue-producing basis, provided that the University may provide financial aid
or assistance to its students, whether in the form of scholarships, free or reduced tuition, loans or otherwise. The
University also covenants during such period to fix, revise, charge and collect such reasonable tuition fees, other
student fees, rates, other fees, rentals and charges for the use and occupancy of such educational facilities, including
the Project or any part thereof, in amounts so that the University will receive gross cash receipts in each fiscal year
that, together with other money legally available to it, are sufficient (as determined in accordance with generally
accepted accounting principles then in effect and applicable to nonprofit educational institutions) to pay the
following costs (without priority of anyone clause over another): (i) currently all of the University’s expenses
during that fiscal year for its operation, including those expenses incurred in carrying out its educational purposes,
and for the operation, maintenance and repair of all its educational facilities, including the Project and any other
facilities operated by the University; (ii) all Rental Payments and Additional Payments due in such fiscal year under
the Lease; (iii) all other obligations imposed by the Bond Documents and the Reimbursement Agreement upon the
University payable during that fiscal year; and (iv) all indebtedness and other obligations of the University due in
that fiscal year, as the same become due and payable.
Maintenance and Insurance
The University agrees that during the term of the Lease it will keep and maintain the Project including all
appurtenances thereto and any personal property necessary to the operation thereof, in good repair and good
operating condition at its own cost. The University will obtain and maintain within the Project all movable
furnishings, equipment and other personal property (in addition to that purchased with the proceeds of the Bonds) as
are essential for the faithful and efficient administration, operation, and maintenance of the Project. The University
-29-
has no obligation, however, to repair, renew or replace any inadequate, obsolete, worn out, unsuitable, undesirable
or unnecessary portions of the Project Facilities unless provision is made therefor in the Lease. The University may
from time to time make modifications to the Project (including removal of portions of the Project without
substitution) so long as it is not in default under the Lease and such modifications do not impair the character of the
Project as furthering the purposes of the Act.
The University will pay, as they become due, all lawful taxes and assessments and governmental charges of
any kind that may be levied or assessed against the Project. The University will not create or permit to remain with
respect to the Project any lien or encumbrance, except for Permitted Encumbrances.
So long as any Bonds are outstanding, the University will obtain and at all times maintain in force at its
expense insurance coverage with respect to the educational facilities including the Project, and other properties of
the University and the operation and maintenance thereof of such type and in such amounts as is normally carried on
educational facilities and other properties of similar type and size, and against such risks as are customarily insured
against in connection with educational facilities and other properties of similar type and size. The University will
carry and maintain (or cause to be carried and maintained), and will pay timely (or cause the timely payment of) the
premiums for, at least the following types of insurance coverage:
(a) property insurance in an amount equal to the then replacement value of the Project
Facilities excluding such values as are not insured by standard fire insurance policy, such as excavations,
underground foundations, piping, underground utilities, footings below ground level and architects’ fees
related to repair or restoration resulting from damage covered by such insurance, but in no event shall the
amount of such insurance be less than that required to avoid coinsurance, insuring the Project Facilities
against loss or damage by fire, lightning, such perils as are at any time covered by the uniform standard
extended coverage insurance endorsements, vandalism, malicious mischief and the “all risks” form
approved for issuance in the State and such other risks as are ordinarily insured against by educational
institutions carrying on operations similar to that of the University (including builder’s risk insurance
during the period of construction of the Project Facilities) and containing loss deductible provisions as are
customarily maintained by educational institutions conducting operations similar to the University;
(b) comprehensive general liability insurance, including landlord’s liability, with reference to
the Project, and motor vehicle insurance, in such amounts and with such deductible provisions as are
customarily maintained by educational institutions conducting operations similar to the University;
(c)
State; and
workers’ compensation and employer’s liability coverage as required by the laws of the
(d) fidelity bonds on all officers and employees of the University who have access to or
custody of revenues, receipts or income from the Project or any funds of the University in amounts
customarily carried by like organizations.
The Lease provides that, under certain circumstances, the insurance requirements may be funded by self
insurance programs of the University, or by umbrella policies if such policies in the aggregate provide the same
coverage as the insurance coverage enumerated above.
Annual Financial Statements
The University agrees to have an annual audit of its financial statements made by an independent certified
public accountant and to provide that audit report to the Commission, the Trustee and the Underwriter within 150
days after the end of each fiscal year.
Merger, Consolidation or Transfer of Assets
During the term of the Lease the University is to maintain its existence as an educational institution not for
profit and will not dissolve or otherwise dispose of all or a substantial part of its assets or consolidate with or merge
-30-
into another Person or pennit one or more other Persons to consolidate with or merge into it, unless the corporation
surviving such merger (i) is a State college or university or holds a certificate of authorization from the Ohio Board
of Regents pursuant to Section 1713.02 of the Ohio Revised Code, (ii) is an organization described in
Section 501(c)(3) of the Code and is exempt from federal income taxation under Section 501(a) of the Code or is a
governmental unit, (iii) has an aggregate unrestricted net asset balance equal to at least 90% of that of the University
prior to such transaction, (iv) expressly assumes all agreements of the University under the Bond Documents and the
Reimbursement Agreement, and (v) meets certain other conditions described in the Lease.
The University will be deemed to have disposed of a substantial part of its assets if during any fiscal year it
disposes of 25% or more of its assets, whether or not shown as assets on the balance sheets of the University. The
sale or exchange of securities or real estate held for investment purposes in order to obtain other securities or real
estate to be held for investment purposes, however, will not be deemed to be a disposal of assets.
Indemnification of the Commission
The University will hold the Commission hannless against any loss or costs arising from any loss of or
damage to property, or any injury to or death of any person, that may be occasioned by any cause whatsoever
pertaining to the Project or the use thereof. In addition, the University will indemnify and hold harmless the
Commission against all costs, liabilities, expenses, losses or claims arising from any breach or default by the
University under the Bond Documents, the construction of the Project and any act or a failure to act by the
University, its agents, contractors, servants, employees or licensees.
The University also agrees to indemnify and save hannless the Commission against any and all costs,
liabilities, expenses, losses or claims to which the Commission may become subject in connection with the
Commission’s authorization, issuance and sale of the Bonds and any information or certification in connection
therewith.
University’s Options to Terminate Lease
The University has the option to terminate the Lease and Base Lease at any time when the Trust Agreement
has been released pursuant to its provisions and all payments thereunder have been made or provided for.
The University also has the option to terminate the Lease and Base Lease if any of the following occurs:
(a) All or a substantial part of the Project is damaged or destroyed to such extent that (i) it
cannot be reasonably restored within a period of six months to the condition thereof immediately preceding
such damage or destruction, or (ii) the University is thereby prevented from carrying on its nonnal
operation of the Project for a period of six months;
(b) Title to, or the temporary use of, all or a substantial part of the Project is taken under the
exercise of the power of eminent domain by any governmental authority, or person, firm or corporation
acting under governmental authority, to such extent that (i) the Project cannot be reasonably restored within
a period of six months to a condition comparable to its condition prior to such taking or (ii) the University
is thereby prevented from carrying on its normal operation of the Project for a period of six months;
(c) As a result of any changes in the Constitution of the State or the Constitution of the
United States of America or of legislative or administrative action (whether State or federal) or by final
decree, judgment or order of any court or administrative body (whether State or federal) entered after the
contest thereof by the Commission or the University in good faith, the Lease becomes void or
unenforceable or impossible ofperfonnance, or if unreasonable burdens or excessive liabilities are imposed
upon the Commission or the University with respect to the Project or operation thereof as described in the
Lease; or
(d) The University loses its status as a federally tax-exempt organization but only if such loss
results in the interest on the Bonds becoming included in gross income for federal income tax purposes.
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For purposes of this paragraph, the term “substantial part” when used with reference to the Project means any part of
the Project, the total cost of which (as determined by the University and approved by the Trustee) equals (i) at least
25% of the aggregate principal amount of the Bonds originally issued or (ii) an amount equal to the aggregate
principal amount of the Bonds then outstanding, whichever is less.
Upon the exercise of such option, the University is required to make arrangements satisfactory to the
Trustee for the redemption of all outstanding Bonds and will pay as the redemption price for the Bonds the
following:
(e) To the Trustee, an amount of money (or provision therefore in accordance with the Trust
Agreement) that, together with the money and investments held to the credit of the Special Funds, will be
sufficient pursuant to the provisions of the Trust Agreement to pay the principal amount of the outstanding
Bonds plus premium, if any, plus the interest accrued on the Bonds to the redemption date, and to discharge
all then outstanding Bonds; and
(f) To the Trustee or to the persons to whom Additional Payments are or will be due, an
amount of money (or provision therefor satisfactory to the Trustee and the Commission) equal to the
Additional Payments accrued and to accrue.
Pursuant to the Lease, upon the expiration of the term of the Lease, the University will purchase all
interests of the Commission in the Project for a nominal amount.
Assignment and Subleasing
The Lease may be assigned in whole or in part, and the Project may be subleased in whole or in part, by the
University without the necessity of obtaining the consent of the Commission, the Bank or the Trustee, provided that
certain conditions are met, including (i) no such assignment (other than assignments pursuant to the consolidation,
merger, sale or other transfer as described in “THE LEASE — Merger, Consolidation or Transfer of Assets”) will
relieve the University from primary liability for any of its obligations under the Lease and the University will
continue to remain primarily liable for the payment of Rental Payments and Additional Payments, (ii) any such
assignment or sublease will retain for the University such rights as will permit it to perform its obligations under the
Lease, (iii) the assignee or sublessee from the University assumes the obligations of the University to the extent of
the interest assigned or subleased, (iv) the University furnishes a copy of such assignment, sublease or grant of use
to the Commission, the Bank and the Trustee, and (v) any such assignment or sublease shall be subject to the terms
of the Lease and will not materially impair fulfillment of the purposes of the Act in providing educational facilities
or adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes.
Events of Default
The following are defined as Events of Default under the Lease.
(a) The University fails to pay any Rental Payment on or prior to the date on which such
Rental Payment is due and payable.
(b) The University fails to administer, maintain or operate the Project as educational facilities
in accordance with the Act.
(c) The University fails to observe or perform any other covenant, agreement or obligation
under the Lease, and that failure continues for a period of 60 days after written notice of the failure is given
by registered or certified mail to the University by the Commission, the Bank or the Trustee requesting that
it be remedied. The Commission, the Bank (if the Letter of Credit is in effect) and the Trustee may agree in
writing to an extension of that 60-day period prior to its expiration, provided that if the University proceeds
to take curative action that, if begun and prosecuted with due diligence, cannot be completed reasonably
within the 60-day period, that period will be increased without a written extension to any extent that will be
necessary to enable the University to complete the curative action diligently.
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(d) Certain events of dissolution, liquidation, insolvency, bankruptcy, reorganization or other
similar events with respect to the University occur.
(e) The University fails to make any payment due under a lease or lease agreement entered
into between the University and the Commission in connection with any issue of State of Ohio higher
educational facility bonds issued to finance or refinance a project at the University, provided that such
failure constitutes an event of default under such lease or lease agreement.
The provisions described in (c) above are subject to the following limitations: if by reason of any cause,
circumstance or event not reasonably within the control of the University, it is unable in whole or in part to perform
or observe its agreements under the Lease other than its obligation to make payments or to carry insurance required
thereunder, the University will not be deemed in default during the continuance of such inability.
The declaration of an Event of Default under the Lease and the exercise of remedies upon any such
declaration are subject to any applicable limitations of federal bankruptcy law affecting or precluding such
declaration or exercise during the pendency of or immediately following any bankruptcy, liquidation or
reorganization proceedings.
Remedies on Default
If any Event of Default described above happens and is continuing, anyone or more of the following
actions may be taken:
(a) The Trustee, if acceleration is declared pursuant to the Trust Agreement, will, and
otherwise the Trustee may, declare all Rental Payments, Additional Payments and other amounts payable
under the Lease to be immediately due and payable, whereupon the same will become immediately due and
payable.
(b) The Trustee may enter and take possession of the Project without terminating the Lease,
complete the Project Facilities if not then completed, sublease the Project or any part thereof for the
account of the University, receive all rents, income and other sums with respect to the Project, and hold the
University liable for the difference between the rent and other amounts payable by such subleasing and the
Rental Payments, Additional Payments and such other amounts payable by the University under the Lease.
(c) The Trustee may have access to and inspect, examine and make copies of the books and
records and any and all accounts, data and income tax and other tax returns of the University.
(d) The Trustee may exercise any and all and any combination of rights, remedies and
powers available to it under the Bond Documents to collect all amounts due or to become due from the
University under the Bond Documents or to enforce the performance of any other obligation or agreement
of the University under those instruments, including the right to appointment of a receiver for the Project.
Amendments of the Lease
The Trust Agreement provides that the Commission and the Trustee, with the consent of the Bank, may
consent to any amendment of the Lease without the prior consent of or notice to the Holders only as may be required
(i) by the provisions of the Bond Documents, (ii) for the purpose of curing any ambiguity, inconsistency or formal
defect or omission in the Bond Documents, (iii) in connection with an amendment or to effect any purpose for which
there could be an amendment of the Trust Agreement without the consent of the Holders or (iv) in connection with
any other change therein that, in the judgment of the Trustee, does not materially, adversely affect the Trustee or the
Holders. Any amendment to the Lease or the Letter of Credit that would change the amount of Rental Payments, or
time as of which they are required to be paid, may only be made with the consent of all Holders and prior written
consent of the Bank. Any other amendments to the Lease may only be made with the written consent of the Holders
of not less than a majority in aggregate principal amount of the Bonds then outstanding and prior written consent of
the Bank, and any other person whose rights or responsibilities are affected as set forth in the Trust Agreement.
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THE TRUST AGREEMENT
The following describes certain provisions of the Trust Agreement. Reference is made to the Trust
Agreement for the detailed provisions thereof
Security
In order to secure the payment of the debt service on the Bonds and the performance of the obligations
contained in the Trust Agreement and the Bonds, the Commission will assign to the Trustee for the benefit of the
Holders any and all of its right, title and interest in and to (i) the Revenues, (ii) the Lease, except Unassigned Rights,
(iii) the proceeds of the Bonds, the Guaranty Agreement and any other property or agreements that may be given to
the Commission as security for the Bonds, (iv) the Letter of Credit Account within the Bond Fund and (v) the
Purchase Fund.
Use of Bond Proceeds
The proceeds of the sale of the Bonds will be deposited by the Trustee as follows: to the Issuance
Expenses Fund, the amount certified by the Commission to the Trustee to pay issuance expenses relating to the
Bonds; to the 1997 Bond Account of the Escrow Fund, the amount necessary to pay the redemption price of the
1997 Bonds attributable to the University on April 3, 2006; to the 2000 Bond Account of the Escrow Fund, the
amount necessary to pay the redemption price of the 2000 Bonds attributable to the University on April 3, 2006; and
to the Improvement Fund, the balance. The respective deposits into the Escrow Fund assume that the bonds to be
refunded with such deposits will bear interest at the maximum rate of interest that may be borne by such bonds to
the April 3, 2006 redemption date.
Bond Fund
The Bond Fund (and accounts therein for which provision is made in the Trust Agreement or the Lease)
and the money and Eligible Investments therein will be used to pay the debt service on the Bonds; provided that no
part thereof shall be used to redeem any Bonds prior to maturity, except as may be provided otherwise in the Lease
or the Trust Agreement. All amounts drawn under the Letter of Credit for Bond Service Charges are required to be
deposited directly into an account in the Bond Fund designated the “Letter of Credit Account,” all amounts deposited to
pay premium on the Bonds are required to be deposited directly into an account in the Bond Fund designated the
“Redemption Premium Account” and all payments into the Bond Fund (other than from draws on the Letter of Credit)
are to be deposited directly into the account in the Bond Fund designated the “University Account.” All amounts
deposited to pay and discharge the Bonds are required to be deposited into an account in the Bond Fund designated the
“DefeasanceAccount.”
All amounts drawn under the Letter of Credit to pay the purchase price of tendered bonds are required to be
deposited in the “LOC Draw for Purchase Account” of the Purchase Fund.
Any amounts that are to be applied to the payment of Bond Service Charges on the Bonds, including
accrued interest received in connection with the sale of the Bonds and all Revenues and all money received upon
drawings for such purpose made under the Letter of Credit, will be deposited in the Bond Fund created by the Trust
Agreement and maintained with the Trustee. Money in the Bond Fund is to be used for the payment of Bond
Service Charges on the Bonds by first applying amounts held therein pursuant to draws by the Trustee on the Letter
of Credit, to the extent there is a Letter of Credit in effect, and secondly by applying any other amounts available
therein.
Amounts remaining in the Bond Fund after all outstanding Bonds are deemed paid and discharged are to be
paid to the Bank and the University after the payment of various fees, reimbursements and charges have been made
in accordance with the Trust Agreement.
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Improvement Fund and Issuance Expenses Fund
Bond proceeds will be deposited into the Improvement Fund and the Issuance Expenses Fund maintained
by the Trustee as provided in the Trust Agreement. The money in the Improvement Fund and in the Issuance
Expenses Fund will be disbursed by the Trustee upon requisition from the Commission or from the University in
accordance with the Lease to reimburse or pay the University, or any person designated by the University, for any of
the following:
(a) Costs incurred directly or indirectly for or in connection with the acquisition and leasing
of the Project, survey fees, recording fees and costs related to any of the work deemed desirable in order to
perfect or protect the interests of the Commission, the Trustee and the University in the Project;
(b) Costs incurred directly or indirectly for or in connection with the acquisition,
construction, remodeling, improvement, equipping or furnishing of the Project, including but not limited to
those costs incurred for preliminary planning and studies, architectural, accounting, consulting, fmancial,
legal, engineering, supervisory and other services, site preparation, utilities, labor, materials and acquisition
and installation of personal property;
(c) Premiums attributable to any bond insurance or to any surety bonds, initial expenses
relating to any letter of credit or liquidity facility, and insurance to be taken out and maintained during
construction of the Project;
(d) Taxes, assessments and other charges in respect of the Project that may become payable
during the construction of the Project;
(e) Costs incurred directly or indirectly in seeking to enforce any remedy against any
contractor or subcontractor in respect of any actual or claimed default under any contract relating to the
Project Facilities;
(f) Any other incidental and necessary costs, expenses, fees and charges relating to the
acquisition, construction, installation, leasing, improvement or equipping of the Project;
(g) Interest on the Bonds during the construction of the Project;
(h) Any other costs incurred in connection with the Project or the Bonds or as otherwise
permitted to be paid from the proceeds of the Bonds under the Act or the Code; and
(i) Payments made to the Rebate Fund;
provided that none of the proceeds of the Bonds in the Improvement Fund may be used to pay issuance costs of the
Bonds within the meaning of Section 147(g) of the Code.
The money and Eligible Investments held in and to the credit of the Improvement Fund will, pending
application thereof as above set forth, be subject to a lien and charge in favor of the Trustee under the Trust
Agreement.
The money and Eligible Investments held in and to the credit of the Issuance Expenses Fund will not
constitute part of the Revenues assigned to the Trustee as security for the payment of Bond Service Charges. Money
will be disbursed from the Issuance Expenses Fund only upon proper requisition by the University or the
Commission, to pay, or to reimburse the University for payment of, the fees, charges and expenses incurred in
connection with the issuance of the Bonds.
Either on (i) a date six months from the date of the Trust Agreement or (ii) when all fees, charges and
expenses relating to the Bonds have been paid or provision for their payment have been made, whichever shall occur
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first, the Trustee will transfer any balance remaining in the Issuance Expenses Fund, as directed by the University, to
the Bond Fund or to the Improvement Fund.
Escrow Funds
Escrow Fund – 1997 Bond Account. The 1997 Bond Account of the Escrow Fund and the money and
Eligible Investments therein shall, except as otherwise provided in the Trust Agreement, be used solely and
exclusively for, and are irrevocably committed to, the reimbursement of the issuer of the letter of credit securing the
1997 Bonds for the payment of the principal amount of, and the redemption premium and interest on, the 1997
Bonds attributable to the University, on April 3, 2006.
Money and Eligible Investments in the 1997 Bond Account of the Escrow Fund shall, and the Trustee
agrees such money and Eligible Investments will, be used solely for the purposes as described above and the deposit
of such money and Eligible Investments in the 1997 Bond Account of the Escrow Fund shall be irrevocable.
Subject to the foregoing requirements for the use of the 1997 Bond Account of the Escrow Fund and the money and
Eligible Investments therein and except as otherwise provided in the Trust Agreement, the Trustee shall have full
and complete control and authority over and with respect to the Escrow Fund and money and Eligible Investments
therein, and the Commission or the University shall not exercise any control or authority over and with respect to the
Escrow Fund and the money and Eligible Investments therein.
Principal, interest and any premium due and payable on the 1997 Bonds attributable to the University on
the redemption date shall be payable on presentation and surrender of the 1997 Bonds attributable to the University
in accordance with the 1997 Trust Agreement.
The payment of the holders of the 1997 Bonds attributable to the University on the redemption date shall be
made with proceeds of a draw on the letter of credit securing the 1997 Bonds, and funds on deposit in the 1997 Bond
Account of the Escrow Fund shall be used to reimburse the issuer of that letter of credit for such draw. After
payment to the holders of the 1997 Bonds attributable to the University of the principal of and any redemption
premium and interest on the 1997 Bonds attributable to the University, and the reimbursement of the issuer of the
letter of credit securing the 1997 Bonds for such payment, the Trustee shall transfer all remaining money and
Eligible Investments in the 1997 Bond Account of the Escrow Fund to the Improvement Fund.
Escrow Fund – 2000 Bond Account. The 2000 Bond Account of the Escrow Fund and the money and
Eligible Investments therein shall, except as otherwise provided in the Trust Agreement, be used solely and
exclusively for, and are irrevocably committed to, the reimbursement of the issuer of the letter of credit securing the
2000 Bonds for the payment of the principal amount of, and the redemption premium and interest on, the 2000
Bonds attributable to the University, on April 3, 2006.
Money and Eligible Investments in the 2000 Bond Account of the Escrow Fund shall, and the Trustee
agrees such money and Eligible Investments will, be used solely for the purposes as described above and the deposit
of such money and Eligible Investments in the 2000 Bond Account of the Escrow Fund shall be irrevocable.
Subject to the foregoing requirements for the use of the 2000 Bond Account of the Escrow Fund and the money and
Eligible Investments therein and except as otherwise provided in the Trust Agreement, the Trustee shall have full
and complete control and authority over and with respect to the Escrow Fund and money and Eligible Investments
therein, and the Commission or the University shall not exercise any control or authority over and with respect to the
Escrow Fund and the money and Eligible Investments therein.
Principal, interest and any premium due and payable on the 2000 Bonds attributable to the University on
the redemption date shall be payable on presentation and surrender of the 2000 Bonds attributable to the University
in accordance with the 2000 Trust Agreement.
The payment of the holders of the 2000 Bonds attributable to the University on the redemption date shall be
made with proceeds of a draw on the letter of credit securing the 2000 Bonds, and funds on deposit in the 2000 Bond
Account of the Escrow Fund shall be used to reimburse the issuer of that letter of credit for such draw. After
payment to the holders of the 2000 Bonds attributable to the University of the principal of and any redemption
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premium and interest on the 2000 Bonds attributable to the University, and the reimbursement of the issuer of the
letter of credit securing the 2000 Bonds for such payment, the Trustee shall transfer all remaining money and
Eligible Investments in the 2000 Bond Account of the Escrow Fund to the Improvement Fund.
Rebate Funds
The Rebate Fund is established by the Trust Agreement. The provisions relating to rebate under the Code
are set forth in the Tax Agreement.
The amounts on deposit in the Rebate Fund will not be part of the Revenues assigned under the Trust
Agreement to the Trustee.
Investment of Funds
Money held in the Improvement Fund, the Issuance Expenses Fund, the Rebate Fund or the Bond Fund
(except money in the Letter of Credit Account, Redemption Premium Account and Defeasance Account), will, at the
direction of the University, be invested or reinvested by the Trustee in Eligible Investments. Money derived from a
draw on the Letter of Credit or from remarketing of the Bonds that is deposited in the Purchase Fund and in the
Letter of Credit Account, Redemption Premium Account and Defeasance Account within the Bond Fund will not be
invested.
The University has agreed in the Lease to restrict the investment, reinvestment and use of the proceeds of
the Bonds in such manner and to such extent, if any, as may be necessary, after taking into account reasonable
expectations at the time of issuance of the Bonds, so that the Bonds will not constitute arbitrage bonds under federal
tax laws.
An investment made from money credited to the Bond Fund, the Rebate Fund, the Bond Reserve Fund or
the Improvement Fund will constitute part of that respective Fund and such respective Fund will be credited with all
proceeds of sale and income from such investment.
Assignment and Security
In the Trust Agreement, the Commission will assign to the Trustee its right, title and interest in and to the
Special Funds and the Purchase Fund and all of the Commission’s rights and remedies under the Lease (excluding
the rights of the Commission with respect to certain expenses, reimbursement and indemnity provisions). The
Commission will also grant a security interest to the Trustee in the Revenues (other than the Letter of Credit
Account within the Bond Fund).
Defeasance
When all debt service on the Bonds has been paid or provision has been made for such payment of all
amounts and provision has been made for payment of all amounts due under the Lease and the Trust Agreement,
then and in that event the Trust Agreement (except for certain provisions thereof that need to remain operative such
as those relating to the holding of funds for the benefit of particular Holders or for the University) will cease,
determine and become null and void, and the covenants, agreements and other obligations of the Commission
thereunder will be released, discharged and satisfied. Thereupon, the Trustee will release the Trust Agreement, and
sign and deliver to the Commission such instruments or documents in writing as will be required to evidence such
release and discharge or as may be reasonably requested by the Commission and will return the Letter of Credit to
the Bank.
All or any part of the outstanding Bonds will be deemed to have been paid and discharged within the
meaning of the Trust Agreement if:
(a) the Trustee and any other paying agent has received, in trust for and irrevocably
committed thereto, sufficient money, or
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(b) the Trustee has received, in trust for and irrevocably committed thereto, Defeasance
Obligations that are verified or certified by an independent firm experienced in the preparation of
verification reports and acceptable to Bond Counsel, to be of such maturities or redemption dates and
interest payment dates and to bear such interest as will be sufficient together with money to which
reference is made in subparagraph (a) above without further investment or reinvestment of either the
principal amount thereof or the interest earnings therefrom (which earnings are to be held likewise in trust
and so committed, except as otherwise provided in the Trust Agreement),
for the payment of all Bond Service Charges on those Bonds at their maturity or redemption dates, as the case may
be, or if default in such payment has occurred on such date, then to the date of the tender of such payment; provided
that with respect to the Bonds that are not in a Fixed Rate Period, such money represents or such obligations were
acquired with money derived from drawings made, to the extent permitted, under the Letter of Credit, so long as the
Letter of Credit is in effect or with other money as to which the Trustee has received an opinion of counsel in a form
acceptable to the Trustee to the effect that the payment of Bond Service Charges with such money will not constitute
a transfer that is voidable as a preference payment under the federal Bankruptcy Code. If such Bonds bear interest
in any Interest Rate Period, with the exception of a Fixed Interest Rate, the Bonds are assumed to bear interest at the
Maximum Interest Rate. If any of those Bonds are to be redeemed prior to their maturity thereof, notice of such
redemption must have been duly given or irrevocable provision satisfactory to the Trustee must have been duly
made for the giving of such notice.
Events of Default
The following are “Events of Default” under the Trust Agreement:
(a) Nonpayment of interest on any Bond when it becomes due and payable;
(b) Nonpayment of the principal of or premium on any bond when it becomes due and
payable; whether at stated maturity, by redemption, by acceleration or otherwise;
(c) The Commission or the University fails to perform or observe any covenant or agreement
or obligation under the Trust Agreement, the Lease or the Tax Agreement that results in the interest on the
Bonds no longer being excluded from gross income for federal income tax purposes.
(d) The Commission fails to observe or perform any other covenant, agreement or obligation
on its part to be observed or performed contained in the Trust Agreement or in the Bonds, which failure
shall have continued for a period of 60 days after written notice, by registered or certified mail, to the
Commission and the University specifying the failure and requiring that it be remedied, which notice may
be given by the Trustee in its discretion and shall be given by the Trustee at the written request of the
Holders of not less than 25% in aggregate principal amount of Bonds then outstanding;
(e) The occurrence and continuance of an Event of Default as defined in the Lease subject to
applicable waivers and cure periods as provided therein;
(f) The University fails to perform or observe any covenant, agreement or obligation on the
part of the University contained in the Guaranty Agreement, giving effect to any notices and grace periods
therein; or
(g) Nonpayment of amounts due to the Holder of any Bond who has delivered such Bond to the
Tender Agent for purchase pursuant to the Trust Agreement after such payment has become due and payable;
(h) Receipt by the Trustee of a written notice from the Bank that an Event of Default has
occurred and is continuing under the Reimbursement Agreement and directing the Trustee to accelerate the
maturity of the Bonds;
(i) Failure by the Bank to honor a proper drawing under the Letter of Credit; or
U) The occurrence of certain acts of insolvency or liquidation relating to the Bank.
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Acceleration
Ifan Event of Default under the Trust Agreement occurs as described under paragraphs (c), (d), (e) or (f) above,
the Trustee shall, upon the written direction of the Bank, declare the principal of all Bonds then outstanding (if not then
due and payable), together with interest accrued thereon, to be due and payable immediately. Upon the occurrence of an
Event of Default described under paragraphs (a), (b), (g), (h), (i), or (j) above, the Trustee, without the consent of the
Bank, is required to declare the principal of all Bonds then outstanding (if not then due and payable), together with
interest accrued thereon, to be due and payable immediately. Pursuant to such declaration, interest on the Bonds shall
cease to accrue.
The provisions of the preceding paragraph are subject, however, to the condition that if, at any time after
declaration of acceleration and prior to the entry of a judgment in a court for enforcement under the Trust Agreement
(after an opportunity for hearing by the Commission and the University),
(a) all amounts payable under the Trust Agreement (except the principal of and interest on
Bonds that have not reached their stated maturity dates, but which are due and payable solely by reason of that
declaration of acceleration), plus interest to the extent permitted by law on any overdue installments of interest
at the rate borne by the Bonds in respect of which the default occurred, shall have been duly paid or provision
shall have been duly made therefor by deposit with the Trustee or any paying agents, and
(b) all existing Events of Default under the Trust Agreement have been cured,
then, and in every case, the Trustee is required to waive the particular Event of Default and its consequences and shall
rescind and annul the declaration of acceleration; provided that if the Letter of Credit was drawn upon as a result of such
declaration, the Trustee shall not waive the Event of Default unless the Trustee has received written notice that the
amount of the Letter of Credit has been fully reinstated.
Other Remedies
In addition, upon the occurrence and continuance of an Event of Default under the Trust Agreement and with or
without an acceleration as described above, the Trustee may, with the Consent of the Bank, pursue any available remedy
to enforce the payment of Bond Service Charges on the Bonds or the observance and performance of any other covenant,
agreement or obligation under the Trust Agreement, the Lease, the Guaranty or any other instrument providing security,
directly or indirectly, for the Bonds. If requested to do so by the Bank or the Holders of at least in aggregate principal
amount of the Bonds outstanding and if indemnified as provided in the Trust Agreement, the Trustee is required to
exercise such of the rights and powers conferred upon it under the Trust Agreement as the Trustee.
Right of Holders and Bank to Direct Proceedings
The Bank or Holders of at least a majority in aggregate principal amount of Bonds then outstanding have
the right at any time, by an instrument or instruments in writing signed and delivered to the Trustee, to direct the
method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and
conditions of the Trust Agreement or any other proceedings under the Trust Agreement, provided that such direction
will not be other than in accordance with the provisions of law and the Trust Agreement, that the Bank has no such
rights with respect to the enforcement of remedies against the Bank, that the Trustee will be indemnified to its
satisfaction and that the Trustee may take any other action that it deems to be proper and that is not inconsistent with
the direction. Notwithstanding the foregoing, so long as no Event of Default described in clause (i) or (j) under
“THE TRUST AGREEMENT – Events of Default” has occurred and is continuing, the Bank will have the exclusive
right to give any such directions to the Trustee.
Rights and Remedies of Holders
Neither the Bank nor any Holder of any Bond will have any right to institute any suit, action or proceeding
for the enforcement of the Trust Agreement or for the execution of any trust under the Trust Agreement or any
remedy under the Trust Agreement, unless (i) an Event of Default has occurred and is continuing of which the
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Trustee has been notified or of which it is deemed to have notice, (ii) the Holders of not less than 25% in aggregate
principal amount of the Bonds then outstanding or the Bank have made written request to the Trustee and have
afforded the Trustee reasonable opportunity to proceed to exercise the powers provided in the Trust Agreement or to
institute such action, suit or proceeding and have offered to the Trustee indemnity as provided for in the Trust
Agreement, and (iii) the Trustee thereafter has failed or refused to exercise its powers under the Trust Agreement or
to institute such action, suit or proceeding in its own name.
Waivers of Events of Default
Except as hereinafter described, at any time, in its discretion, the Trustee, but only with the express written
consent of the Bank, other than in the case of an Event of Default described in paragraphs (i) or (j) under “THE
TRUST AGREEMENT – Events of Default”, may waive any Event of Default under the Trust Agreement and its
consequences and may rescind and annul any declaration of maturity of principal of the Bonds. The Trustee is
required to do so upon the written request of the Holders of either (i) at least a majority in aggregate principal
amount of all Bonds then outstanding in respect of which an Event of Default in the payment of Bond Service
Charges exists, or (ii) at least 25% in aggregate principal amount of all Bonds then outstanding, in the case of any
other Event of Default. Such written request will take priority over other actions requested or authorized by the
Holders.
There will not be so waived, however, any Event of Default described in paragraphs (a), (b) or (g) under
“THE TRUST AGREEMENT – Events of Default”, or any declaration of acceleration in connection with any Event
of Default rescinded or annulled (or that Event of Default waived), unless at the time of that waiver or rescission and
annulment payments of the amounts provided in the Trust Agreement for waiver and rescission and annulment in
connection with acceleration of maturity have been made or provision has been made therefor. In the case of the
waiver or rescission and annulment, or in case any suit, action or proceedings taken by the Trustee on account of any
Event of Default shall have been discontinued, abandoned or determined adversely to it, the Commission, the
Trustee and the Holders shall be restored to their former positions and rights hereunder, respectively. Ifthe Letter of
Credit was drawn upon as a result of such declaration of acceleration, the Trustee shall not so waive the Event of
Default unless the Trustee has received notice from the Bank that the Letter of Credit has been reinstated in full. No
waiver or rescission will extend to any subsequent or other Event of Default or impair any right consequent thereon.
Applications of Money Received Pursuant to Right of Action Taken
All money received by the Trustee representing a drawing made upon the Letter of Credit will be applied
by the Trustee only to the payment of principal of or interest on or purchase price of the Bonds. All money received
by the Trustee or a receiver from remedial action taken will be applied to the payment of the costs and expenses of
the proceedings resulting in the collection of such money, and the balance of such money will be deposited in the
Bond Fund and applied to the payment of Bond Service Charges on the Bonds in the manner and in the order of
priority set forth in the Trust Agreement.
Supplemental Trust Agreements
The Commission and the Trustee may, with the consent of the Bank, enter into supplemental trust
agreements not inconsistent with the Trust Agreement in the opinion of the Commission and the Trustee, without the
prior consent of or notice to any of the Holders (although Holders will be sent copies of the supplemental trust
agreements), for anyone or more of the following purposes:
(a)
Agreement;
to cure any ambiguity, inconsistency or formal defect or omISSIon III the Trust
(b) to grant to or confer upon the Trustee for the benefit of the Holders additional rights,
remedies, powers or authority that may lawfully be granted to or conferred upon the Holders or the Trustee;
(c) to assign additional revenues under the Trust Agreement;
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(d) to accept additional security and instruments and documents of further assurance with
respect to the Project;
(e) to add to the covenants, agreements and obligations of the Commission contained in the
Trust Agreement, to add other covenants, agreements and obligations to be observed for the protection of
the Holders, or to surrender or limit any right, power or authority reserved to or conferred upon the
Commission in the Trust Agreement;
(1) to evidence any succession to the Commission and the assumption by such successor of
the covenants, obligations and agreements of the Commission under the Trust Agreement, the Base Lease,
the Lease and the Bonds;
(g) to permit the Trustee or the Commission to comply with any obligations imposed upon it
by law, including the Code so long as such change would not be to the prejudice of the Trustee or the
Holders;
(h) to specify further the duties and responsibilities of and to define further the relationship
among the Trustee, the Registrar, and any authenticating agents or paying agents, and the Remarketing
Agent;
(i) to achieve compliance of the Trust Agreement with any applicable federal securities or
tax law provided that in the opinion of Independent Counsel (Bond Counsel if related to federal tax law)
such supplemental trust agreement does not adversely affect the validity or security of the Bonds;
(j) to obtain or maintain a rating on the Bonds from a Rating Service or to obtain or maintain
insurance on the Bonds;
(k) To adopt procedures for the disclosure of information to Holders and others with respect
to the Bonds and the Commission in accordance with applicable federal securities laws or with any
guidelines for such purpose promulgated by any appropriate national organizations;
(1) to facilitate (i) the transfer of Bonds from one Depository to another, and the succession
of Depositories, or (ii) the withdrawal of Bonds issued to a Depository for use in a book entry system and
the issuance of replacement Bonds in fully registered form to others than a Depository;
(m)
(n)
Agreement;
(0)
to evidence the appointment of a new Remarketing Agent or Tender Agent;
to accept a Supplemental Credit Facility as provided in Section 8.08 of the Trust
to provide for an Alternate Letter of Credit; and
(P) to permit any other amendment that, in the judgment of the Trustee, is not to the material
prejudice of the Trustee or the Holders.
The Trustee may also accept, without the consent of or notice to any of the Holders, an Alternate Letter of
Credit or any amendments to the Letter of Credit necessary to continue the effectiveness of the Letter of Credit as
originally intended or which in the judgment of the Trustee are not to the prejudice of the Holders.
Exclusive of supplemental trust agreements for the purposes stated above, the consent of the Holders of not
less than a majority in aggregate principal amount of the Bonds then outstanding and the Bank will be required to
approve any trust agreement supplementing the Trust Agreement, provided that no supplemental trust agreement
may permit: (i) an extension of the maturity of the principal of or the interest on any Bond, (ii) a reduction in the
principal amount of any Bond, or the rate of interest or premium on any Bond, (iii) a reduction in the amount or
-41-
extension of the time of payment of any mandatory sinking fund requirements, (iv) a decrease in amounts to be paid,
or an extension of any time for payments under the Letter of Credit or a change in timing for draws on the Letter of
Credit required by the Trust Agreement, or (v) the creation of a privilege or priority of any Bond over any other
bond, any series of Bonds over any other series of Bonds, or a reduction in the aggregate principal amount of Bonds
required for consent to such supplemental trust agreement, without the consent of the Holders of all of the Bonds
then outstanding. In addition, the University must consent to any supplemental trust agreements.
Discharge of Lien
The lien of the Trust Agreement will be discharged if the Commission will payor cause to be paid and
discharged all the outstanding Bonds, or there will otherwise be paid to the Holders of the outstanding Bonds all
Bond Service Charges due or to become due thereon, and provisions will also be made for paying all other amounts
payable under the Trust Agreement by the Commission, and under the Trust Agreement and the Lease by the
University.
Any Bond will be deemed to be paid and discharged for all purposes of the Trust Agreement when payment
of the principal of such Bond, plus interest thereon to the due date thereof (whether such due date is by reason of
maturity or upon redemption as provided in the Trust Agreement) will have been made or caused to be made with
funds available therefor on deposit in the Bond Fund in accordance with the terms thereof.
All or any part of the outstanding Bonds will be deemed to have been paid and discharged within the
meaning of the Trust Agreement if (a) the Trustee and any paying agent will have received and hold in trust and
irrevocably committed for such payment, sufficient money, or (b) the Trustee will hold in trust, irrevocably
committed for such payment, Defeasance Obligations verified or certified by an independent firm described in “THE
TRUST AGREEMENT – Defeasance” to be of such maturities or redemption dates and interest payment dates and
to bear such interest as will, without further investment or reinvestment of either the principal amount hereof or the
interest earnings therefrom, be sufficient together with money referred to in (a) above, for the payment of all Bond
Service Charges on the Bonds, at their maturities or redemption dates, as the case may be, or if default in such
payment will have occurred on such date, then to the date of the tender of such payment, provided that with respect
to Bonds that are not in a Fixed Rate Period such money represents or such obligations were acquired with money
derived from drawings under the Letter of Credit, or with money as to which the Trustee has received an opinion of
counsel in a form acceptable to the Trustee to the effect that the payment of Bond Service Charges from such money
will not institute a transfer that is voidable as a preference payment under the federal Bankruptcy Code. If the
Bonds bear interest at any rate other than the Fixed Interest Rate, the Bonds shall be deemed to be paid and
discharged only if the amount held by the Trustee under 9(a) or (b) above shall be sufficient to provide for the
Maximum Rate on the bonds to the earlier of the first tender or redemption date, and the tender or redemption of the
Bonds so discharged shall occur on the first such tender or redemption date; provided that if any Bonds are to be
redeemed prior to the maturity thereof, notice of such redemption will have been duly given or irrevocable provision
satisfactory to the Trustee will have been duly made for the giving of such notice. Any money so held by the
Trustee may be invested by the Trustee, but only in Defeasance Obligations, the maturities or redemption dates of
which, at the option of the holder, will be not later than the date or dates at which said money will be required for
the aforesaid purposes.
The Trustee
The Trustee, U.S. Bank National Association, is a national banking association organized and existing
under the laws of the United States and duly authorized to exercise corporate trust powers in the State, with its
designated corporate trust office in Cleveland, Ohio.
The Trustee, prior to the occurrence of an Event of Default under the Trust Agreement, and after the curing
of all Events of Default that may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in the Trust Agreement. In case an Event of Default under the Trust Agreement has occurred
and is continuing, the Trustee will exercise the rights and powers vested in it by the Trust Agreement and will take
such actions as it is instructed to take and indemnified against by the Bank and the Holders and if there is no
instruction, such action as a prudent man would exercise or use under the circumstances in the conduct of his own
affairs. The Trust Agreement provides that the Trustee is entitled to act upon opinions of counsel and will not be
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responsible for any loss or damage resulting from reliance thereon in good faith. In addition, the Trust Agreement
provides that the Trustee is entitled to rely on certain other instruments, and it will not be liable for any action
reasonably taken or omitted to be taken by it in good faith or be responsible other than for its own negligence or
willful misconduct. The Trust Agreement provides for removal of the Trustee and the appointment of a successor
trustee under certain circumstances.
Remarketing Agent
B.c. Ziegler and Company has been appointed Remarketing Agent under the Trust Agreement. The
principal office of the Remarketing Agent is One South Wacker Drive, Suite 3080, Chicago, Illinois 60603. The
Remarketing Agent will perform such of the duties of the Remarketing Agent as are set forth in the Trust Agreement
and the Remarketing Agreement. The Remarketing Agent may be removed at any time by the University. The
Remarketing Agent may resign at any time by giving 30 days notice to the Commission, the University, the Trustee
and the Ban1c
The Trust Agreement provides that the Remarketing Agent shall establish the applicable interest rate
payable on the Bonds by determining the minimum rate, on the basis of prevailing market conditions, necessary to
enable it to remarket such Bonds at a price equal to the principal amount of such Bonds in a secondary market
transaction on the first day of the relevant Interest Rate Period.
In the event the Commission shall fail to appoint a successor Remarketing Agent upon resignation or
removal, the Trustee will either appoint a Remarketing Agent or itself as Remarketing Agent, provided the Trustee,
acting in its individual capacity shall neither be required to sell the Bonds nor establish the interest rate on the
Bonds.
Extent of Commission’s Covenants – No Personal Liability
All covenants, stipulations, obligations and agreements of the Commission to be contained in the Trust
Agreement will be effective to the extent authorized and permitted by applicable law. No such covenant,
stipulation, obligation or agreement will be deemed to be a covenant, stipulation, obligation or agreement of any
present or future member, officer, agent or employee of the Commission in other than that person’s official capacity.
Neither the members of the Commission nor any official of the Commission signing the Bonds, the Trust
Agreement, the Lease, any supplement or amendment to those documents, or any related documents will be liable
personally on the Bonds, or any of those documents or be subject to any personal liability or accountability by
reason of the issuance of the Bonds.
THE GUARANTYAGREEMENT
The following describes certain provisions ofthe Guaranty Agreement. Reference is made to the Guaranty
Agreement for the detailed provisions thereof
In the Guaranty Agreement entered into by the University and the Trustee, the University, as further
evidence of its obligation to pay debt service on the Bonds, unconditionally guarantees to the Trustee for the benefit
of the Holders of the Bonds (a) the full and prompt payment of the principal of and any premium on any Bond when
and as the same becomes due, whether at the stated maturity, by acceleration, by call for redemption or otherwise,
(b) the full and prompt payment of any interest on any Bond when and as the same becomes due, (c) the full and
prompt payment of all Letter of Credit reimbursement obligations to reimburse the Bank for amounts drawn under
the Letter of Credit and the principal and accrued interest on Pledged Bonds as provided in the Trust Agreement,
and (d) the full and prompt payment of all expenses and charges paid or incurred in enforcing the Guaranty
Agreement.
The Trustee shall proceed against the University under the Guaranty Agreement ifrequested by the Holders
of at least 25% in aggregate principal amount of the Bonds outstanding or the Bank. No setoff, counterclaim,
reduction or diminution of an obligation, or any defense of any kind that the University has or may have against the
State, the Commission, the Bank, the Remarketing Agent, the Trustee, or any Holder will be available to the
University against the Trustee.
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THE TAX AGREEMENT
The following describes certain provisions of the Tax Agreement. Reference is made to the Tax Agreement
for the detailed provisions thereof
University Not to Affect Adversely Exclusion of Interest on the Bonds from Gross Income for Federal Income
Tax Purposes
The University represents in the Tax Agreement that it has taken and caused to be taken and covenants that
it will take and cause to be taken all actions that may be required of it, alone or in conjunction with the Commission,
for the interest on the Bonds to be and remain excluded from gross income for federal income tax purposes and from
treatment as an item of tax preference for purposes of the alternative minimum tax imposed on individuals and
corporations under the Code. The University represents that it has not taken or permitted to be taken on its behalf,
and covenants that it will not take or permit to be taken on its behalf, any actions that would adversely affect those
exclusions under the provisions of the Code. Unless the University receives and provides to the Commission and
the Trustee a written opinion of Bond Counsel that such action will not adversely affect the exclusion of interest on
the Bonds from gross income for federal income tax purposes and from treatment as an item of tax preference for
purposes of the alternative minimum tax imposed on individuals and corporations under the Code, the University
will not take any action or fail to take any action the result of which if it had occurred prior to or at the time of
issuance of the Bonds, or at any time thereafter, would be to cause the Bonds not to be considered qualified
50I(c)(3) bonds under Section 145 of the Code or to cause application of Section 150(b)(3) or (5) of the Code.
Rebate Fund
Within 30 days after the Fifth Bond Year and every Fifth Bond Year thereafter and within 30 days after the
payment in full of all outstanding Bonds, the University is required to engage an independent certified public
accounting firm or law firm to calculate that Rebate Amount determined as provided in Section 148 of the Code (the
“Rebate Amount”) as of the end of the applicable period and to notify the Trustee of that amount. The Trustee will
notify the University of any amount on deposit in the applicable Rebate Fund created in the Trust Agreement and
maintained by the Trustee. If the amount on deposit in the Rebate Fund is less than the Rebate Amount, the
University is required to pay the amount of the deficiency to the Trustee for deposit in that Rebate Fund. If the
amount on deposit in that Rebate Fund is in excess of the Rebate Amount, the excess will be paid to the University.
The Trustee is required to use the money in the Rebate Funds to make payment of the Rebate Amount to the United
States in accordance with provisions of the Code.
ENFORCEABILITY OF REMEDIES
Enforcement of the security interest in the Revenues and the remedies specified by the Bond Documents
and the Reimbursement Agreement may be limited by the application of federal bankruptcy laws or other laws
relating to creditors’ rights. A court may decide not to order the specific performance of the covenants contained in
these documents.
Under the United States Bankruptcy Code, allowable claims in a bankruptcy proceeding for future rents
under a lease of real property are limited to rentals during the greater of (i) one year or (ii) 15% (but not exceeding
three years) of the lease term remaining after the date of the filing of the bankruptcy proceedings or the removal of
the University from possession. There is no case that decides whether the Bankruptcy Code’s limitation on the
payment of rentals may apply to a bond trustee’s claim against a bankrupt guarantor under a guaranty of payment on
tax-exempt bonds. In light, however, of (i) the weight of the case law regarding claims in bankruptcy by bond
trustees under lease agreements and (ii) the economic realities of this tax-exempt bond fmancing, a claim by the
Trustee under the Guaranty Agreement in a bankruptcy proceeding should not be subject to limitations imposed on
amounts allowed for claims arising under the leases of real property. The degree to which such a claim is satisfied
will be dependent upon amounts that are available for and ordered to be distributed in the bankruptcy proceeding.
The enforceability of the liens of the Bond Documents and the Reimbursement Agreement may be subject
to subordination or prior claims in certain instances other than bankruptcy proceedings. Examples of possible
-44-
limitations on enforceability and of possible subordination or prior claims include (i) statutory liens, (ii) rights
arising in favor of the United States of America or any agency thereof; (iii) present or future prohibitions against
assignment in any federal statutes or regulations, (iv) constructive trusts, equitable liens or other rights impressed or
conferred by any state or federal court in the exercise of its equitable jurisdiction, (v) claims that might arise if
appropriate fmancing or continuation statements are not filed in accordance with the Ohio Uniform Commercial
Code from time to time in effect or as a result of that code’s not providing for perfection of a security interest
therein, (vi) inability of the Trustee to perfect a security interest in those elements of the Revenues that can be
perfected only by taking possession of such collateral, (vii) federal bankruptcy laws affecting, among other matters,
payments made within 90 days prior to any institution of bankruptcy proceedings by the University or the
Commission, (viii) state fraudulent conveyance laws and (ix) the rights of holders of prior perfected security
interests or of perfected purchase money security interests in equipment or other goods owned by the University and
in the proceeds of the sale of such property and the rights of other parties secured by liens permitted under the Bond
Documents.
The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as
to the enforceability of the various legal instruments by limitations imposed by state and federal laws, rulings and
decisions affecting remedies and by bankruptcy, reorganization or other laws affecting the enforcement of creditors’
rights.
ABSENCE OF MATERIAL LITIGATION
To the knowledge of the appropriate officials of the Commission and the University, there is no litigation
or administrative action or proceeding pending or threatened, restraining or enjoining, or seeking to restrain or
enjoin, the issuance and delivery of the Bonds, or the Bond Documents or the Reimbursement Agreement, or the
Letter of Credit or contesting or questioning the validity of the Bonds or the proceedings and authority under which
the Bonds have been authorized and are to be issued or delivered, or the pledge or application of any money or
security provided for the payment of the Bonds under the Bond Documents. No-litigation certificates to such effect
with respect to the Bonds will be delivered to the Underwriter at the time of the original delivery of the Bonds.
UNDERWRITING
Subject to the terms and conditions set forth in the Bond Purchase Agreement relating to Bonds between
the Underwriter, the Commission, the Bank and the University, the Underwriter has agreed to purchase the Bonds at
an aggregate price equal to $13,705,000 representing the par amount of the Bond less the underwriting discount of
$90,000. The Underwriter’s obligations are subject to certain conditions precedent, and the Underwriter will
purchase all Bonds, if any are purchased. The University and the Bank have agreed to indenmify the Underwriter
and the Commission against certain civil liabilities, including liabilities under federal securities laws. The Bonds
will be offered to the public initially at the offering prices set forth on the cover page of this Offering Circular. Such
offering prices subsequently may change without any requirement of prior notice. The Underwriter may offer the
Bonds to other dealers at prices lower than those offered to the public.
ELIGIBILITY UNDER OHIO LAW FOR INVESTMENT
AND AS SECURITY FOR THE DEPOSIT OF PUBLIC FUNDS
Under the authority of Section 3377.11 of the Ohio Revised Code and to the extent investments of the
following are subject to Ohio law, the Bonds are lawful investments of banks, societies for savings, building and
loan and savings and loan associations, deposit guarantee associations, trust companies, trustees, fiduciaries,
insurance companies, including domestic for life and domestic not for life, trustees or other officers having charge of
sinking and bond retirement or other special funds of political subdivisions and taxing districts of the State, the
commissioners of the sinking fund of the State, the administrator of workers’ compensation, subject to the approval
of the workers’ compensation board and the industrial commission, the State teachers retirement system, the public
employees retirement system, the school employees retirement system, and the police and firemen’s disability
pension fund, and are also acceptable as security for the deposit of public money.
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TAX MATTERS
In the opinion of Squire, Sanders & Dempsey L.L.P., Bond Counsel, under existing law (i) interest on the
Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Code and is not an
item of tax preference under Section 57 of the Code for purposes of the alternative minimum tax imposed on
individuals and corporations, and (ii) interest on the Bonds, and any profit made on their sale, exchange or other
dispositions are exempt from the Ohio personal income tax, the Ohio commercial activity tax, the net income base
of the Ohio corporate franchise tax and municipal and school district income taxes in Ohio. An opinion to those
effects will be included in the legal opinion. Bond Counsel will express no opinion regarding other tax
consequences regarding the Bonds.
The opinions on federal tax matters will be based on and will assume the accuracy of certain
representations and certifications and compliance with certain covenants of the Commission and the University to be
contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that
the Bonds are and will remain obligations the interest on which is excluded from gross income for federal income
tax purposes. Bond Counsel will not independently verify the accuracy of the certifications and representations
made by the University and the Commission.
The Code prescribes a number of qualifications and conditions for the interest on state and local
government obligations to be and remain excluded from gross income for federal income tax purposes, some of
which, including provisions for potential payments by the issuer to the federal government, require future or
continued compliance after issuance in order for the interest to be and to continue to be so excluded from the date of
issuance. Noncompliance with these requirements could cause the interest on the Bonds to be included in gross
income for federal income tax purposes and to be subject to federal income taxation retroactively to the date of their
issuance. The University and the Commission have covenanted in the Trust Agreement and the Lease and other
transcript documents to take actions required of them for the interest on the Bonds to be and remain excluded from
gross income for federal income tax purposes, and not to take any actions that would adversely affect that exclusion.
Under Code provisions applicable only to certain corporations, a portion of the excess of adjusted current
earnings (which includes interest on all tax-exempt bonds, including the Bonds) over other alternative minimum
taxable income is included in alternative minimum taxable income that may be subject to the corporate alternative
minimum tax. In addition, interest on the Bonds may be subject to a branch profits tax imposed on certain foreign
corporations doing business in the United States and to a tax imposed on excess net passive income of certain
S corporations.
Under the Code, the exclusion of interest from gross income for federal income tax purposes can have
certain adverse federal income tax consequences on items of income, deductions or credits for certain taxpayers,
including financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement
benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations and
individuals otherwise eligible for the earned income credit. The applicability and extent of these or other tax
consequences will depend upon the particular tax status or other tax items of the owner of the Bonds. Bond Counsel
expresses no opinion regarding such consequences. Owners of the Bonds should consult their own tax advisers as to
those circumstances.
The discussion of tax matters in this Offering Circular applies only in the case of purchasers of the Bonds at
their original issuance and at the respective prices indicated on the cover. It does not address any other tax
consequences, such as, among others, the consequence of the existence of any market discount to subsequent
purchasers of the Bonds.
LEGAL MATTERS
Legal matters incident to the issuance of the Bonds and with regard to the tax -exempt status of the interest
thereon (See “TAX MATTERS”) are subject to the legal opinion of Squire, Sanders & Dempsey L.L.P., Bond
Counsel. The legal opinion, dated and premised on law in effect as of the date of original delivery of the Bonds, will
be delivered to the Underwriter at the time of that original delivery and the text of the opinion will be printed on the
Bonds.
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The proposed text of the legal opinion is set forth as Appendix C. The legal opinion to be delivered may
vary from that text if necessary to reflect facts and law on the date of delivery. The opinion will speak only as of its
date, and subsequent distribution of it by recirculation of the Offering Circular or otherwise shall create no
implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referred to in
the opinion subsequent to its date. Bond Counsel will express no opinion concerning the Letter of Credit.
While Bond Counsel has participated in the preparation of portions of this Offering Circular, it has not been
engaged to confirm or verify, and expresses and will express no opinion as to, the accuracy, completeness or fairness
of any statements in this Offering Circular, or in any other reports, financial information, offering or disclosure
documents or other information pertaining to the University, the Bank or the Bonds that may be prepared or made
available by the University, the Bank, the Underwriter, or others to prospective purchasers or holders of the Bonds
or others.
In addition to rendering the legal opinion, Bond Counsel will assist in the preparation of and advise the
Commission and the University concerning documents for the bond transcript.
Certain legal matters in connection with the Bond Documents will be passed upon for the Underwriter by
its counsel, Thompson Hine LLP and for the University by its co-counsel, Hawkins Delafield & Wood LLP and
Martin, Brown, Hull & Harper, P.L.L. Certain legal matters in connection with the Letter of Credit and the Bank
will be passed upon by its counsel, Charles Spain, Esq.
Certain of the law firms representing parties in this transaction have provided and may be providing legal
services to other parties in this transaction for matters unrelated to the issuance ofthe Bonds.
TRANSCRIPT AND CLOSING DOCUMENTS
A complete transcript of proceedings and a certificate (described under “ABSENCE OF MATERIAL
LITIGATION”) relating to litigation will be delivered by the Commission, and a certificate relating to litigation will
be delivered by the Bank and the University when the Bonds are delivered by the Commission to the Underwriter.
The Bank and the University at that time will each also provide to the Underwriter a certificate relating to the
accuracy and completeness of the Offering Circular.
RATING
Standard & Poor’s Rating Services, a division of The McGraw Hill Companies (“S&P”) is expected to
assign its rating of “A+/A-l” to the Bonds with the understanding that concurrently with the delivery of the Bonds
the Bank will issue the Letter of Credit. A rating reflects only the view of the Rating Service and an explanation of
the significance of the rating may only be obtained from that Rating Service.
The University has furnished to the Bank and the Rating Service certain information and materials, some of
which have not been included in this Offering Circular. Generally, Rating Services base their ratings on such
information and materials and on investigations, studies, and assumptions furnished to, obtained and made by the
Rating Services. There is no assurance that such rating when assigned will continue for any given period of time or
that it may not be changed or withdrawn entirely by the Rating Service, if in its judgment circumstances so warrant.
Neither the Commission, the University nor the Underwriter has undertaken any responsibility either to bring to the
attention of the Holders of the Bonds any proposed revision or withdrawal of the rating or to oppose any such
revision or withdrawal. Any downward change in or withdrawal of the rating may have an adverse effect on the
marketability and/or market price of the Bonds.
CONCLUDING STATEMENT
The foregoing references to descriptions of provisions of the Bonds, the Bond Documents, the Letter of
Credit, the Reimbursement Agreement and all references to other materials not stated to be quoted in full are only
brief descriptions of some of the provisions thereof, and do not purport to summarize or describe all of the
provisions thereof. Copies of the Bond Documents, the Letter of Credit and the Reimbursement Agreement are
available during the initial offering period for inspection at the office of B.C. Ziegler and Company, and thereafter at
the designated corporate trust office of the Trustee.
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(THIS PAGE INTENTIONALL Y LEFT BLANK)
APPENDIX A
CERTAIN INFORMA nON REGARDING
ANTIOCH UNIVERSITY
General Description
Antioch University (the “University”), an Ohio nonprofit corporation, is a private coeducational institution of higher
education founded and incorporated as a nonprofit corporation is 1852. The traditional purpose of a liberal arts education has
been to prepare young people for a lifetime of learning. The University offers degrees from baccalaureate through doctorate
in flexible programs on six campuses throughout the United States.
The University is a multi-campus university that is unified through shared educational and cultural values and
consistent business practices. All degree programs strive to balance the academic and experiential by giving students
opportunities to test theory against practice. Inspired by and evolved from Antioch College, which was founded in 1852, the
University emphasizes students’ education and engagement in the real world and their responsibility for what they learn.
Over 80% of the more than 4,000 students enrolled at the University are older than 25. More than 70% are enrolled in
master’s and doctoral programs. The University’s campuses in Yellow Springs, Ohio (housing both Antioch College and
Antioch McGregor); Keene, New Hampshire; Los Angeles and Santa Barbara, California; and Seattle, Washington are united
and animated by the exhortation of Horace Mann, Antioch College’s founding president, “Be ashamed to die until you have
won some victory for humanity.”
The University expanded beyond its original undergraduate campus in southern Ohio in 1964 to begin educating
older, diverse Americans with a variety of unmet needs.
More than 4,000 students currently study at the six campuses of the University: Antioch College at Yellow Springs,
Ohio; the Antioch New England Graduate School at Keene, New Hampshire; Antioch Seattle at Seattle, Washington;
Antioch Southern California at Los Angeles and Santa Barbara, California; and Antioch McGregor at Yellow Springs. The
University’s administrative offices are in Yellow Springs, and it is there that the Chancellor and staff provide University-wide
planning, fiscal review and accountability for all operations, and advice to the Board of Trustees on University-wide policies.
The University’s opening enrollment for academic year 2005-06 was 4,024 students, of which 713 were full-time
undergraduate students and 1,927 were full-time graduate students and 1,384 were part-time undergraduate or graduate
students.
The University operates on a fiscal year (the “Fiscal Year”) that begins on July I and ends on June 30 and any
reference to a particular Fiscal Year means the Fiscal Year that ends on June 30 in the indicated year.
Campuses of the University
The following are brief descriptions of each of the six campuses of the University and the University-wide Ph.D.
program.
Antioch College
Antioch College was founded in 1852 and is the original campus of the University. This campus includes
approximately 30 buildings on an approximately 1200-acre campus (including a lOOO-acre nature preserve) in Yellow
Springs, Ohio. The small residential undergraduate campus in Yellow Springs, Ohio is the source not only of the University’s
name but also of its values and its pedagogy. “Antioch is more important in the 2000s,” Loren Pope wrote in Colleges That
Change Lives, “than it was in the 1900s.”
Degrees and Programs:
Bachelor of Arts and Bachelor of Science
A-I
Antioch McGregor
Antioch McGregor, founded in 1988, is the newest component of the University, shares the College’s Yellow
Springs campus and is named after Antioch College’s president from 1948 to 1954, Douglas McGregor, who pioneered the
concept of participative management and wrote the classic business text, The Human Side ofEnterprise. Antioch McGregor
currently shares the Yellow Springs campus with Antioch College. McGregor takes special pride in its teacher education
programs, which account for more than half the school’s enrollment and are considered models for the State of Ohio. In
addition to serving the area, McGregor has developed an array of distance-learning programs.
Degrees and Programs:
Bachelor of Arts Completion Program
Master of Arts
Management
Community College Management
Individualized Liberal and Professional Studies
Conflict Resolution
Master of Education
Educational Leadership
Teacher Licensure
Postgraduate
Principal Licensure
The 2006 Project will be a new home for Antioch McGregor to be known as Campus West and is expected to raise
Antioch McGregor’s competitive standing in the higher education community. The new facility, located at the intersection of
Dayton Yellow Springs Road and Enon Road in Yellow Springs, Ohio is just a few minutes from the current location of
Antioch College. The new 60,000 square foot building will be two- and three-stories tall, complete with a central three-story
library and reading room. The new facility will anchor Yellow Spring’s Business & Education Park, a new economic
development project that will accommodate office and business incubators. Campus West is a response to the growing
enrollment at Antioch McGregor. Having recorded an average growth rate of 10 percent each year for the past several years,
McGregor has outgrown its physical facilities on the current campus.
Antioch New England Graduate School
Antioch New England Graduate School, founded in 1963, is the oldest of the University’s adult campuses and is
devoted entirely to graduate studies. It was the first campus of the University to offer doctoral degrees. This campus consists
of a single building of approximately 90,000 square feet on an approximately 6-acre campus in Keene, New Hampshire.
Antioch New England is deeply rooted in northern New England, though by no means restricted to it. Many of its programs
emphasize educating, counseling and otherwise serving rural and small-town populations and conserving the rural
environment.
Degrees and Programs:
Master of Arts
Counseling Psychology
DancelMovement Therapy
Marriage and Family Therapy
Substance Abuse Counseling
Master of Education
Administration and Supervision
Elementary/Early Childhood Education
Experienced Educators
Waldorf Teacher Training
Master of Science
Environmental Studies
Resource Management and Administration
Management
Master of Human Services Administration
Doctoral Programs
Psy.D. in Clinical Psychology
Ph.D. in Environmental Studies
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Antioch Seattle
Although each University campus honors and promotes diversity, Antioch Seattle, founded in 1975, is exceptionally
active in identifYing the needs of minority communities and designing programs to meet them. This campus consists of a
single building of approximately 65,000 square feet in Seattle, Washington. Its first doctoral program, a Psy.D. in Clinical
Psychology, began in fall 2004. The program stresses multicultural perspectives and is the first such program in the nation to
offer a concentration in Art Therapy.
Antioch Seattle is also unusual among graduate schools in having instituted a core curriculum for students pursuing
Master’s degrees in four quite different fields. Under the aegis of the Center for Creative Change, each student must
undertake a project in real-world leadership and change and follow it up with a reflective practicum seminar.
Degrees and Programs:
Bachelor of Arts Completion in Liberal
Studies
Bachelor of Arts in Liberal Studies with
Teacher Preparation
Master of Arts in Psychology
Integrated Studies
Child, Couple and Family Therapy (CCFT)
Mental Health Counseling (MHC)
Art Therapy with CCFT
Art Therapy with MHC
Antioch Los Angeles
Art Therapy Post-Master’s Certificate
Master of Arts in Education
Master of Arts in Education with Teacher Preparation
Graduate Teacher Preparation
Master of Arts in Environment and Community
Master of Arts in Organizational Psychology
Master of Arts in Whole Systems Design
Master of Science in Management
Psy.D. in Clinical Psychology
Antioch Los Angeles was founded in 1972. Programs enabling adults to complete their undergraduate degrees are a
mainstay of the Los Angeles campus, but these returning students no longer represent a majority of the students at that
campus. This campus consists of approximately 45,000 square feet of leased space in Culver City, California. Master’s
programs in Psychology are the most heavily enrolled in both the Los Angeles and Santa Barbara campuses, which are
independent but cooperate closely, share much of their curricula and enjoy reciprocity. Whatever course of study they
pursue, students at Antioch Los Angeles enjoy the intimacy and interchange of small classes and usually undertake a service
learning project that engages them in the community.
Degrees and Programs:
Bachelor of Arts in Liberal Studies
Master of Arts
Education and Teacher Credentialing
Organizational Management
Psychology
Clinical Psychology
Master of Fine Arts in Creative Writing
Antioch Santa Barbara
Antioch Santa Barbara was founded in 1977. Programs enabling adults to complete their undergraduate degrees are
a mainstay of the Santa Barbara campus, but these returning students no longer represent a majority of the students at that
campus. This campus consists of approximately 12,000 square feet of leased space in Santa Barbara, California. Master’s
programs in Psychology are the most heavily enrolled at both the Santa Barbara and the Los Angeles campuses, which are
independent but cooperate closely, share much of their curricula and enjoy reciprocity. Whatever course of study they
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pursue, students at Antioch Santa Barbara enjoy the intimacy and interchange of small classes and usually undertake a
service-learning project that engages them in the community.
Degrees and Programs:
Bachelor of Arts in Liberal Studies
Master of Arts
Education and Teacher Credentialing
Organizational Management
Psychology
Clinical Psychology
Psy.D. in Clinical Psychology
University-Wide Ph.D. Program
In 2002, the University established its first University-wide program, a Ph.D. in Leadership and Change. A handful
of doctoral programs in the United States study leadership, but Antioch University, in keeping with its historical emphasis on
experiential learning and applied knowledge, is expanding leadership studies to include the practice of leadership and
effecting social change.
In addition to undertaking a challenging interdisciplinary course of study, much of it on-line, students must
demonstrate their competency by completing a major project in organizational leadership and change and a rigorous research
based dissertation. One member of the program’s initial cohort, a college dean, developed a partnership between her school
and a South African university; another formulated a code of ethics for a major financial institution where she is a senior
manager.
The structure of the program is as innovative as its curriculum. In a major advance in cooperation and synergy
among the University’s campuses, faculty and student cohorts convene in residencies at each campus in succession, while
every campus contributes resources. McGregor, for instance, is providing the program with financial and expertise and
Antioch New England with its superb research library.
Governing Structure
The University is governed by a Board of Trustees (the “Board”), which sets the financial budget for each fiscal
year, selects the President and Chancellor of the University, decides on the basic policies of the University, and monitors
overall operations of the University. The Board elects each trustee to serve for a three-year term, which generally is
renewable for three additional three-year terms. The Board is composed of not less than 15 nor more than 40 (including the
President of the Antioch College Alumni Association as an ex officio trustee) elected trustees plus the Chancellor of the
University as a non-voting ex officio trustee and the President of the Antioch College Alumni Association as ex officio
trustee.
The full Board meets a minimum of three times a year. The presence of a majority of the trustees is required for a
quorum at any meeting of the Board. All but a select few actions of the Board require the affirmative vote of a majority of
the trustees present at a meeting at which a quorum is present.
The following table lists the members of the Board and each trustee’s principal business or professional affiliation
and the year in which each trustee’s current term expires. The standing committees of the Board include the Academic
Affairs, Communications, Compensation; Development, Executive, Finance, Investment, Physical Facilities and Trusteeship
Committees. Members of the Executive Committee, marked by an asterisk, meet more frequently, and the Executive
Committee has the power to make most decisions for the Board. The Chancellor is an ex officio non-voting member of the
Executive Committee.
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Michael B. Alexander
Bruce P. Bedford*
Amy S. Chappell*
David Crippens
Daniel Fallon*
Vice Chair
John D. Feinberg
President,
Antioch College Alumni
Association
Dianne Brou Fraser
Everette Freeman
Sherwood H. Guernsey, II
Reuben Harris
Harold Joseph
Daniel 1. Kaplan
Jeffrey C. Kasch*
Niels Lyster
Thomas A. McNicol
John G. Merselis, Jr.
BOARD OF TRUSTEES
Affiliation
Managing Partner,
Echo Bridge Entertainment
Retired,
John Nuveen Company, Inc.
Associate Medical Director
Clinical Neuroscience
Eli Lilly and Company
Principal,
DLC & Associates
Chair,
Carnegie Corp. Education Div.
Principal,
The Collaborative
Retired,
Senior Vice President of Development
MINACT, Inc.
President
Albany State University
Attorney
Vice Chair
C & S Wholesale Grocers, Inc.
Executive Director,
Coachella Valley Enterprise Zone
Founder and Publisher
New England Home Magazine
President and CEO
JCK Enterprises, LLC
Retired VP/Marketing
American Phosphate Export Association
Retired Quality Engineer, CME
International Truck & Engine Corp.
Chairman,
Sweet Brook Care Centers, Inc.
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Term Expires (June)
2008
2007
2008
2006
2006
Ex Officio
2008
2008
2008
2006
2006
2007
2007
2006
2007
2006
Tullisse A. Murdock, Ph.D. *
Larry Stone*
Paula Treichler
Barbara Winslow*
Secretary
Arthur J. Zucker*
Chair
Leo Drey
Lillian Lovelace
Administration
Affiliation
Acting Chancellor,
Antioch University
Chief Operating Officer
Metron, Inc.
Retired Director and Research Professor
University of Illinois
at Urbana-Champaign
Assistant Professor of Women’s Studies,
Brooklyn College/City U. of NY
Retired President,
Zucker Associates, Inc.
Term Expires (June)
Ex Officio
2008
2006
2007
2007
Trustee Emeritus
Trustee Emeritus
The University’s daily administration, management, and policy implementation is conducted by the Chancellor and
Vice Chancellor of the University, as well as the President of each of Antioch College, Antioch McGregor, Antioch New
England, Antioch Seattle and Antioch Southern California. The Chancellor is appointed by and serves at the pleasure of the
Board. The following briefly describes the principal officers of the University.
TULLISSE A. MURDOCK, Acting President of the Corporation and Acting Chancellor of the University and Vice President
of the Corporation and President of Antioch University Seattle. Dr. Murdock became President of Antioch Seattle in July
1997. Before taking that position, Dr. Murdock served as assistant dean of the College of Arts and Sciences and as an
administrator and faculty member at Western Wyoming College and then moved to Seattle University where she served for
eight years as associate provost for academic planning and programs. Dr. Murdock has been actively involved in promoting
diversity in the curriculum and faculty at Antioch University. She has served as the president of the Seattle Coalition for
Educational Equity, an organization of educational institutions committed to increasing the number of students of color
graduating from higher education institutions and served eight years on the American Council on Education Office of
Women in Higher Education’s National Executive Board, receiving numerous awards and recognition for her work in
women’s leadership.
DON P. TECKLENBURG, Assistant Treasurer, Vice Chancellor and Chief Financial Officer of the University. Mr.
Tecklenburg is a C.P.A. and has been in higher education for 24 years. A graduate of Brown University (A.R Chemistry),
Wilmington College (RA. Accounting) and The Colgate Darden School of Business Administration (M.B.A.), Mr.
Tecklenburg has served as the Director of Financial Services at Wilmington College and as an Associate Professor of
Management from 1982-2001. From 2002-2004, he served as the Chief Financial Officer of Chatfield College and was a
Professor of Business Administration and served as chair of that department. Mr. Tecklenburg came to Antioch University as
the University Controller in December 2004 and assumed the role of Vice Chancellor and Chief Financial Officer in January
2005. Prior to entering academe, he was the Business Manager for the Cincinnati Reds.
BARBARA GELLMAN-DANLEY, Vice President of the University and President of Antioch McGregor. Dr. Danley was
appointed President of Antioch University McGregor effective May 1, 1999. From 1994 to 1999, Dr. Danley served as Vice
President for Educational Technology at Momoe Community College in Rochester, New York. She served as Vice President
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for Institutional Advancement at Monroe from 1991 to 1995. Previously, Dr. Danley served as Associate Executive Vice
Chancellor for Educational Outreach with the Oklahoma State Regents for Higher Education and Coordinator of
Telecommunications Services of the Oklahoma Network of Continuing Higher Education Outreach, also with the Oklahoma
State Regents for Higher Education. Dr. Danley was named IT Executive of the Year in 1998, an award sponsored by
Informix Software, Rochester ITEC, the Rochester Business Journal and TSR Consulting.
LUCY ANN GEISELMAN, Vice President of the University and President of Antioch University Southern California. Dr.
Geiselman was appointed President of Antioch University Southern California effective September 1, 2003. Previously, Dr.
Geiselman served as Professor and Special Assistant to the Dean, College of Education and prior to that as Dean of the
College of Extended Leaming at San Francisco State University. Before coming to San Francisco State University, Dr.
Geiselman was president and chief operating officer at Panetta Institute for Public Policy (Monterey). She was also the vice
president for university advancement at California State University at Monterey. Other appointments include president of
Mount Vernon College in Washington, D.C.; vice-president California Institute of the Arts (Valencia); vice-president of
institutional advancement at Eisenhower Medical Center (Beverly Hills and Palm Springs). She is a member of the Public
Health Institute’s board of directors (Berkeley) and also serves on the board for the Center for Development and Population
Activities (D.C.). She has also served as president of the University of Chicago Alumni Association of the Bay Area.
NEAL KING, Interim Vice President of the University and Interim President of Antioch New England Graduate School. Dr.
King was appointed Interim President of Antioch New England Graduate School, effective May 1,2005. He has served as
Antioch New England Graduate School’s fIrst Dean of Faculty and Academic Affairs since August 2004. Dr. King was the
founding director for an innovative new PsyD Program at John F. Kennedy University in Northern California. Both in this
role and later as Associate Dean of the then new Arizona School of Professional Psychology in Phoenix, Dr. King continued
to work closely with Antioch New England Graduate School’s psychology faculty in the National Council of Schools and
Programs of Professional Psychology. Dr. King has held previous positions as provost in a small undergraduate art and
design college in Colorado, as founding president of the California campus ofthe University of Sarasota, as counselor in a K
12 International School in London, as director of a bi-national cultural center in Laos, and as a faculty member in English in a
regional lycee in Algeria, as well as serving as a member of the adjunct faculty in the state university system in California
and a high school counselor and English teacher in the San Francisco Bay Area.
STEVEN W. LAWRY, Vice President of the University and President of Antioch College. Dr. Lawry was appointed
President of Antioch College in January 2006. Previously, Dr. Lawry was the director of the Office of Management Services
at the Ford Foundation. In that capacity, he was responsible for the program budget and worked with approximately eighty
program officers and fIeld directors throughout the world. He was previously head of the Ford Foundation’s office in
Namibia and was in charge of its Middle East and North Africa programs based in Cairo. He also has worked with USAID,
the United Nations, and as a Peace Corps volunteer in Botswana. Dr. Lawry holds a Ph.D. in Environmental Studies from the
University of Wisconsin-Madison and developed the African Land Tenure Center, focusing on applied research and policy, at
the University of Wisconsin from 1988-92. His professional focus has been on the environment, human rights issues,
governance, peace, poverty alleviation, and the development of strong and independent civil societies.
Accreditation
The University is a member of the Association of American Universities, and is fully accredited by the North
Central Association of Colleges and Schools, Commission on Institutions of Higher Education (NCACS). In 2003, NCACS
granted a 10-year extension based on the institution’s self-study with a 2006 focused visit on assessment and resources. The
focused visit report has been issued and the NCACS committee will fInish its review in April.
Faculty and Employees
The University has a full-time faculty of216. The University’s full-time faculty is augmented by over 760 part-time
faculty members and graduate assistants who teach courses. 55% of the University’s faculty is female. The University
maintains a student to faculty ratio of approximately 15 to 1. Only Antioch College grants tenure and 57% of the Antioch
College faculty of 47 have tenure.
The University believes that its faculty compensation program is competitive, allowing the University to attract and
retain persons with outstanding qualifIcations. Over the past three years, compensation increases have been at an annualized
rate of approximately 3%.
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As of December 31, 2005, the University had 378 full-time and 737 part-time employees (excluding faculty
mentioned above and including part-time student employees). The only unionized employees are 14 clerical employees at
Antioch University McGregor with a contract expiring in 2008 and 64 clerical, production and maintenance, and security
employees at Antioch College with a contract expiring in 2006. There have been no major labor issues for over 20 years.
Pension Plans
The University has a defmed contribution retirement plan for eligible faculty and non-faculty personnel managed by
Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF). Contributions to this plan
by the University were $3,264,679 in Fiscal Year 2005 ($3,051,771 in Fiscal Year 2004). Participants may also contribute at
their option to TIAA-CREF through individual retirement annuity contracts.
The University also maintains separate, self-administered, noncontributory pension plans for certain individuals,
who were faculty employees at June 30, 1970 or non-faculty personnel at June 30, 1973. Substantially all benefits previously
earned under these plans are paid directly by the University and amounted to approximately $64,660 in Fiscal Year 2005
($68,525 in Fiscal Year 2004). The unfunded, actuarially determined liability utilizing an average interest assumption of 7.5
percent for benefits earned under these plans was approximately $392,882 at June 30, 2005 ($429,000 at June 30, 2004) and
is included in accrued liabilities in the accompanying statements of financial position. The net periodic pension benefit cost
included as income in the statement of activities amounted to $35,637 in Fiscal Year 2005 ($30,422 in Fiscal Year 2004).
Medical Benefits
In addition to the University’s defmed contribution retirement plan, the University has three defined benefit
postretirement plans covering most salaried employees. One plan provides medical benefits, another provides prescription
drug benefits, and the third provides life insurance benefits. The postretirement health care and prescription drug plans are
contributory, with retiree contributions adjusted annually, and contain other cost-sharing features such as deductibles and
coinsurance. The accounting for the health care and prescription drug plans anticipates future cost-sharing changes to the
written plan that are consistent with the University’s expressed intent to increase the retiree contribution rate annually for the
expected general inflation rate for that year. The University’s policy is to pay the cost of retirees’ postretirement health care
and drug benefit claims as incurred and to pay the premiums to the life insurance plan for participants on an annual basis.
Insurance
The University maintains comprehensive insurance coverage on its assets. Buildings, other real property and
equipment are insured on a replacement value basis with a $10,000 deductible. For the October 31,2005-06 policy year, the
University is insured for an aggregate amount of approximately $11 million. Business interruption insurance is carried that
protects the University against loss of income from closure caused by insured events.
The University maintains insurance coverage for personal injury and property damage under a comprehensive
general liability policy with a $0 self insured retention, and loss limits of $10 million per occurrence. It also carries umbrella
policies that increase these coverages substantially. The University considers these policies to be comparable to those carried
by similar universities and businesses.
Enrollment
The following table of full-year unduplicated headcount sets forth the enrollment for the University for the past five
academic years:
Academic
Year
2000-01
2001-02
2002-03
2003-04
2004-05
Antioch
College
682
652
868
827
738
McGregor
628
644
703
715
737
New
England
910
960
1,117
1,127
1,141
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Seattle
816
877
1,324
1,291
1,318
Southern
California*
885
1,026
1,314
1,344
1,344
University
Ph.D
o
o
38
64
85
Total
Enrollment
3,921
4,159
5,364
5,368
5,363
The following table, based on fall-term registration, sets forth the full-time equivalent enrollment for the University for the
past five academic years:
Academic
Year
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
Antioch
College
630
660
719
713
711
510
McGregor
404
415
624
721
635
750
New
England
781
765
832
846
869
941
Seattle
657
580
725
675
764
660
Southern
California*
666
675
780
770
795
692
University
Ph.D
oo
38
64
85
91
Total FTE
Enrollment
3,137
3,095
3,718
3,789
3,859
3,644
* Combined Antioch Los Angeles and Antioch Santa Barbara.
The following tables summarize applications and admissions data for the preceding three academic years for each campus
and for the University-wide Ph.D. program:
Antioch College
Percent of
Academic Applications Applications Acceptance Students Accepted
Year Received Accepted Rate Enrolled Enrolled
2002-03 592 417 70% 191 46%
2003-04 592 402 68 186 46
2004-05 567 343 60 121 35
Antioch McGregor
Percent of
Academic Applications Applications Acceptance Students Accepted
Year Received Accepted Rate Enrolled Enrolled
2002-03 353 285 81% 273 96%
2003-04 363 309 85 296 96
2004-05 375 318 85 304 96
Antioch New England Graduate School
Percent of
Academic Applications Applications Acceptance Students Accepted
Year Received Accepted Rate Enrolled Enrolled
2002-03 528 331 63% 321 97%
2003-04 481 305 63 262 86
2004-05 440 277 63 240 87
Antioch Seattle
Percent of
Academic Applications Applications Acceptance Students Accepted
Year Received Accepted Rate Enrolled Enrolled
2002-03 817 576 71% 321 55%
2003-04 773 523 68 477 91
2004-05 821 500 61 473 95
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Antioch Los Angeles
Percent of
Academic Applications Applications Acceptance Students Accepted
Year Received Accepted Rate Emolled Emolled
2002-03 563 438 78% 401 92%
2003-04 588 452 77 412 91
2004-05 576 431 74 393 91
Antioch Santa Barbara
Percent of
Academic Applications Applications Acceptance Students Accepted
Year Received Accepted Rate Emolled Emolled
2002-03 277 235 85% 175 74%
2003-04 292 243 83 194 80
2004-05 264 211 80 168 80
University Ph.D.
Percent of
Academic Applications Applications Acceptance Students Accepted
Year Received Accepted Rate Emolled Emolled
2002-03 51 33 65% 27 82%
2003-04 48 34 71 26 76
2004-05 57 32 56 27 84
The University projects that total unduplicated headcount undergraduate emollment for the full year for the next five
years will be in the current range of approximately 1,750 to 2,000 students (total head count of full-time and part-time
students) and between 1,250 and 1,400 full-time equivalent students for the fall term. The University projects that total
unduplicated headcount graduate emollment for the full year for the next five years will be in the current range of
approximately 3,800 to 4,250 students (total head count of full-time and part-time students) and between 2,450 and 2,800
full-time equivalent students. The University believes that these figures are based on realistic assumptions concerning future
emollment.
Room and Board
The only campus with students in residence is Antioch College. As the college curriculum contains a cooperative
learning component, not all students reside on campus at the same time. The dorm census for fall 2006 was 222. Room and
Board produces revenue in excess of $2,000,000 per year which is a significant income stream for Antioch College;
nevertheless, on a University-wide basis, room and board accounts for less than 3% of total revenue.
Financial Aid
Financial aid for students is given in the forms of scholarships, grants, gifts, loans, and work-study employment.
The number of full-time undergraduate students receiving need-based financial aid for the 2004-05 academic year was 2,784,
which is 52% of the full-time undergraduates. The average financial aid including employment and loans was $3,700. Total
aid to undergraduates for the 2004-05 academic year was approximately $10 million comprised of Federal and State grants,
loan, work study, Institutional discounting, and Institutional Endowed scholarships.
There is no assurance that the current level of federal, state or the University’s financial assistance will be
maintained at comparable levels in future years. Any change in the availability of financial aid from these sources could
inhibit the University’s ability to attract students from all socioeconomic groups. The University has increased its own
budgetary commitment to student aid in order to compensate for actual and expected reductions in federal and state student
aid programs during each of the past five years, and expects that it will continue to do so for the foreseeable future.
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Revenues
The following table sets forth the total revenue of each campus of the University for each of the last five Fiscal Years.
Total Revenue
Fiscal Antioch Southern University
Year College McGregor New England Seattle California Ph.D
2000-01 $16,861,770 $5,168,849 $10,911,322 $9,455,210 $10,335,014 $0
2001-02 17,859,971 5,224,296 11,265,521 9,729,973 11,562,817 221,172
2002-03 17,515.890 6,315,364 11,923,734 10,753,675 12,515.035 687,523
2003-04 17,417,288 6,751,687 12,745,436 12,444,847 13,616,702 1,063,414
2004-05 18,964,238 7,152,228 13,822,768 13,961,781 14,719,592 1,340,470
The following table sets forth the percentage of revenues resulting from net tuition and fees for each campus of the
University for each of the last five Fiscal Years.
Fiscal
Year
2000-01
2001-02
2002-03
2003-04
2004-05
Antioch
College
53.8%
53.7
50.6
46.8
41.6
McGregor
94.7%
96.1
97.2
86.7
98.5
New England
80.7%
80.7
80.7
82.0
78.6
Seattle
90.7%
90.6
86.4
82.2
84.4
Southern
California
93.0%
93.2
90.4
90.9
90.9
University
Ph.D
42.6%
89.8
94.0
98.9
Certain Financial Information
The University’s financial accounts are maintained according to generally accepted accounting principles and
traditional concepts employed among institutions of higher education. Independent auditors have audited the University’s
financial statements for over 30 years.
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The financial information included in the Financial Position and History of Operations tables below is derived from
the University’s audited financial statements for those Fiscal Years.
Financial Position
Fiscal Year
2005 2004 2003 2002 2001
Assets
Cash and cash equivalents $9,229,101 $4,155,225 $3,813,141 $2,344,446 $1,713,885
Accounts receivable, less allowance for
doubtful accounts 7,624,609 6,144,744 7,825,396 7,106,514 7,152,409
Grants receivable 297,962 258,192 235,512 354,628 122,052
Prepaid expenses 1,645,333 1,153,294 1,086,748 942,449 1,089,221
Loans to students, less allowance for
uncollectible loans 5,347,887 5,276,302 4,914,390 4,728,349 4,660,982
Contributions receivable, less
allowance for uncollectible items 7,449,821 7,849,534 8,782,115 8,012,290 8,146,568
Investments 35,537,630 34,951,177 30,778,413 32,775,748 24,291,249
Land, buildings, and equipment – net 27,852,488 28,784,801 29,017,766 29,235,964 30,171,627
Total assets $94,984,831 $88,573,269 $86,453,481 $85,500,388 $77,347,993
Liabilities
Accounts payable $1,435,263 $1,541,563 1,482,595 1,195,587 902,614
Accrued benefit liabilities 3,502,506 3,538,873 3,340,608 3,600,782 2,926,606
Other accrued liabilities 2,259,937 2,249,463 2,254,832 1,986,335 2,746,542
Deferred revenue 11,333,315 10,061,093 9,610,700 8,481,091 6,866,640
Notes and bonds payable 13,618,552 14,363,855 15,232,743 16,105,596 17,115,900
Annuities payable 1,855,670 2,044,317 2,075,313 2,017,220 2,032,493
Deposits held for others 950,370 794,413 673,653 681,798 779,660
Advances from government for student
loans 4,827,683 4,729,376 4,645,503 4,597,376 4,578,820
Total liabilities $39,783,296 $39,322,953 $39,315,947 $38,665,785 $37,949,275
Net assets
Unrestricted 12,511,322 9,396,393 6,079,192 7,772,817 11,079,587
Temporarily restricted 12,474,230 10,046,825 12,315,678 10,793,370 10,429,319
Permanently restricted 30,215,983 29,807,098 28,742,664 28,268,416 17,889,812
Total net assets 55,201,535 49,250,316 47,137,534 46,834,603 39,398,718
Total liabilities and net assets $94,984,831 $88,573,269 $86.453.481 $85.500,388 $77.347,993
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History of Operations
Fiscal Year
2005 2004 2003 2002 2001
Revenues, gains and other support
Tuition and fees $59,494,638 $56,504,715 $52,339,789 $47,394,128 $43,946,537
Less student aid (6,197,694) 0,503,534) (5,701,407) (4,253,169) (3,392,569)
53,296,944 49,001,181 $46,638,382 43,140,959 40,553,968
Contributions 9,642,751 5,962,854 6,574,266 16,035,472 6,003,734
Contracts and other exchange transactions 6,156,619 6,024,940 4,926,258 4,370,662 3,988,819
Investment income on life income and
annuity agreements 76,728 94,562 100,402 112,216 191,351
Investment income on endowments 585,790 473,919 586,050 648,179 541,437
Other investment income 416,578 120,514 141,648 184,932 307,875
Net realized gains (losses) on endowments 1,441,669 876,708 (2,433,109) (649,478) (241,100)
Net realized gains (losses) on other
investments (183,518) 531 (8,128) (20,663) 60,666
Sales and service of auxiliary enterprises 3,607,992 3,871,733 3,774,241 3,672,379 3,400,471
Other income 1,643,073 1.529,498 1,277,772 1,046,152 1,231,092
Total revenues, gains and other support $76,684,626 $67,956,440 $61,577,782 $68,540,810 $56,038,313
Expenses and losses
Educational and general:
Instruction 29,974,931 27,794,929 25,475,975 23,654,752 22,618,821
Research 16,209 6,989 3,038 8,600
Public service 4,258,410 4,111,227 3,777,346 3,599,399 3,326,217
Academic support 5,811,861 5,314,624 4,406,197 4,055,756 4,193,282
Student services 8,424,675 7,550,276 7,072,801 6,500,859 6,273,366
Institutional support 16,792,857 15,073,408 13,874,757 14,226,105 13,525,387
Scholarships and fellowships 2,534,514 2,963,277 2,904,510 3,078,912 2,974,727
Total educational and general expenses 67,813,457 62,814,730 57,514,624 55,115,783 52,920,400
Auxiliary enterprises 4,052,720 3,936,006 4,583,131 4,342,031 4,369,307
Total expenses $71,866,177 $66,750,736 $62,097,755 $59,457,814 $57,289,707
Actuarial change on annuity obligations (198,507) (94,116) (65,678) (118,256) (42,042)
Payments to life income beneficiaries 245,320 239,824 242,013 242,094 247,518
Bad debt expense 2,113,314 273
Total expenses and losses $71,912,990 $69,009,758 $62,274,363 $59,581 ,652 $57,495,183
Revenues, gains and other support less
expenses and losses 4,771,636 (1,053,318) (696,581) 8,959,158 (1,456,870)
Net unrealized gains (losses) on
investments 1,179,583 3,166,100 999,512 (1,523,273) 528,904
(Decrease) increase in net assets 5,951,219 2,112,782 302,931 7,435,885 (927,966)
Net assets at beginning of year 49,250,316 47,137.534 46,834,603 39,398,718 40,326,684
Net assets at end of year $55,201.535 $49,250316 $47,137.534 $46,834,603 $39.398,718
The University’s operating budget is maintained on a modified cash basis. Estimates for Fiscal Year 2006 include
an increase in revenues from gross tuition and fees of approximately 3% over the prior year and result in a budgeted increase
in unrestricted net assets in excess of $1,000,000.
A-13
Management Discussion and Analysis
The University continues to grow with additional tuition and fees, gifts, and grants. Though the University is tuition
driven, it is mindful of budgeted enrollment shortfalls, as occurred in Fall 2005. Budgets have been adjusted such that all
academic units are projected to run a surplus, and the University currently expects an unrestricted net surplus in excess of $1
million for Fiscal Year 2006. This will be the third year in a row with an unrestricted net surplus. In addition to successful
unrestricted operations, temporarily restricted and endowment funds have increased. Since 2000, the endowment corpus has
had a 71% increase and temporarily restricted net assets are up 31%. During this period, long-term debt has decreased by
23%, or almost $4 million and cash has increased by nearly a factor of 4.
Beginning with the Fall of 2005, Antioch College launched a new curricular delivery system. Antioch College has
evolved an approach intended to empower students with broad-based knowledge, the ability to think creatively and make
effective contributions to society. This approach includes interdisciplinary, theme-focused, team-taught modes of study that
provide academic rigor and liberal arts integrated education. This academic experience is combined with work experience in
host communities where students have the opportunity to work in a job related to their professional goals while residing near
other Antioch College students and under the supervision of a professor living in the same community.
Litigation Affecting the University
There are currently several claims pending or threatened against the University with respect to the normal course of
the University’s operations. Management of the University believes that except as set forth below, there is no pending or
threatened litigation that would materially and adversely affect the University or its financial condition.
The University is a defendant in a suit filed by a former student of Antioch Southern California who alleges that
while receiving psychological counseling at the University’s counseling center she suffered damages by virtue of negligent
treatment, and that her counselor engaged in inappropriate conduct, including a sexual relationship. Causes of actions
include negligence, medical malpractice, intentional infliction of emotional distress, battery, sexual battery, sexual conduct
by a psychotherapist with a patient, breach of fiduciary duty, fraud, constructive fraud and sexual harassment. The
University’s insurance carrier has advised the University that a majority of the plaintiff’s complaint seeks damages for
injuries which fall outside of insurance coverage and as a result any judgment with respect to such charges would be the
responsibility of the University. The University intends to vigorously defend the charges on the merits; however, no
assurance can be given that that University will prevail and in the event it does not prevail, that any judgment would not have
a material adverse effect on the financial condition of the University.
Gifts, Grants and Bequests
The University annually solicits gifts and bequests for both current operating purposes and other needs. In addition,
the University receives various grants from private foundations and from agencies of the federal government. The following
table sets forth the total amount of gift and grant support received by the University for the last five Fiscal Years:
Total Annual Support
(Unrestricted Cash Restricted for Total
Fiscal Year Gifts) Endowment and Other Cash Gifts
2001 $2,895,961 $3,107,773 $6,003,734
2002 2,657,267 13,378,205 16,035,472
2003 2,196.021 4,378,245 6,574,266
2004 2,974,323 2,988,531 5,962,854
2005 2,087,111 7,555,640 9,642.751
There can be no assurance that the amount of gifts, grants and bequests received by the University will remain stable
or increase in the future. Future economic and other conditions, and actions by the federal government, including changes in
regulations affecting the tax treatment of such contributions, may affect the level of giving in the future.
A-14
Endowment
The University endowment includes funds that are subject to the restrictions of gift instruments requiring that the
principal be maintained in perpetuity and invested and that only the income be utilized, either for donor-specified purposes or
for general University purpose.
The year-end balances of the University endowment, shown at market value, for the past five Fiscal Years are
shown in the table below.
The following table summarizes the endowment market value and total return, which includes dividends, interest,
and realized and unrealized gains for the past five years.
Restricted Unrestricted Total Total Annual
At June 30 Endowment Endowment Endowment Return
2001 $13,276,338 $6,071,284 $19,342,622 2.58%
2002 22,599,925 5,611,191 28,211,116 (4.35)
2003 21,124,990 5,215,396 26,340,386 (2.39)
2004 24,325,563 5,911,308 30,236,871 17.25
2005 25,737,363 6,214,671 31,952,034 10.11
Distributions of the University’s endowment assets are governed by University spending policies and a budgeting
process that determine the amounts to be distributed for various uses and which result in total distributions from the
endowment in any year being 5% of a rolling twelve-quarter average market value of the endowment.
Outstanding Indebtedness
The following table sets forth the total outstanding indebtedness of the University as of January 31, 2006.
New Hampshire Health and Education Facilities Authority
Adjustable Rate Demand Refunding Revenue Bonds, Antioch
University Issue, Series 2004
Adjustable Rate Mortgage Loan
Washington State Housing Finance Commission Variable
Rate Demand Nonprofit Revenue Bonds, (Antioch University
Project), Series 2005
1997 Series State of Ohio Higher Education Facility Revenue
Bonds
2000 Series C State of Ohio Higher Education Facility
Revenue Bonds
Total
* To be refunded with the proceeds of the Bonds.
A-IS
Maturity
2024
2008
2027
2008
2020
Outstanding Principal Amount
$4,175,000.00
359,832.19
6,635,000.00
355,000.00*
1,455,000.00*
$12,979,832.19
(THIS PAGE INTENTIONALLY LEFT BLANK)
APPENDIXB
CERTAIN INFORMATION REGARDING NATIONAL CITY BANK
Thefollowing information has been obtained from National City Bank. The Commission, the Underwriter and the
University make no representations as to the accuracy or completeness ofsuch information.
National City Bank (the “Bank”) is a national banking association organized under the laws of the United States.
The Bank is engaged in general commercial banking and trust business.
All of the Bank’s capital stock is owned by National City Corporation, a bank holding company organized under
the laws of Delaware. The Letter of Credit is an obligation of the Bank and not of National City Comoration.
Certain financial statements of the Bank are set forth on the following pages. The Bank will provide without
charge to each person to whom this Offering Circular is delivered, upon written request of any such person, a copy
of National City Corporation’s most recent Annual Report on Form IO-K, as well as any subsequent and available
quarterly reports on Form IO-Q filed with the Securities and Exchange Commission. Written requests should be
delivered to National City Corporation, National City Center, 1900 East Ninth Street, Cleveland, Ohio 44114,
Attention: Treasurer.
B-1
REPORT OF CONDITION
NATIONAL CITY BANK
(Including Domestic and Foreign Subsidiaries)
At the close of business on September 30, 2005
ASSETS
(In Thousands)
388,425
334,699
112,882
$2,558,612
201,594
o
3,430,433
57.035,140
508,061
490,026
10,510
92
23,469
2,344,236
3,747,613
$71,185,792
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ..
Interest-bearing balances ..
Securities:
Held-to-maturity securities .
Available-for-sale securities .
Federal funds sold and securities purchased under agreement to resell:
Federal funds sold in domestic offices .
Securities purchased under agreements to resell… ; ..
Loans and lease financing receivables:
Loans and leases held for sale ..
Loans and leases, net of unearned income…………………………………………. $57,664,090
Less: Allowance for loan and lease losses ,……………………………. 628,950
Loans and leases, net of unearned income and allowance ..
Assets held in trading accounts .
Premises and fixed assets (including capitalized leases) ..
Other real estate owned .
Investments in unconsolidated subsidiaries and associated companies
Customers’ liability to this bank on acceptances outstanding ..
Intangible assets .
Other assets ..
–==:-:’-~”‘=~TOTAL ASSETS .
LIABILITIES
4.595,131
$33,284,969
Deposits:
In domestic offices .
Non-interest bearing…………………………………………………………………….. $9,380,615
Interest-bearing……………………………………………………………………………. 23,904,354
In foreign offices, Edge and Agreement subsidiaries, and IBFs ..
Interest-bearing……………………………………………………………………………. 4,595,131
Federal funds purchased and securities sold under agreements to repurchase:
Federal funds purchased in domestic offices……………………………………………………………………….. 706,029
Securities sold under agreements to repurchase………………………………………………………………….. 2,089,011
Trading Liabilities…… 11,058
Other borrowed money…………………………………………………………………………………………………………… 19,648,894
Bank’s liability on acceptances executed and outstanding………………………………………………………….. 23.469
Subordinated notes and debentures………………………………………………………………………………………… 1,639.270
Other liabilities………………………………………………………………………………………………………………………. 2,109,994
TOTAL LIABILITIES – -‘:”64’:”‘-.1::-::0::7″‘:::.8~25=-
Minority interest in consolidated subsidiaries 150,309
EQUITY CAPITAL
Common Stock……………. 7.311
Surplus…………………………………………………………………………………………………………………………………. 3,374,695
Retained earnings………………………………………………………………………………………………………………….. 3,537,988
Ac~;T~~t~dQ~~~ ~:~~:t~.~.i~~.~~~~~~.::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::–‘6;-:.9″‘2-‘:;;;’-::~;;;~:-;:’
TOTAL LIABILITIES AND EQUITY CAPITAL……………………………………………………………………….. $71.185,792
B-2
APPENDIXC
PROPOSED FORM OF BOND COUNSEL OPINION
OF SQUIRE, SANDERS & DEMPSEY L.L.P.
March _, 2006
To: Ohio Higher Educational Facility Commission
Columbus, Ohio
B.C. Ziegler and Company
New Albany, Ohio
We have examined the transcript of proceedings (the “Transcript”) relating to the issuance by the Ohio
Higher Educational Facility Commission (the “Commission”) of $13,795,000 Higher Educational Facility Variable
Rate Revenue Bonds (Antioch University 2006 Project) dated their date of issuance and delivery (the “Bonds”) of
the State of Ohio (the “State”). The Bonds are being issued for the purpose of providing funds to pay “project costs”
of “educational facilities,” as those terms are defined in Section 3377.01 of the Revised Code, including costs
relating to acquiring, constructing, renovating, improving, equipping and furnishing a new building for Antioch
University’s (the “University”) adult non-residential campus in Yellow Springs, Ohio known as “Antioch University
McGregor” and other related facilities, including facilities for graduate and adult education, and acquiring the site
thereof, and refunding a portion of each of State of Ohio Higher Educational Facility Variable Rate Demand Revenue
Bonds (Pooled Financing 1997 Program) (the “1997 Bonds”) and State of Ohio Variable Rate Demand Revenue Bonds
(Pooled Financing 2000 Program) Series C (the “2000 Bonds”) which were previously issued in part to fund University
educational facilities consisting of, with respect to the 1997 Bonds, (i) the renovation and remodeling of Spalt Hall and
the International Center, (ii) the renovation and remodeling of President and West Dormitories, (iii) the construction of
the New Dormitory, and (iv) the renovation of the heating plant including new boilers, all together with the necessary
appurtenances thereto and, with respect to the 2000 Bonds, acquiring and installing telephone switch equipment, data
and telephone network, computers and related applications, equipment and facilities, mail processor, residence hall,
laboratory and classroom furniture and equipment, tractor, passenger van, records archive project, upgrading of lighting
systems and transformer, and renovation and improvements of conference room, residence halls (including air
conditioning),roofs of certain buildings, drives, parking, walkways and landscape and utility systems, and for such other
uses as are permitted by the Act and the Lease (collectively, the “Project”), including costs incidental thereto and the
costs of financing and refinancing thereof, and to pay certain issuance costs related to the Bonds. The Bonds are
issued and secured by the Trust Agreement (the “Trust Agreement”) between the Commission and U.S. Bank
National Association, Cleveland, Ohio, as trustee (the “Trustee”). The Project has been leased by the University, as
lessor, to the Commission, as lessee, under the Base Lease (“Base Lease”) and has been leased back to the
University under the Lease (the “Lease”) between the Commission, as lessor, and the University, as lessee. Pursuant
to the Assignment of Rights under Lease (the “Assignment”), the Commission has assigned to the Trustee for the
benefit of the holders of the Bonds substantially all of its rights under the Lease, including the Rental Payments to be
made by the University. The documents in the Transcript examined include signed counterparts of the Base Lease,
the Lease, the Assignment and the Trust Agreement, each dated as of February 1,2006. We have also examined a
conformed copy of a signed and authenticated Bond of the first maturity.
Based on this examination, we are of the opinion that under existing law:
1. The Bonds, the Base Lease, the Lease, the Assignment and the Trust Agreement are legal, valid,
binding and enforceable in accordance with their respective terms, except that the binding effect and enforceability
thereof are subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws in effect from
time to time affecting the rights of creditors generally, and except to the extent that the enforceability thereof may be
limited by the application of general principles of equity.
2. The Bonds constitute special obligations of the State, and the principal of and interest and any
premium on the Bonds (collectively, “debt service”) are payable solely from the revenues and other money pledged
and assigned by the Trust Agreement and the Assignment to secure that payment, including the payments required
to be made by the University under the Lease. The Bonds and the payment of debt service are not secured by an
C-l
obligation or pledge of any money raised by taxation, and the Bonds do not represent or constitute a debt, or,pledge
of the faith and credit, of the State or the Commission.
3. The interest on the Bonds is excluded from gross income for federal income tax purposes under
Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), and is not treated as an item of tax
preference under Section 57 of the Code for purposes of the alternative minimum tax imposed on individuals and
corporations. The Bonds are “qualified 501(c)(3) bonds” as defined in Section 145(a) of the Code. The interest on
the Bonds, and any profit made on their sale, exchange or other disposition, are exempt from the Ohio personal
income tax, the Ohio commercial activity tax, the net income base of the Ohio corporate franchise tax, and
municipal and school district income taxes in Ohio.
In giving the foregoing opinion with respect to the treatment of interest on the Bonds and the status of
the Bonds under the tax laws, we have assumed and relied upon compliance with the covenants of the University
and the Commission, and the accuracy, which we have not independently verified, of the representations and
certifications of the University and the Commission contained in the Transcript. The accuracy of certain of those
representations and certifications, and compliance by the University and the Commission with certain of those
covenants, may be necessary for the interest on the Bonds to be and to remain excluded from gross income for
federal income tax purposes and for other tax effects stated above. Failure to comply with certain of those
covenants subsequent to issuance of the Bonds could cause interest on the Bonds to be included in gross income for
federal income tax purposes retroactively to the date of their issuance.
Under the Code, portions of the interest on the Bonds earned by certain corporations may be subject to
a corporate alternative minimum tax, and interest on the Bonds may be subject to a branch profits tax imposed on
certain foreign corporations doing business in the United States and to a tax imposed on excess net passive income
of certain S corporations.
In rendering this opinion, we have relied upon opinions, certifications and representations of fact,
contained in the Transcript, which we have not independently verified, and we have assumed the due authorization,
signing and delivery by, and the binding effect upon and the enforceability against, the Trustee of the Trust
Agreement. We have also relied upon the opinions of, Martin Browne Hull & Harper, P.L.L. and Hawkins
Delafield & Wood LLP, counsel for the University, contained in the Transcript, as to all matters concerning the
University, including the due authorization, signing and delivery by, and the binding effect upon the enforceability
against, the University of the Base Lease, the Lease and the Guaranty, matters of title to the Project and the status of
the University as a 501(c)(3) organization within the meaning of the Code.
We express no opinion concerning the Letter of Credit identified III the Transcript delivered III
connection with the issuance of the Bonds.
C-2
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