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n.PRELIMINARY OFFICIAL STATEMENT DATED JULY 7, 2017

NEW ISSUE - Book Entry Only RATINGS: S&P Series 2017A “A-”S&P Series 2017B “BBB-”

See “RATINGS” herein

In the opinion of Butler Snow LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, (i) interest on the Bonds will be excludible from gross income of the holders thereof for purposes of federal income taxation and (ii) interest on the Bonds will not be a specific item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. Bond Counsel expresses no opinion with respect to the treatment of interest on the Bonds under the laws of any state. See “Tax MaTTers.”

$60,505,000*PUBLIC FINANCE AUThORITYMultifamily housing Revenue Bonds

(Cedar Grove Portfolio Project)

$54,425,000*Series 2017A

$6,080,000*Subordinate Series 2017B

Dated: Date of Delivery Due: As shown on inside front cover

The Public Finance Authority (the “Authority”) is issuing its (i) $54,425,000* Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project) Series 2017A (the “Series 2017A Bonds”), and (ii) $6,080,000* Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project) Subordinate Series 2017B (the “Series 2017B Bonds” and together with the Series 2017A Bonds, the “Bonds”). The Series 2017A Bonds are sometimes referred to herein as the “Senior Bonds.” The Series 2017B Bonds are sometimes referred to herein as the “Subordinate Bonds.” The principal of, premium, if any, and interest on the Bonds are payable at the designated corporate trust office of Wilmington Trust, National Association, as Trustee (the “Trustee”), in Dallas, Texas. Interest on the Bonds is payable on June 1 and December 1 of each year, commencing December 1, 2017. The Bonds are being issued only as fully registered bonds in denominations of $5,000 each and integral multiples thereof. The Bonds will be issued in book-entry form only under a global book-entry system operated by The Depository Trust Company, New York, New York (“DTC”), and purchasers will not be entitled to receive certificates representing their Bonds for so long as the global book-entry system is in effect. See “THE BONDS-Book Entry-Only System.” Principal of, premium, if any, and interest on the Bonds will be paid by the Trustee directly to DTC, as the registered owner thereof. Any purchaser as a beneficial owner of a Bond must maintain an account with a broker or dealer who is, or acts through, a DTC Participant to receive payment of the principal of, premium, if any, and interest on such Bond. The Bonds are subject to redemption prior to maturity as more fully described herein.

The Bonds are being issued pursuant to and secured by a Trust Indenture dated as of July 1, 2017 (the “Indenture”) between the Authority and the Trustee. The proceeds of the Bonds will be loaned to: (i) 2017 IAVF Cedar Whispering LLC, a Florida limited liability company; (ii) 2017 IAVF Twin City LLC, a Florida limited liability company; (iii) 2017 IAVF Cedar Silas LLC, a Florida limited liability company; and (iv) 2017 IAVF Cedar Chesterfield LLC, a Florida limited liability company (collectively, the “Borrowers” and each a “Borrower”), each of whose sole member is Invest in America’s Veterans Foundation, Inc. (the “Sole Member”), a Florida nonprofit corporation recognized as an exempt organization pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, to (a) finance the cost of the acquisition, renovation and equipping of the following facilities: (i) a 312-unit multifamily residential rental housing facility located in Spartanburg, South Carolina, (ii) a 285-unit multifamily residential rental housing facility located in Winston-Salem, North Carolina, (iii) a 234-unit multifamily residential rental housing facility located in Winston-Salem, North Carolina, and (iv) a 294-unit multifamily residential rental housing facility located in Winston-Salem, North Carolina, (collectively, the “Projects” and each a “Project”), (b) fund separate accounts for the Senior Bonds and the Subordinate Bonds in the Debt Service Reserve Fund, (c) pay certain costs of issuing the Bonds.

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

INVESTMENT IN ThE BONDS INVOLVES A SIGNIFICANT DEGREE OF RISK AND EACh PROSPECTIVE INVESTOR ShOULD CONSIDER ITS FINANCIAL CONDITION AND ThE RISKS INVOLVED TO DETERMINE ThE SUITABILITY OF INVESTING IN ThE BONDS. SEE “RISK FACTORS AND INVESTMENT CONSIDERATIONS” hEREIN.

The Bonds will be secured by a pledge and assignment of the Trust Estate (as defined herein), including certain revenues from the Projects and funds deposited under the Indenture, including payments made by the Borrowers pursuant to the Loan Agreement dated as of July 1, 2017 (the “Loan Agreement”) among the Authority and the Borrowers. The Borrowers’ obligations under the Loan Agreement are secured by the Mortgages, which include a pledge of Project Revenues (as defined in the Indenture). The Subordinate Bonds are subordinate to the Senior Bonds in the manner and to the extent described herein. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” herein. A FAILURE TO PAY PRINCIPAL OR INTEREST ON ThE SUBORDINATE BONDS WILL NOT CONSTITUTE AN EVENT OF DEFAULT AS LONG AS ThE SENIOR BONDS ARE OUTSTANDING. See “RISK FACTORS AND INVESTMENT CONSIDERATIONS – Subordinate Status of Series 2017B Bonds” herein and “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Indenture; Revenue Fund” and “– The Indenture; Defaults and Remedies” in Appendix B hereto.

The Bonds are offered when, as, and if issued by the Authority, subject to prior sale, withdrawal or modification of the offer without notice and subject to the approval of legality by Butler Snow LLP, Atlanta, Georgia, Bond Counsel. Certain legal matters will be passed upon for the Authority by its counsel von Briesen & Roper, s.c., Milwaukee, Wisconsin; for the Borrowers by its counsel Brennan, Manna & Diamond, Jacksonville, Florida, and by Parker Poe Adams & Bernstein LLP, Greenville, South Carolina, with respect to certain South Carolina and North Carolina matters; and for Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) by Kutak Rock LLP, Omaha, Nebraska. It is expected that delivery of the Bonds will be made against payment therefor through the facilities of DTC on or about July 27, 2017.

This cover page contains limited information for reference only. It is not a summary of the issue. The entire Official Statement, including the Appendices, must be read to make an informed investment decision.

Date: ____________, 2017

* Preliminary; subject to change

MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND PRICES

$54,425,000* PUBLIC FINANCE AUTHORITY

MULTIFAMILY HOUSING REVENUE BONDS (CEDAR GROVE PORTFOLIO PROJECT)

SERIES 2017A BONDS

Maturity Date Principal Amount Interest Rate Yield CUSIP**

December 1, 2027 $8,595,000* % % December 1, 2042 $21,165,000* December 1, 2052 $24,665,000*

$6,080,000* PUBLIC FINANCE AUTHORITY

MULTIFAMILY HOUSING REVENUE BONDS (CEDAR GROVE PORTFOLIO PROJECT)

SUBORDINATE SERIES 2017B BONDS

Maturity Date Principal Amount Interest Rate Yield CUSIP**

December 1, 2052 $6,080,000* % %

* Preliminary; subject to change **CUSIP numbers have been assigned by an independent company not affiliated with the Authority, the Borrowers or the Underwriter and are included solely for the convenience of the holders of the Bonds. None of the Authority, the Borrowers or the Underwriter are responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of the Bonds.

No dealer, broker, salesman, or other person has been authorized by the Borrowers or the Authority to give any information or to make any representation with respect to the Bonds, other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the Borrowers or the Authority. This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation, or sale. The information set forth herein has been obtained from the Borrowers and other sources which are believed to be reliable but is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Borrowers or the Authority. The information regarding DTC has been obtained from DTC, but is not guaranteed as to accuracy or completeness by the Borrowers. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the information or opinions set forth herein after the date of this Official Statement. This Official Statement does not constitute a contract between or among the Authority, the Borrowers or the Underwriter and any one or more of the purchasers or registered Holders of the Bonds.

THE AUTHORITY HAS NOT PARTICIPATED IN THE PREPARATION OF, OR REVIEWED OR APPROVED, AND DOES NOT REPRESENT OR WARRANT IN ANY WAY, THE ACCURACY OR COMPLETENESS OF ANY OF THE INFORMATION SET FORTH IN THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES HERETO OTHER THAN THE STATEMENTS SET FORTH UNDER THE CAPTIONS “THE AUTHORITY” AND “LITIGATION – THE AUTHORITY.”

Wilmington Trust, National Association, as Trustee, has not reviewed, provided or undertaken to determine the accuracy of any of the information contained in this Official Statement and makes no representation or warranty, express or implied, as to any matters contained in this Official Statement, including, but not limited to, (i) the accuracy or completeness of such information, (ii) the validity of the Bonds, or (iii) the tax-exempt status of the Bonds.

CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by the CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Global Market Intelligence, as part of S&P Global Inc.

The Bonds have not been registered under the Securities Act of 1933, and the Indenture has not been qualified under the Trust Indenture Act of 1939, in reliance on exemptions contained in such Acts.

THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE SECURITIES HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THE BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON OR UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT.

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

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This Official Statement contains “forward-looking” information within the meaning of the federal securities laws. Certain statements in this Official Statement that relate to the Projects and the Borrowers including,

but not limited to, statements under the captions “THE BORROWERS AND THE PROJECTS,” “ESTIMATED SOURCES AND USES OF FUNDS,” and “PRO FORMA FINANCIAL PROJECTIONS” attached hereto as Appendix D are forward-looking statements that are based on the beliefs of, and assumptions made by, the management of the Borrowers. The forward-looking information includes statements concerning the Borrowers’ outlook for the future, as well as other statements of beliefs, future plans and strategies or anticipated events, and similar expressions concerning matters that are not historical facts. Forward-looking information and statements are subject to many risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, the statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of the Projects and the Borrowers to be materially different from any expected future results or performance. These risks and uncertainties include the availability and amount of governmental reimbursements, appropriations, the competitive environment and related market conditions, operating efficiencies, access to capital, the cost of compliance with environmental and health standards, litigation and other risks and uncertainties described herein under “RISK FACTORS AND INVESTMENT CONSIDERATIONS.” Readers are cautioned not to place undue reliance on forward-looking statements because actual results may differ materially from those expressed in, or implied by, the statements. Any forward-looking statement made in this Official Statement speaks only as of the date of such statement, and the Borrowers and the Authority undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

THE UNDERWRITER HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES ARISING UNDER WISCONSIN STATE LAW WITH RESPECT TO (1) THE VALIDITY OF THE TRUST INDENTURE OR OTHER DOCUMENTS ISSUED IN CONNECTION WITH THIS TRANSACTION, (2) THE SUBJECT MATTER OF OPINIONS GIVEN BY COUNSEL ISSUED IN CONNECTION WITH THIS TRANSACTION, AND (3) INFORMATION SUPPLIED BY OTHER PARTIES TO THE TRANSACTION. THIS DISCLAIMER DOES NOT APPLY AND IS NOT INTENDED TO APPLY TO THE UNDERWRITER’S RESPONSIBILITIES UNDER THE FEDERAL SECURITIES LAWS.

[Remainder of Page Intentionally Left Blank]

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TABLE OF CONTENTS

INTRODUCTION ....................................................................................................................................................... 1

THE BONDS ............................................................................................................................................................... 4

General Description ....................................................................................................................................... 4 Transfer and Exchange of the Bonds ............................................................................................................. 4 Book-Entry-Only System .............................................................................................................................. 4 Revision of Book-Entry-Only System ........................................................................................................... 7 Mandatory Redemption of Bonds ................................................................................................................. 7 Optional Redemption of Bonds ..................................................................................................................... 8 Mandatory Sinking Fund Redemption .......................................................................................................... 8 Selection of Bonds to be Redeemed ............................................................................................................ 10 Notice of Redemption ................................................................................................................................. 10 Payment of Redemption Price ..................................................................................................................... 10 No Partial Redemption After Default .......................................................................................................... 11

ANNUAL DEBT SERVICE REQUIREMENTS ...................................................................................................... 11

SECURITY AND SOURCES OF PAYMENT FOR THE BONDS ......................................................................... 12

Trust Estate .................................................................................................................................................. 12 Special Limited Obligations of Authority ................................................................................................... 12 Repayment of Loan; Limited Recourse ....................................................................................................... 12 Mortgages .................................................................................................................................................... 13 Rate Covenants ............................................................................................................................................ 13 Flow of Project Revenues ............................................................................................................................ 14 Revenue Fund .............................................................................................................................................. 15 Debt Service Reserve Fund ......................................................................................................................... 16 Surplus Funds .............................................................................................................................................. 17 Other Funds ................................................................................................................................................. 18 No Credit Enhancement Facility ................................................................................................................. 18 Other Covenants of the Borrowers .............................................................................................................. 18 Relationship Among Series ......................................................................................................................... 18 Issuance of Additional Bonds ...................................................................................................................... 19

THE AUTHORITY ................................................................................................................................................... 19

Formation and Governance ......................................................................................................................... 19 Powers ...................................................................................................................................................... 20 Local and TEFRA Approvals ...................................................................................................................... 20 Governing Body .......................................................................................................................................... 20 Resolutions; Approval ................................................................................................................................. 21 Special Limited Obligations ........................................................................................................................ 21 Other Obligations ........................................................................................................................................ 21 Limited Involvement of the Authority ........................................................................................................ 22

THE BORROWERS AND THE PROJECTS ........................................................................................................... 22

The Borrowers ............................................................................................................................................. 22 The Sole Member ........................................................................................................................................ 22 The Projects ................................................................................................................................................. 25 The Seller ................................................................................................................................................... 25 Limitation on Obligations of the Borrowers ................................................................................................ 27 The Property Manager ................................................................................................................................. 27 Prior Operating Histories ............................................................................................................................. 32 Occupancy ................................................................................................................................................... 32

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Pro Forma Financial Projections ................................................................................................................. 33 Environmental Assessments ........................................................................................................................ 33 Physical Needs Assessments ....................................................................................................................... 34 Project Regulation ....................................................................................................................................... 35 Insurance ..................................................................................................................................................... 35

APPRAISALS ........................................................................................................................................................... 35

ESTIMATED SOURCES AND USES OF FUNDS ................................................................................................. 36

RISK FACTORS AND INVESTMENT CONSIDERATIONS ................................................................................ 36

Special Limited Obligations of Authority ................................................................................................... 37 Limited Resources of Borrowers; Security for Repayment ......................................................................... 37 The Borrowers and Related Parties; Conflicts of Interest ........................................................................... 37 Future Project Revenues and Expenses ....................................................................................................... 38 Subordinate Status of Series 2017B Bonds ................................................................................................. 38 Risks of Real Estate Investment .................................................................................................................. 39 Marketing and Management ........................................................................................................................ 40 Effect of Increases in Operating Expenses .................................................................................................. 40 Projects’ Risks ............................................................................................................................................. 40 Insurance Risks ........................................................................................................................................... 41 Delinquent and Defaulting Tenants ............................................................................................................. 42 Appraisals .................................................................................................................................................... 42 Physical Needs Assessments ....................................................................................................................... 43 Financial Projections ................................................................................................................................... 43 Acceleration of the Bonds; Limitation ........................................................................................................ 43 Risk of Early Redemption ........................................................................................................................... 43 Risk of Loss Upon Redemption .................................................................................................................. 43 Incurrence of Additional Indebtedness ........................................................................................................ 44 Debt Service Reserve Fund ......................................................................................................................... 44 Effect of Bankruptcy ................................................................................................................................... 44 Enforceability of Remedies; Prior Claims ................................................................................................... 45 Secondary Market and Prices ...................................................................................................................... 45 Credit Ratings .............................................................................................................................................. 45 Environmental Matters ................................................................................................................................ 46 Forward-Looking Statements ...................................................................................................................... 46 Specific Tax Covenants of Borrowers and Rental Restrictions ................................................................... 46 Taxation of the Bonds ................................................................................................................................. 47 Federal Income Tax Matters and Securities Laws; 501(c)(3) Status ........................................................... 47 Possible Consequence of Tax Compliance Audit ........................................................................................ 47 Other Possible Risk Factors ........................................................................................................................ 48 Summary ..................................................................................................................................................... 48

LITIGATION ............................................................................................................................................................ 48

The Authority .............................................................................................................................................. 48 The Borrowers ............................................................................................................................................. 48

APPROVAL OF LEGAL MATTERS ...................................................................................................................... 49

TAX MATTERS ....................................................................................................................................................... 49

General Matters ........................................................................................................................................... 49 Backup Withholding ................................................................................................................................... 50 Original Issue Discount ............................................................................................................................... 50 Changes in Federal and State Tax Law ....................................................................................................... 50

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RATINGS .................................................................................................................................................................. 51

UNDERWRITING .................................................................................................................................................... 51

CONTINUING DISCLOSURE ................................................................................................................................. 51

RELATIONSHIP AMONG PARTIES ..................................................................................................................... 52

MISCELLANEOUS .................................................................................................................................................. 52

APPENDIX A – DEFINITIONS OF CERTAIN TERMS APPENDIX B – SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS APPENDIX C – FORM OF BOND COUNSEL OPINION APPENDIX D – COMPILATION OF HISTORICAL FINANCIAL STATEMENTS AND PRO FORMA

FINANCIAL PROJECTIONS APPENDIX E – FORM OF CONTINUING DISCLOSURE AGREEMENT

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1

OFFICIAL STATEMENT

relating to the original issuance of

$60,505,000* Public Finance Authority

Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project)

consisting of:

$54,425,000* Series 2017A

$6,080,000* Subordinate Series 2017B

INTRODUCTION

This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and Appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of Bonds to potential investors is made only by means of the entire Official Statement. For the definitions of certain other terms used in this Official Statement and not otherwise defined herein, see Appendix A “DEFINITIONS OF CERTAIN TERMS” hereto.

Purpose of this Official Statement. This Official Statement, including the cover page and the Appendices hereto, is provided to furnish information in connection with the original issuance by the Public Finance Authority (the “Authority”) of its (i) $54,425,000* Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project) Series 2017A (the “Series 2017A Bonds”) and (ii) $6,080,000* Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project) Subordinate Series 2017B (the “Series 2017B Bonds” and together with the Series 2017A Bonds, the “Bonds”). The Series 2017A Bonds are sometimes referred to herein as the “Senior Bonds.” The Series 2017B Bonds are sometimes referred to herein as the “Subordinate Bonds.”

Purpose of the Bonds. The Bonds are being issued by the Authority to make a loan to: (i) 2017 IAVF Cedar Whispering LLC, a Florida limited liability company; (ii) 2017 IAVF Twin City LLC, a Florida limited liability company; (iii) 2017 IAVF Cedar Silas LLC, a Florida limited liability company; and (iv) 2017 IAVF Cedar Chesterfield LLC, a Florida limited liability company (collectively, the “Borrowers” and each a “Borrower”), each of whose sole member is Invest in America’s Veterans Foundation, Inc. (the “Sole Member”), a Florida nonprofit corporation recognized as an exempt organization pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”). The Loan will be made pursuant to a Loan Agreement dated as of July 1, 2017 (the “Loan Agreement”), among the Authority and the Borrowers, and will be used to (a) finance the cost of the acquisition, renovation and equipping of the following facilities: (i) a 312-unit multifamily residential rental housing facility located in Spartanburg, South Carolina, (ii) a 285-unit multifamily residential rental housing facility located in Winston-Salem, North Carolina, (iii) a 234-unit multifamily residential rental housing facility located in Winston-Salem, North Carolina, and (iv) a 294-unit multifamily residential rental housing facility located in Winston-Salem, North Carolina (collectively, the “Projects” and each a “Project”), (b) fund separate accounts for the Senior Bonds and the Subordinate Bonds in the Debt Service Reserve Fund, (c) pay certain costs of issuing the Bonds. See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” and “ESTIMATED SOURCES AND USES OF FUNDS.”

THE SERIES 2017B BONDS (ALSO REFERRED TO HEREIN AS THE “SUBORDINATE BONDS”) ARE SUBORDINATE IN RIGHT OF PAYMENT, SECURITY AND PRIORITY TO THE SERIES 2017A BONDS (ALSO REFERRED TO HEREIN AS THE “SENIOR BONDS”).

The Bonds. The Bonds are to be issued pursuant to the provisions of Wisconsin law applicable to the Authority, including without limitation, Sections 66.0301, 66.0303 and 66.0304 of the Wisconsin Statutes (as amended, the “Statute”), and a Trust Indenture dated as of July 1, 2017 (the “Indenture”), between the Authority and


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Wilmington Trust, National Association, Dallas, Texas, as trustee (the “Trustee”). The Bonds will be issued in the amounts, will be dated, will bear interest at the respective rates and will be payable on the dates and will mature on the respective dates set forth on the inside cover page of this Official Statement. The Bonds are subject to redemption as described herein under the caption “THE BONDS – Mandatory Redemption of Bonds; – Optional Redemption of Bonds; and – Mandatory Sinking Fund Redemption.” For a more complete description of the Bonds, see “THE BONDS” herein.

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

Trust Estate. The Bonds are secured by the Trust Estate created in the Indenture which includes all right, title and interest of the Authority in and to (a) the Note, the Mortgages, the Land Use Restriction Agreements and the Loan Agreement (other than the Unassigned Rights as defined in the Indenture), including the proceeds thereof or recovery thereon; (b) all funds, money and securities from time to time held by the Trustee under the terms of the Indenture (except with respect to money in the Rebate Fund) and any interest, profits and other income derived from the investment thereof, including the proceeds of the Bonds, subject to the application thereof in accordance with the Indenture, and including Net Proceeds; (c) any and all other rights and interests in property conveyed, mortgaged, pledged, assigned or transferred as and for additional security for the Bonds by the Authority or by anyone on its behalf or with its written consent to the Trustee; and (d) all proceeds of the foregoing. The Subordinate Bonds are subordinate in all respects to the Senior Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” herein.

The Note. The Borrowers are jointly and severally obligated under the Loan Agreement to make payments (the “Loan Payments”) in such amounts and at such times as will be sufficient to pay, when due, the principal of, premium, if any, and interest on the Bonds as well as pay certain other fees and expenses in connection with the Bonds. As evidence of their obligations to make the Loan Payments with respect to the Bonds the Borrowers will execute and deliver to the Trustee a promissory note (the “Note”).

Nonrecourse Obligations. The Borrowers’ obligations under the Loan Agreement, the Note and the hereinafter defined Mortgages are limited, nonrecourse obligations and the Borrowers have no obligation to make payments of amounts due under the Loan Agreement except from Project Revenues and from amounts held in the Funds and Accounts created under the Indenture and the security provided by the Mortgages. No other revenues or assets of the Borrowers or the Sole Member will be available for the payment of, or as security for, the Bonds. The right of the Authority to collect and receive payments under the Loan Agreement (other than payments related to the Unassigned Rights) has been assigned to the Trustee under the Indenture for the benefit of the Holders. No assets or other revenues of the Authority are or will be available for the payment of, or as security for, the Bonds. The Sole Member will not have any liability on account of the financial obligations of the Borrowers under the Loan Agreement and the Note or the other Bond Documents. The Sole Member will enter into certain other of the Bond Documents for the sole purpose of agreeing to comply with the tax covenants therein, but the Trustee’s recourse

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against the Sole Member for any violation of those covenants will be limited to the Sole Member’s interests in the Borrowers.

Subordination of Subordinate Bonds. The security for and payment of the principal of, premium, if any, and interest on the Subordinate Bonds is subordinated to the security for and payment of the principal of, premium, if any, and interest on the Senior Bonds. Principal and interest on the Subordinate Bonds is payable as described under “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Relationship Among Series.” Under the Indenture, amounts deposited in the Revenue Fund will be used to fund the Bond Fund for payment of the Senior Bonds prior to funding the Bond Fund for payment of the Subordinate Bonds.

While any Senior Bonds are outstanding, a failure to make any debt service payments on the Subordinate Bonds does not constitute an Event of Default under the Indenture. If no Senior Bonds are outstanding, a failure to make payment on the principal of or premium, if any, or an installment of interest on any of the Subordinate Bonds shall constitute an Event of Default under the Indenture. See “RISK FACTORS AND INVESTMENT CONSIDERATIONS – Subordinate Status of Series 2017B Bonds” herein.

Mortgages. As further security for the Bonds, and to secure the Borrowers’ obligations under the Note and the Loan Agreement, each Borrower will grant to the Trustee a mortgage, assignment of leases and rents and security agreement, each dated on or about the date of issuance of the Bonds to be recorded against the Project it owns (collectively, the “Mortgages” and each a “Mortgage”) in the real property records of the jurisdiction where such Project is located. Such Mortgages grant to the Trustee a first lien on and first security interest in the Borrowers’ interest in the Projects and the sites thereof. Such first liens and first security interests are subject, in each instance, to Permitted Encumbrances identified therein and such liens and security interests will secure the Senior Bonds and the Subordinate Bonds in that order of priority.

Certain Tax Matters. The Bonds will be issued as “qualified 501(c)(3) bonds” as defined in Section 145 of the Code. Although the Borrowers are not organizations described in Section 501(c)(3) of the Code, in the opinion of Brennan, Manna & Diamond, counsel to the Borrowers, the Borrowers’ existences should, in each instance, be disregarded as entities separate from its owner, the Sole Member, for federal income tax purposes. Consequently, the Borrowers should be treated as a part of the Sole Member, which is treated as a 501(c)(3) entity for federal income tax purposes. See the captions “THE BORROWERS AND THE PROJECTS – The Sole Member” herein.

Additionally, in order for the Bonds to be treated as “qualified 501(c)(3) bonds,” the Projects must meet certain occupancy restrictions set forth in Section 142(d) and Section 145(d) of the Code. Therefore, each Borrower’s operation of the Project it owns will be subject to the terms and restrictions of a land use restriction agreement dated as of July 1, 2017, entered into among the Authority, such Borrower and the Trustee and recorded in the official real property records of the jurisdiction in which such Project is located (collectively, the “Land Use Restriction Agreements” and each a “Land Use Restriction Agreement”) and the Tax Regulatory Agreement and No-Arbitrage Certificate dated the Closing Date, executed by the Authority, the Borrowers, the Sole Member and the Trustee (the “Tax Agreement”). The Land Use Restriction Agreements, among other things, will require that for the Qualified Project Period (as defined in each Land Use Restriction Agreement), at least 40% of the dwelling units in each Project subject to such agreement be occupied by low income tenants, defined as families or individuals whose income does not exceed 60% (adjusted for family size) of the median gross income for the area in which such Project is located (“Low Income Tenants”) .

Furthermore, the Borrowers will be obligated to operate the Projects in accordance with Revenue Procedure 96-32 issued by the Internal Revenue Service in order to maintain the Sole Member’s treatment as an entity described in Section 501(c)(3) of the Code. The terms of the Tax Agreement will therefore require that for so long as a Borrower is the owner of a Project, at least 75% of the dwelling units in such Project be occupied by families of moderate income (the “Moderate Income Tenants”), defined as families or individuals whose income does not exceed 80% of the median gross income for the MSA (as defined in each Land Use Restriction Agreement) in which such Project is located, as adjusted for family size. The Land Use Restriction Agreements and the Tax Agreement will have the effect of reducing the potential universe of tenants eligible to reside in the Projects. See “THE BORROWERS AND THE PROJECTS – Project Regulation” and “RISK FACTORS AND INVESTMENT CONSIDERATIONS – Project Risks; Rental Housing Requirements” herein and Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Land Use Restriction Agreements” herein.

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Risk Factors. AN INVESTMENT IN THE BONDS INVOLVES A SIGNIFICANT DEGREE OF RISK, INCLUDING, AMONG OTHERS, RISKS ASSOCIATED WITH THE LIMITED SOURCE OF PAYMENT FOR THE BONDS AND VARIOUS REAL ESTATE AND OPERATING RISKS. PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE STATEMENTS AND INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT, INCLUDING THE MATERIAL UNDER THE CAPTION “RISK FACTORS AND INVESTMENT CONSIDERATIONS.”

This Official Statement and the Appendices attached hereto contain descriptions of, among other matters, the Bonds, the Borrowers, the Projects, the Indenture, the Loan Agreement, the Mortgages, the Land Use Restriction Agreements, Tax Agreement, and the Continuing Disclosure Agreement. Such descriptions and information do not purport to be comprehensive or definitive. Definitions of certain terms and words used in this Official Statement and not otherwise defined are set forth in the Indenture. All references herein to any agreements are qualified in their entirety by reference to such agreements and documents, and all references herein to the Bonds are qualified in their entirety by reference to the forms thereof included in the Indenture. Copies of such agreements and all other documents referenced herein are available to the recipient of this Official Statement during the initial offering period by contacting the Underwriter.

THE BONDS

The Bonds are available in book-entry only form. See “Book-Entry-Only System” below. So long as Cede & Co., as nominee of The Depository Trust Company (“DTC”), is the registered owner of the Bonds, references herein to the Bondholders or holders or Holders or registered owners of the Bonds means Cede & Co. and not the beneficial owners of the Bonds.

General Description

The Bonds are issuable as fully registered bonds without coupons in denominations of $5,000 each and integral multiples thereof. The Bonds will be dated their date of delivery. The Bonds will bear interest at the rates, and will mature on the dates and in the amounts, all as set forth on the inside cover page of this Official Statement. Interest on the Bonds will be payable semiannually on each June 1 and December 1 of each year (the “Interest Payment Dates”) commencing December 1, 2017*, and will be payable as to principal on the dates and in the amounts as set forth in the Indenture. Interest shall be computed on the basis of a year of 360 days and twelve 30-day months.

Each Bond shall bear interest from the Interest Payment Date preceding the date of authentication thereof, unless the date of such authentication is after the fifteenth day (whether or not a Business Day) of the calendar month preceding the applicable Interest Payment Date (the “Record Date”), in which case it will bear interest from the next succeeding Interest Payment Date, or unless no interest has been paid on such Bond, in which case from their date of delivery; provided, however, that if at the time of registration of any Bond the interest thereon is in default, as shown by the records of the Trustee, such Bond shall bear interest from the date to which interest has been paid in full.

Transfer and Exchange of the Bonds

So long as the Bonds are in book-entry only form, Cede & Co., as nominee of DTC, will be the sole registered owner of the Bonds. Transfers of beneficial interests in the Bonds will be made as described below under “Book-Entry-Only System.”

Book-Entry-Only System

The following has been provided by DTC for use herein. While the information is believed to be reliable, none of the Authority, the Trustee, the Borrowers or the Underwriter, subject to the standard of review found on the


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inside cover hereof, nor any of their respective counsel, members, officers or employees, make any representations as to the accuracy, sufficiency or completeness of such information.

The Bonds initially are being issued solely in book entry form to be held in the book entry only system maintained by The Depository Trust Company (“DTC”), New York, New York. So long as such book entry system is used, only DTC will receive or have the right to receive physical delivery of Bonds and Beneficial Owners (as hereinafter defined) will not be or be considered to be, and will not have any rights as, owners or holders of the Bonds under the Resolution. The following information about the book entry only system applicable to the Bonds has been supplied by DTC. Neither the Authority nor the Trustee makes any representations, warranties or guarantees with respect to its accuracy or completeness.

DTC will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of maturity and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book entry system for the Bonds is discontinued.

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

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by

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arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Trustee and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

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

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

DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered to DTC. The Authority may decide to discontinue use of the system of book entry only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Authority believes to be reliable, but the Authority takes no responsibility for the accuracy thereof.

NEITHER THE AUTHORITY NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DIRECT PARTICIPANT, INDIRECT PARTICIPANT OR ANY BENEFICIAL OWNER OR ANY OTHER PERSON NOT SHOWN ON THE REGISTRATION BOOKS OF THE TRUSTEE AS BEING A HOLDER WITH RESPECT TO: (1) THE BONDS; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (4) THE DELIVERY BY ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE RESOLUTION TO BE GIVEN TO HOLDERS; (5) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS HOLDER.

Each Beneficial Owner for whom a Direct Participant or Indirect Participant acquires an interest in the Bonds, as nominee, may desire to make arrangements with such Direct Participant or Indirect Participant to receive a credit balance in the records of such Direct Participant or Indirect Participant, to have all notices of redemption, elections to tender Bonds or other communications to or by DTC which may affect such Beneficial Owner forwarded in writing by such Direct Participant or Indirect Participant, and to have notification made of all debt

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service payments. Beneficial Owners may be charged a sum sufficient to cover any tax, fee, or other governmental charge that may be imposed in relation to any transfer or exchange of their interests in the Bonds.

THE AUTHORITY AND THE TRUSTEE CANNOT AND DO NOT GIVE ANY ASSURANCES THAT THE DIRECT PARTICIPANTS OR THE INDIRECT PARTICIPANTS WILL DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE BONDS (i) PAYMENTS OF PRINCIPAL OF AND INTEREST ON THE BONDS, (ii) BONDS REPRESENTING AN OWNERSHIP INTEREST OR OTHER CONFIRMATION OF BENEFICIAL OWNERSHIP INTERESTS IN THE BONDS OR (iii) REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS NOMINEE, AS THE REGISTERED OWNERS OF THE BONDS, OR THAT THEY WILL DO SO ON A TIMELY BASIS OR THAT DTC, DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CURRENT “RULES” APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE CURRENT “PROCEDURES” OF DTC TO BE FOLLOWED IN DEALING WITH DIRECT PARTICIPANTS ARE ON FILE WITH DTC.

Revision of Book-Entry-Only System

In the event that either: (i) the Authority receives notice from DTC to the effect that DTC is unable or unwilling to discharge its responsibilities as a clearing agency for the Bonds or (ii) the Authority or the Borrowers elects to discontinue its use of DTC as a clearing agency for the Bonds, then the Authority and the Trustee will do or perform or cause to be done or performed all acts or things, not adverse to the rights of the holders of the Bonds, as are necessary or appropriate to discontinue use of DTC as a clearing agency for the Bonds and to transfer the ownership of each of the Bonds to such person or persons, including any other clearing agency, as the holder of such Bonds may direct in accordance with the Indenture. Any expense of such a discontinuation and transfer, including any expenses of printing new certificates to evidence the Bonds, will be paid by the Borrowers.

Mandatory Redemption of Bonds

Bonds shall be called for redemption (1) in whole or in part in the event the Projects or any portion thereof is damaged or destroyed or taken in a condemnation proceeding and Net Proceeds resulting therefrom are to be applied to the payment of the Note as provided in the Loan Agreement and the Borrowers pursuant to the Loan Agreement have elected to use the Net Proceeds to redeem Bonds, (2) in whole in the event the Borrowers exercise their option to terminate the Loan Agreement if any changes in the Constitution of the states of Florida, North Carolina, South Carolina or Wisconsin or the Constitution of the United States or of legislative or administrative action (whether state, federal or local), by which the Loan Agreement shall become void or unenforceable or impossible of performance in accordance with the intent and purposes thereof, (3) in whole or in part from proceeds of the title insurance policies for the Projects pursuant to the Loan Agreement, (4) in whole or in part, at the earliest practicable date, in the event that the Borrower exercises its option to terminate the Loan Agreement (as a whole or in part) or exercises its option to sell one or more of the Projects, pursuant to the provisions of the Loan Agreement (see “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Loan Agreement – Grant of Option to Terminate”) or (5) in whole in the event the Borrowers are required to prepay the Note following a Default under the Loan Agreement. As set forth in clause (4) above, the Loan Agreement may be terminated at the option of the Borrower (i) following a determination, as evidenced by the report of a Management Consultant, that the continued operation of one or more of the Projects would have a material adverse effect on the ability of the Borrower to meet the financial covenants contained in the Loan Agreement and (ii) subject to the conditions for prepayment of the Bonds as set forth in the Loan Agreement. Other events, such as destruction or condemnation of one or more of the Projects (as more particularly described in the Loan Agreement), may also permit the Borrower to terminate the Loan Agreement. See “RISK FACTORS AND INVESTMENT CONSIDERATIONS – Risk of Early Redemption” below and “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Loan Agreement” in Appendix B hereto.”

If called for redemption at any time pursuant to (1) through (5) above, the Bonds to be redeemed shall be subject to redemption by the Authority prior to maturity, in whole at any time or (in the case of redemption pursuant to clause (1), (3), or (4) above) in part at any time (less than all of such Bonds to be selected in accordance with the provisions of the Indenture (as described under the caption “Selection of Bonds to be Redeemed” below)) at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date; such

8

redemption date to be a date determined by the Borrowers, and in the case of redemption pursuant to clause (5) above, to be the earliest practicable date, as determined by the Trustee, following acceleration of amounts due under the Loan Agreement.

No Subordinate Bonds may be redeemed as described in this section if any Senior Bonds remain Outstanding except that the Subordinate Bonds may only be redeemed on any Interest Payment Date if the principal and interest due on the Senior Bonds at such time has been paid in full.

Optional Redemption of Bonds*

Except as set forth below, the Bonds are subject to optional redemption by the Authority, at the direction of the Borrowers, on or after December 1, 2022, in whole or in part at any time, at the following redemption prices as a percentage of the par amount set forth below, plus accrued interest to the redemption date:

Redemption Period Redemption Price

December 1, 2022 through November 30, 2023 105% December 1, 2023 through November 30, 2024 104% December 1, 2024 through November 30, 2025 103% December 1, 2025 through November 30, 2026 102% December 1, 2026 through November 30, 2027 101% December 1, 2027 and thereafter 100%

No Subordinate Bonds, or any portion thereof, may be redeemed pursuant to optional redemption if any Senior Bonds remain Outstanding. Money used to pay premium, if any, on the Bonds to be redeemed must constitute Available Money.

Mandatory Sinking Fund Redemption*

The Series 2017A Bonds are subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest on June 1 and December 1 of each year and in the principal amounts shown below:

2027 Term Bond

Date Principal Amount




$ $ $ $


9

2042 Term Bond





$ $ $ $

2052 Term Bond





$ $ $ $

The Series 2017B Bonds are subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest on June 1 and December 1 of each year and in the principal amounts shown below:

2052 Term Bond





$ $ $ $

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Selection of Bonds to be Redeemed

Bonds may be redeemed only in Authorized Denominations (such provision shall not apply to scheduled mandatory sinking fund redemption). If less than all of the Bonds are being redeemed: (i) the principal amount and Series of the Bonds to be redeemed shall be designated by a Borrowers’ Representative in writing to the Trustee (subject to the requirement in the Indenture with respect to redeeming Senior Bonds prior to any Subordinate Bonds) and (ii) the particular Bonds of the Series or portions thereof to be redeemed shall be selected by DTC or any successor depository in accordance with its procedures, or, if the book-entry system is discontinued, by the Trustee by lot, in such manner as the Trustee in its discretion may deem proper. If it is determined that less than all of the principal amount represented by any Bond is to be called for redemption, then, following notice of intention to redeem such principal amount, the Holder thereof shall surrender such Bond to the Trustee on or before the applicable redemption date for (a) payment on the redemption date to such Holder of the redemption price of the amount called for redemption and (b) delivery to such Holder of a new Bond or Bonds of such Series in the aggregate principal amount of the unredeemed balance of the principal amount of such Bond, which shall be an Authorized Denomination. A new Bond of such Series representing the unredeemed balance of such Bond shall be issued to the Holder thereof, without charge therefor. Such provision shall not apply to scheduled mandatory sinking fund redemptions. If the Holder of any Bond or integral multiple of the Authorized Denomination selected for redemption shall fail to present such Bond to the Trustee for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the date fixed for redemption to the extent of the amount called for redemption (and to that extent only), and interest shall cease to accrue from the date fixed for redemption.

Notice of Redemption

In the event any of the Bonds are called for redemption and notice thereof has been given by the Borrowers to the Trustee pursuant to the Loan Agreement, the Trustee shall give notice, in the name of the Authority, of the redemption of such Bonds, which notice shall (i) specify the Bonds to be redeemed, the redemption date, the redemption price and the place or places where amounts due upon such redemption will be payable (which shall be the Designated Office of the Trustee) and, if less than all of the Bonds are to be redeemed, the numbers of the Bonds, and the portions of the Bonds, to be so redeemed, (ii) state any condition to such redemption, including but not limited to a statement that redemption is conditional upon receipt by the Trustee of sufficient moneys to redeem the Bonds, including any redemption premium, and (iii) state that on the redemption date, and upon satisfaction of any such condition, the Bonds to be redeemed shall cease to bear interest. Such notice may set forth any additional information relating to such redemption. Such notice shall be given by Mail to the Holders of the Bonds to be redeemed, at least 30 days but no more than 60 days prior to the date fixed for redemption. If a notice of redemption shall be unconditional, or if the conditions of a conditional notice of redemption shall have been satisfied, then upon presentation and surrender of the Bonds so called for redemption at the place or places of payment, such Bonds shall be redeemed.

The Trustee may give any other or additional redemption notice as it deems necessary or desirable.

Any Bonds which have been duly selected for redemption and which are deemed to be paid in accordance with the Indenture shall cease to bear interest on the specified redemption date.

Payment of Redemption Price

For the redemption of any of the Bonds of a Series, the Trustee shall cause to be deposited in the applicable Special Redemption Account of the Bond Fund, whether out of Project Revenues or any other money constituting the Trust Estate, including Net Proceeds of any Insurance Proceeds or Condemnation Awards available for such purpose pursuant to the Loan Agreement, or otherwise, an amount sufficient to pay the principal of, premium, if any, and interest to become due on the date fixed for such redemption. The obligation of the Trustee to cause any such deposit to be made under the Indenture shall be reduced by the amount of money in such Special Redemption Account available for and used on such redemption date for payment of the principal of, premium, if any, and accrued interest on the Bonds to be redeemed.

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No Partial Redemption After Default

Anything in the Indenture to the contrary notwithstanding, if there has occurred and is continuing an Event of Default under the Indenture on account of a failure to pay the principal of or premium, if any, or any installment of interest on the Bonds when due and payable with respect to the Bonds, there shall be no redemption of less than all of the Bonds Outstanding. See Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Indenture.”

ANNUAL DEBT SERVICE REQUIREMENTS*

The principal (including principal payable at maturity and by mandatory sinking fund redemption) and interest payment requirements with respect to the Bonds are as follows:

Series 2017A Bonds Subordinate Series 2017B Bonds Year Principal Interest Total Principal Interest Total Total 2017 $ $ $ $ $ $ 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052

Total $ $ $ $ $ $


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SECURITY AND SOURCES OF PAYMENT FOR THE BONDS

Trust Estate

The Bonds are secured by a first lien on and pledge and assignment of a security interest in the Trust Estate. The Trust Estate includes (a) all right, title and interest of the Authority in and to the Note, the Mortgages, the Land Use Restriction Agreements and the Loan Agreement (other than the Unassigned Rights), including the proceeds thereof or recovery thereon; (b) all funds, money and securities from time to time held by the Trustee under the terms of the Indenture (except amounts on deposit in the Rebate Fund and except that money and securities on deposit in the Funds and Accounts established with respect to the Bonds shall be held solely for the Holders of the Bonds) and any interest, profits and other income derived from the investment thereof, including the proceeds of the Bonds, subject to the application thereof in accordance with the Indenture, including Net Proceeds; (c) excepting the Unassigned Rights, any and all other rights and interests in property conveyed, mortgaged, pledged, assigned or transferred as and for additional security for the Bonds by the Authority or by anyone on its behalf or with its written consent to the Trustee; and (d) all proceeds of the foregoing. The Subordinate Bonds are subordinate in all respects to the Senior Bonds.

Special Limited Obligations of Authority


Repayment of Loan; Limited Recourse

The Loan Agreement and the Note obligate the Borrowers, jointly and severally, to pay to the Trustee, for the account of the Authority, ratable monthly payments equal to the amounts required to pay the interest coming due on each Interest Payment Date with respect to the Bonds plus the principal amount of the Bonds maturing or required to be redeemed.

The Borrowers’ obligations to make Loan Payments with respect to the Bonds are limited obligations of the Borrowers, and holders of the Bonds will have recourse only to the Projects, the moneys held in the Funds and Accounts created under the Indenture (except as specifically set forth therein) and the Project Revenues to satisfy the obligations of the Borrowers with respect to the Bonds. No other revenues or assets of the Borrowers or of the Sole Member will be available for the payment of, or as security for, the Bonds.

Pursuant to the Indenture, the Authority will pledge and assign all its rights and interests (except certain reimbursement and indemnification rights of the Authority and its rights to perform discretionary acts) and all amounts payable (other than certain fees and expenses due to the Authority) under the Loan Agreement, the Note

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and the Mortgages to the Trustee, in trust, to be held and applied pursuant to the provisions of the Indenture, for the benefit of the Holders on a senior basis with respect to the Holders of the Senior Bonds relative to the Holders of the Subordinate Bonds.

Mortgages

To secure the payment of the Loan Payments payable under the Loan Agreement and the Note, the Borrowers will grant to the Trustee under the Mortgages, a first priority lien on and a first security interest in the Projects and the right, title and interests of the Borrowers in the Project Revenues and other property as described in the Mortgages, including the Borrowers’ fee interests in the sites of the Projects, subject only to certain Permitted Encumbrances identified therein and which Mortgages will secure the Senior Bonds and the Subordinate Bonds in that order of priority. The mortgaged property includes generally all the land and the buildings, fixtures and equipment comprising the Projects. See Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Mortgages.”

Operation of the Projects

Payments to be made by the Borrowers pursuant to the Loan Agreement will be derived solely from revenues generated by the operation of the Projects and the monies held in the Funds and Accounts held under the Indenture. NO REPRESENTATIONS OR ASSURANCES CAN BE MADE THAT REVENUES WILL BE REALIZED BY THE BORROWERS IN AMOUNTS NECESSARY TO ENABLE THE BORROWERS TO MAKE PAYMENTS PURSUANT TO THE LOAN AGREEMENT SUFFICIENT TO PAY THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE BONDS.

Rate Covenants

The Borrowers have agreed in the Loan Agreement to use their best efforts to fix, charge and collect, or cause to be fixed, charged and collected, rents, fees and charges in connection with the operation and maintenance of the Projects, such that for each Fiscal Year, beginning with the Fiscal Year ending December 31, 2017, the Debt Service Coverage Ratio will not be less than the applicable Coverage Test (being 1.25 to 1.00 on all Outstanding Senior Bonds and all Senior Parity Indebtedness and 1.10 to 1.00 on all Outstanding Senior Bonds and Subordinate Bonds and all Senior Parity Indebtedness and all Subordinate Parity Indebtedness), determined as of the end of each such subsequent Fiscal Year. In the event that the Borrowers should fail to meet such rate covenant, the Borrowers are required to retain a consultant to make recommendations with respect to the operations of the Projects and the sufficiency of the rates, fees and charges imposed by the Borrowers to enable the Borrowers to improve the Debt Service Coverage Ratio to at least the applicable Coverage Test. Failure by the Borrowers to retain a consultant or implement the recommendations of that consultant in any calendar year in which the Debt Service Coverage Ratio is not met will constitute a Default as set forth in the Loan Agreement. Failure of the Borrowers to meet the rate covenant does not constitute an Event of Default with respect to the Bonds. See Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Loan Agreement.”

[Remainder of Page Intentionally Left Blank]

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Flow of Project Revenues

The following chart depicts the flow of Project Revenues described under “Revenue Fund” below:

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Revenue Fund

(a) There shall be deposited in the Revenue Fund (i) all Loan Payments and other amounts paid to the Trustee under the Loan Agreement (other than prepayments required to redeem Bonds pursuant to the Indenture, which shall be deposited in the related Special Redemption Account), (ii) all other amounts required to be so deposited pursuant to the terms of the Indenture or of the Tax Agreement, including investment earnings to the extent provided in the Indenture, (iii) any amounts derived from the Loan Agreement or the Mortgages to be applied to payment of amounts intended to be paid from the Revenue Fund, (iv) all Project Revenues, and (v) such other money as is delivered to the Trustee by or on behalf of the Authority or the Borrowers with written directions for deposit of such money in the Revenue Fund.

(b) Money on deposit in the Revenue Fund shall be disbursed on the 15th day of each month in the following order of priority:

(1) To the Interest Account for the Senior Bonds, the applicable Interest Requirement for the Senior Bonds for that calendar month, together with an amount equal to any unfunded Interest Requirement for the Senior Bonds for any prior month and, at the written direction of a Borrowers’ Representative, to the holder of any Senior Parity Indebtedness an amount, as certified by a Borrowers’ Representative, equal to the interest due in such month, together with an amount equal to any unfunded interest for any prior month;

(2) To the Principal Account for the Senior Bonds, an amount equal to the Principal Requirement for the Senior Bonds for that calendar month, together with an amount equal to any unfunded Principal Requirement for the Senior Bonds from any prior month and, at the written direction of a Borrowers’ Representative, to the holder of any Senior Parity Indebtedness an amount, as certified by a Borrowers’ Representative, equal to the principal due in such month, together with an amount equal to any unfunded principal for any prior month;

(3) To the Debt Service Reserve Account for the Senior Bonds, the amount, if any, required to be paid into the Debt Service Reserve Account for the Senior Bonds pursuant to the Loan Agreement to restore the amount on deposit therein to the Debt Service Reserve Requirement;

(4) To the Interest Account for the Subordinate Bonds, an amount equal to the Interest Requirement for the Subordinate Bonds, together with an amount equal to any unfunded Interest Requirement for the Subordinate Bonds for any prior month and, at the written direction of a Borrowers’ Representative to the holder of any Subordinate Parity Indebtedness an amount, as certified by a Borrowers’ Representative, equal to the interest due in such month, together with an amount equal to any unfunded interest for any prior month;

(5) To the Principal Account for the Subordinate Bonds, an amount equal to the Principal Requirement for the Subordinate Bonds, together with an amount equal to any unfunded Principal Requirement for the Subordinate Bonds for any prior month and, at the written direction of a Borrowers’ Representative to the holder of any Subordinate Parity Indebtedness an amount, as certified by a Borrowers’ Representative, equal to the principal due in such month, together with an amount equal to any unfunded principal for any prior month;

(6) To the Debt Service Reserve Account for the Subordinate Bonds, the amount, if any, required to be paid into such Debt Service Reserve Account pursuant to the Loan Agreement to restore the amounts on deposit therein to the Debt Service Reserve Requirement for the Subordinate Bonds;

(7) Subject to the Indenture, for transfer to the Insurance and Tax Escrow Fund and the respective accounts within the Insurance and Tax Escrow Fund, an amount equal to such

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month’s pro rata portion of the amount budgeted by the Borrowers for the current year for annual premiums for insurance required to be maintained pursuant to the Loan Agreement and for annual real estate taxes (if any), or other charges for governmental services for the current year, as provided in the Budget, provided that distribution by the Trustee to the Insurance and Tax Escrow Fund and the respective accounts within the Insurance and Tax Escrow Fund in respect of the first date or dates on which premiums for insurance and taxes or other payments described above are payable will be made in amounts equal to the respective quotients obtained by dividing the sum of (i) the amount of such premiums and (ii) the amount of such taxes or other charges, by the respective number of months, including the month of computation, to and including the month prior to the month in which such premiums or taxes are payable;

(8) To the respective accounts within the Operating Fund, an amount equal to such month’s Operating Requirement, as provided in the Budget, together with such additional Operating Expenses requested in writing by a Borrowers’ Representative pursuant to and after satisfaction of the conditions specified in the Loan Agreement, which shall then automatically be transferred to the respective Property Operating Accounts;

(9) Subject to the provisions of the Indenture, for transfer to the accounts within the Repair and Replacement Fund, commencing with the month of August 2017, an amount equal to such month’s pro rata portion of the Replacement Reserve Requirement until the Replacement Reserve Requirement is met;

(10) Subject to the provisions of the Indenture, for transfer to the Administration Fund, an amount equal to such month’s pro rata portion of the Administration Expenses scheduled to be due and payable on or before the next June 1;

(11) To the Rebate Fund, to the extent of any deposit required to be made thereto pursuant to the Tax Agreement; and

(12) To the Surplus Fund, all remaining amounts.

In the event that, for any month, there are insufficient funds in the Revenue Fund to fund any one or more of the uses set forth in clauses (1) through (11) above, the amount not funded in such month due to such insufficiency of revenues shall be added to the amount to be funded in subsequent months under the same clause until such amount has been in fact funded. If funds in the Revenue Fund are insufficient to fund the uses in clause (10) above, then the Borrowers shall pay any shortfalls in the payment of Administration Expenses as they become due. Failure to deposit sufficient Project Revenues to make the deposits described above shall not, in itself, constitute an Event of Default under the Indenture.

Debt Service Reserve Fund

A Debt Service Reserve Fund with separate accounts for the Senior Bonds and the Subordinate Bonds will be established under the Indenture. The Debt Service Reserve Fund will be funded in an aggregate amount approximately equal to 50% of the Maximum Annual Debt Service for the Bonds; provided, however, that such amounts shall be reduced on a pro-rata basis to the extent of any reduction in Annual Debt Service on the aggregate principal amount of the Senior Bonds Outstanding and Subordinate Bonds Outstanding, as applicable, if any Bonds are redeemed other than pursuant to mandatory sinking fund redemption. Amounts on deposit in each account of the Debt Service Reserve Fund will be used solely to pay the principal of and interest on the applicable Series of Bonds secured thereby when due to the extent moneys on deposit in the related Principal Account or Interest Account are insufficient therefor after the transfer of any amounts from the Surplus Fund, and the Repair and Replacement Fund pursuant to the Indenture.

Amounts on deposit in the applicable Debt Service Reserve Accounts will be transferred to the applicable Principal Accounts of the Bond Fund at the written direction of the Borrower’s Representative for the purpose of paying the last maturing principal of the Senior Bonds or Subordinate Bonds, as applicable, on a Principal Payment

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Date or, if all of a series of the Bonds are being redeemed, to the applicable Special Redemption Accounts of the Bond Fund for redemption of Bonds; provided, however, that amounts may be transferred from the Debt Service Reserve Account for the Senior Bonds only in connection with shortfalls on the Senior Bonds and amounts may be transferred from the Debt Service Reserve Account for the Subordinate Bonds only in connection with shortfalls on the Subordinate Bonds.

In addition, if the amount on deposit in an account of the Debt Service Reserve Fund is less than the applicable Debt Service Reserve Requirement for the series of Bonds secured thereby, investment earnings thereon will remain in such account. See Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Trust Indenture.”

Surplus Fund

The Trustee shall deposit, into the Surplus Fund, amounts provided under the section “Revenue Fund” and any other amounts delivered to it with written instructions to deposit the same in the Surplus Fund. Money in the Surplus Fund shall be applied each month, when needed, for the following purposes and in the following manner:

(1) transferred to the Interest Account for the Senior Bonds to pay interest on the Senior Bonds to the extent amounts on deposit in such Interest Account are insufficient therefor;

(2) transferred to a Principal Account for the Senior Bonds to pay principal on the Senior Bonds to the extent amounts on deposit in such Principal Account are insufficient therefor;

(3) transferred to the Interest Account for the Subordinate Bonds to pay interest on the Subordinate Bonds to the extent amounts on deposit in such Interest Account are insufficient therefor;

(4) transferred to the Principal Account for the Subordinate Bonds to pay principal on the Subordinate Bonds to the extent amounts on deposit in such Principal Account are insufficient therefor;

(5) transferred to the Revenue Fund to the extent of any deficiency in the amounts needed to fully make all transfers from the Revenue Fund pursuant to the section “Revenue Fund” (other than to the Surplus Fund);

(6) transferred to or upon the direction of the Borrower’s Representative for deposit into a Property Operating Account for the payment of Operating Expenses when the Borrower’s Representative certifies to the Trustee that there are not sufficient money in the Operating Fund or the Property Operating Account to pay Operating Expenses; and

(7) to pay any unpaid and due Administrative Expenses.

If on or after any Annual Evaluation Date, the Trustee receives a certificate signed by the Borrowers’ Representative stating that (i) the Borrowers have satisfied the Coverage Test for the Fiscal Year ending on such Annual Evaluation Date, upon which the Trustee may conclusively rely, (ii) no Event of Default, or event which with the passage of time or the giving of notice or both would constitute an Event of Default, has occurred and is continuing, (iii) the Debt Service Reserve Requirement and the Replacement Reserve Requirement have been met, (iv) monies in the Repair and Replacement Fund, the Operations and Maintenance Reserve Fund and the Surplus Fund are equal to an aggregate amount no less than 60 days of Operating Expenses (the “Liquidity Requirement”) and (v) the Borrowers have delivered to the Trustee the financial reports and certificates required under the Loan Agreement, then within two Business Days after written request by the Borrowers’ Representative to the Trustee, the Trustee shall disburse cash in the Surplus Fund (the “Surplus Cash”) as follows; provided, however, such payments shall not result in the Borrowers having funds in an amount less than the Liquidity Requirement:

(1) to the Holder of the Seller Note (as defined herein), an amount equal to the aggregate accrued and unpaid interest then due on the Seller Note; then

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(2) to the Holder of the Seller Note, interest then due and payable under the Seller Note as of such date; then

(3) to the Borrowers, 25% of the remaining monies after the payments described in (1) and (2) above; then

(4) to the Holder of the Seller Note, all remaining monies to be applied towards the payment of principal on the Seller Note.

Other Funds

The Indenture also provides for a Bond Fund, a Project Fund an Operating Fund, an Operations and Maintenance Reserve Fund, an Insurance and Tax Escrow Fund, a Repair and Replacement Fund and an Administrative Fund. The purposes of such funds and the specific requirements related to each are described in “APPENDIX B – SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Trust Indenture”.

No Credit Enhancement Facility

THERE IS NO CREDIT ENHANCEMENT FACILITY SECURING ANY OF THE BONDS AS INITIALLY ISSUED, NOR IS THERE ANY PROVISION FOR A CREDIT ENHANCEMENT FACILITY TO BE PROVIDED TO SECURE ANY OF THE BONDS FOLLOWING ISSUANCE OF THE BONDS.

Other Covenants of the Borrowers

Under the Loan Agreement, the Mortgages and the Land Use Restriction Agreements, the Borrowers are required to comply with certain other covenants and agreements. See Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Loan Agreement,” “The Mortgages” and “The Land Use Restriction Agreements.”

Relationship Among Series

Under the Indenture, amounts deposited in the Revenue Fund (after all other required applications) will be applied to the payment of the Senior Bonds prior to the payment of the Subordinate Bonds. See “APPENDIX B – SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – THE INDENTURE – Revenue Fund.” Consequently, revenues will not be deposited equally towards the payment of interest and principal on each Series of Bonds. Amounts on deposit in the accounts of the Bond Fund for a Series of Bonds will be used solely to pay principal and interest on that Series of Bonds, on the applicable payment dates. If there is a shortfall of revenues, interest and principal on the Senior Bonds must be paid prior to any such payments being made with respect to the Subordinate Bonds. Under such circumstances, principal and/or interest on the Subordinate Bonds may remain unpaid.

Pursuant to the Indenture, failure to pay any installment of interest on any Senior Bond when such interest becomes due and payable and failure to pay the principal of, or premium, if any, on any Senior Bond when such becomes due and payable, whether at maturity, by proceedings for redemption, by declaration or otherwise constitutes an Event of Default. If no Senior Bonds are Outstanding, failure to pay any installment of interest on any Subordinate Bond when such interest becomes due and payable and failure to pay the principal of, or premium, if any, or any Subordinate Bond when such becomes due and payable constitutes on Event of Default. Upon an Event of Default, however, the Indenture provides the Subordinate Bonds may not be accelerated unless the Senior Bonds have been paid in full, or provision for their payment in full has been made in accordance with the Indenture. Furthermore, amounts resulting from the exercise by the Trustee of any remedies available upon an Event of Default would be used to pay the Senior Bonds prior to the payment of the Subordinate Bonds. See “APPENDIX B – SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – THE INDENTURE – Revenue Fund” and “THE INDENTURE – Defaults and Remedies.”

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THE SERIES 2017B BONDS ARE SUBORDINATE IN RIGHT OF PAYMENT, SECURITY AND PRIORITY TO THE SERIES 2017A BONDS.

Issuance of Additional Bonds and Parity Indebtedness

So long as no Event of Default under the Indenture has then occurred and is continuing, the Authority at the request of a Borrowers’ Representative, upon compliance with the terms of the Indenture, may but shall not be required to (in the Authority’s sole and exclusive discretion), issue Additional Bonds (as defined in the Indenture) for the purpose of (i) financing the costs of making such Modifications as the Borrowers may deem necessary or desirable, (ii) financing the cost of completing any Modifications, (iii) refunding any Bonds, and (iv) in each such case, paying the costs of the issuance and sale of the Additional Bonds, paying capitalized or funded interest and such other costs reasonably related to the financing as shall be agreed upon by the Borrowers and the Authority. As a condition for the issuance of Additional Bonds, (i) such Additional Bonds shall be rated in a rating category that is not lower than the underlying rating (i.e., the rating of the respective Outstanding Bonds without giving effect to any credit enhancement) of the Series of Bonds of the same parity as such Additional Bonds, and (ii) prior to the issuance of such Additional Bonds, the Rating Agency then rating the Outstanding Bonds shall deliver a Confirmation of Rating stating that the issuance of the Additional Bonds will not result in a qualification, downgrade or withdrawal of the then current ratings on the Outstanding Bonds.

Additionally, pursuant to the terms and conditions set forth in the Loan Agreement, under certain circumstances the Borrowers are permitted to incur Parity Indebtedness that is secured by a lien on and security interests in all or any portion of the Projects or the Project Revenues, secured on an equal and ratable basis with one or more Series of the then Outstanding Bonds under the Mortgages.

THE AUTHORITY

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

Formation and Governance

In early 2010, both houses of the Wisconsin Legislature passed 2009 Wisconsin Act 205 (the “Act”), which was signed into law by the Governor of the State of Wisconsin (the “State”) on April 21, 2010. The Act added Section 66.0304 of the Wisconsin Statutes (the “Statute”) authorizing two or more political subdivisions to create a commission to issue bonds under the Statute. Before an agreement for the creation of such a commission could take effect, the Act requires that such agreement be submitted to the Attorney General of the State to determine whether the agreement is in proper form and compatible with the laws of the State. The Authority was formed upon execution of a Joint Exercise of Powers Agreement Relating to the Public Finance Authority dated as of June 30, 2010 as amended by an Amended and Restated Joint Exercise of Powers Agreement Relating to the Public Finance Authority dated September 28, 2010 (as such may be amended from time to time, the “Joint Exercise Agreement”) among Adams County, Wisconsin, Bayfield County, Wisconsin, Marathon County, Wisconsin, Waupaca County, Wisconsin and the City of Lancaster, Wisconsin (each a “Member” and, collectively, the “Members,” which term shall include any political subdivision designated in the future as a “Member” of the Authority pursuant to the Joint Exercise Agreement). The Joint Exercise Agreement was approved by the Wisconsin Attorney General on September 30, 2010. The Act also provides that only one commission may be formed thereunder.

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

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Powers

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

Local and TEFRA Approvals

Under the Subsection (11)(a) of the Statute and Section 4 of the Joint Exercise Agreement, financing for all “capital improvement projects” located outside the State requires approval from the governing body or highest-ranking executive or administrator of at least one political subdivision within whose boundaries the capital improvement project is located (the “Authority Local Approval Requirement”). The issuance of the Bonds was approved on February 28, 2017 by the Clerk of Marathon County, Wisconsin, a Member of the Authority duly authorized to give such approval on behalf of the Authority. Based upon information provided by the Borrowers, the financing of the Projects and issuance of the Bonds by the Authority was approved by the city of Spartanburg, South Carolina, on March 20, 2017 with respect to the Project located in Spartanburg, South Carolina; and by the city of Winston-Salem, North Carolina on March 27, 2017 with respect to the three Projects located in Winston-Salem, North Carolina. Such approvals were given in satisfaction of and in accordance with the requirements of Section 147(f) of the Code and the Authority Local Approval Requirement, as applicable.

Governing Body

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

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

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Name Title

Current Term

Expires (May 31) Position

William Kacvinsky Chair 2018 Former Board Chair--Bayfield County, Wisconsin Jerome Wehrle Vice Chair 2018 Former Mayor—City of Lancaster, Wisconsin Heidi Dombrowski Treasurer 2019 Finance Director –Waupaca County, Wisconsin, Allen Buechel Secretary 2019 County Executive—Fond du Lac County, Wisconsin Del Twidt Director 2019 Former Board Chair—Buffalo County, Wisconsin, Michael Gillespie Director 2020 Former Chair—Madison County, Alabama Board of

Commissioners John West** Alternate

Director 2019 Board Chair—Adams County, Wisconsin

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

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

Resolutions; Approval

The Board is expected to adopt a Resolution approving the issuance of the Bonds on July 12, 2017.

Special Limited Obligations


Other Obligations

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

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security for the Bonds, and the owners of the Bonds will have no claim on the security for such other obligations issued by the Authority.

Limited Involvement of the Authority

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

The Authority has not participated in the preparation of or reviewed this Official Statement and is not responsible for any information contained herein, except for the information in this Section and under the caption “LITIGATION – The Authority” as such information applies to the Authority.

THE BORROWERS AND THE PROJECTS

The following information has been provided by the Borrowers. None of the Authority, the Trustee or the Underwriter has made any independent investigation regarding the information presented under this heading, nor have such parties verified the accuracy or completeness thereof, and none of the Authority, the Trustee or the Underwriter assumes any responsibility or liability therefor.

The Borrowers

Each of the Borrowers—(i) 2017 IAVF Cedar Whispering LLC, a Florida limited liability company; (ii) 2017 IAVF Twin City LLC, a Florida limited liability company; (iii) 2017 IAVF Cedar Silas LLC, a Florida limited liability company; and (iv) 2017 IAVF Cedar Chesterfield LLC, a Florida limited liability company—is a newly-created single asset entity whose sole member is Invest in America’s Veterans Foundation, Inc., a Florida nonprofit corporation recognized as an exempt organization pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986. The Borrowers have no operating history and have no financial statements.

The single asset of each Borrower is the Project owned by it. The Borrowers do not intend to acquire any substantial assets or engage in any substantial business activities other than those related to the ownership of the Projects, and each Borrower is required to be a single asset/sole purpose entity by the documents relating to the Loan Agreement. However, the Sole Member and its affiliated entities may engage in the acquisition, development, ownership and management of similar types of housing projects.

Each Borrower has reserved the right to convert or otherwise reconstitute its form of organization from a limited liability company to a nonprofit corporation subject to certain conditions, including without limitation, delivery of an opinion of Bond Counsel to the effect that such actions will not adversely affect the tax-exempt status of interest earned on the Bonds. See Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Loan Agreement – Reorganization or Reconstitution of Form of Organization.”

None of the directors, officers, members, managers, shareholders or employees of the Borrowers or the Sole Member will be personally liable for payments on the Note. Furthermore, no representation is made that the Borrowers will have substantial funds to meet operating deficits of the Projects should they occur. Accordingly, the financial statements of the Borrowers and the Sole Member have not been included in this Official Statement.

The Sole Member

The Sole Member is a Florida nonprofit corporation formed on February 6, 2009 for the purpose of assisting veterans with housing, employment, career counseling, education and other services related to veteran’s affairs and to operate the Southwest Florida Military Museum & Library. The Sole Member has received a determination letter from the IRS dated May, 2010 for its tax-exempt status as an organization described in Section 501(c)(3) of the Code. IRS correspondence dated July 15, 2014 (the “Determination Letter”) to the Sole Member confirmed that the Sole Member is described in section(s) 509(a)(1) and 170(b)(1)(A)(vi) to the effect that the Sole

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Member can reasonably be expected to be a publicly supported organization described in Section 509(a)(2) of the Code and not a private foundation.

The American Veterans Housing Group (“AVHG”) is the Sole Member’s real estate operating group. Principles of AVHG have approximately 35 years of experience operating in the housing sector. AVHG currently has 1,889 units of multifamily housing under contract that will be closing over the coming months. AVHG manages one of the largest HUD-VASH housing initiatives in the country. AVHG is currently active in 12 states with a program portfolio in excess of 12,000 units of multifamily housing either direct ownership, joint venture or support services agreement.

Board of Directors. The Sole Member is governed by a Board of Directors, which currently consists of three members. The following are brief resumes of the directors of the Sole Member:

Ralph Santillo, Founder and President.

Mr. Santillo created the Sole Member in 2009. In addition to providing services directly to, and working directly with, individual veterans, he and the Sole Member are active in many veterans’ organizations, helping veterans of all ages to help themselves to better their lives and their families. Some of these organizations include:

• Veterans of Foreign Wars (VFW) • Disabled American Veterans (DAV) • American Veterans (AmVets) • American Legion

Mr. Santillo has been involved in a number of retail, wholesale and manufacturing businesses since the age

of 18 and has frequently been active in more than one job or business at a time. Over the years he maintained an interest in real estate and/or construction businesses and has been involved in several real estate investment and development opportunities.

Mr. Santillo has produced and performed at hundreds of seminars and educational workshops. A number

of his educational seminars have recently been directed to veterans to address their unique housing, loan, educational and business opportunities.

Judy Petrulavage, Founder and Vice President.

Judy Petrulavage has had several roles in business, ranging from working in a candle shop to managing the electronics department in a photo lab. She was employed from 1978 - 1991 in the Missile Systems division at Raytheon. She worked her way up from entry level to Head Assembly Line Leader and served as Trainer for all line employees and for other countries who bought the systems.

Ms. Petrulavage has been affiliated with the Sole Member as one of the early founders in 2010. In her role

as Vice President, she works 40 – 50 hours a week overseeing much of the Sole Member’s operations.

In addition to providing services directly to, and working directly with, individual veterans, she is active in many veterans’ organizations, helping veterans of all ages to help themselves to better their lives and their families. Some of these organizations include:

• Veterans of Foreign Wars (VFW) • Disabled American Veterans (DAV) • American Veterans (AmVets)

Nicholas A. Napolitano Jr., Secretary/Treasurer.

Mr. Napolitano has been affiliated with the Sole Member since 2010 and became a current board member in January 2012. As the Sole Member’s Secretary/Treasurer, Mr. Napolitano’s duties include - collecting all

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donations, accounting for all Sole Member receivable/payable accounts and expenditures, coordinating the pick-up of furniture and various other items being donated to the Sole Member, and coordinating court ordered community service personnel with the Lee County Sheriff’s Department.

Mr. Napolitano is a fully certified Veteran Service Officer (VSO), and as such, has assisted hundreds of

veterans and their families. Some of his areas of expertise include - assisting with filing paperwork with the Department of Veterans Administration (VA), supporting homeless veterans with applications to the HUD/VASH program, and researching and obtaining military records. He is also very well versed in job placement, and even assist the general community with applying for food stamps and social security benefits.

Mr. Napolitano currently serves as the Commander of AMVETS Post 65 (FL), Finance Officer of

American Legion Post 90 (FL), and is the past President of the Korean War Veterans Chapter 155 (FL). Mr. Napolitano has a successful business background, including a position in charge of finances with a

textile business and A & R (Artist and Repertoire) Administrator with a major recording label. He also held the position of Director of Energy Programs for the city of New York. In that role he managed and directed the operation of Central Office Administrative Units, acted as personnel liaison, managed and accounted for program funds through the direct supervision of the grant payment process, coordinated the development and maintenance of agency relationships with utility companies and fuel vendors. He also oversaw the issuance of timely HEAP regular and emergency benefits to clients and/or vendors and directed the benefit fund recoupment process in case of duplicate inappropriate payments.

Projects of the Sole Member. No entity has any legal responsibility for the debts of any other, and the financial covenants relating to the debt of each entity preclude that entity from providing any financial support to other entities. The subsequent success or failure of the individual financings have therefore turned on the performance of management, local and industry market conditions, reimbursement systems and other factors affecting the operations of the individual facilities. It is possible that under certain circumstances one or more projects of the Sole Member may have to restructure their debt in the future to comply with future financial liabilities. Following is a brief description of each project in which the Sole Member is a general partner or managing member:

The Cove at Nola Apartments. The Cove at Nola Apartments consists of a 300-unit multifamily residential rental housing facility, including 20 three-story residential buildings and three one-story accessory buildings, located at 10501 Curran Boulevard, New Orleans, Louisiana 70127. 2016 AVHG Cove, LLC, a Louisiana limited liability company, whose sole member is the Sole Member, acquired rights to The Cove at Nola Apartments on April 11, 2017, in connection with the issuance by the Louisiana Local Government Environmental Facilities and Community Development Authority of (i) $16,990,000 in original aggregate principal amount of Multifamily Housing Revenue Bonds (The Cove at NOLA Apartments) Series 2017A and (ii) $2,400,000 in original aggregate principal amount of Multifamily Housing Revenue Bonds (The Cove at NOLA Apartments) Subordinate Series 2017B. S&P rated these bonds and these bonds currently have a credit rating of “A” / “BBB” (effective April 11, 2017). The Cove at NOLA Apartments was constructed in 1987 and renovated in 2014 and 2015. As of the date hereof, the project is in material compliance with its financial and operating covenants.

Mission Springs Apartments. Mission Springs Apartments consists of a 444-unit

multifamily residential rental housing facility consisting of 54 studio, 74 one-, 275 two-, and 41 three-bedroom units. Mission Springs Apartments consists of 69 one and two-story residential garden-style apartments and two accessory buildings, located at 5327 Timuquana Road, Jacksonville, Florida 32210. 2017 IAVF Mission Springs LLC, a Florida limited liability company, whose sole member is the Sole Member, acquired rights to Mission Springs Apartments on June 20, 2017, in connection with the issuance by the Capital Trust Agency of (i) $24,460,000 in original aggregate principal amount of Multifamily Housing Revenue Bonds (Mission Springs Apartments) Series 2017A, (ii) $1,175,000 in original aggregate principal amount of Multifamily Housing Revenue Bonds (Mission Springs Apartments) Taxable Series 2017B, and (iii) $4,035,000 in original aggregate principal amount of Multifamily Housing Revenue Bonds

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(Mission Springs Apartments) Subordinate Series 2017C. S&P rated these bonds and these bonds currently have a credit rating of “A” / “BBB” (effective June 20, 2017). Mission Springs Apartments was constructed in 1972 and renovated in 2014 and 2015. As of the date hereof, the project is in material compliance with its financial and operating covenants.

The Projects

Each Project is owned by one of the Borrowers. For purposes of the discussion under this caption “THE BORROWERS AND THE PROJECTS”: (i) the Project owned by 2017 IAVF Cedar Whispering LLC located in Spartanburg, South Carolina is referred to as the “Whispering Pines Project;” (ii) the Project owned by 2017 IAVF Twin City LLC located in Winston-Salem, North Carolina is referred to as the “Twin City Project,” (iii) the Project owned by 2017 IAVF Cedar Silas LLC located in Winston-Salem, North Carolina is referred to as the “Silas Creek Project,” and (iv) the Project owned by 2017 IAVF Cedar Chesterfield LLC located in Winston-Salem, North Carolina is referred to as the “Chesterfield Project.”

The Seller

The Sole Member will acquire the Projects for an aggregate purchase price of $54,170,000 (the “Purchase Price”). A portion of the Purchase Price equal to approximately $________ will be paid to the Seller in the form of a tax-exempt seller note (the “Seller Note”). The Seller Note is payable solely from amounts available in the Surplus Fund as described under “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS—Surplus Fund” herein.

The Whispering Pines Project. The Whispering Pines Project is located at 408 Abner Road, Spartanburg, South Carolina 29301. The Whispering Pines Project maintains 24-hour availability, an on-site property manager, a breakfast/coffee concierge, laundry facilities, picnic area, playground, swimming pool, and tennis court. The Whispering Pines Project consists of 312-units located in thirty-seven (37) two-story buildings. Original construction of the Whispering Pines Project was completed in 1978. A brief description of the unit mix and rent is included below:

Unit Mix # of Units Square Footage

Current Rent

Potential Gross

Rent (Month)

Potential Gross

Rent (Annual)

1x1 56 627 $ 600 $ 33,600 $ 403,200 2x2 144 967 650 93,600 1,123,200 3x2 112 1,026 700 78,400 940,800

Total 312 $205,600 $2,467,200

A typical unit in the Whispering Pines Project includes a kitchen with the following features: refrigerator/freezer, electric range/oven, dishwasher, microwave, garbage disposal, single-basin stainless steel sink, wood cabinetry, laminate counter tops and vinyl flooring. The bathroom in a typical unit has a porcelain sink, fiberglass bathtub, vitreous china toilet, wood cabinetry and vinyl flooring. The interior of a typical unit includes vinyl flooring throughout.

Additional information concerning the Whispering Pines Project and the Spartanburg, South Carolina metropolitan area is contained in the related Appraisal, a summary of which is included herein. The summary of such Appraisal does not purport to be complete or definitive and is qualified only in its entirety by reference to the full Appraisal of the Whispering Pines Project. During the initial offering period for the Bonds, the full Appraisal of the Whispering Pines Project will be provided to any prospective purchaser upon request to the Underwriter. See “APPRAISALS” herein.

The Twin City Project. The Twin City Project is located at 1805 Franciscan Terrace, Winston-Salem, North Carolina 27127. The Twin City Project maintains a business center, clubhouse, fitness center, game room, laundry facilities, playground, swimming pool and an on-site property manager. The Twin City Project consists of

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285-units located in twenty-seven (27) two-story buildings. Original construction of the Twin City Project was completed in 1972. A brief description of the unit mix and rent is included below:


Current Rent

Potential Gross

Rent (Month)

Potential Gross

Rent (Annual)

1x1 12 725 $ 549 $ 6,588 $ 79,056 1x1 64 800 570 36,480 437,760

2x1.5 76 1,100 625 47,500 570,000 2x2 59 1,200 675 39,825 477,900 3x2 40 1,250 739 29,560 354,720

3x2.5 34 1,400 799 27,166 325,992 Total 285 $187,119 $2,245,428

A typical unit in the Twin City Project includes a kitchen with the following features: a refrigerator/freezer, an electric range/oven, a stainless steel sink and pressed wood countertops covered with plastic laminate. The bathroom in a typical unit has an enameled steel sink and a fiberglass tub/shower surround combination with a porcelain toilet. The interior of a typical unit includes carpet flooring throughout and vinyl tile flooring in the kitchen and bathrooms.

Additional information concerning the Twin City Project and the Winston-Salem, North Carolina metropolitan area is contained in the related Appraisal, a summary of which is included herein. The summary of such Appraisal does not purport to be complete or definitive and is qualified only in its entirety by reference to the full Appraisal of the Twin City Project. During the initial offering period for the Bonds, the full Appraisal of the Twin City Project will be provided to any prospective purchaser upon request to the Underwriter. See “APPRAISALS” herein.

The Silas Creek Project. The Silas Creek Project is located at 1010 Oak Grove Road, Winston-Salem, North Carolina 27103. The Silas Creek Project maintains a business center, clubhouse, fitness center, laundry facilities, playground, swimming pool, sundeck, on-site maintenance and an on-site property manager. The Silas Creek Project consists of 234-units located in nineteen (19) two-story buildings. Original construction of the Silas Creek Project was completed in 1962. A brief description of the unit mix and rent is included below:


Current Rent

Potential Gross

Rent (Month)

Potential Gross

Rent (Annual)

1x1 24 676 $ 505 $ 12,120 $ 145,440 1x1 32 690 509 16,288 195,456

2x1.5 48 818 635 30,480 365,760 2x1.5 74 868 640 47,360 568,320 2x2 4 1,026 675 2,700 32,400

3x1.5 24 1,082 725 17,400 208,800 3x1.5 28 1,210 765 21,420 257,040 Total 234 $147,768 $1,773,216

A typical unit in the Silas Creek Project includes a kitchen with the following features: a refrigerator/freezer, dishwasher, an electric range/oven, a stainless steel sink and plastic laminate countertops. The bathroom in a typical unit has a porcelain sink and a ceramic tile and fiberglass tub/shower surround combination with a toilet. The interior of a typical unit includes carpet flooring throughout and vinyl tile and vinyl sheet flooring in the kitchen and ceramic tile and sheet vinyl flooring in the bathrooms.

Additional information concerning the Silas Creek Project and the Winston-Salem, North Carolina metropolitan area is contained in the related Appraisal, a summary of which is included herein. The summary of such Appraisal does not purport to be complete or definitive and is qualified only in its entirety by reference to the full Appraisal of the Silas Creek Project. During the initial offering period for the Bonds, the full Appraisal of the

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Silas Creek Project will be provided to any prospective purchaser upon request to the Underwriter. See “APPRAISALS” herein.

The Chesterfield Project. The Chesterfield Project is located at 3411 Old Vineyard Road, Winston-Salem, North Carolina 27103. The Chesterfield Project maintains laundry facilities, a playground, swimming pool, an on-site property manager, security system and door-to-door trash pickup. The Chesterfield Project consists of 294-units located in nine three-story buildings. Original construction of the Chesterfield Project was completed in 1980. A brief description of the unit mix and rent is included below:


Current Rent

Potential Gross

Rent (Month)

Potential Gross

Rent (Annual)

2x1 7 913 $ 640 $ 4,480 $ 53,760 2x1 83 913 640 53,120 637,440 2x1 193 882 635 122,555 1,470,660 3x2 11 1,057 820 9,020 108,240

Total 294 $189,175 $2,270,100

A typical unit in the Chesterfield Project includes a kitchen with the following features: a refrigerator/freezer, an electric range/oven, dishwasher, garbage disposal, stainless steel sink and pressed wood countertops covered with plastic laminate. The bathroom in a typical unit contains a vanity sink, fiberglass tub/shower surround combination and porcelain toilet. The interior of a typical unit includes vinyl flooring throughout with carpeted bedrooms.

Additional information concerning the Chesterfield Project and the Winston-Salem, North Carolina metropolitan area is contained in the related Appraisal, a summary of which is included herein. The summary of such Appraisal does not purport to be complete or definitive and is qualified only in its entirety by reference to the full Appraisal of the Chesterfield Project. During the initial offering period for the Bonds, the full Appraisal of the Chesterfield Project will be provided to any prospective purchaser upon request to the Underwriter. See “APPRAISALS” herein.

Limitation on Obligations of the Borrowers

The obligations of the Borrowers under the Loan Agreement, the Note and the Mortgages are payable solely from Project Revenues and the Funds and Accounts created under the Indenture (except as specifically set forth therein), without recourse to the assets of any other person or entity, including the Sole Member. The Borrowers’ obligations to make Loan Payments with respect to the Bonds are limited recourse obligations of the Borrowers; as a result, holders of the Bonds will have recourse only to the Funds and Accounts created under the Indenture (except as specifically set forth therein), the sites of the Projects, the Projects and the other equipment and personal property secured under the Mortgages to satisfy the obligations of the Borrowers with respect to the Bonds. No other revenues or assets of the Borrowers will be available for the payment of, or as security for, the Bonds. No representation is made that the Borrowers will have funds available sufficient to make payments due pursuant to the Loan Agreement. Accordingly, neither the Borrowers’ financial statements nor those of the Sole Member are included in this Official Statement.

The Property Manager

The Borrowers will each enter into a Property Management Agreement with The Lynd Company (the “Property Manager”). The Property Manager was founded in 1980 and currently manages 19,792 multifamily units in 8 different states. Pursuant to the Property Management Agreements, the Property Manager will be the exclusive agent for the management of the Projects subject to such agreements, including marketing, rental activities, collection of rents, enforcement of leases, maintenance and repair of such Projects, and provision of utilities and services. Under the Property Management Agreements, the Property Manager will be paid a monthly fee. The initial monthly fee will be equal to approximately 4.00% of effective revenue for the Projects. According to the Loan Agreement, no Person shall be engaged by the Borrowers as a replacement manager unless such Person or a

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principal officer (or in the case of a limited liability company, manager) thereof (a) shall have at least five years of demonstrated experience in the management and leasing of affordable residential rental housing facilities, including having (or in the case of such officer or manager, overseeing) not less than 500 units under management subject to restrictions similar to those contained in the Land Use Restriction Agreements and (b) have its employees bonded for not less than the $500,000.

The following table is a list of multifamily residential rental housing properties currently and previously managed by the Property Manager:

The Lynd Company – Multifamily Housing Portfolio Property Name Location # of Units The Cove at NOLA Apartments New Orleans, Louisiana 300 2100 Memorial Houston, Texas 197 1221 Broadway San Antonio, Texas 307 Auburn Creek San Antonio, Texas 224 Autumn Oaks Apartments San Antonio, Texas 114 Avalon Apartments Los Angeles, California 15 Ashton Oaks Clute, Texas 520 Autumn Oaks Beaumont, Texas 152 Beauvoir Manor Apartments Biloxi, Mississippi 150 Bent Creek Apartments Atlanta, Georgia 324 Berkley Apartments Little Rock, Arkansas 252 Berrendo Square Apartments San Antonio, Texas 100 Briar Creek Apartments Houston, Texas 88 Briarcrest Apartments Spring, Texas 376 Bridges on Kinsey Tyler, Texas 232 Brightwaters Apartments Little Rock, Arkansas 256 Broadmoor Huston, Texas 235 Brookhollow Apartments Kerrville, Texas 48 Canlen West Apartments San Antonio, Texas 132 Cardinal Oaks Beaumont, Texas 152 Caswyck Trail Apartments Marietta, Georgia 403 Cedars of Baymeadows Jacksonville, Florida 160 Celina Plaza El Paso, Texas 289 Center Park Apartments San Antonio, Texas 395 Cranbrook Forest Houston, Texas 261 Champion at Marshall Meadows San Antonio, Texas 250 Champion at Mission Del Rio San Antonio, Texas 180 Champion at Port Royal San Antonio, Texas 252 City Parc II Houston, Texas 192 Pecan Grove Dallas, Texas 250 Champion at the Green Houston, Texas 238 CR Claremore Claremore, Oklahoma 104 CR Gallatin Gallatin, Tennessee 208 CR Jackson Jackson, Mississippi 144 CR Jackson Jackson, Tennessee 124 CR North Little Rock Little Rock, Arkansas 172 CR of Tinker Oklahoma City, Oklahoma 152 CR of Yukon Yukon, Oklahoma 200 CR Richland Richland, Mississippi 184 CR Sherwood Sherwood, Arkansas 160 CR Springdale Bethel Heights, Arkansas 184 Chenal Lakes Apartments Little Rock, Arkansas 456 Cheyenne Village Apartments San Antonio, Texas 60 Chisolm Trace Apartments San Antonio, Texas 126 City Parc II West Oaks Apartments Houston, Texas 192

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The Lynd Company – Multifamily Housing Portfolio Property Name Location # of Units Cleme Manor Houston, Texas 284 Clippers Cove Boynton Beach, Florida 384 Cobb Park Townhomes Fort Worth, Texas 172 Concord at Gulfgate Houston, Texas 288 Concord at LittleYork Houston, Texas 276 Concord at Williamcrest Houston, Texas 288 Copper Creek Apartments Abilene, Texas 228 Covina Plaza San Antonio, Texas 70 Creek Hollow Apartments Fort Worth, Texas 120 Crown Ridge of Edmond Edmond, Oklahoma 160 Dublin Apartments San Antonio, Texas 156 Dorado Ranch Odessa, Texas 224 Emerald Bay Houston, Texas 248 Enclave Amarillo, Texas 225 Fairfield Apartments Little Rock, Apartments 337 Fairways V San Antonio, Texas 205 Forest Hills Apartments Garner, North Carolina 136 Forest River Apartments Gadsden, Alabama 248 Fowler Square Apartments Little Rock, Arkansas 88 Fulton Village Houston, Texas 108 Gracie Square Houston, Texas 223 Golf Villas Gulf Breeze, Florida 136 Glen Oaks Beaumont, Texas 250 Greenhouse Houston, Texas 350 Greenview Gardens Apartments Butler, Pennsylvania 137 Greenview Manor St. Petersburg, Florida 52 Grove at Trinity Mills Dallas, Texas 320 Haven at Augusta Woods Houston, Texas 246 Haven at West 11th Houston, Texas 121 Heatherbrook Apartments Houston, Texas 176 Heritage Square Apartments Dallas, Texas 112 Heritage Square Apartments Edinburg, Texas 204 Highland Ridge Overland Park, Kansas 370 Highlands Apartments Dallas, Texas 136 Hillcrest Apartments Grand Prairie, Texas 310 Hillstone at Centreport Fort Worth, Texas 318 Hillstone at Trinity Oaks Benbrook, Texas 166 Hillstone on the Trails Benbrook, Texas 168 Historic at Allen Parkway Houston, Texas 500 Howell Bridge Apartments Duluth, Georgia 256 Huntington Ridge DeSoto, Texas 198 Huntington Park New Orleans, La 161 Huebner Oaks Apartments San Antonio, Texas 344 Ingram Ranch Apartments San Antonio, Texas 164 Ironwood Crossing Apartments Fort Worth, Texas 280 Jacob’s Crossing Magee, Mississippi 45 James Park St. Petersburg, Florida 82 Kingswood Manor Apartments San Antonio, Texas 129 Kitty Hawk Apartments Universal City, Texas 308 La Plaza Apartments El Paso, Texas 129 Lake Vista Warner Robbins, Georgia 234 Lakes at Indian Creek Clarkston, Georgia 603 Lakeside Villas Apartments Jackson, Mississippi 146 Landmark Beaumont, Texas 200

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The Lynd Company – Multifamily Housing Portfolio Property Name Location # of Units Las Colinas Apartments San Antonio, Texas 232 Las Villas de Merida San Antonio, Texas 160 Laurel Crossing Apartments San Antonio, Texas 112 Laurel Gardens Metairie, Louisiana 60 Le Chateau Lake Charles, Louisiana 200 Legends of El Paso El Paso, Texas 240 Limestone Houston, Texas 438 Lodge of Overland Park Overland Park, Kansas 548 Longfellow Arms Longivew, Texas 216 Madison Crossing Vernon, Texas 112 Madison Highlands Hillsboro, Texas 128 Madison Trails Altus, OK 112 Magnolia Terraces Montgomery, AL 176 Marbach Park Apartments San Antonio, Texas 304 Marianna Gardens Marianna, Florida 100 Maverick San Antonio, Texas 86 Meadows Universal City, Texas 216 Meadow Creek Apartments Houston, Texas 192 Mill Creek Apartments Spring, Texas 174 Mission Springs Apartments Jacksonville, Florida 444 Mountainside Apartments Jasper, Georgia 176 Nob Hill Apartments San Antonio, Texas 368 Oak Hills Apartments San Antonio, Texas 121 Oak Hollow Austin, Texas 409 Oak Park Village Lenexa, Kansas 511 Oaks at Ashford Point Houston, Texas 255 Oaks at Brandlewood Savannah, Georgia 324 Oakdell Way San Antonio, Texas 10 Palacio Del Sol San Antonio, Texas 222 Paramount Terrace Amarillo, Texas 181 Park at Summerhill Texarkana, Texas 184 Pawel Village San Antonio, Texas 76 Pebble Hills Apartments El Paso, Texas 104 Pepperidge Apartments San Antonio, Texas 144 Perrin Crest Apartments San Antonio, Texas 200 Perrin Square Apartments San Antonio, Texas 236 Pine Forest Houston, Texas 161 Pinhook South Apartments Lafayette, Louisiana 240 Pleasant Pointe Little Rock, Arkansas 239 Portland Courtyard Los Angeles, California 46 Portofino Villas Melbourne, Florida 160 Raintree Senior Apartments St. Louis, Missouri 102 Ranch on Guadalupe New Braunfels, Texas 184 Ranch at Waller Waller, Texas 224 Rankin Square Pearl, Mississippi 120 Regents Center Apartments Overland Park, Kansas 424 Reserve at Pecan Valley San Antonio, Texas 412 Residences at Fannin Station Houston, Texas 301 Residences at Stone Brook Nashville, TN 320 River Mill Apartments Hudson, Florida 136 River Road Terrace Ettrick, Virginia 128 River Oaks Wylie, Texas 180 Riverview Apartments Tampa, Florida 296 Riverwalk II Apartments Homestead, Florida 112

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The Lynd Company – Multifamily Housing Portfolio Property Name Location # of Units Rush Creek Apartments Arlington, Texas 248 Sabine Park Orange, Texas 200 Sandridge Pasadena, Texas 504 Sandpiper Houston, Texas 286 Savoy on Garland Garland, Texas 144 Shadow Ridge Apartments Houston, Texas 260 Shadowood Apartments Lake Charles, Louisiana 180 St. Luke’s Plaza St. Louis, Missouri 216 Stations at Richmond Hills Atlanta, Georgia 181 Stonebridge at City Park Houston, Texas 240 Stone Creek Apartments Tyler, Texas 248 Stone Ridge Apartments Arlington, Texas 204 Stonehouse Apartments San Antonio, Texas 248 Stratford Landing Tallahassee, Florida 192 Suffolk Manor Lake Charles, Louisiana 220 Summertree Valley View Apartments Little Rock, Arkansas 232 Sunset Bay Apartments Miami, Florida 308 Sweetwater Point Houston, Texas 260 Terraces and Highbury Apartments Atlanta, Georgia 172 The Commons Texarkana, Texas 196 The Forum at Grand Prairie Grand Prairie, Texas 304 The Preserve at Collier Ridge Atlanta, Georgia 419 The Regents Jacksonville, Florida 304 The Villages at Cable Ranch Apartments San Antonio, Texas 272 Timber Ridge Apartments San Antonio, Texas 168 Townhouse Apartments San Antonio, Texas 574 Towne Oaks Beaumont, Texas 186 Trace Apartments Lake Charles, Louisiana 80 Travis Park Apartments Austin, Texas 199 Tribute at Rim San Antonio, Texas 380 Tupelo Trace Tupelo, Mississippi 200 Union Square White Settlement, Texas 144 Valley View Summertree North Little Rock, Ar 232 Valley Crossing Apartments Little Rock, Arkansas 211 Vantage at San Marcos San Marcos, Texas 240 Village Circle New Braunfels, Texas 50 Village Square Apartments Port Richey, Florida 92 Villages at Lost Creek San Antonio, Texas 260 Village at Uvalde Houston, Texas 446 Villas at Pinnacle Park Dallas, Texas 332 Villas Winkler Houston, Texas 234 Vista Houston, Texas 320 Waterford Apartments San Antonio, Texas 133 Waterside at Mason Richmond, Texas 246 Westchase Crossing Houston, Texas 366 Westgate Apartments Ocean Springs, Mississippi 90 Westridge Apartments Fort Worth, Texas 176 Willow Bend Apartments Lake Charles, Louisiana 105 Woodchase Apartments Gulfport, Mississippi 80 Woodland Heights Austin, Texas 288 Woodside Village Clarkston, Georgia 356 Wyncrest Clarkston Station Clarkston, Georgia 356 Wyndham Apartments Houston, Texas 448

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Prior Operating Histories

The Borrowers have provided a compilation of financial statement for the Projects for fiscal years ended December 31, 2016 and December 31, 2015. See APPENDIX D herein. The Underwriter makes no representations as to the accuracy or completeness of such financial statements. No assurance can be given that the prior operating revenues from the Projects (or any of them) or operating expenses of the Projects (or any of them) as set forth in these financial statements will be consistent with those historically experienced. Certain expenses incurred by the Seller may not be incurred by the Borrowers, and the Borrowers may incur expenses that were not incurred by the Seller.

Occupancy

The Whispering Pines Project. The Borrower for the Whispering Pines Project expects physical occupancy to be at least 93% for the Whispering Pines Project in each year. The physical occupancy rate is the proportion of units that are occupied by tenants. The chart below sets forth the physical occupancy rate for the Whispering Pines Project for the fiscal years ending December 31 of each year:

Whispering Pines Apartments Historical Occupancy Trends 2016 2015 Physical Occupancy 89% 100%

As of June 1, 2017, the Whispering Pines Project was 95% occupied.

The Twin City Project. The Borrower for the Twin City Project expects physical occupancy to be at least 93% for the Twin City Project in each year. The physical occupancy rate is the proportion of units that are occupied by tenants. The chart below sets forth the physical occupancy rate for the Twin City Project for the fiscal years ending December 31 of each year:

Twin City Apartments Historical Occupancy Trends 2016 2015 Physical Occupancy 92% 91%

As of June 1, 2017, the Twin City Project was 95% occupied.

The Silas Creek Project. The Borrower for the Silas Creek Project expects physical occupancy to be at least 91% for the Silas Creek Project in each year. The physical occupancy rate is the proportion of units that are occupied by tenants. The chart below sets forth the physical occupancy rate for the Silas Creek Project for the fiscal years ending December 31 of each year:

Silas Creek Apartments Historical Occupancy Trends 2016 2015 Physical Occupancy 65% 44%

As of June 1, 2017, the Silas Creek Project was 92% occupied. The Silas Creek Project was acquired by the Seller in May of 2015. After the Seller acquired the Silas Creek Project, he rehabilitated most of the units, resulting in a decrease in occupancy in 2015 and 2016. When a tenant lease expired, the Seller decided not to renew the lease but to create a vacancy in order to rehabilitate such unit. Occupancy and rental income rebounded in late 2016 as these units came back on line.

The Chesterfield Project. The Borrower for the Chesterfield Project expects physical occupancy to be at least 92% for the Chesterfield Project in each year. The physical occupancy rate is the proportion of units that are

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occupied by tenants. The chart below sets forth the physical occupancy rate for the Chesterfield Project for the fiscal years ending December 31 of each year:

Chesterfield Apartments Historical Occupancy Trends 2016 2015 Physical Occupancy 89% 83%

As of June 1, 2017, the Chesterfield Project was 95% occupied.

Pro Forma Financial Projections

Attached hereto as Appendix D (included in the compilation of financial statement for the Projects which also reports historical data for fiscal years 2015 and 2016) are pro forma financial projections prepared by the Borrowers setting forth an estimate of revenues and expenses for each Project for the period ending December 31, 2017, with adjustments related to changes in management, administrative costs associated with the Bonds and required deposits into the Repair and Replacement Fund. The Underwriter makes no representation for the accuracy of the financial projections.

There are no assurances that operating revenues will not be less than, or that operating expenses will not be greater than those listed in the projections, and it is reasonably expected that such expenses will increase during the term of the Bonds. In the event of increases in the operating expenses of the Projects, the Borrowers will be primarily dependent upon increases in tenant rents in order to adequately operate and maintain the Projects. See “RISK FACTORS AND INVESTMENT CONSIDERATIONS – Future Project Revenues and Expenses” herein.

Environmental Assessments

The Borrowers have obtained independent Phase I Environmental Site Assessments for each of the Projects (collectively, the “Environmental Assessments” and each an “Environmental Assessment”) as further described below. The Environmental Assessments were conducted utilizing the generally accepted Phase I industry standards using the American Society for Testing and Materials (ASTM) Standard Practice E-1527-13. During the initial offering period for the Bonds, the Environmental Assessments will be provided to any prospective purchaser upon request to the Underwriter. Summaries of certain aspects of the Environmental Assessments follow. The following summaries do not purport to be complete or definitive and are qualified in their respective entireties by reference to the full Environmental Assessments.

Whispering Pines Project Environmental Assessment. The Environmental Assessment for the Whispering Pines Project was prepared by Gill Group, Inc. (“Gill Group”) and is the subject of a written report dated August 8, 2016. Such Environmental Assessment did not reveal evidence of recognized environmental conditions.

Twin City Project Environmental Assessment. The Environmental Assessment for the Twin City Project was prepared by Gill Group and is the subject of a written report dated August 8, 2016. Such Environmental Assessment did not reveal evidence of recognized environmental conditions at the Twin City Project.

Silas Creek Project Environmental Assessment. The Environmental Assessment for the Silas Creek Project was prepared by Partner Engineering North Carolina, PLLC (“Partner Engineering”) and is the subject of a written report dated April 18, 2016. Such Environmental Assessment did not reveal evidence of recognized environmental conditions at the Silas Creek Project. However, the Environmental Assessment for the Silas Creek Project recommended the implementation of an Asbestos Containing Materials and Lead-Based Paint Operations and Maintenance Program, remediation of water damage during routine maintenance, and recommended a long-term radon study to be conducted on the property. According to an Appraisal of the Silas Creek Project dated October 17, 2016 performed by Novogradac and Company LLP (“Novogradac”), all such recommended items have been completed (according to information supplied to Novogradac by the Sole Member).

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Chesterfield Project Environmental Assessment. The Environmental Assessment for the Chesterfield Project was prepared by Gill Group and is the subject of a written report dated August 8, 2016. Such Environmental Assessment did not reveal evidence of recognized environmental conditions at the Chesterfield Project. However, in connection with a previous site inspection performed in April of 2012 and its accompanying report, it was recommended that the property implement an Asbestos Operations and Management Plan (an “AOMP”) to manage suspect asbestos containing material (“SAC Material”) observed on-site and any other SAC Material that may be located on-site. Accordingly, the Environmental Assessment for the Chesterfield Project recommends that the property owners/management implement an AOMP to manage any SAC Material.

Physical Needs Assessments

The Borrowers have obtained independent physical condition reports for each of the Projects (collectively, the “Physical Needs Assessments” and each a “Physical Needs Assessment”) as further described below.

Prospective purchasers of the Bonds may obtain a copy of the Physical Needs Assessments upon request to the Underwriter during the initial offering period for the Bonds. The following summaries do not purport to be complete or definitive and are qualified in their respective entireties by reference to the full Physical Needs Assessments. On the basis of such Physical Needs Assessments, the Borrowers intend to use a portion of the proceeds of the Bonds in the aggregate amount of approximately $1,000,000 to address the immediate and short-term repair needs of the Projects. See “ESTIMATED SOURCES AND USES OF FUNDS.” The costs of physical needs stated on a per unit basis in the following discussion have been rounded up to the nearest dollar.

Whispering Pines Project Physical Needs Assessment. Real Estate Advisory, LLC (“Real Estate Advisory”) prepared a Physical Needs Assessment for the Whispering Pines Project dated January 15, 2016. Such Physical Needs Assessment concluded the Whispering Pines Project is in fair physical condition. Such Physical Needs Assessment identified the following: $240,480 (approximately $771 per unit) in immediate repairs (comprised of $48,480 of life safety items and $192,000 of critical repairs (to be completed within six months)); and $1,077,400 (uninflated) of capital item repairs to be completed over the course of the next 12 years (approximately $288 per unit (uninflated), per year, for the next 12 years). According to an Appraisal of the Whispering Pines Project dated October 18, 2016 performed by Novogradac, all $240,480 of immediate repairs have been completed (according to information supplied to Novogradac by the Sole Member).

Twin City Project Physical Needs Assessment. Gill Group prepared a Physical Needs Assessment for the Twin City Project dated September 23, 2016. Such Physical Needs Assessment concluded the Twin City Project is in fair physical condition and identified the following: $-0- in critical repairs; $559,520 ($1,963 per unit) in non-critical repairs (to be completed within one year); and $2,722,137 (uninflated) in repairs to be completed over the course of the next 12 years ($796 per unit (uninflated), per year, for the next 12 years).

Silas Creek Project Physical Needs Assessment. Partner Engineering prepared a Physical Needs Assessment for the Silas Creek Project dated March 30, 2017. Such physical needs assessment concluded the Silas Creek Project is in good to fair physical condition. Partner Engineering identified the following: $308,970 in total immediate and deferred maintenance repairs (approximately $1,321 per unit) (comprised of $86,000 of site improvements, $18,000 of structural frame and building envelope improvements, $1,500 of mechanical and electrical system improvements, $162,900 in interior element improvements, $250 of accessibility improvements and $40,320 of water intrusion and microbial growth improvements); and $423,400 (uninflated) of capital item repairs to be completed over the course of the next 7 years (approximately $258 per unit (uninflated), per year, for the next 7 years).

Chesterfield Project Physical Needs Assessment. Gill Group prepared a Physical Needs Assessment for the Chesterfield Project dated September 22, 2016. The Physical Needs Assessment prepared by Gill Group concluded the Chesterfield Project is in fair physical condition. Such Physical Needs Assessment identified the following: $-0- in critical repairs; $462,000 ($1,571 per unit) in non-critical repairs (to be completed in one year); and $2,069,535 (uninflated) in repairs to be completed over the course of the next 12 years ($587 per unit (uninflated)), per year, for the next 12 years).

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Project Regulation

Each Project is required to be operated in accordance with the terms of the Land Use Restriction Agreement relating to such Project, which requires that such Project be maintained as a residential rental housing project within the meaning of Section 142(d) of the Code, and the Treasury Regulations thereunder and that during the Qualified Project Period (as defined in such Land Use Restriction Agreement) at least 40% of the completed units be occupied by Low Income Tenants. The Tax Agreement further imposes certain requirements relating to the 501(c)(3) tax-exempt treatment of the Sole Member, including the requirement that 75% of the units in each Project be rented to Moderate Income Tenants. See Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – “The Land Use Restriction Agreements.” Each Land Use Restriction Agreement further requires that the Project subject thereto be offered for rental to the general public, prohibits rental of certain units to persons related to the Borrower owning such Project and rentals on a transient basis, and imposes other restrictions on the operation of such Project (as defined in the Land Use Restriction Agreement relating to such project, the “Rental Restrictions”). These conditions and restrictions may continue in effect upon a sale or foreclosure under the Mortgages and can be expected to adversely affect the value of the Projects to prospective purchasers of the Bonds in the event of a sale or foreclosure. In addition, failure by the Borrowers to operate the Projects in compliance with the provisions of the Land Use Restriction Agreements or the Tax Agreement could cause interest on the Bonds to be subject to federal income taxation, possibly retroactive to the date of issuance of the Bonds.

Insurance

Under the Loan Agreement, the Borrowers are required to maintain: (i) insurance against loss or damage to the improvements by fire and other risks covered by fire and extended coverage insurance in an amount not less than the greater of the full replacement cost of the improvements and personal property or the outstanding principal amount of the Bonds, with a deductible for any casualty; (ii) business interruption or loss of rent insurance in amounts sufficient to make all payments due under the Loan Agreement and the Note during any twelve-month period, or the gross amount of annual rentals projected (or, if greater, actual) for the Projects based upon the projected (or, if greater, actual) occupancy of the Projects; provided that such coverage shall be increased annually on each anniversary date of the policy to comply with the Loan Agreement; (iii) comprehensive general liability insurance on an occurrence basis against claims for personal injury, including bodily injury, death or property damage; (iv) workers’ compensation insurance; (v) during the construction or repair of improvements on the Projects, builders’ completed value risk insurance against all risks of physical loss; (vi) boiler and machinery insurance; (vii) flood insurance if the Projects are in an area identified as a special flood hazard area; (viii) and such other insurance as may from time to time be reasonably required by the Trustee, in such amounts and against such hazards and risk, as is commonly obtained by prudent owners of property similar in use as to the Projects and in the respective areas in which the Projects are located.

All policies of insurance will contain an endorsement or agreement by the insurer that any loss will be payable in accordance with the terms of such policy notwithstanding any act or negligence of the Borrowers, which might otherwise result in forfeiture of such insurance, and the further agreement of the insurer waiving all rights of set-off, counterclaim or deductions against the Borrowers.

APPRAISALS

Each of the Projects has been appraised by Novogradac, as independent appraiser (the “Appraiser”) selected by the Sole Member (collectively, the “Appraisals” and each an “Appraisal”). A summary of each Appraisal follows. Such summaries do not purport to be complete or definitive and are qualified in their respective entireties by reference to the full Appraisals. During the initial offering period for the Bonds, the Appraisals will be provided to any prospective purchaser of the Bonds upon request to the Underwriter.

The Appraisals include information regarding the procedures utilized in preparing the respective Appraisal and the underlying general assumptions and limiting conditions. The conclusions and much of the other information included in the Appraisals are based on the assumptions and rationale stated therein. In some instances the currently available information may be incomplete, may not necessarily disclose all material facts that might affect the

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Projects, and, in any case, may change after the date of the Appraisals. Accordingly, the assumptions and other information in the Appraisals should be carefully evaluated by a prospective investor in the light of the circumstances then prevailing.

Appraisals, by their nature, are based on the judgment of the respective appraisers, represent only estimates of value and should not be relied upon as a measure of realizable value. Each Appraisal is dated as of its date. There can be no assurance that information set forth therein continues to be accurate in all respects as of the date hereof. In any event, the accuracy of the Appraisals is dependent upon the occurrence of specified assumptions and other future events which cannot be assured, and therefore, the actual results achieved will vary from the forecasts, and the variation may be material.

Information taken from the Appraisals prepared by the Appraiser should be evaluated within the context of the related full narrative report. Information presented out of the context of the full narrative report may be misleading. There is no assurance that the “as is values” set forth in the Appraisals would be realized in the event of the foreclosure or forced sale of the Projects or any of them.

Whispering Pines Project Appraisal. Novogradac determined as of October 7, 2016 the market value of the fee simple interest of the Whispering Pines Project “as is” to be $17,600,000.

Twin City Project Appraisal. Novogradac determined as of October 6, 2016 the market value of the fee simple interest of the Twin City Project “as is” to be $18,100,000.

Silas Creek Project Appraisal. Novogradac determined as of October 6, 2016 the market value of the fee simple interest of the Silas Creek Project “as is” to be $13,100,000.

Chesterfield Project Appraisal. Novogradac determined as of October 6, 2016 the market value of the fee simple interest of the Chesterfield Project “as is” to be $15,800,000.

ESTIMATED SOURCES AND USES OF FUNDS*

The Borrowers expect the proceeds of the Bonds to be provided to be used and applied in the following manner:

Sources of Funds: Series 2017A Bonds $54,425,000 Subordinate Series 2017B Bonds 6,080,000 Original Issue Discount (1,336,815)

Total Sources of Funds $59,168,185 Uses of Funds: Acquisition—Deposit Project Fund $54,170,000 Renovation—Deposit Project Fund 1,006,790 Deposit to Debt Service Reserve Fund 1,767,069 Real Estate Closing Costs 600,000 Cost of Issuance 1,624,326

Total Uses of Funds $59,168,185

RISK FACTORS AND INVESTMENT CONSIDERATIONS

AN INVESTMENT IN THE BONDS INVOLVES A SIGNIFICANT DEGREE OF RISK. PROSPECTIVE PURCHASERS OF THE BONDS SHOULD CAREFULLY CONSIDER ALL POSSIBLE FACTORS WHICH MAY AFFECT THEIR INVESTMENT IN THE BONDS. IN ADDITION TO THE OTHER INFORMATION SET FORTH HEREIN, THE FOLLOWING LIST, WHILE NOT SETTING FORTH ALL THE FACTORS, CONTAINS SOME OF THE FACTORS THAT SHOULD BE CONSIDERED PRIOR TO PURCHASING THE BONDS.


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In order to identify risk factors and make an informed investment decision, prospective investors should be thoroughly familiar with this entire Official Statement (including the Appendices hereto, the documents describing the transactions, the third party reports with respect to the Projects and the documents relating to the formation and organization of the Borrowers and the Sole Member) and review the actual documents summarized herein to make a judgment as to whether the Bonds are an appropriate investment for the investor. Moreover, the order of presentation of the risk factors does not necessarily reflect the order of their importance.

Special Limited Obligations of Authority


Limited Resources of Borrowers; Security for Repayment

Each of the Borrowers is a newly formed entity whose only asset is its interest in its respective Project. As a result, each Borrower’s sole source of funds with which to pay its obligations under the Loan Agreement and Note is the revenue generated by the operation of its respective Project. There can be no assurance that such amounts will be sufficient to repay the Borrowers’ obligations with respect to the Bonds. No other revenues or assets of the Borrowers or the Sole Member will be available for the payment of, or as security for, the Bonds.

The security for the Bonds (subject to Permitted Encumbrances) will consist entirely of (a) all right, title and interest of the Authority in and to the Note, the Mortgages, the Land Use Restriction Agreements and the Loan Agreement (other than the Unassigned Rights), including the proceeds thereof or recovery thereon; (b) all funds, money and securities from time to time held by the Trustee under the terms of the Indenture (except with respect to money in the Operations and Maintenance Reserve Fund and the Rebate Fund) and any interest, profits and other income derived from the investment thereof, including the proceeds of the Bonds, subject to the application thereof in accordance with the Indenture, including Net Proceeds; (c) any and all other rights and interests in property conveyed, mortgaged, pledged, assigned or transferred as and for additional security for the Bonds by the Authority or by anyone on its behalf or with its written consent to the Trustee; and (d) to the extent not covered above, all proceeds of the foregoing. Prospects for uninterrupted payment of principal and interest on the Bonds in accordance with their terms are dependent upon the success of the Borrowers in renovating and operating the Projects to generate adequate cash flow to meet its obligations under the Loan Agreement and the Note.

The Borrowers and Related Parties; Conflicts of Interest

Each Borrower was organized for the sole purpose of acquiring, rehabilitating and operating the Project owned by it. Each Borrower has no assets other than the Project owned by it and the rights and revenues incident thereto and no intention to acquire other assets. The ability of the Borrowers to pay and perform its obligations

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under the Loan Agreement and the Note will depend primarily upon the ability of the Projects to generate sufficient revenues.

Under the terms of the Loan Agreement and applicable law relating to limited liability companies, the Sole Member is not liable for the debts or losses of the Borrowers, nor is it obligated to contribute any funds to or on behalf of the Borrowers or any of them, irrespective of whether the revenues of the Projects are sufficient to pay operating expenses and debt service requirements with respect to the Bonds.

The Sole Member has engaged in, and may continue to engage in, business for its own accounts, independently or with others, and whether or not in the vicinity of or in competition with any Project. As a result of its other interests and activities, the Sole Member may have conflicts of interest with its role in the Projects, including conflicts in allocating its time and resources between the Projects and other activities in which it is involved.

Future Project Revenues and Expenses

As noted herein, and except to the extent payable from investment income or, under certain circumstances, proceeds of casualty insurance or condemnation awards, principal of and premium, if any, and interest on the Bonds is payable solely from Project Revenues, which include payments from tenants, from the security provided by or pursuant to the Indenture, the Loan Agreement and the Mortgages. No representation or assurance is given or can be made that Project Revenues, as presently estimated or otherwise, will be realized by the Borrowers, the Trustee, or by any other person in amounts sufficient, together with such other moneys available under the Indenture and pledged to the Bonds, to pay debt service on the Bonds when due and to make other payments necessary to meet the obligations of the Borrowers. Future revenues and expenses of the Projects are subject to conditions which may change.

The realization of Project Revenues from the Projects by the Borrowers generally is subject to, among other factors, federal and state policies affecting rental housing and the housing market generally, demand for multifamily rental housing, the capability of management of the Projects, the nature and condition of the housing stock in the neighborhood in which the Projects are located, future economic conditions and other conditions which are impossible to predict. Such conditions may include an inability of management at the Projects to control expenses during periods of inflation, changes in government involvement in and regulation of rental housing, changes in local real estate taxes and zoning restrictions, and competition from other sources of assisted or market-rate multifamily housing.

The payment of debt service on the Bonds is, among other things, dependent upon the Borrowers’ ability to maintain occupancy of the Projects, charge and collect rents which are sufficient to pay operating expenses of the Projects, debt service requirements with respect to the Bonds and to fund necessary reserves as required under the Indenture. Occupancy levels (which also affect Project Revenues) will depend principally upon the desirability of the Projects as rental housing, taking into account factors such as its cost, location, physical condition and amenities. See “THE BORROWERS AND THE PROJECTS” and the subheadings thereunder herein for a description of the Projects. Occupancy levels may also be affected by a variety of future events, including but not limited to failure of the Projects to attract such tenants because of competition from other rental housing, changes in zoning restrictions, or development activities near the Projects.

Subordinate Status of Series 2017B Bonds

The Series 2017B Bonds (also referred to as the Subordinate Bonds) are subordinate to the Senior Bonds as described herein and as set forth in the Indenture. Under the Indenture, amounts deposited in the Revenue Fund (after all other required applications) will be used to fund the accounts in the Bond Fund for payment of the Senior Bonds and the account in the Debt Service Reserve Fund for the Senior Bonds prior to funding the accounts in the Bond Fund and the account in the Debt Service Reserve Fund for payment of the Subordinate Bonds. See “APPENDIX B – SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – THE INDENTURE – Revenue Fund.” Amounts on deposit in the Bond Fund for a particular Series of Bonds will be used solely to pay principal and interest on the related Series of Bonds, on the applicable payment dates. If there is a shortfall of revenues, deposits to the Bond Fund and the Debt Service Reserve Fund for the Senior Bonds must be

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made prior to any such deposits being made with respect to the Subordinate Bonds. Under such circumstances, principal and/or interest on the Subordinate Bonds may remain unpaid.

Risks of Real Estate Investment

General. Development, ownership and operation of real estate, such as the Projects, involves certain risks, including the risk of adverse changes in general economic and local conditions, the possible future oversupply and lagging demand for housing; adverse use of adjacent or neighboring real estate; community acceptance of the Projects; changes in the cost of operation of the Projects; difficulties or restrictions in the Borrowers’ ability to raise rents charged; adverse weather and delays in rehabilitation; population decreases; uninsured losses; failure of residents to pay rent; operating deficits and mortgage foreclosure; lack of attractiveness of the property to residents; adverse changes in neighborhood values; and adverse changes in zoning laws, federal and local rent controls, other laws and regulations and real property tax rates. Such losses also include the possibility of fire or other casualty or condemnation. If the Projects, or any parts of the Projects, (or any one of the Projects or portions thereof) were uninhabitable during restoration after damage or destruction, the residence units or common areas affected would not be available during the period of restoration, which could adversely affect the ability of the Projects to generate sufficient revenues to pay debt service on the Bonds. Changes in general or local economic conditions and changes in interest rates and the availability of mortgage funding may render the sale or refinancing of the Projects difficult or unattractive. These conditions may have an adverse effect on the demand for the Projects as well as the market price received for a Project in the event of a sale or foreclosure of such Project. Many other factors may adversely affect the operation of facilities like the Projects and cannot be determined at this time.

Risks of Competition, the Rental Market and Occupancy and Rental Rates. The Projects may compete with other current and future multifamily housing developments in their market areas, some of which may offer lower rentals. It is difficult to assess the current and future demand for units of the Projects or future rental rates. Therefore, there can be no assurance that the Projects will achieve the occupancy levels or the rental rates necessary to cover debt service requirements.

Failure to Maintain Occupancy. The economic feasibility of the Projects and their ability to provide revenues to the Borrowers sufficient to make payments on the Note depend in large part upon their being substantially occupied. Occupancy of the Projects may be affected by competition from existing competing facilities or from competing facilities which may be constructed in the area served by each Project, including facilities which the Sole Member, or its or their affiliates, may acquire or construct. None of the participants in the Project have agreed to a covenant not to compete with any of the Projects. Circumstances may occur, including but not limited to, insufficient demand for affordable multifamily housing in the Projects’ locations, decreases in the population, deterioration of the structure and living facilities of the Projects, and construction of competing projects for low income individuals or other more attractive living accommodations, which could increase the rate of vacancy. Further, the sustained failure of tenants to meet their rental payment obligations would make it difficult for the Projects to meet its current operating expenses which could result in a curtailment of essential services and decrease the desirability of the Projects to existing or prospective tenants.

Damage, Destruction or Condemnation. Although the Borrowers will be required to obtain and maintain certain insurance against damage or destruction as set forth in the Loan Agreement and the Mortgages, there can be no assurance that the Projects will not suffer losses for which insurance cannot be or has not been obtained or that the amount of any such loss, or the period during which the Projects cannot generate Project Revenues, will not exceed the coverage of such insurance policies.

If the Projects or any portion of the Projects (or any one Project or portion thereof) are damaged or destroyed, or are taken in a condemnation proceeding, funds derived from proceeds of insurance or any such condemnation award for such Project must be applied as provided in the Loan Agreement to restore or rebuild such Project or to redeem the Bonds (in whole or in part, as applicable). There can be no assurance that the amount of funds available to restore or rebuild any Project or to so redeem the Bonds will be sufficient for that purpose, or that any remaining portion of the Projects will generate Project Revenues sufficient to pay the expenses of the Projects and the debt service on the Bonds remaining outstanding.

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Marketing and Management

The successful operation of the Projects is heavily dependent upon the efforts of the Property Manager. The Borrowers have contracted with the Property Manager pursuant to the Property Management Agreement for marketing and day-to-day management and operation of the Projects. If the Property Manager was to terminate its relationships with the Borrowers, the Borrowers would need to hire and train management teams for the affected Project(s) or contract for similar services at equivalent rates with other companies. No assurance can be given that the Property Manager can continue to successfully manage or operate the Project, that the Borrowers will not terminate the relationship with the Property Manager or that another experienced successor management/consulting company will undertake the management or operation of the Projects under the terms required by the Indenture. A failure to maintain the Property Manager as the management/consulting company for the Projects or to hire, train and retain a successor management/consulting company may have an adverse effect on the ability of the Projects to operate and could negatively impact occupancy levels and revenues of the Borrowers. For more information see “THE BORROWERS AND THE PROJECTS – The Property Manager” herein.

Effect of Increases in Operating Expenses

It is impossible to predict future increases in operating expenses. An extended period of inflation may cause the rate of increases in Operating Expenses to rise more rapidly than the Borrowers’ ability to raise rents. Conversely, an extended period of deflation may cause the Projects’ rents to decrease more rapidly than any decrease in the Projects’ Operating Expenses. In addition, any underestimation by the Borrowers of the current Operating Expenses of the Projects may materially adversely affect sufficiency of the operating income of the Projects.

Property reserves are an important consideration for replacing such items as kitchen appliances, heating and air conditioning systems, roofs and other major capital items to maintain the quality of the Projects over time. The adequacy of the Projects’ reserve funds will depend in part on the quality of workmanship performed during construction or rehabilitation and the longevity of mechanical equipment that was installed in the units. The deterioration and replacement of capital items is not predictable with certainty, and real estate properties such as the Projects may encounter a periodic need for capital for replacement or repair of capital items in excess of property reserves on hand. The Borrowers have obtained physical needs assessments for the Projects and a portion of the proceeds of the Bonds will be used to pay the costs of the improvements recommended by the physical needs assessments. See “THE BORROWERS AND THE PROJECTS—Physical Needs Assessments” herein.

In the event that additional capital is needed for the replacement of capital items, since the Borrowers have no other source of income other than the Projects, it is likely that the Borrowers will either have to seek additional debt financing from third-party lenders or pay for such capital replacement or improvement out of Surplus Cash from the Projects. The Authority has no obligation with respect to any operating, reserve or capital expenses of the Projects and no obligation to issue Additional Bonds with respect to the Projects.

To the extent there are any expenditures required to maintain the Projects that are not foreseen by the Borrowers, any uninsured losses are experienced, the only source of money to pay such expenses would be additional resources, if any, available to the Borrowers. The Borrowers may be unable or unwilling to pay for such additional expenditures.

Substantial increases in Operating Expenses would affect future net operating income of the Projects and the ability of the Projects to generate rental revenue in amounts sufficient to satisfy the Borrowers’ obligations under the Loan Agreement and the Note. Any failure by the Borrowers to satisfy their payment obligations under the Loan Agreement and the Note will have an adverse impact on the ability of the Trustee to pay, from the Trust Estate, debt service payments on the Bonds.

Projects’ Risks

Adequacy of the Projects as Security. The security for the Bonds includes liens on the Projects, evidenced by the Mortgages which have been granted in favor of the Trustee. If the Borrowers fail to make sufficient and timely payments required under the Loan Agreement, it may be necessary for the Authority and the Trustee to exercise their remedies under the Mortgages or the Indenture, including foreclosure.

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There can be no assurance that if and when the Trustee forecloses and obtains possession of the Projects (or any of them) or realizes amounts from the sales thereof, that resulting proceeds or Project Revenues (if such Projects are retained and operated by the Trustee), would be sufficient to pay debt service on the Bonds in full when due and operating expenses of the Projects. The Trustee is not in the business of operating facilities such as the Projects and any amounts which might be realized from operation of the Projects are uncertain. Further, attempts to foreclose under the Mortgages or to obtain other remedies under such document, the Indenture, the Loan Agreement or any other documents relating to the Bonds may be met with protracted litigation and/or bankruptcy proceedings, which could cause delays, and a court may decide not to order specific performance of covenants contained in such documents. Thus, there can be no assurance that upon the occurrence of an event of default on the Bonds the Trustee will be able to obtain possession of the Projects (or any of them) or generate proceeds of sale or revenues from the Projects (or any of them), or obtain other relief, in a timely fashion.

Projects are Special Purpose Facilities. The Projects were constructed for multifamily residential rental housing purposes and are subject to physical restrictions that limit the alternative uses that can be made of such properties. The Land Use Restriction Agreements also impose significant restrictions on the use of the Projects which could remain in effect, even in the event of foreclosure of the Mortgages. See Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Land Use Restriction Agreements.” If the Borrowers are unable to operate the Projects successfully as multifamily residential rental housing facilities, the number of entities that would be interested in purchasing or leasing the Projects from the Borrowers (or any Project from any Borrower) for other purposes could be limited, and the ability of the Trustee to lease or sell the Projects (or any of them) to third parties would be adversely affected. Therefore, there is no assurance that the Trustee could realize sufficient proceeds from the foreclosure of the Mortgages and the sale of the Projects (or any of them) thereunder to pay the Bonds in their entirety.

Rental Housing Requirements. The Projects are subject to significant regulation which, among other things, affects the eligibility of tenants who may reside in the Projects and the rents which may be charged to tenants. The Tax Agreement and the Land Use Restriction Agreements require that so long as a Borrower is the owner of a Project, 75% of the units of such Project be rented or held available to Moderate Income Tenants and that at least 40% of the units of such Project be rented or held available to Low Income Tenants. See “INTRODUCTION” and “THE BORROWERS AND THE PROJECTS – Project Regulation” herein. The restrictions are necessary to maintain the tax-exempt status of the Bonds. Pursuant to safe harbor rules relative to federal income tax treatment of the Sole Member, the Borrowers must maintain a rental policy with respect to the portions of the Projects that are leased to low and very low income tenants that follows government imposed rental restrictions or a rental policy that otherwise provides that the housing is affordable to those tenants. However, these restrictions may limit the ability of the Borrowers to increase the rentals charged to the tenants of the Projects to the extent required to compensate for increasing expenses. (See “THE BORROWERS AND THE PROJECTS – Project Regulation” herein and “The Land Use Restriction Agreements” in Appendix B). The foregoing rental housing requirements may adversely affect the occupancy and revenues of the Projects and may limit the Borrowers’ ability to refinance the Projects.

Other Government Regulation. The Projects are and will continue to be subject to rules and regulations promulgated by various agencies and bodies of federal, state and local governments which have jurisdiction over such matters as employment, environment, safety, traffic and health. The impact of such rules and regulations on the Projects is unknown and cannot be predicted. Future orders, pursuant to existing or subsequently enacted rules or regulations, may require the expenditure by the Borrowers of substantial sums to effect compliance therewith.

Insurance Risks

The Loan Agreement requires the Borrowers to carry certain insurance; however, there are certain types of losses (generally of a catastrophic nature) that are either uninsurable or not economically insurable. Such risks include, but may not be limited to, earthquakes, terrorism, war, and floods. Moreover, such insurance coverage is subject to certain upper limits, which may not be sufficient to pay the costs of remedying every event of casualty that may occur. In addition, the Borrowers could mistakenly allow the insurance on the Projects to lapse. If an uninsured loss occurs, a default in payment of the Bonds could result. Failure of an insurer to pay a claim could also result in a default on the Note.

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Substantial increases in general liability insurance premiums may occur at any time and, at times, the Borrowers may experience difficulty in obtaining such insurance for the Projects (or any of them). Litigation may also arise from the corporate and business activities of the Borrowers and from the status of the Borrowers as an employer; many of these risks are covered by insurance, but some are not.

While the Borrowers are required by the Loan Agreement to have in effect at all times comprehensive general liability insurance providing insurance against liability for personal and bodily injury including death resulting therefrom, if a claim or judgment against any Borrowers for an amount in excess of the limits of such insurance were to arise, it would likely have a material adverse effect on the financial results of the Projects and the Borrowers.

Delinquent and Defaulting Tenants

The Borrowers only intend to rent to tenants that they judge to be creditworthy. Nevertheless, a portion of the tenants in the Projects will be lower income persons who may not be able to make timely rental payments or will otherwise fail to make rental payments at all. To the extent possible, management intends to terminate rentals to such delinquent or defaulting tenants as soon as practicable after their default. Tenants who do not voluntarily vacate will require that the Borrower owning the Project affected to recover possession through legal action. Legal action is costly, both in regard to legal fees and expenses and to lost revenues during the time necessary to remove the tenant. The existence of delinquent or defaulting tenants in the Projects could adversely affect the ability of the Borrowers to make timely payments, if at all, under the Loan Agreement and the Note. Any failure by the Borrowers to satisfy their payment obligations under the Loan Agreement and the Note will have an adverse impact on the ability of the Trustee to pay debt service payments on the Bonds.

Appraisals

The Borrowers secured Appraisals for each of the Projects in connection with the issuance of the Bonds. See “APPRAISALS” herein. The Appraisals are based on certain assumptions significant to the operation of the Projects as described therein, and set forth information as of the date thereof. Some assumed events and circumstances inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of the Appraisals. Accordingly, the assumptions and other information in the Appraisals should be carefully evaluated by a prospective investor in the light of the circumstances then prevailing. Appraisals, by their nature, are based on the judgment of the appraiser, represent only estimates of value, and should not be relied upon as a measure of realizable value. There can be no assurance that information set forth therein continues to be accurate in all respects as of the date hereof. In any event, the accuracy of the Appraisals is dependent upon the occurrence of specified assumptions and other future events which cannot be assured, and therefore, the actual results achieved will vary from the forecasts, and the variation may be material. Neither the Authority, the Underwriter, the Trustee nor any counsel rendering approving or other opinions with respect to the transactions described herein have examined or verified the assumptions and conclusions contained in the Appraisals.

There can be no assurance that another party would not have arrived at different, and perhaps significantly different, results regarding the “as is” value included in each Appraisal as stated herein especially if such party elected to employ a different approach. If the Projects (or any of them) were foreclosed and sold after an Event of Default, there can also be no assurance that the sale price would equal the appraised value of the affected Project. The Authority and the Underwriter make no representations as to the fair market value of the Projects (or any of them).

As described above, summaries of the Appraisals are set forth in this Official Statement. The summaries do not purport to be complete or definitive and are qualified in their respective entireties by reference to the full Appraisals. During the initial offering period for the Bonds, the Appraisals will be provided to any prospective purchaser upon request to the Underwriter. See “APPRAISALS” herein.

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Physical Needs Assessments

None of the Authority, the Borrowers, the Underwriter or any other party makes any representation as to the physical conditions of the Projects. There exists the possibility that the Projects (or any of them) will require repairs and improvements that were not discovered during the procedures performed by the independent engineers who prepared such assessments and consequently, such repairs and improvements have not been disclosed in the Physical Needs Assessments. Prospective purchasers of the Bonds may obtain copies of the Physical Needs Assessments upon request to the Underwriter during the initial offering period for the Bonds. See “THE BORROWERS AND THE PROJECTS—Physical Needs Assessments” herein.

Financial Projections

The financial projections included in Appendix D present the Borrowers’ present estimate of future results of operations of the Projects and are subject to certain assumptions used in preparing them as discussed therein. The Underwriter makes no representation or warranty as to the financial projections asserted therein. The passage of time and current economic conditions should be considered by investors when considering such projections. The financial projections included as Appendix D to this Official Statement were prepared on behalf of the Sole Member and have note been examined by an independent certified public accountant and are not intended to and do not meet the requirements of the American Institute of Certified Public Accountants for prospective financial forecasts or projects.

SOME ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS MAY NOT MATERIALIZE AND UNANTICIPATED EVENTS AND CIRCUMSTANCES ARE LIKELY TO OCCUR. THEREFORE, THE ACTUAL RESULTS ATTAINED WILL IN ALL LIKELIHOOD VARY FROM THE PROJECTIONS CONTAINED IN THE PRO FORMA FINANCIAL PROJECTIONS. ACCORDINGLY, NO PERSON CAN MAKE REPRESENTATIONS OR WARRANTIES AS TO THE FUTURE RESULTS OF OPERATIONS OF THE PROJECTS OR ANY OF THEM. IN ADDITION, THE PROFORMA FINANCIAL PROJECTIONS INCLUDED IN APPENDIX D HEREIN HAVE NOT BEEN EXAMINED BY AN ACCOUNTANT.

Acceleration of the Bonds; Limitation

The Indenture provides that following an Event of Default thereunder, the maturity of the Bonds may be accelerated by the Trustee, subject to cure provisions of the Indenture, and upon written request of the holders of a majority of the principal amount of a Series of Bonds, shall be accelerated. However, the acceleration rights of holders of the Subordinate Bonds are limited during the period while any Senior Bonds remain Outstanding. See Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS - The Trust Indenture.”

Risk of Early Redemption

There are a number of circumstances in which all or a portion of the Bonds may be redeemed prior to their stated maturity, and redemption of the Subordinate Bonds is limited during the period while any Senior Bonds remain Outstanding. In addition, there are a number of circumstances where the Bonds may be redeemed at a price of the principal amount of Bonds then Outstanding plus accrued interest to the redemption date. One such circumstance in which all or a portion of the Bonds may be redeemed prior to their stated maturity is following the determination of a Management Consultant that the continued operation of one or more of the Projects would have a material adverse effect on the ability of the Borrowers to comply with the financial covenants contained in the Loan Agreement. For a description of the circumstances in which Bonds may be redeemed and the terms of redemption, see “THE BONDS – Mandatory Redemption of Bonds” herein and “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS - The Trust Indenture, - The Loan Agreement” in Appendix B hereto.

Risk of Loss Upon Redemption

The rights of Bondholders to receive interest will terminate on the date, if any, on which such Bonds are to be redeemed pursuant to a call for redemption, notice of which has been given under the terms of the Indenture and

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interest on such Bonds will no longer accrue on and after such date of redemption. There can be no assurance that the Borrowers will be able or will be obligated to pay for any amounts not available under the Indenture. In addition, there can be no guarantee that present provisions of the Code or the rules and regulations thereunder will not be adversely amended or modified, thereby rendering the interest earned on the Bonds taxable for federal income tax purposes.

Incurrence of Additional Indebtedness

The Loan Agreement and the Indenture permit the Borrowers to incur additional indebtedness, upon compliance with the provisions thereof. Such additional indebtedness, under certain circumstances, may be equally and ratably secured with the Bonds on a senior basis with respect to the Senior Bonds and on a subordinate basis with respect to the Subordinate Bonds, as applicable. See Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Loan Agreement.”

Debt Service Reserve Fund

The Indenture creates a Debt Service Reserve Fund. In the event that the Borrowers do not make timely payment under the Note, funds in the accounts of the Debt Service Reserve Fund will be used to make payments of principal of and interest on the Series of Bonds secured thereby as they become due. Although the Borrowers believe such reserve to be reasonable, and anticipate that Project Revenues will be sufficient to cover the debt service on the Bonds, there is no assurance that funds reserved and future Project Revenues will be sufficient to cover debt service on the Bonds. In addition, the Debt Service Reserve Fund is only funded in an amount equal to approximately 50% of the Maximum Annual Debt Service of the Bonds. Although the Loan Agreement requires the Borrowers to do so, there can be no assurance that the Borrowers will repay into the Debt Service Reserve Fund money so advanced. Investments in the Debt Service Reserve Fund must be in Investment Securities (as described in the Indenture), but are subject to investment risks. There is no limitation on the maturity of investments in the Debt Service Reserve Fund; therefore, there can be no assurance that if the Debt Service Reserve Fund has to be liquidated that sale of investments therein will not result in a loss.

Effect of Bankruptcy

Bankruptcy and similar proceedings against the Borrowers or any of them and usual equity principles may affect the enforcement of rights to first lien security for the Bonds. A court may invoke other equity principles to refuse to enforce specifically rights to such security. If such security is inadequate for payment in full of the Bonds, bankruptcy proceedings and usual equity principles may also limit any attempt by the Trustee to seek payment from other property, if any, of the Borrowers.

If a Borrower was to file a petition for relief under the United States Bankruptcy Code, the filing would operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against such Borrower, and any interest it has in property. If the bankruptcy court so orders, such Borrower’s property, including its accounts receivable and proceeds thereof, could be used, at least temporarily, for the benefit of the bankruptcy estate despite the claims of its creditors.

Bankruptcy proceedings by or against a Borrower could adversely affect Beneficial Owners of the Bonds by reducing or delaying payments on the Bonds and may impede enforcement by the Trustee and such Beneficial Owners of their claims to the collateral assigned and pledged to secure the Bonds.

Furthermore, judicial decisions concerning the status of debt service reserve funds held by an indenture trustee have concluded that such reserves are “cash collateral” of a debtor in bankruptcy and have cast doubt on the ability of the Trustee to use moneys in the Debt Service Reserve Fund to make payments on the Bonds in the event of a bankruptcy of the affected Borrower.

The commencement of bankruptcy proceedings by or against a Borrower will result in an Event of Default under the Loan Agreement.

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Enforceability of Remedies; Prior Claims

The Bonds are payable from the payments to be made under the Loan Agreement. Pursuant to the Indenture, the Bonds are secured by an assignment by the Authority to the Trustee of certain of its rights under the Loan Agreement (except as provided therein) and by the Mortgages on the Projects and the security interests in the personal property and Project Revenues with priority for the Senior Bonds over the Subordinate Bonds. The practical realization of the value from this property upon any default will depend upon the exercise of various remedies specified by the Loan Agreement, the Note, the Mortgages and the Indenture. These and other remedies may require judicial actions, which are often subject to discretion and delay. Under existing law (including, without limitation, the United States Bankruptcy Code), the remedies specified by the Loan Agreement, the Mortgages, or the Indenture may not be readily available or may be limited. A court may decide not to order the specific performance of the covenants contained in the Loan Agreement, the Mortgages or the Indenture. The various 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 generally.

In addition, the various security interests established under the Indenture and the Mortgages will be subject to Permitted Encumbrances, and may be limited by or subject to other claims and interests. Examples of such claims and interests are:

1. statutory liens and assessments for improvements;

2. rights arising in favor of the United States of America or any agency thereof;

3. constructive trusts, equitable liens or other rights impressed or conferred by any state or federal court in the exercise of its equitable jurisdiction;

4. federal bankruptcy laws affecting amounts earned by a Borrower after institution of bankruptcy proceedings by or against such Borrower; and

5. the requirement that appropriate continuation statements be filed in accordance with the Uniform Commercial Code as from time to time in effect.

Secondary Market and Prices

The Underwriter will not be obligated to repurchase any of the Bonds and no representation is made concerning the existence of any secondary market therefor, nor can any assurance be given that any secondary market will develop following the completion of the offering of the Bonds, and no assurance can be given that initial offering prices for the Bonds will continue for any period of time. Any prospective purchaser of the Bonds, therefore, should undertake an independent investigation through its own advisors regarding the desirability and practicality of the investment in the Bonds. Any prospective purchaser should be fully aware of the long-term nature of an investment in the Bonds and should assume that it will have to bear the economic risk of its investment indefinitely. Any prospective purchaser of the Bonds that does not intend or that is not able to hold the Bonds for a substantial period of time is advised against investing in the Bonds.

Credit Ratings

There is no assurance that the credit ratings assigned to any Series of the Bonds at the time of issuance or at a subsequent time will not be lowered or withdrawn, the effect of which could adversely affect the market price and the market for the Bonds of such Series. The Rating Agency may revise the criteria under which it rates the Bonds at any time, which revisions could result in significant changes to or withdrawal of the credit ratings assigned to the Bonds. In addition, in determining the initial credit ratings for the Bonds, and in conducting its annual rating surveillance, the Rating Agency may use assumptions regarding occupancy, revenues, expenses and values related to the Projects that differ materially from those used by the Borrowers. Such differences could result in a lowering or withdrawal of the ratings on the Bonds, if, for example, the Rating Agency’s calculations resulted in a failure of

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the Projects to meet the required Coverage Test for the Bonds. There is no covenant requiring the Borrowers to maintain the credit rating assigned to the Bonds or to maintain any credit rating in the future.

Environmental Matters

The Borrowers obtained the Environmental Assessments. The Environmental Assessment for the Whispering Pines Project and the Twin City Project did not reveal evidence of recognized environmental conditions.

The Environmental Assessment for the Silas Creek Project did not reveal evidence of recognized environmental conditions. However, such Environmental Assessment for the Silas Creek Project recommended that the Borrower for the Silas Creek Project implement an Asbestos Containing Materials and Lead-Based Paint Operations and Maintenance Program, remediation of water damage during routine maintenance, and recommended a long-term radon study to be conducted on the property. Based on representations of the Sole Member, such recommended repairs have been completed.

The Environmental Assessment for the Chesterfield Project did not reveal evidence of recognized environmental conditions. However, such Environmental Assessment for the Chesterfield Project recommended that the Borrower for the Chesterfield Project implement an Asbestos Operations and Management Plan to manage any suspect asbestos containing material.

The Borrowers represent that they are not aware of any releases of pollutants or contaminants at the Projects (or any of them) other than as disclosed in the Environmental Assessments that would give rise to enforcement actions under applicable state or federal environmental statutes. However, there could be other such releases not known to the Borrowers as of the date of the issuance of the Bonds. The Borrowers are not aware of any enforcement actions currently in process with respect to any releases of pollutants or contaminants at the real property relating to the Projects (or any of them).

Each of the Projects will be subject to risks arising out of environmental law considerations generally associated with ownership of real estate. Such risks include, in general, a decline in property values in a Project resulting from possible violations of applicable federal or state environmental laws and regulations, including, but not limited to, the Comprehensive Environmental Compensation and Liability Act of 1980 (CERCLA), the Resource Conservation and Recovery Act of 1976 (RCRA). These risks may be associated with contamination of a Project from hazardous substances located in, on, around or in the vicinity of such Project. Please refer to “THE BORROWERS AND THE PROJECTS – Environmental Assessments” herein.

Forward-Looking Statements

Certain statements in this Official Statement that relate to the Projects and the Borrowers including, but not limited to, statements under the captions “THE BORROWERS AND THE PROJECTS,” “ESTIMATED SOURCES AND USES OF FUNDS” and certain statements in Appendix D attached hereto, are forward-looking statements that are based on the beliefs of, and assumptions made by, the management of the Borrowers. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of the Projects and the Borrowers to be materially different from any expected future results or performance. Such factors include, but are not limited to, items described in “RISK FACTORS AND INVESTMENT CONSIDERATIONS.”

Specific Tax Covenants of Borrowers and Rental Restrictions

As referenced in the Sections of this Official Statement captioned “INTRODUCTION” and “THE BORROWERS AND THE PROJECTS – Project Regulation,” the Borrowers have covenanted to comply with certain income limits and certain rent restrictions with respect to the Projects. These restrictions, by their very nature, limit the revenues which the Projects can generate in order to repay the Bonds. See “RISK FACTORS AND INVESTMENT CONSIDERATIONS – Projects' Risks” and Appendix B “SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS – The Land Use Restriction Agreements.”

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Taxation of the Bonds

The interest on the Bonds may be includable in gross income for purposes of federal income taxation retroactive to the date of issuance of the Bonds for a variety of reasons. The exclusion from gross income is dependent upon, among other things, compliance with certain restrictions regarding investment of Bond proceeds and continuing compliance by the Borrowers with the Land Use Restriction Agreements under which enforcement remedies available to the Authority and the Trustee are severely limited. In addition, the Borrowers must be and remain organizations treated as part of the Sole Member, and the Sole Member must remain an organization eligible to be treated as a 501(c)(3) organization at all times while any Bonds remain Outstanding in order for the Bonds to retain their tax-exempt status. Failure of the Borrowers to comply with the terms and conditions of the documents relating to the Bonds or the Loan Agreement, the Land Use Restriction Agreements and other documents as described herein or the loss by the Sole Member of eligibility to treated as a 501(c)(3) organization may result in the loss of the tax-exempt status of the interest on the Bonds retroactive to the date of issuance of the Bonds. See “Project Risks–Rental Housing Requirements” under this heading and “TAX MATTERS” herein. Although a determination of taxability is not an express Event of Default, the Borrowers have covenanted to take all action necessary to cause interest on the Bonds to remain tax-exempt; therefore, if interest on the Bonds becomes taxable, this could be an Event of Default. No assurance can be given that sufficient funds will be available in such a case to enable the Bonds to be redeemed at the applicable redemption price.

If interest on the Bonds should become included in gross income for federal income tax purposes, the market for and value of the Bonds would be adversely affected.

Moreover, there can be no assurance that the present advantageous provisions of the Code, or the rules and regulations thereunder, will not be retroactively adversely amended or modified, thereby resulting in the inclusion in gross income of the interest on the Bonds for federal income tax purposes or otherwise eliminating or reducing the benefits of the present advantageous tax treatment of the Bonds. There can be no assurance that Congress will not adopt legislation applicable to the Bonds, the Borrowers or the Projects or that the Borrowers would be able to comply with any such future legislation in a manner necessary to maintain the tax-exempt status of the Bonds. The Borrowers are required under the Loan Agreement to use their best efforts to comply with any other future federal income tax law requirements in order to maintain the tax-exempt status of the Bonds to the extent that any such other requirements are made applicable to the Borrowers or the Projects. There is no assurance, however, that the Borrowers would be able to comply with any such other requirements.

Federal Income Tax Matters and Securities Laws; 501(c)(3) Status

Loss by the Sole Member of the benefits of certain provisions of the federal income tax law could jeopardize the tax-exempt status of the Bonds. The Internal Revenue Service (the “IRS”) has determined in a determination letter that the Sole Member is an organization described in Section 501(c)(3) of the Code, and therefore is exempt from federal income taxation under Section 501(a) of the Code. Changes in the Code or Treasury Regulations or the judicial or administrative interpretation thereof or certain actions of the Sole Member or the Borrowers could result in the revocation by the IRS of such determination and loss of the tax-exempt status of the Sole Member or the Borrowers.

Any failure by the Sole Member or the Borrowers to remain qualified as tax-exempt under Section 501(c)(3) of the Code could affect the amount of funds of the Borrowers which would be available to pay debt service on the Bonds or could lead to a determination that the interest on the Bonds is taxable. The Borrowers’ or the Authority’s failure to continuously comply with certain covenants contained in the Indenture, the Loan Agreement and the Land Use Restriction Agreements after delivery of the Bonds could result in the loss of the exclusion from gross income of interest on the Bonds by the owners thereof for federal income tax purposes.

Possible Consequence of Tax Compliance Audit

The IRS has established a general audit program to determine whether issues of tax-exempt obligations, such as the Bonds, are in compliance with requirements of the Code that must be satisfied in order for the interest of those obligations to be, and continue to be, excluded from gross income for federal income tax purposes. It cannot be predicted whether the IRS will commence an audit of the Bonds. Depending on all the facts and circumstances

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and the type of audit involved, it is possible that commencement of an audit of the Bonds could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of its ultimate outcome. Such an audit would result in the IRS declaring that interest on the Bonds should be included in gross income for federal income tax purposes. See “TAX MATTERS” herein.

Other Possible Risk Factors

The occurrence of any of the following events, or other unanticipated events, could adversely affect the operations of the Borrowers and the Projects:

1. Reinstatement of or establishment of mandatory governmental wage, rent or price controls.

2. Inability to control increases in operating costs, including salaries, wages and fringe benefits, supplies and other expenses, without being able to obtain corresponding increases in Project Revenues from residents of the Projects (or any of them).

3. Unionization, employee strikes and other adverse labor actions which could result in a substantial increase in expenditures without a corresponding increase in Project Revenues.

4. Adoption of other federal, state or local legislation or regulations having an adverse effect on the future operating or financial performance of the Borrowers and the Projects (or any of them).

5. The occurrence of any natural disasters or other disruptions that impact the operations of the Projects (or any of them).

Summary

The foregoing is intended only as a summary of certain risk factors attendant to an investment in the Bonds. In order for potential investors to identify risk factors and make an informed investment decision, potential investors should be thoroughly familiar with this entire Official Statement and the appendices hereto so as to make a judgment as to whether the Bonds are an appropriate investment, and obtain such additional information as they deem advisable in connection with their evaluation of the suitability of the Bonds for investments.

LITIGATION

The Authority

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

The Borrowers

At the time of the issuance and delivery of the Bonds, the Borrowers will deliver a certificate to the effect that no litigation and no proceedings are pending or, to their knowledge, threatened against the Borrowers (or any of them), the Sole Member or otherwise with respect to the Projects (or any of them), or the acquisition and rehabilitation thereof, or the issuance of the Bonds or which would adversely affect the transactions contemplated by this Official Statement.

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APPROVAL OF LEGAL MATTERS

Legal matters incident to the authorization, issuance, sale and delivery of the Bonds by the Authority are subject to the approving opinion of Butler Snow LLP, Atlanta, Georgia, Bond Counsel. Copies of the approving opinion of Bond Counsel will be available at the time of delivery of the Bonds in substantially the form set forth in Appendix C.

Certain legal matters will be passed upon for the Authority by its counsel von Briesen & Roper, s.c., Milwaukee, Wisconsin; for the Borrowers by its counsel Brennan, Manna & Diamond, Jacksonville, Florida, and by Parker Poe Adams & Bernstein LLP, Greenville, South Carolina, with respect to certain South Carolina and North Carolina matters, and for Stifel, Nicolaus & Company, Incorporated by Kutak Rock LLP, Omaha, Nebraska.

The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering those opinions on the legal issues explicitly addressed therein. By rendering the legal opinion, the opinion giver does not become an insurer or guarantor of an expression of professional judgment of the transaction opined upon or of the future performance of parties to such transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.

TAX MATTERS

General Matters

In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and judicial decisions, interest on the Bonds will be excludible from gross income for federal income tax purposes. Bond Counsel is also of the opinion that interest on the Bonds will not be a specific item of tax preference under Section 57 of the Code for purposes of the federal individual and corporate alternative minimum taxes. Bond Counsel expresses no opinion with respect to the treatment of interest on the Bonds under the laws of any state.

A copy of the opinion of Bond Counsel is set forth in Appendix C attached hereto.

Notwithstanding Bond Counsel’s opinion that interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax, such interest will be included in adjusted current earnings of certain corporations, and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of such corporation’s adjusted current earnings over its alternative minimum taxable income (determined without regard to such adjustment and prior to deduction for certain net operating losses).

The Code imposes various restrictions, conditions, and requirements relating to the qualification of Bonds as so-called “tax-exempt” bonds. The Authority, the Borrower and the Sole Member have covenanted to comply with certain restrictions designed to ensure that interest on the Bonds will not be includable in gross income for federal income tax purposes. Failure to comply with these covenants could result in the Bonds not qualifying as “tax-exempt bonds,” and thus interest on the Bonds being includable in the gross income of the holders thereof for federal income tax purposes. Such failure to qualify and the resulting inclusion of interest could be required retroactively to the date of issuance of the Bonds. The opinion of Bond Counsel assumes compliance with these covenants. However, Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may adversely affect the federal tax status of the Bonds. The opinion of Bond Counsel also relies on the opinion of Brennan, Manna & Diamond, that the Sole Member is an organization described in Section 501(c)(3) of the Code and that the Projects will not be used in an unrelated trade or business within the meaning of Section 513 of the Code. Bond Counsel has not undertaken to confirm the validity of such opinion.

Certain requirements and procedures contained, or referred to, in the Indenture, the Tax Agreement and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Bonds) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Bond Counsel expresses no opinion as to the Bonds or the interest thereon if any such change occurs or action is taken or omitted upon the advice or approval of bond counsel other than Butler Snow LLP.

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Although Bond Counsel is of the opinion that interest on the Bonds will be excludible from gross income for federal income tax purposes, as described above, the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may otherwise affect a holder’s federal, state or local tax liabilities. The nature and extent of these other tax consequences may depend upon the particular tax status of the holder or the holder’s other items of income or deduction. Bond Counsel expresses no opinions regarding any tax consequences other than what is set forth in its opinion and each holder of the Bonds or potential holder is urged to consult with its tax counsel or advisor with respect to the effects of purchasing, holding or disposing the Bonds on the tax liabilities of the individual or entity.

Receipt of tax-exempt interest, ownership or disposition of the Bonds may result in other collateral federal, state or local tax consequences for certain taxpayers. Such effects may include, without limitation, increasing the federal tax liability of certain foreign corporations subject to the branch profits tax imposed by Section 884 of the Code, increasing the federal tax liability of certain insurance companies under Section 832 of the Code, increasing the federal tax liability and affecting the status of certain S Corporations subject to Sections 1362 and 1375 of the Code, increasing the federal tax liability of certain individual recipients of Social Security or the Railroad Retirement benefits under Section 86 of the Code and limiting the amount of the Earned Income Credit under Section 32 of the Code that might otherwise be available. Ownership of any of the Bonds may also result in the limitation of interest and certain other deductions for financial institutions and certain other taxpayers pursuant to Section 265 of the Code.

Backup Withholding

As a result of the enactment of the Tax Increase Prevention and Reconciliation Act of 2005, interest on tax-exempt obligations such as the Bonds is subject to information reporting in a manner similar to interest paid on taxable obligations. Backup withholding may be imposed on payments made after March 31, 2007 to any bondholder who fails to provide certain required information including an accurate taxpayer identification number to any person required to collect such information pursuant to Section 6049 of the Code. This reporting requirement does not in and of itself affect or alter the excludability of interest on the Bonds from gross income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling tax-exempt obligations.

Original Issue Discount

The Bonds having a yield that is higher than the interest rate (as shown as shown on the maturity schedule on the inside cover page hereof) are being offered and sold to the public at an original issue discount (“OID”) from the amounts payable at maturity thereon (the “Discount Bonds”). OID is the excess of the stated redemption price of an obligation at maturity (the face amount) over the “issue price” of such bond. The issue price is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of obligations of the same maturity are sold pursuant to that initial offering. For federal income tax purposes, OID on each obligation will accrue over the term of the obligation, and for the Discount Bonds, the amount of accretion will be based on a single rate of interest, compounded semiannually (the “yield to maturity”). The amount of OID that accrues during each semi-annual period will do so ratably over that period on a daily basis. With respect to an initial purchaser of a Discount Bond at its issue price, the portion of OID that accrues during the period that such purchaser owns the Discount Bond is added to such purchaser’s tax basis for purposes of determining gain or loss at the maturity, redemption, sale or other disposition of that Discount Bond and thus, in practical effect, is treated as stated interest, which is excludable from gross income for federal income tax purposes.

Holders of any Bonds, including any Discount Bonds should consult their own tax advisors as to the treatment of OID and the tax consequences of the purchase of such Discount Bonds other than at the issue price during the initial public offering and as to the treatment of OID for state tax purposes.

Changes in Federal and State Tax Law

From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would

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apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Bonds or the market value thereof would be impacted thereby. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation.

RATINGS

S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (the “Rating Agency”), has assigned ratings of “A-” to the Senior Bonds and “BBB-” to the Subordinate Bonds. An explanation of the significance of such ratings may be obtained from the Rating Agency. The ratings of the Bonds reflect only the views of the Rating Agency at the time such ratings were given, and none of the Authority, the Borrowers or the Underwriter makes any representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that it will not be revised downward or withdrawn entirely by the Rating Agency, if in its judgment, circumstances (including the financial status of any investment agreement provider) so warrant. Any such downward revision or withdrawal of the ratings (or either of them) may have an adverse effect on the market price of the Bonds.

UNDERWRITING

Pursuant to a Bond Purchase Agreement among the Authority, the Borrowers, and the Underwriter, the Underwriter has agreed to purchase the Bonds at the purchase prices set forth on the inside front cover hereof plus accrued interest to the date of purchase. For its services, the Underwriter shall be paid by the Borrowers (jointly and severally) an Underwriter fee equal to $____________, which fee is net of certain of its expenses. The Bond Purchase Agreement provides that the Underwriter shall purchase all of the Bonds if any are purchased, and that such obligation to purchase the Bonds is subject to certain terms and conditions set forth in such Bond Purchase Agreement, the approval of certain legal matters by counsel and certain other conditions. The initial offering prices set forth on the inside cover page hereof may be changed from time to time by the Underwriter, the Underwriter may join with dealers and other underwriters in offering the Bonds, and the Underwriter may offer and sell Bonds to certain dealers (including dealer banks and dealers depositing Bonds in investment trusts) and others at prices lower than the public offering prices stated on the inside cover of this Official Statement. Such initial public offering prices may be changed from time to time by the Underwriter.

The Borrowers have agreed (jointly and severally), pursuant to the Bond Purchase Agreement, to indemnify the Underwriter and the Authority against certain liabilities relating to this Official Statement.

The Underwriter does not guarantee a secondary market for the Bonds and is not obligated to make any such market for the Bonds. No assurance can be made that such a market will develop or continue. Consequently, investors may not be able to resell Bonds should they need or wish to do so for emergency or other purposes.

CONTINUING DISCLOSURE

In accordance with the Securities and Exchange Commission Rule 15c2-12 (the “Rule”) the Borrowers have agreed pursuant to a Continuing Disclosure Agreement dated as of July 1, 2017 with Disclosure Advisors LLC, as dissemination agent (the “Dissemination Agent”), to be delivered on the date of delivery of the Bonds, to cause certain financial and operating information to be provided through the Dissemination Agent to the Municipal Securities Rulemaking Board (the “MSRB”) via the Electronic Municipal Marketing Access (“EMMA”) System. The Borrowers have not previously been subject to the Rule.

The Authority has determined that no financial or operating data concerning the Authority is material to an evaluation of the offering of the Bonds or to any decision to purchase, hold or sell the Bonds and the Authority will not provide any such information. The Borrowers have undertaken all responsibilities for any continuing disclosure

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to holders of the Bonds as described above, and the Authority shall have no liability to the holders of the Bonds or any other person with respect to the Rule. See “FORM OF CONTINUING DISCLOSURE AGREEMENT” in Appendix E hereto.

RELATIONSHIP AMONG PARTIES

Bond Counsel has previously represented, and is currently representing, the Underwriter with respect to other financings and has acted or is acting as bond counsel with respect to other bonds underwritten by the Underwriter and may do so in the future. Counsel to the Underwriter has previously acted, and is currently acting, as bond counsel with respect to other bonds issued by the Authority as well as other bonds underwritten by the Underwriter and may continue to do so in the future. Additionally, Parker Poe Adams & Bernstein LLP, local counsel to the Borrowers has previously acted and is currently acting as counsel to the Underwriter with respect to other bonds and may continue to do so in the future.

MISCELLANEOUS

Any statements made in this Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized.

The references herein to the Act, the Statute, the Indenture, the Loan Agreement, the Note, the Mortgages, the Land Use Restriction Agreements, and other documents are brief outlines of certain provisions thereof. Such outlines do not purport to be complete or comprehensive and for a full and complete statement of the provisions thereof, reference is made to the Act and the Statute, and such documents, copies of which documents will be on file at the designated office of the Trustee following delivery of the Bonds or the Underwriter as noted herein during the initial offering of the Bonds.

The agreement of the Authority with the Holders of the Bonds is fully set forth in the Indenture, and this Official Statement is not to be construed as constituting any agreement with the purchasers of the Bonds. Insofar as any statements are made in this Official Statement involving matters of opinion, whether or not expressly so stated, they are intended merely as such, and not as representations of fact.

The attached Appendices are integral parts of this Official Statement and must be read together with all of the foregoing statements.

The Borrowers have reviewed the information contained herein which relates to them, the Sole Member and the Projects and have approved all such information for use within this Official Statement.

The Authority has not participated in the preparation of this Official Statement and has not verified the accuracy of the information contained herein, other than the information respecting the Authority contained under “THE AUTHORITY” and “LITIGATION – The Authority.” The Authority’s approval of this Official Statement does not constitute approval of the information contained herein, other than that information relating to the Authority, or a representation of the Authority as to the completeness or accuracy of the information contained herein.

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The execution, delivery and distribution of this Official Statement have been duly authorized by the Borrowers.

2017 IAVF CEDAR TWIN CITY LLC, a Florida limited liability company By: Invest in America’s Veterans Foundation Inc., a Florida nonprofit corporation, its sole member

2017 IAVF CEDAR WHISPERING LLC, a Florida limited liability company By: Invest in America’s Veterans Foundation Inc., a Florida nonprofit corporation, its sole member

By: ________________________________ By: ________________________________ Name: Name: Title: Title:

2017 IAVF CEDAR SILAS LLC, a Florida limited liability company By: Invest in America’s Veterans Foundation Inc., a Florida nonprofit corporation, its sole member

2017 IAVF CEDAR CHESTERFIELD LLC, a Florida limited liability company By: Invest in America’s Veterans Foundation Inc., a Florida nonprofit corporation, its sole member


APPENDIX A

DEFINITIONS OF CERTAIN TERMS

A-1

APPENDIX A DEFINITIONS OF CERTAIN TERMS

Capitalized items used in this Official Statement, and not otherwise defined, are used with the meanings assigned to such terms in the Indenture. The following definitions of such capitalized terms are summaries of the definitions applicable in the Indenture with such modifications as may be appropriate for use in this Official Statement.

The following are definitions set forth in the Indenture and used in this Official Statement:

“Account” or “Accounts” means any one or more, as the case may be, of the named and unnamed accounts established within any Fund.

“Accredited Investor” has the meaning applied to it in Rule 501 of the Securities Act of 1933, as amended.

“Act” means Sections 66.0301, 66.0303 and 66.0304 of the Wisconsin Statutes, as amended.

“Additional Bonds” means the additional parity Bonds authorized to be issued by the Authority pursuant to the terms and conditions of the Indenture.

“Additional Loan Payments” means that portion of the Loan Payments described as Additional Loan Payments in the Loan Agreement.

“Administration Expenses” means (a) the Ordinary Trustee’s Fees and Expenses and the Additional Loan Payments described in the Loan Agreement, (b) the Dissemination Agent Fee, (c) the Rebate Analyst Fee, (d) the Rating Agency Fee, and (e) the Authority’s Fees and Expenses.

“Administration Fund” means the trust fund by that name established pursuant to the Indenture.

“Advanced Funds” has the meaning provided in Section 8.04 of the Indenture.

“Affiliate” means any Person (a) directly or indirectly controlling, controlled by, or under common control with the Borrowers; or (b) a majority of the members of the Directing Body of which are members of the Directing Body of the Borrowers. For purposes of this definition, control means with respect to: (i) a corporation having stock, the ownership, directly or indirectly, of more than 50% of the securities (as defined in Section 2(1) of the Securities Act of 1933, as amended) of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the directors of such corporation; (ii) a not for profit corporation not having stock, having the power to elect or appoint, directly or indirectly, a majority of the members of the Directing Body of such corporation; or (iii) any other entity, the power to direct the management of such entity through the ownership of at least a majority of its voting securities or the right to designate or elect at least a majority of the members of its Directing Body, by contract or otherwise. For the purposes of this definition, “Directing Body” means with respect to: (A) a corporation having stock, such corporation’s board of directors and owners, directly or indirectly, of more than 50% of the securities (as defined in Section 2(1) of the Securities Act of 1933, as amended) of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the directors of such corporation (both of which groups will be considered a Directing Body); (B) a not for profit corporation not having stock, such corporation’s members if the members have complete discretion to elect the corporation’s directors, or the corporation’s directors if the corporation’s members do not have such discretion; or (C) any other entity, its governing body or board. For the purposes of this definition, all references to directors and members will be deemed to include all entities performing the function of directors or members however denominated.

“Amend” or “Amendment,” as used in the Indenture, refer to any amendment, modification, alteration or supplement to any Bond Document, or any waiver of any provision in the Indenture.

“Annual Debt Service” means, for any period of a calendar year, the amount of the scheduled principal and interest payment required with respect to all Outstanding Bonds, or all Outstanding Bonds of one or more Series, or Parity Indebtedness, as applicable, for such period.

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“Annual Evaluation Date” means each December 31, commencing December 31, 2017.

“Architect” means any architect providing design, architecture or other service to the Borrowers.

“Audited Financial Statements” means the financial statements prepared for each Fiscal Year for the Projects prepared in accordance with generally accepted accounting principles and examined by a Certified Public Accountant.

“Authority” means the Public Finance Authority, its successors and assigns.

“Authority Annual Fee” means the Authority’s annual administration fee determined and payable in the amounts and at the times specified in the Loan Agreement.

“Authority Indemnified Person” means, collectively, (i) the Sponsors, (ii) the Members and (iii) each and all of the Authority’s, the Sponsors’ and the Members’ respective past, present and future directors, board members, governing members, trustees, commissioners, elected or appointed officials, officers, employees, attorneys, contractors, subcontractors, agents and advisers (including counsel and financial advisors), the Authority Representative and each of their respective heirs, successors and assigns.

“Authority Representative” means any officer, director or other person designated by resolution of the Board of Directors of the Authority (whether such resolution is adopted in connection with the issuance of the Bonds or otherwise) or by the Authority’s Bylaws as an “Authorized Signatory” empowered to, among other things, execute and deliver on behalf of the Authority the Indenture, the Bond Documents and the Bonds.

“Authority’s Fees and Expenses” means the fees and expenses, if any, payable to or incurred by the Authority under any of the Bond Documents, and including but not limited to, (i) the Authority Annual Fee, (ii) any fees and expenses of counsel to the Authority, (iii) the Liabilities described in the Loan Agreement and (iv) the Additional Loan Payments described in the Loan Agreement.

“Authorized Denominations” means, with respect to the Senior Bonds and Subordinate Bonds, $5,000 principal amount and any integral multiple in excess thereof and with respect to the Junior Subordinate Bond, the principal amount of the Junior Subordinate Bond.

“Available Money” means (a) money held by the Trustee under the Indenture for a period of at least 123 days and not commingled with any money so held for less than said period and during which period no petition in bankruptcy was filed by or against, and no receivership, insolvency, assignment for the benefit of creditors or other similar proceedings has been commenced by or against, the Authority or the Borrowers, unless such petition or proceeding was dismissed and all applicable appeal periods have expired without an appeal having been filed, (b) Project Revenues held by the Trustee (c) investment income derived from the investment of money described in clauses (a) and (b), (d) proceeds of obligations issued to refund the Bonds, or (e) any money with respect to which an opinion of Bond Counsel or nationally recognized bankruptcy counsel has been received by the Trustee to the effect that payments by the Trustee in respect of the Bonds, as provided in the Indenture, derived from such money should not constitute transfers avoidable under 11 U.S.C. § 547(b) and recoverable from the Holders under 11 U.S.C. § 550(a) should the Authority or the Borrowers be the debtor in a case under Title 11 of the United States Code, as amended.

“Basic Loan Payments” means that portion of the Loan Payments described as Basic Loan Payments in the Loan Agreement.

“Beneficial Owner” means a Person owning a Beneficial Ownership Interest in the Bonds, as evidenced to the satisfaction of the Trustee.

“Beneficial Ownership Interest” means the right to receive payments and notices with respect to the Bonds held in a book-entry system.

“Bond Counsel” means (a) Butler Snow LLP or (b) any Independent Counsel of nationally recognized standing in matters pertaining to the validity of, and exclusion from gross income for federal income tax purposes of

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interest on, obligations issued by states and political subdivisions, familiar with the transactions contemplated under the Indenture appointed by the Borrowers and reasonably acceptable to the Authority.

“Bond Documents” means the Indenture and the Borrowers’ Documents.

“Bond Fund” means the trust fund by that name created pursuant to the Indenture.

“Bond Obligation” means the then outstanding principal amount of the Bonds.

“Bond Payment Date” means any Interest Payment Date, any Principal Payment Date and any other date on which the principal of, premium, if any, or interest on the Bonds is to be paid to the Holders thereof, whether upon redemption, at maturity or upon acceleration of maturity of the Bonds.

“Bond Year” means the period from and including the Closing Date through May 31, 2018, and thereafter each year beginning on June 1 and ending on the earlier of the following May 31, as applicable, or the maturity of the Series 2017 Bonds (whether by redemption, acceleration or otherwise).

“Bonds” means, collectively, the Series 2017 Bonds together with any Additional Bonds issued under the Indenture.

“Borrowers” means, collectively, (i) 2017 IAVF Cedar Twin City LLC, a limited liability company organized and existing under the laws of the State of Florida, and its authorized successors and assigns, (ii) 2017 IAVF Cedar Silas LLC, a limited liability company organized and existing under the laws of the State of Florida, and its authorized successors and assigns, (iii) 2017 IAVF Cedar Chesterfield LLC, a limited liability company organized and existing under the laws of the State of Florida, and its authorized successors and assigns, and (iv) 2017 IAVF Cedar Whispering LLC, a limited liability company organized and existing under the laws of the State of Florida, and its authorized successors and assigns.

“Borrowers’ Documents” means, collectively, the Loan Agreement, the Mortgages, the Note, the Land Use Restriction Agreements, the Continuing Disclosure Agreement, the Tax Agreement, the Management Agreement, and the Collateral Assignments of Management Agreements, together with all other documents or instruments executed by the Borrowers evidencing or securing the Borrowers’ obligations under the Loan Agreement, in each case as originally executed or as it may thereafter be amended or supplemented in accordance with its respective terms.

“Borrowers’ Representative” means each person at the time designated to act on behalf of the Borrowers, collectively, by written certificate furnished to the Authority and the Trustee on behalf of the Borrowers, collectively, containing the specimen signature of such person and any designated alternates.

“Budget” means the budget described in the Loan Agreement.

“Business Day” means any day other than a (a) Saturday, (b) Sunday, (c) day on which banking institutions in (i) any city in which the designated corporate trust or principal operations offices of the Trustee (such city being initially Dallas, Texas) are located, (ii) the State or (iii) the City of New York, New York, are authorized or obligated by law or executive order to be closed, or (d) day on which the New York Stock Exchange is closed.

“Certified Public Accountant” means any Person who is Independent, appointed by the Borrowers, actively engaged in the business of public accounting and duly licensed as a certified public accountant under the applicable laws of the relevant state.

“Clearing Agency” means any clearing agency under federal law operating and maintaining, with its participants or otherwise, a book-entry system to record Beneficial Ownership Interests in the Bonds, and to effect transfers of book-entry interests of the Bonds in book-entry form, which initially will be The Depository Trust Company.

“Closing Date” means the date of initial issuance and delivery of the Series 2017 Bonds.

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“Code” means the Internal Revenue Code of 1986, the applicable regulations (whether proposed, 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 and procedures regarding any of the foregoing. Unless otherwise indicated, reference to a Section of the Code means that Section of the Code, including such applicable regulations, rulings, announcements, notices and procedures.

“Collateral Assignment of Management Agreements” means, with respect to each Project, each Collateral Assignment of Management Agreement dated its date of execution, between a Borrower and the Trustee and consented to by the Manager for a Project and as it may thereafter to be amended or supplemented from time to time in accordance with its terms.

“Compliance Certificate” means a certificate of a Borrowers’ Representative stating that, as of the date of such certificate, the Borrowers are in compliance with all requirements of the Borrowers’ Documents.

“Condemnation Award” means the total condemnation proceeds paid by the condemner as a result of condemnation or eminent domain proceedings with respect to all or any part of the Projects or of any settlement or compromise of such proceedings.

“Confirmation of Rating” means a written confirmation, obtained prior to the event or action under scrutiny, from the Rating Agency then rating any Outstanding Bonds to the effect that, following the proposed action or event under scrutiny at the time such confirmation is sought, the rating or ratings of the Rating Agency with respect to all Bonds then Outstanding and then rated by the Rating Agency will not be downgraded, suspended, qualified or withdrawn as a result of such action or event.

“Consultant” means a Person who is Independent, appointed by the Borrowers, and who is nationally recognized as being expert as to matters for which its certificate or advice is required or contemplated.

“Continuing Disclosure Agreement” means the Continuing Disclosure Agreement dated as of August 1, 2017 between the Borrowers and the Dissemination Agent, and as it may thereafter be amended or supplemented from time to time in accordance with its terms.

“Controlled Group” means a group of entities directly or indirectly controlled by the same entity or group of entities. An entity or group of entities (the “controlling entity”) directly controls another entity (the “controlled entity”), in general, if it possesses either of the following rights or powers and the rights or powers are discretionary and non-ministerial: (a) the right or power both to approve and to remove without cause a controlling portion of the governing body of the controlled entity; or (b) the right or power to require the use of funds or assets of the controlled entity for any purpose of the controlling entity. A controlling entity indirectly controls all entities controlled, directly or indirectly, by an entity controlled by such controlling entity.

“Controlling Holders” means, as of any date, in the case of consent or direction to be given hereunder, the Holders of the majority in aggregate principal amount of the then Outstanding Senior Bonds, or, if no Senior Bonds are Outstanding, the Holders of the majority in aggregate principal amount of the then Outstanding Subordinate Bonds.

“Costs of Issuance” means all fees, costs and expenses payable or reimbursable directly or indirectly by the Borrowers and related to the authorization, issuance and sale of the Bonds.

“Costs of Issuance Account” means the account by that name in the Project Fund created pursuant to the Indenture.

“Costs of the Projects” means those costs and expenses in connection with the acquisition, rehabilitation, furnishing, and equipping of the Projects permitted by the Act to be paid or reimbursed from Bond proceeds including, but not limited to, the following:

(a) payment of (i) the cost of the preparation of plans and specifications (including any preliminary study or planning of the Projects, the renovations to the Projects or any aspect thereof), (ii) the cost of acquisition, construction and rehabilitation of the Projects and all acquisition, construction,

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rehabilitation and installation expenses required to provide utility services or other facilities and all real or personal properties deemed necessary in connection with the Projects (including development, architectural, engineering, and supervisory services with respect to any of the foregoing and premium on any surety bond), (iii) interest on the Bonds during the rehabilitation of the Projects, and (iv) any other costs and expenses relating to the Projects;

(b) payment of the purchase price of the Projects, improvements thereon, and the Equipment, and any fixtures to be incorporated into the Projects, including all costs incident thereto, payment for labor, services, materials, and supplies used or furnished in site improvement and in the rehabilitation, furnishing and equipping of the Projects, including all costs incident thereto, payment for the cost of the construction, rehabilitation, acquisition, and installation of utility services or other facilities, payment for all real and personal property deemed necessary in connection with the Projects, payment of consulting and development fees payable to the Borrowers or others, and payment for the miscellaneous expenses incidental to any of the foregoing items;

(c) payment to the Trustee, as such payments become due, of the reasonable fees and expenses of the Trustee, including attorneys’ fees, other than its initial fee (as Trustee, bond registrar and paying agent) and of any paying agent properly incurred under the Indenture that may become due during the rehabilitation and equipping of the Projects;

(d) to such extent as they are not paid by a contractor for construction or installation with respect to any part of the Projects, payment of the premiums on all insurance required to be taken out and maintained during the period of rehabilitation and equipping of the Projects;

(e) payment of the taxes, assessments, and other charges, if any, that may become payable during the period of construction or rehabilitation of the Projects;

(f) payment of expenses incurred in seeking to enforce any remedy against any contractor or subcontractor in respect of any default under a contract relating to the Projects;

(g) payment of the fees or out-of-pocket expenses of the Borrowers, if any, including, but not limited to, architectural, engineering, and supervisory services with respect to the Projects;

(h) payment of the fees or out-of-pocket expenses, if any, of those providing services with respect to the Projects, including, but not limited to, architectural, engineering, and supervisory services;

(i) payment to the Borrowers of such amounts, if any, as are necessary to reimburse the Borrowers in full for all advances and payments made by it for any of the items set forth in (a) through (h) above; and

(j) payment of any other costs and expenses relating to the Projects that would constitute a “cost” or “expense” permitted to be paid by the Authority under the Act.

“Counsel” means an attorney or firm of attorneys duly admitted to practice law before the highest court of any state and not unsatisfactory to the Authority.

“Coverage Test” means that the Debt Service Coverage Ratio for the relevant period was equal to or greater than (i) 1.25 to 1 on all Outstanding Senior Bonds and all Senior Parity Indebtedness and (ii) 1.10 to 1 on all Outstanding Senior Bonds and Subordinate Bonds and all Senior Parity Indebtedness and Subordinate Parity Indebtedness.

“Debt Service” means the principal and redemption price of and interest due on the Bonds on any given Interest Payment Date.

“Debt Service Coverage Ratio” means, for any period, the ratio obtained by dividing Net Income Available for Debt Service for such period by the Annual Debt Service for such period, expressed as a percentage or a ratio, in

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each case, as calculated by the Borrowers and certified to the Trustee in writing and supported by the Audited Financial Statements described in the Loan Agreement.

“Debt Service Requirements” means for a specified period: (a) amounts needed to pay scheduled payments of principal of the Bonds during such period, including payments for mandatory sinking fund redemption pursuant to the Indenture; (b) amounts needed to pay interest on the Bonds payable during such period; and (c) to the extent not duplicative of (a) or (b) above, amounts paid during such period to restore the amounts on deposit in the Debt Service Reserve Fund to the Debt Service Reserve Requirement.

“Debt Service Reserve Account” means, as applicable, (i) the trust account by that name for the Senior Bonds in the Debt Service Reserve Fund created pursuant to the Indenture or (ii) the trust account for the Subordinate Bonds by that name in the Debt Service Reserve Fund created pursuant to the Indenture.

“Debt Service Reserve Fund” means the trust fund of that name created with respect to the Series 2017 Bonds pursuant to the Indenture.

“Debt Service Reserve Requirement” means, with respect the Senior Bonds, the amount of $[SENIOR DEBT SERVICE REQUIREMENT], and, with respect to the Subordinate Bonds, the amount of $[SUBORDINATE DEBT SERVICE REQUIREMENT]; provided, however, that the foregoing amount shall be reduced on a pro-rata basis to the extent of any reduction in Annual Debt Service on the aggregate principal amount of the Senior Bonds Outstanding and Subordinate Bonds Outstanding, as applicable, if any Bonds are redeemed other than pursuant to mandatory sinking fund redemption.

“Default” under the Loan Agreement means any of the events described in the Loan Agreement.

“Default Rate” means (i) with respect to the Loan and Bonds, the interest rate on the applicable Loan or the applicable Series of Bonds plus 2% per annum, and (ii) with respect to any other amounts due means 10% per annum, but in no case shall the Default Rate exceed the Maximum Rate.

“Designated Office” means, when referring to the Trustee or any Paying Agent, means the office where the Trustee or Paying Agent, as applicable, maintains its designated corporate trust department, which as of the date of the Indenture, will be the address provided in the Indenture.

“Dissemination Agent” means Disclosure Advisors LLC, or any successor thereto, acting as Dissemination Agent under the Continuing Disclosure Agreement.

“Dissemination Agent Fee” means the fee payable to the Dissemination Agent (expressed as an annual amount set forth in the then current Budget) payable semi-annually in advance on the Closing Date (pro-rated to the initial Interest Payment Date) and on each Interest Payment Date thereafter; provided such fee shall not exceed $1,000 annually as compensation for its services and expenses in performing its obligations under the Continuing Disclosure Agreement.

“Environmental Laws” means Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), Public Law No. 96-510, 94 Stat. 1613; the Resource Conservation and Recovery Act (“RCRA”), the National Environmental Policy Act of 1969, as amended (42 U.S.C. § 4321 et seq.); the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C. §§ 1801 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. §§ 136 et seq.); RCRA; the Toxic Substance Control Act, as amended (15 U.S.C. §§ 2601 et seq.); the Clean Water Act; the Clean Air Act, as amended (42 U.S.C. §§ 7401 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C. §§ 1251 et seq.); the Federal Coastal Zone Management Act, as amended (16 U.S.C. §§ 1451 et seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. §§ 651 et seq.); the Safe Drinking Water Act, as amended (42 U.S.C. §§ 300(f) et seq.); and any other federal, state, or local law, statute, ordinance, and regulation, now or hereafter in effect, and in each case as amended or supplemented from time to time, and any applicable judicial or administrative interpretation thereof, including, without limitation, any applicable judicial or administrative order, consent decree, or judgment applicable to the Projects relating to the regulation and protection of human health and safety and/or the environment and natural resources (including, without limitation, ambient air, surface water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species, and/or vegetation),

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including all amendments to such Acts, and any and all regulations promulgated thereunder, and all analogous local or state counterparts or equivalents, and any transfer of ownership notification or approval statutes, and any federal, state or local statute, law, ordinance, code, rule, regulation, order or decree, regulating, relating to or imposing liability or standards of conduct concerning any petroleum, petroleum byproduct (including but not limited to, crude oil, diesel oil, fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with other waste, oil sludge, and all other liquid hydrocarbons, regardless of specific gravity) natural or synthetic gas, products and/or hazardous substance or material, toxic or dangerous waste, substance or material, pollutant or contaminant, as may now or at any time hereafter be in effect.

“Equipment” means the equipment, machinery, furnishings and other personal property located on the Sites and all replacements, substitutions, and additions thereto

“Event of Default” means any occurrence or event specified in the Indenture.

“Extraordinary Trustee’s Fees and Expenses” means the fees, expenses and disbursements payable to the Trustee and Paying Agent pursuant to the Indenture during any Fiscal Year in excess of Ordinary Trustee’s Fees and Expenses, including but not limited to, reasonable counsel fees and expenses, reasonable fees of other third party professionals, and any costs of sending notices pursuant to the terms and conditions of the Bond Documents.

“Favorable Opinion of Bond Counsel” means, with respect to any action the taking of which requires such an opinion, an opinion of Bond Counsel addressed to the Authority, the Underwriter and the Trustee to the effect that such action will not, in and of itself, cause interest on the Tax-Exempt Bonds to be includible in gross income for federal income tax purposes (subject to the inclusion of any exceptions contained in the opinion delivered upon the original issuance of the Tax-Exempt Bonds).

“Fiduciary” means the Trustee and any Paying Agent.

“Fiscal Year” means a period of 12 consecutive months beginning on January 1 and ending on December 31, except that the first Fiscal Year shall begin on the Closing Date and end on December 31, 2017.

“Fitch” means Fitch Ratings, Inc., a corporation organized and existing under the laws of the State of New York, its successors and assigns.

“Force Majeure” means (a) the following: acts of nature; strikes or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States of America or of the Project Jurisdictions where the Projects are located or of any of their subdivisions, departments, agencies or officials, or of any civil or military authority; insurrections; riots; landslides; earthquakes; fires; floods; explosions, but only to the extent that any such cause or event is not within the control of the Borrowers; and (b) any other cause or event not reasonably within the control of the Borrowers.

“Fund” or “Funds” means any one or more, as the case may be, of the separate trust funds created and established in the Indenture.

“GAAP” means generally accepted accounting principles consistently applied.

“Governing Body” means (a), with respect to the Authority, the Board of Directors of the Authority, or any governing body that succeeds to the functions of the Board of Directors of the Authority, and (b) with respect to a Borrower, the Board of Directors of the Sole Member.

“Government Obligations” means direct obligations of, and obligations the principal of and interest on which are unconditionally guaranteed as to timely payment by, the United States of America.

“Hazardous Substances” means any petroleum or petroleum products and their by-products, flammable explosives, radioactive materials, toxic chemicals and substances, radon, asbestos in any form that is or could become friable, urea formaldehyde foam insulation and polychlorinated biphenyls (PCB), asbestos-containing materials (ACMs), lead-containing or lead-based paint (LBP), radon, medical waste and other bio-hazardous materials and any chemicals, pollutants, materials or substances defined as or included in the definition of

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“hazardous substances” as defined pursuant to the federal Comprehensive Environmental Response, Compensation and Liability Act, “regulated substances” within the meaning of subtitle I of the federal Resource Conservation and Recovery Act and words of similar import under applicable Environmental Laws.

“Holder” or “Bondholder” means the Person or Persons in whose name any Bond is registered on the registration records for the Bonds maintained by the Trustee as registrar.

“Imposition” has the meaning given such term in the Loan Agreement.

“Indebtedness” means (a) all indebtedness, whether or not represented by bonds, debentures, notes or other securities, for the repayment of money borrowed, (b) all deferred indebtedness for the payment of the purchase price of properties or assets purchased, (c) all guaranties, endorsements (other than endorsements in the ordinary course of business), assumptions, and other contingent obligations in respect of, or to purchase or to otherwise acquire, indebtedness of others, (d) all indebtedness secured by a mortgage, or secured by a pledge, security interest, or lien existing on property owned which is subject to a mortgage, pledge, security interest, or lien, whether or not the indebtedness secured thereby has been assumed, (e) all capitalized lease obligations, (f) all unfunded amounts under a loan agreement, letter of credit, or other credit facility for which such Person would be liable, if such amounts were advanced under the credit facility, (g) all amounts required to be paid by the Borrowers as a guaranteed payment to partners or members or a preferred or special dividend, including any mandatory redemption of shares or interests, (h) all unfunded pension funds, or welfare or pension benefit plans or liabilities, and (i) all obligations (calculated on a net basis) of the Borrowers under derivatives in the form of interest rate swaps, credit default swaps, total rate of return swaps, caps, floors, collars and other interest hedge agreements, in each case whether the Borrowers are liable contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations the Borrowers otherwise assure a creditor against loss; provided, however, that for the purpose of computing Indebtedness, there will be excluded any particular Indebtedness if, upon or prior to the maturity thereof, there has been deposited with the proper depository in trust the necessary funds (or Government Obligations not callable or pre-payable by the Authority thereof) for the payment, redemption, or satisfaction of such Indebtedness, and thereafter such funds and such Government Obligations so deposited will not be included in any computation of the assets of the Borrowers and the income derived from such funds and such direct obligations of the United States of America so deposited will not be included in any computation of the income of the Borrowers.

“Indenture” means the Trust Indenture, dated as of August 1, 2017, between the Authority and the Trustee, and as it may hereafter be amended or supplemented from time to time in accordance with the Indenture.

“Independent” means, with respect to Counsel or any Consultant, a person who is not a member of the Governing Body of the Authority or the Borrowers and is not an officer or employee of the Authority or the Borrowers and which is not a partnership, corporation or association having a partner, director, officer, member or substantial stockholder who is a member of the Governing Body of the Authority or the Borrowers or who is an officer or employee of the Authority or the Borrowers; provided, however, that the fact that such person is retained regularly by or transacts business with the Authority will not make such person an employee within the meaning of this definition.

“Insurance and Tax Escrow Fund” means the trust fund by that name established pursuant to the Indenture.

“Insurance Consultant” means a Consultant having the skill and expertise necessary to evaluate the insurance needs of affordable multifamily rental housing and which may be a broker or agent with which the Borrowers or the Authority transacts business.

“Insurance Proceeds” means the total proceeds of insurance paid by an insurance company under the policies of property insurance required to be procured by the Borrowers pursuant to the Loan Agreement.

“Interest Account” means, as applicable, (i) the trust account by that name for the Senior Bonds in the Bond Fund created with respect to the Bonds pursuant to the Indenture or (ii) the trust account by that name for the Subordinate Bonds in the Bond Fund created pursuant to the Indenture.

“Interest Payment Date” means each June 1 and December 1, commencing December 1, 2017, until the final Principal Payment Date of the Bonds.

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“Interest Period” for any Bonds means initially the period from the Dated Date to but not including the first Interest Payment Date and thereafter the period from and including each Interest Payment Date to but not including the next Interest Payment Date or other date on which interest is required to be paid on such Bonds.

“Interest Requirement” for any Bonds means an amount equal to the interest that would be due and payable on such Bonds on the Interest Payment Date next succeeding the date of determination (assuming that no principal of such Bonds is paid or redeemed between such date and the next succeeding Interest Payment Date) multiplied by a fraction the numerator of which is one and the denominator of which is the number of whole calendar months in the Interest Period in which such date occurs.

“Investment Securities” means any of the following obligations or securities, to the extent permitted by applicable law:

(a) Government Obligations;

(b) An interest in any trust or fund that invests solely in Government Obligations or repurchase agreements with respect to Government Obligations;

(c) Commercial paper having, at the time of investment or contractual commitment to invest therein, a rating from the Rating Agency, from which a rating is available in the highest investment category granted thereby;

(d) Repurchase and reverse repurchase agreements with a provider whose long-term rating is at least “A” by the Rating Agency at the time any such agreement is entered into, which agreement is collateralized with Government Obligations, including those of the Trustee or any of its affiliates;

(e) Investment in money market mutual funds having a rating in the highest investment category granted thereby from the Rating Agency, including, without limitation any mutual fund for which the Trustee or an affiliate of the Trustee serves as investment manager, administrator, shareholder servicing agent, and/or custodian or sub-custodian, notwithstanding that (A) the Trustee or an affiliate of the Trustee receives fees from funds for services rendered, (B) the Trustee collects fees for services rendered pursuant to the Indenture, which fees are separate from the fees received from such funds, and (C) services performed for such funds and pursuant to the Indenture may at times duplicate those provided to such funds by the Trustee or an affiliate of the Trustee; and

(f) Demand deposits, including interest bearing money market accounts, time deposits, trust funds, trust accounts, overnight bank deposits, interest-bearing deposits, and certificates of deposit or bankers acceptances of depository institutions, including the Trustee or any of its affiliates which are either (a) rated in the “AA” long-term ratings category or higher by the Rating Agency or (b) are fully insured (and within the limits of insurance provided by) the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation.

“Joint Exercise Agreement” means the Amended and Restated Joint Exercise of Powers Agreement Relating to the Public Finance Authority, dated September 28, 2010 by and among Adams County, Wisconsin, Bayfield County, Wisconsin, Marathon County, Wisconsin, Waupaca County, Wisconsin and the City of Lancaster, Wisconsin, as such agreement may be amended from time to time.

“Junior Subordinate Bonds” means the Series 2017C Bonds and any Additional Bonds issued on parity therewith.

“Land Use Restriction Agreement” means, with respect to each Project, the Land Use Restriction Agreement relating to such Project, dated the Closing Date, among the Authority, the applicable Borrower, and the Trustee, and as it may thereafter be amended and supplemented from time to time in accordance with its terms.

“Liquidity Requirement” means an amount of monies in the Repair and Replacement Fund, Surplus Fund and Operations and Maintenance Reserve Fund, collectively, equal to no less than sixty (60) days of Operating Expenses.

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“Loan” means the loan evidenced by the Note from the Borrowers to the Trustee financed by the Authority with proceeds of the Series 2017 Bonds in the aggregate principal amount of $[PRINCIPAL AMOUNT].

“Loan Agreement” means the Loan Agreement of even date herewith among the Authority and the Borrowers, and as it may thereafter be amended and supplemented from time to time in accordance with its terms.

“Loan Payments” means, collectively, the “Basic Loan Payments” and the “Additional Loan Payments.”

“Long-Term Indebtedness” means any Indebtedness other than Short-Term Indebtedness.

“Mail” means either (a) first class mail by the United States Postal Service, postage prepaid, to the Holders at their respective addresses which appear on the registration books of the Paying Agent on the date of mailing, or (b) actual delivery to the Holders or their representatives evidenced by receipt signed by such Holders or their representatives.

“Management Agreement” means any agreement for the management, maintenance and operation of the Projects, between the Manager and each Borrower, or any substitute agreement providing for the management, maintenance and operation of the Projects, in each case as it may be amended and supplemented from time to time.

“Management Consultant” means a Consultant possessing significant management consulting experience in matters pertaining to owning and operating affordable multifamily residential rental housing facilities similar to the Projects.

“Management Fee” means any and all compensation payable to the Manager under and pursuant to the Management Agreement.

“Manager” means any property manager under any Management Agreement which subsequent manager satisfies the requirements of the Loan Agreement as manager of the Projects.

"Mandatory Sinking Fund Requirements" means (i) with respect to Series 2017A Bonds, the amounts required to be deposited in the Bond Fund for the purpose of redeeming the Series 2017A Bonds and (ii) with respect to Series 2017B Bonds, the amounts required to be deposited in the Bond Fund for the purpose of redeeming the Series 2017B Bonds, in each case pursuant to Section 3.03 of the Indenture.

“Material Adverse Effect” means (a) a material adverse change in the financial condition of the Borrowers or the Projects; or (b) any event or occurrence of whatever nature which would materially and adversely change (i) the Borrowers’ ability to perform their obligations under the Loan Agreement or any other Borrowers’ Documents; or (ii) the Holders’ or the Trustee’s security interests in the security pledged under the Indenture.

“Maximum Annual Debt Service” means as of any date of calculation the highest principal and interest requirements with respect to all Outstanding Bonds of the applicable Series for any succeeding Fiscal Year, but excluding the period ending on the final Principal Payment Date of the Bonds.

“Maximum Rate” means the lesser of (i) 12% per annum and (ii) the maximum non-usurious interest rate permitted by applicable law.

“Member” means the parties to the Joint Exercise Agreement and any political subdivision that has been designated in the past, or from time to time in the future is designated, as a member of the Authority pursuant to the Joint Exercise Agreement.

“Modifications” means modifications, repairs, renewals, improvements, replacements, alterations, additions, enlargements, or expansions in, on, or to the Projects (other than routine repair or maintenance), including any and all machinery, furnishings, and equipment therefor.

“Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns.

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“Mortgages” means, collectively, (i) Deed of Trust, Assignment of Leases and Rents and Security Agreement from 2017 IAVF Cedar Twin City LLC in favor of the Trustee, (ii) Deed of Trust, Assignment of Leases and Rents and Security Agreement from 2017 IAVF Cedar Silas LLC in favor of the Trustee, (iii) Deed of Trust, Assignment of Leases and Rents and Security Agreement from 2017 IAVF Cedar Chesterfield LLC in favor of the Trustee, and (iv) Mortgage and Security Agreement from 2017 IAVF Cedar Whispering LLC in favor of the Trustee, each dated as of the Closing Date, collectively and jointly and severally securing the repayment of the Loan and the Note and certain additional amounts due and owing under the Loan Agreement, and as they may thereafter be amended and supplemented from time to time in accordance with their terms.

“Mortgaged Property” means the real property and all improvements thereon on which the Projects are located which is subject to the lien of the Mortgages and the Indenture, as more specifically described in Exhibit A to the Mortgages.

“Net Income Available for Debt Service” means, for any period of determination thereof, Project Revenues for such period, plus all interest earnings on money held in Funds and Accounts which are transferred to the Revenue Fund pursuant to the Indenture plus any Unrestricted Contributions, minus (a) total Operating Expenses incurred on a GAAP basis by the Borrowers for such period, (b) all required deposits to the Insurance and Tax Escrow Fund, the Operations and Maintenance Reserve Fund and the Repair and Replacement Fund for such period, (c) any profits or losses which would be regarded as extraordinary items under generally accepted accounting principles, (d) gain or loss on the extinguishment of Indebtedness, (e) restricted contributions, (f) proceeds of Additional Bonds and any other Permitted Indebtedness, (g) Net Proceeds of any Insurance Proceeds or Condemnation Award, (h) the proceeds of any sale, transfer or other disposition of all or any portion of the Projects by the Borrowers and (i) with respect to Net Income Available for Debt Service as it relates to the Subordinate Bonds, the Debt Service Reserve Requirement for the Senior Bonds and debt service due on any Senior Parity Indebtedness for such period.

“Net Proceeds,” when used with respect to any Insurance Proceeds or Condemnation Award, means the gross proceeds from such Insurance Proceeds or Condemnation Award, less all expenses (including reasonable attorneys’ fees of the Borrowers or the Trustee and any extraordinary fees and expenses of the Trustee) incurred in the realization thereof.

“Note” means the note executed by the Borrowers in favor of the Authority on behalf of the Holders evidencing the Loan of the proceeds of the Series 2017 Bonds and endorsed to the Trustee.

“Notes” means the Note and any promissory note issued in connection with Additional Bonds.

“Operating Account” means, the demand deposit bank account maintained by the Borrowers pursuant to the Loan Agreement on which the Borrowers or its authorized agent write checks to pay Operating Expenses.

“Operating Expenses” means, for any period, cash expenses paid or accrued in connection with the operation, maintenance and current repair of the Projects (determined on a cash basis) during such period including without limitation, the costs of any utilities necessary to operate the Projects, advertising and promotion costs, payroll expenses, insurance premiums, lease payments, deposits to the Insurance and Tax Escrow Fund and to the Repair and Replacement Fund, any Rebate Amount to the extent that it is not paid from the Rebate Fund, the Management Fee, administrative and legal expenses of the Borrowers relating to the Projects, labor, executive compensation, the cost of materials and supplies used for current operations of the Project, taxes and charges for accumulation of appropriate reserves for current expenses not annually recurrent but which are such as may reasonably be expected to be incurred in connection with the Projects and in accordance with sound accounting practice. “Operating Expenses” does not include (a) Debt Service Requirements, (b) any loss or expense resulting from or related to any extraordinary and nonrecurring items, (c) any losses or expenses related to the sale of assets, the proceeds of which sale are not included in Project Revenues pursuant to clause (b) of the definition thereof, (d) expenses paid from operational reserves, (e) the Administration Expenses (f) Extraordinary Trustee’s Fees and Expenses, (g) any Rebate Amount to the extent that it is paid from the Rebate Fund, (h) any allowance for depreciation or replacements of capital assets of the Projects or amortization of financing costs, or (i) disbursements from the Surplus Fund.

“Operating Fund” means the trust fund by that name created pursuant to the Indenture.

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“Operating Requirement” means all Operating Expenses, exclusive of amounts to be deposited to or payable from the Administration Fund, Insurance and Tax Escrow Fund, Operations and Maintenance Reserve Fund or Repair and Replacement Fund, projected to be payable in such month in accordance with the Budget.

“Operations and Maintenance Reserve Fund” means the trust fund by that name created pursuant to the Indenture.

“Ordinary Trustee’s Fees and Expenses” means those fees, expenses and disbursements for the services normally rendered by, and the expenses incurred in the ordinary course of business of, the Trustee and Paying Agent incurred in connection with their duties under the Indenture and the other Borrowers’ Documents payable annually in advance on the Closing Date and on each June 1.

“Organizational Documents” means the documents under which each Borrower and the Sole Member, as applicable, is organized and governed, including its Articles of Organization, Operating Agreement or Bylaws, respectively, as such documents may be thereafter amended or supplemented from time to time in accordance with their terms.

“Outstanding” or “outstanding” means, as of any given date, all Bonds which have been authenticated and delivered by the Trustee under the Indenture, except: (a) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee or Paying Agent on or prior to such date for cancellation; (b) Bonds deemed to be paid in accordance with the Indenture; and (c) Bonds in lieu of which other Bonds have been authenticated under the terms of the Indenture.

“Parity Indebtedness” means the Indebtedness permitted to be secured by the Borrowers pursuant to the Loan Agreement.

“Paying Agent” means the Trustee or any successor or additional Paying Agent appointed under the Indenture that satisfies the requirements of the Indenture.

“Permitted Encumbrances” means, with respect to the Projects, the Mortgages and (a) the lien of current real property taxes (if any), ground rents, water charges, sewer rents and assessments not yet due and payable, (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record, none of which, individually or in the aggregate, materially interferes with the current use of the Projects or the security intended to be provided by the Mortgages, or with the Borrowers’ ability to pay their obligations when they become due or materially and adversely affects the value of the Projects, (c) the Land Use Restriction Agreements, and (d) the exceptions (general and specific) set forth in the Title Policies or appearing of record, none of which, individually or in the aggregate, materially interferes with the current use of the Projects or the security intended to be provided by the Mortgages or with the Borrowers’ ability to pay their obligations when they become due or materially and adversely affects the value of the Projects.

“Permitted Indebtedness” means (a) payment and other liabilities payable under the Loan Agreement or the Note, (b) liabilities of the Borrowers under the Mortgages, and (c) additional Indebtedness of the Borrowers allowed under the Loan Agreement.

“Person” or “person” means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization, a governmental body, any other political subdivision, municipality or authority or any other group or entity.

“Potential Default” means any event which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Indenture or a Default under the Loan Agreement.

“Principal Account” means, as applicable, (i) the trust account by that name for the Senior Bonds within the Bond Fund created with respect to the Senior Bonds pursuant to the Indenture or (ii) the trust account by that name for the Subordinate Bonds within the Bond Fund for the Subordinate Bonds pursuant to the Indenture.

“Principal Payment Date” means each maturity date of the Bonds and any date for mandatory sinking fund redemption of the Bonds pursuant to the Indenture.

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“Principal Requirement” for any Bonds means an amount equal to the regularly scheduled principal that is due and payable on such Bonds on the Bond Payment Date next succeeding the date of determination, whether by maturity or by mandatory sinking fund redemption pursuant to the Indenture, multiplied by a fraction the numerator of which is one and the denominator of which is the number of whole calendar months in the period commencing on the last date of payment of regularly scheduled principal (or the date of issuance of such Bonds, if no principal has been paid) and ending on the next Bond Payment Date for payment of regularly scheduled principal.

“Project” and “Projects” means the Sites, together with the improvements constructed thereon, consisting of five residential rental facilities and related support facilities, including all buildings, structures and improvements now or hereafter constructed thereon, and all fixtures, machinery, equipment, furniture, furnishings and other personal property hereafter attached to, located in, or used in connection with any such structures, buildings or improvements, and all additions, substitutions and replacements thereto, whether now owned or hereafter acquired. The term “Projects” does not include property owned by Persons other than the Borrowers, including the Manager, the Sole Member or residents of the Projects.

“Project Fund” means the trust fund by that name created pursuant to the Indenture.

“Property Operating Account” means any demand deposit bank accounts maintained by a Borrower pursuant to the Loan Agreement on which a Borrower or its authorized agent writes checks to pay Operating Expenses.

“Project Revenues” means for any period, all cash operating and nonoperating revenues of the Projects, including rental payments and Unrestricted Contributions, less (a) any extraordinary and nonrecurring items (including any real property tax refunds), (b) income derived from the sale of assets not in the ordinary course of business which is permitted under the Bond Documents, (c) security, cleaning or similar deposits of tenants until applied or forfeited, (d) Net Proceeds of Insurance Proceeds or Condemnation Awards and (e) any amount disbursed to the Borrowers from the Surplus Fund; provided that, the following shall constitute Project Revenues: (i) any such Net Proceeds resulting from business interruption insurance or other insurance or condemnation proceeds retained by the Borrowers and (ii) amounts received by the Borrowers or the Trustee pursuant to any payment guaranty, operating guaranty or similar agreement with respect to the Projects.

“Qualified Institutional Buyer” has the meaning applied to it in Rule 144A of the Securities Act of 1993, as amended.

“Rating Agency” means S&P, Moody’s or Fitch, or any other nationally recognized rating agency if such agency currently has a rating in effect with respect to any Series of the Bonds. The initial Rating Agency will be S&P.

“Rating Agency Fee” means any fee required to be paid to a Rating Agency to maintain a rating on the Bonds, and initially means the annual surveillance fee of $1,500 payable by the Borrowers to the initial Rating Agency.

“Rebate Analyst” means a Certified Public Accountant, financial analyst, law firm or Bond Counsel, or any firm of the foregoing, or a financial institution (which may include the Trustee) experienced in making the arbitrage and rebate calculations required pursuant to Section 148 of the Code and retained by the Borrowers to make the computations and give the directions required pursuant to the Tax Agreement.

“Rebate Analyst Fee” means a fee paid for each rebate calculation (which are to be made every fifth year, if required).

“Rebate Fund” means the trust fund by that name created pursuant to the Indenture.

“Record Date” means the fifteenth day (whether or not a Business Day) of the calendar month preceding any applicable Interest Payment Date.

“Related Person” means any member of the same Controlled Group as the Authority or the Borrowers.

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“Repair and Replacement Fund” means the trust fund by that name established pursuant to the Indenture.

“Replacement Reserve Requirement” means an amount equal to $575 per unit in the Projects per year.

“Responsible Officer,” when used with respect to the Trustee, means any corporate trust officer or assistant corporate trust officer or any other officer of the Trustee within its corporate trust department customarily performing functions similar to those performed by any of the above designated officers, and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of such person’s knowledge of and familiarity with the particular subject.

“Restoration” means the restoration, replacement, repair or rebuilding of the Projects (or any portion thereof) as a result of an event for which Condemnation Awards or Insurance Proceeds are received with respect to the Projects (or any portion thereof), as provided in the Loan Agreement.

“Restoration Plans” has the meaning provided in the Loan Agreement.

“Revenue Fund” means the trust fund by that name created pursuant to the Indenture.

“S&P” means Standard & Poor’s Rating Services, a Standard & Poor’s Financial Services, LLC business, its successors and assigns.

“Seller” means Cedar Grove Capital, a Delaware limited liability company having a principal office at 888 Woodmere Place, Woodmere NY 11598.

“Senior Bond Debt Service Reserve Account” means the account by that name in the Debt Service Reserve Fund for the Series 2017A Bonds created pursuant to Section 5.01 hereof.

“Senior Bond Interest Account” means the trust account by that name in the Bond Fund for the Series 2017A Bonds created pursuant to Section 5.01 hereof.

“Senior Bond Principal Account” means the trust account by that name in the Bond Fund for the Series 2017A Bonds created pursuant to Section 5.01 hereof.

“Senior Bond Special Redemption Account” means the trust account by that name in the Bond Fund for the Series 2017A Bonds created pursuant to Section 5.01 hereof.

“Senior Bonds” means the Series 2017A Bonds and any Additional Bonds issued on parity therewith.

“Senior Parity Indebtedness” means any Parity Indebtedness properly incurred on parity with the Senior Bonds as provided for in Section 6.12 of the Loan Agreement.

“Series” means any series of Bonds issued pursuant to the Indenture.

“Series 2017 Bonds” means, collectively, the Series 2017A Bonds, the Series 2017B Bonds and the Series 2017C Bonds.

“Series 2017A Bonds” means $[SERIES A AMOUNT] aggregate principal amount of the Authority’s Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project) Series 2017A, which Bonds are senior in lien and priority to the Series 2017B Bonds and the Series 2017C Bonds.

“Series 2017B Bonds” means $[SERIES B AMOUNT] aggregate principal amount of the Authority’s Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project) Series 2017B, which Bonds are (i) subordinate in lien and priority to the Series 2017A Bonds and (ii) senior in lien and priority to the Series 2017C Bonds.

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“Series 2017C Bonds” means $[SERIES C AMOUNT] aggregate principal amount of the Authority’s Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project) Subordinate Series 2017C, which Bonds are subordinate in lien and priority to the Series 2017A Bonds and the Series 2017B Bonds.

“Short-Term Indebtedness” means any Indebtedness maturing not more than 365 days after it is incurred or which is payable on demand, except for any such Indebtedness which is renewable or extendable at the sole option of the debtor to a date more than 365 days after it is incurred, or any such Indebtedness which, although payable within 365 days, constitutes payments required to be made on account of Indebtedness expressed to mature more than 365 days after it was incurred.

“Sites” means the real property on which the Projects are located.

“Sole Member” means Invest in America’s Veterans Foundation, Inc., a Florida nonprofit corporation described in Section 501(c)(3) of the Code and exempt from federal income taxation under Section 501(a) of the Code, as Sole Member of the Borrowers, and its successors and assigns.

“Special Redemption Account” means each trust account by that name within the Bond Fund created with respect to a Series of Bonds pursuant to the Indenture.

“Sponsor” means the National League of Cities, the National Association of Counties, the Wisconsin Counties Association, the League of Wisconsin Municipalities, and any other Person that holds itself out, or is identified by the Authority, as an organization sponsoring the Authority.

“State” means the State of Wisconsin.

“Subordinate Bond Debt Service Reserve Account” means the account by that name in the Debt Service Reserve Fund for the Series 2017B Bonds created pursuant to Section 5.01 hereof.

“Subordinate Bond Interest Account” means the trust account by that name in the Bond Fund for the Series 2017B Bonds created pursuant to Section 5.01 hereof.

“Subordinate Bond Principal Account” means the trust account by that name in the Bond Fund for the Series 2017B Bonds created pursuant to Section 5.01 hereof.

“Subordinate Bond Special Redemption Account” means the trust account by that name in the Bond Fund for the Series 2017B Bonds created pursuant to Section 5.01 hereof.

“Subordinate Bonds” means the Series 2017B Bonds and any Additional Bonds issued on parity therewith.

“Subordinate Parity Indebtedness” means any Parity Indebtedness properly incurred on parity with the Subordinate Bonds as provided in the Loan Agreement.

“Supplemental Indenture” means any Amendment to the Indenture entered into in accordance with the Indenture.

“Surplus Cash” means the amount on deposit in the Surplus Fund that may be distributed to the Borrowers pursuant to the Indenture.

“Surplus Fund” means the trust fund by that name created pursuant to the Indenture.

“Tax Agreement” means the Tax Regulatory Agreement and No-Arbitrage Certificate dated as of August 1, 2017, among the Authority, the Borrowers and the Sole Member and acknowledged by the Trustee, and as the same may be supplemented or amended from time to time in accordance with its terms.

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“Tax-Exempt Bonds” means the Series 2017A Bonds, the Series 2017B Bonds, the Series 2017C Bonds and any Additional Bonds that as originally issued were the subject of an opinion of Bond Counsel to the effect that the interest thereon is excluded from the gross income of the Holders thereof for federal income tax purposes.

“Test Period” means the Fiscal Year ending on an Annual Evaluation Date.

“Title Policies” means title insurance in the form of an ALTA mortgagee’s title policies issued by a title insurance company acceptable to the Underwriter in the face amount of at least the principal amount of Series 2017 Bonds insuring that the Trustee has a first priority valid lien in the Mortgaged Property subject only to Permitted Encumbrances.

“Trust Estate” means the property conveyed to the Trustee under the Indenture, including all of the Authority’s right, title and interest in and to the property described in the Granting Clauses of the Indenture.

“Trustee” means Wilmington Trust, National Association or any successors or assigns under the Indenture.

“Trustee Indemnified Persons” means the Trustee and its officers, directors, employees and agents.

“Unassigned Rights” means the rights of the Authority under Section 1.04 of the Indenture and Sections 3.2(b)(ii), the last paragraph of section 3.2, 6.4, 6.11, 7.5 and 9.16 of the Loan Agreement and, to the extent not expressly provided in said sections (or in any other sections of the Indenture or thereof) the Authority’s rights thereunder and under the Indenture to (i) inspect books and records; (ii) give or receive notices, approvals, consents, requests, and other communications; (iii) receive payment or reimbursement for expenses, including without limitation Additional Loan Payments and the Authority’s Fees and Expenses; (iv) immunity from and limitation of liability; and (v) indemnification by the Borrowers; and further, to enforce, in its own name and on its own behalf, those provisions of the Indenture and of the Loan Agreement and any other document, instrument or agreement entered into with respect to the Bonds that provides generally for the foregoing enumerated rights or any similar rights of the Authority or any Authority Indemnified Person. For avoidance of doubt, the “Unassigned Rights” referenced in clauses (iv) and (v), above, will be interpreted broadly to encompass (but not be limited to) the rights of the Authority Indemnified Persons to immunity from and limitation of liability and indemnification by the Borrowers as provided in the Loan Agreement and the right of any such Authority Indemnified Person to enforce such rights in his, her or its own name.

“Underwriter” means Stifel, Nicolaus & Company, Incorporated, and its successors and assigns.

“Unrestricted Contributions” means contributions that are not restricted in any way that would prevent their application to the payment of Debt Service on Indebtedness of the Borrowers.

APPENDIX B

SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS

The following are summaries of certain provisions of the Indenture, the Loan Agreement, the Mortgages and the Land Use Restriction Agreements. These summaries do not purport to be complete and are subject in all respects to the provisions of, and are qualified in their entirety by reference to, the complete text of such documents. Copies of the foregoing documents are available from the Trustee.

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APPENDIX B

SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS

The following are summaries of certain provisions of the Indenture, the Loan Agreement, the Mortgages and the Land Use Restriction Agreements. These summaries do not purport to be complete and are subject in all respects to the provisions of, and are qualified in their entirety by reference to, the complete text of such documents. Copies of the foregoing documents are available from the Trustee.

Table of Contents

THE INDENTURE ................................................................................................................................................. B-1 THE LOAN AGREEMENT ................................................................................................................................... B-17 MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, FIXTURE FILING, AND ENVIRONMENTAL INDEMNITY AGREEMENT (NORTH CAROLINA PROJECTS)…………………………………………… ................................................... B-28 MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, FIXTURE FILING, AND ENVIRONMENTAL INDEMNITY AGREEMENT (SOUTH CAROLINA PROJECT)………………………………………………………… .................................. B-32 THE LAND USE RESTRICTION AGREEMENTS…………………………………………… .......................... B-37 THE INDENTURE

The following is a brief summary of certain provisions of the Indenture. The summary does not purport to be complete or definitive and is qualified in its entirety by reference to the Indenture, a copy of which is on file with the Trustee.

Funds and Accounts

The following Funds and accounts are created by the Authority to be held by the Trustee:

(a) A Bond Fund and therein, (i) a Principal Account, an Interest Account and a Special Redemption Account with respect to the Senior Bonds and (ii) a Principal Account, an Interest Account and a Special Redemption Account with respect to the Subordinate Bonds;

(b) A Debt Service Reserve Fund, and therein (i) a Debt Service Reserve Account with respect to the Senior Bonds and (ii) a Debt Service Reserve Account with respect to the Subordinate Bonds;

(c) A Project Fund and therein a Costs of Issuance Account;

(d) A Revenue Fund;

(e) A Rebate Fund;

(f) An Operating Fund and therein an account for each of the Projects: (i) “Twin City Apartments– Operating Account”, (ii) “Silas Creek Apartments– Operating Account”, (iii) “Chesterfield Apartments– Operating Account”, and (iv) “Whispering Pines– Operating Account”;

(g) An Insurance and Tax Escrow Fund and therein an account for each of the Projects: (i) “Twin City Apartments– Insurance and Tax Escrow Account”, (ii) “Silas Creek Apartments– Insurance and Tax Escrow Account”, (iii) “Chesterfield Apartments– Insurance and Tax Escrow Account”, and (iv) “Whispering Pines– Insurance and Tax Escrow Account”;

(h) A Repair and Replacement Fund and therein an account for each of the Projects: (i) “Twin City Apartments– Repair and Replacement Account”, (ii) “Silas Creek Apartments– Repair and Replacement Account”, (iii) “Chesterfield Apartments– Repair and Replacement Account”, and (iv) “Whispering Pines– Repair and Replacement Account”;

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(i) An Operations and Maintenance Reserve Fund;

(j) An Administration Fund; and

(k) A Surplus Fund.

Disbursements from the Project Fund. The Trustee will disburse money in the Costs of Issuance Account in the Project Fund to pay the Costs of Issuance upon receipt of a (i) written requisition of the Borrowers, (ii) a closing memorandum prepared by the Underwriter and signed by the Borrowers or (iii) a closing statement to the Trustee, in each case specifying (A) that such amount is to be paid to persons, firms or corporations identified therein, and (B) that such amount is properly payable as a Cost of Issuance under the Indenture. On the six month anniversary of the Closing Date, the Trustee will pay any remaining balance in the Costs of Issuance Account to the Project Fund.

Amounts on deposit in the Project Fund will be applied to payment of Costs of the Projects by disbursement thereof in accordance with one or more requisitions of the Borrowers to the Trustee within 30 days of receipt of such requisition substantially in the form set forth as Exhibit B-1 to the Loan Agreement. For purposes of complying with the requirements of this Section, the Trustee may conclusively rely and will be protected in acting or refraining upon the form of requisition of the Borrowers, which may be submitted by facsimile or email (pdf format). The Trustee will not be bound to make an investigation into the facts or matters stated in any form of requisition of the Borrowers. The Trustee will not be responsible for determining whether the funds on hand in the Project Fund are sufficient to complete the Costs of the Projects. The Trustee will not be responsible for collecting lien waivers.

Revenue Fund. There will be deposited in the Revenue Fund (i) all Loan Payments and other amounts paid to the Trustee under the Loan Agreement (other than prepayments required to redeem Bonds pursuant to the provisions of the Indenture, which will be deposited in the related Special Redemption Account), (ii) all other amounts required to be so deposited pursuant to the terms of the Indenture or of the Tax Agreement, including investment earnings to the extent provided in the Indenture, (iii) any amounts derived from the Loan Agreement or the Mortgages to be applied to payment of amounts intended to be paid from the Revenue Fund, (iv) all Project Revenues, and (v) such other money as is delivered to the Trustee by or on behalf of the Authority or the Borrowers with written directions for deposit of such money in the Revenue Fund.

Moneys on deposit in the Revenue Fund will be disbursed on the 15th day of each month as described in the front part of this Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Revenue Fund.”

Bond Fund. There will be deposited into the respective Principal Accounts of the Bond Fund (i) money transferred to such Principal Account from the Revenue Fund pursuant to the Indenture; (ii) money transferred from the Surplus Fund, the Operations and Maintenance Reserve Fund, the Repair and Replacement Fund, the Debt Service Reserve Fund and the Operating Fund pursuant to the provisions of the Indenture in respect of principal payable on the Senior Bonds and Subordinate Bonds, and (iii) any other amounts deposited with the Trustee with written directions from the Borrowers Representative to deposit the same in the applicable Principal Account of the Bond Fund.

There will be deposited into the respective Interest Accounts of the Bond Fund (i) all accrued interest, if any, on the sale and delivery of the Bonds; (ii) money transferred to such Interest Account from the Revenue Fund pursuant to the Indenture; (iii) money transferred from the Surplus Fund, the Operations and Maintenance Reserve Fund, the Repair and Replacement Fund, the applicable Debt Service Reserve Account of the Debt Service Reserve Fund and the Operating Fund pursuant to the Indenture in respect of interest payable on the Bonds; and (iv) any other amounts deposited with the Trustee with written directions from the Borrowers Representative to deposit the same in the applicable Interest Account of the Bond Fund.

There will be deposited in the applicable Special Redemption Account of the Bond Fund (i) any Net Proceeds of Insurance Proceeds or Condemnation Award to be transferred to a Special Redemption Account pursuant to the Indenture; and (ii) all other payments made by or on behalf of the Authority with respect to the

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redemption of Bonds pursuant to the Indenture. Amounts on deposit in each Special Redemption Account will be used to pay the redemption price of Bonds of the related Series being redeemed.

Except as otherwise provided in the Indenture, money in the Principal Accounts will be used for payment of principal of the Bonds of the applicable Series as the same will become due and payable on any Principal Payment Date, including a Principal Payment Date resulting from the redemption of the Bonds pursuant to the Indenture.

Except as otherwise provided herein, money in the Interest Accounts will be used for the payment of interest on the Bonds as the same becomes due and payable on any Bond Payment Date.

If on any Interest Payment Date, the amount on deposit in the Interest Account or a Principal Account is insufficient to make the payments or deposits described above, the Trustee will make up any such shortfall by transferring amounts first, to the Principal Account and the Interest Account for the Senior Bonds (first, to the Interest Account and second, to the Principal Account) and second, to the Principal Account and the Interest Account for the Subordinate Bonds (first to the Interest Account and second, to the Principal Account) from the following Funds in the following order:

(a) the Surplus Fund;

(b) the Operations and Maintenance Reserve Fund;

(c) the accounts within the Repair and Replacement Fund;

(d) the respective Debt Service Reserve Account, provided, however, that amounts may be transferred from the Debt Service Reserve Account for the Senior Bonds only in connection with shortfalls on the Senior Bonds and amounts may be transferred from the Debt Service Reserve Account for the Subordinate Bonds only in connection with shortfalls on the Subordinate Bonds; and

(e) the Operating Fund.

Any balance in the Principal Account and the Interest Account of the Bond Fund on each Interest Payment Date after making the transfers required above in this Section will be transferred to the Revenue Fund.

Debt Service Reserve Fund. There will be deposited in the Debt Service Reserve Fund (i) all money transferred to such Debt Service Reserve Fund pursuant to the Indenture, (ii) money transferred from the Revenue Fund pursuant to the Indenture, and (iii) any other money received by the Trustee with directions from such party to deposit the same in the Debt Service Reserve Fund.

Amounts on deposit in the Debt Service Reserve Fund will be used to make the payments required pursuant to the Indenture after the transfer of any amounts from the Surplus Fund and the Repair and Replacement Fund pursuant to the Indenture, if the amounts on deposit in the Revenue Fund are insufficient therefor.

Amounts on deposit in the applicable Debt Service Reserve Accounts will be transferred to the applicable Principal Accounts of the Bond Fund at the written direction of the Borrowers’ Representative for the purpose of paying the last maturing principal of the Senior Bonds or Subordinate Bonds, as applicable, on a Principal Payment Date or, if all of a series of the Bonds are being redeemed, to the applicable Special Redemption Accounts of the Bond Fund for redemption of Bonds; provided, however, that amounts may be transferred from the Debt Service Reserve Account for the Senior Bonds only in connection with final payments on the Senior Bonds and amounts may be transferred from the Debt Service Reserve Account for the Subordinate Bonds only in connection with final payments on the Subordinate Bonds.

If the Debt Service Reserve Requirement for the Senior Bonds or the Subordinate Bonds is reduced or eliminated in accordance with the definition thereof, the amounts on deposit in the applicable Debt Service Reserve Account in excess of the applicable Debt Service Reserve Requirement will, at the written direction of a Borrowers’ Representative delivered to the Trustee, be either (i) transferred to the applicable Special Redemption Account to be

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used to redeem Bonds pursuant to the Indenture, (ii) transferred to the related Principal or Interest Account to pay the principal of and/or interest on the Bonds as it becomes due, or (iii) if no Bonds remain outstanding, either transferred to the Revenue Fund and applied as provided in the Indenture, or used for any other purpose directed in writing by a Borrowers’ Representative, which, in the opinion of a Favorable Opinion of Bond Counsel delivered to the Authority and the Trustee, complies with the Act and will not adversely affect the exclusion from gross income of the recipients thereof of the interest on the Tax-Exempt Bonds for federal income tax purposes.

All interest income derived from the investment of amounts on deposit in the applicable Debt Service Reserve Accounts will be retained in the applicable Debt Service Reserve Accounts until the amount on deposit therein will be equal to the Debt Service Reserve Fund Requirement for the Senior Bonds or the Subordinate Bonds, respectively, and thereafter will be deposited into the Revenue Fund.

Rebate Fund. Amounts will be deposited in the Rebate Fund and will be applied as provided in the Tax Agreement.

Operating Fund. The Trustee will deposit in the Operating Fund (i) money transferred from the Revenue Fund in the amounts and on the dates described in the Indenture, (ii) any other monies received by the Trustee for deposit in the Operating Fund, (iii) any transfers from the Operations and Maintenance Reserve Fund and (iv) any other amounts required to be deposited into the Operating Fund under the Indenture or under the Loan Agreement or the Mortgages and delivered to the Trustee with written instructions to deposit the same therein. Except when an Event of Default under the Indenture or a Default under the Loan Agreement has occurred and is continuing, the Trustee will transfer amounts deposited in the Operating Fund to each of the Property Operating Accounts promptly following such deposits in accordance with the Budget and written instructions delivered by the Borrowers’ Representative. If an Event of Default under the Indenture has occurred and is continuing, the Trustee will, if so directed by the Controlling Holders in accordance with the Indenture, not make such transfers to the Property Operating Accounts, in which case (i) the Borrowers will not be entitled to request withdrawals from funds on deposit in the Operating Fund, and (ii) the Trustee may determine to pay Operating Expenses of the Projects directly, without receipt of direction from a Borrowers’ Representative and in such event is to rely on the annual Budget prepared by the Borrowers in connection with the Projects.

Operations and Maintenance Reserve Fund. The Trustee will deposit in the Operations and Maintenance Reserve Fund a portion of the proceeds of the sale of the Series 2017 Bonds in the amount set forth in the Indenture. The Borrowers will not be obligated to restore or replenish any amounts paid out of the Operations and Maintenance Reserve Fund.

Amounts on deposit in the Operations and Maintenance Reserve Fund shall be used to pay (i) maintenance and repair costs to the Projects which are not capital expenditures payable from the Repair and Replacement Fund, (ii) Operating Expenses in excess of amounts specified in the Budget, (iii) certain costs of repair and replacement in accordance with the Indenture, (iv) shortfalls in any Interest Account or Principal Account in accordance with the Indenture and (v) for any other legal purposes. The Borrowers may also transfer monies from the Operations and Maintenance Reserve Fund to the Repair and Replacement Fund upon providing written direction to the Trustee. The Trustee shall disburse money in the Operations and Maintenance Reserve Fund upon receipt of a written direction of the Borrowers which states the purpose for such disbursement and the persons to which such amounts are to be paid. All interest income derived from the investment of amounts on deposit in the Operations and Maintenance Reserve Fund shall be deposited into the Revenue Fund.

Insurance and Tax Escrow Fund. The Trustee will deposit in the Insurance and Tax Escrow Fund (i) money transferred from the Revenue Fund in the amounts and on the dates described under the heading “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS –Revenue Fund” herein and (ii) any other amounts required to be deposited into the Insurance and Tax Escrow Fund under the Indenture or under the Loan Agreement or the Mortgages and delivered to the Trustee with instructions to deposit the same therein. Amounts in the Insurance and Tax Escrow Fund shall be disbursed by the Trustee as provided herein, upon delivery by a Borrowers’ Representative to the Trustee of a requisition substantially in the form attached as Exhibit B-2 to the Loan Agreement. Money on deposit in the Insurance and Tax Escrow Fund and the applicable accounts thereto will be disbursed by the Trustee to the Borrowers to pay, or as reimbursement for the payment of, taxes, assessments, and insurance premiums with respect to the Projects, as hereinafter provided. Excess amounts in the Insurance and Tax Escrow Fund, and the respective accounts therein, may be disbursed by the Trustee to the Revenue Fund if, on

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or after any Annual Evaluation Date, the Trustee receives a certificate signed by the Borrowers’ Representative stating that actual costs taxes, assessments, and insurance premiums with respect to the Projects are below the amounts set forth in the Budget previously provided to the Trustee.

Upon presentation to the Trustee by a Borrowers’ Representative of a requisition accompanied by copies of bills or statements for the payment of such taxes, assessments, and premiums with respect to the Projects, when due, the Trustee will, not more frequently than once a month, pay to a Borrower or the Borrowers to provide for the payment of, or as reimbursement for the payment of, such taxes, assessments and premiums with respect to the applicable Project, from money then on deposit in the respective accounts in the Insurance and Tax Escrow Fund. If the total amount on deposit in the Insurance and Tax Escrow Fund will not be sufficient to pay to or to pay or reimburse the Borrowers in full for the payment of such taxes, assessments and premiums, then the Borrowers will pay the excess amount of such taxes, assessments and premiums directly.

Repair and Replacement Fund. The Trustee will deposit into the respective accounts within the Repair and Replacement Fund (i) money transferred from the Revenue Fund in the amounts and on the dates described in the Indenture and (ii) any other amounts required to be deposited into the respective accounts within the Repair and Replacement Fund under the Indenture or under the Loan Agreement or the Mortgages and delivered to the Trustee with instructions to deposit the same therein. The Trustee will apply money on deposit in the respective accounts within the Repair and Replacement Fund upon request of a Borrowers’ Representative, but no more frequently than once a month, to pay to or to reimburse a Borrower or the Borrowers for paying the cost of replacements or items of extraordinary maintenance or repair which may be required to keep a respective Project in sound condition, including but not limited to, replacement of appliances, major floor covering replacement, replacement or repair of any roof or other structural component of the Projects, maintenance (including painting) to exterior surfaces and major repairs to or replacements of heating, air conditioning, plumbing and electrical systems, landscaping, storm water drainage, repairs to common area amenities and any other extraordinary costs required for the repair or replacement of the Projects not properly payable from the Operations and Maintenance Reserve Fund or the Revenue Fund but in any case only if there are no funds available in the Project Fund for such purpose.

Upon presentation to the Trustee by a Borrowers’ Representative of a requisition accompanied by a summary of the amount for which payment or reimbursement is sought and, for requests for a particular line item of disbursement in excess of $25,000, copies of bills or statements for the payment of the costs of such repair and replacement (provided that the Trustee will have no duty or obligation to review or approve such bills or statements), the Trustee will pay to the Borrowers the amount of such repair and replacement costs from money then on deposit in the respective accounts within the Repair and Replacement Fund, provided no Event of Default will then exist under the Indenture. If the total amount on deposit in an account within the Repair and Replacement Fund will not be sufficient to pay all of such repair and replacement costs when they will become due, then funds in the Operations and Maintenance Reserve Fund may be disbursed until exhausted, and then the Borrowers will pay the excess amount of such costs directly (which Borrowers’ monies may be reimbursed from monies available in an account within the Repair and Replacement Fund at a later date when they become available).

The monies in the Repair and Replacement Fund will also be used to remedy any deficiency in the Bond Fund on any Interest Payment Date after exhaustion of the Surplus Fund and the Operations and Maintenance Reserve Fund, without any prior consents.

Monies in the Repair and Replacement Accounts can only be used, with the exception of remedying any deficiency in the Bond Fund as described in the Indenture, solely for the respective Projects for which such accounts were created under the Indenture.

Administration Fund. The Trustee will deposit in the Administration Fund (i) money transferred from the Revenue Fund pursuant to the Indenture, and (ii) any other amounts required to be deposited in the Administration Fund pursuant to the Indenture or under the Loan Agreement or the Mortgages with written instructions to deposit the same therein. The Trustee will disburse amounts in the Administration Fund necessary for payment of Administration Expenses then due automatically to the parties due such payment upon presentation of an invoice for payment from such requesting party without any approval of the Borrowers. The Trustee will disburse amounts in the Administration Fund necessary for payment of Extraordinary Trustee’s Fees and Expenses upon presentation of an invoice for payment from the Trustee approved by the Borrowers, which approval will not be unreasonably

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withheld and which will not be required in the event an Event of Default under the Indenture has occurred and is then continuing.

Surplus Fund. The Trustee will deposit into the Surplus Fund, amounts transferred from the Revenue Fund pursuant to the Indenture and any other amounts delivered to it with written instructions to deposit the same in the Surplus Fund. Money in the Surplus Fund will be applied each month, when needed, for the following purposes and in the following manner:

(i) transferred to the Interest Account for the Senior Bonds to pay interest on the Senior Bonds to the extent amounts on deposit in such Interest Account are insufficient therefor;

(ii) transferred to a Principal Account for the Senior Bonds to pay principal on the Senior Bonds to the extent amounts on deposit in such Principal Account are insufficient therefor;

(iii) transferred to the Interest Account for the Subordinate Bonds to pay interest on the Subordinate Bonds to the extent amounts on deposit in such Interest Account are insufficient therefor;

(iv) transferred to the Principal Account for the Subordinate Bonds to pay principal on the Subordinate Bonds to the extent amounts on deposit in such Principal Account are insufficient therefor;

(v) transferred to the Revenue Fund to the extent of any deficiency in the amounts needed to fully make all transfers from the Revenue Fund pursuant to the Indenture (other than to the Surplus Fund);

(vi) transferred to or upon the direction of the Borrowers’ Representative for deposit into a Property Operating Account for the payment of Operating Expenses when the Borrowers’ Representative certifies to the Trustee that there are not sufficient money in the Operating Fund or a Property Operating Account to pay Operating Expenses; and

(vii) pay any unpaid and due Administrative Expenses.

If on or after any Annual Evaluation Date, the Trustee receives a certificate signed by the Borrowers’ Representative stating that (i) the Borrowers have satisfied the Coverage Test for the Fiscal Year ending on such Annual Evaluation Date (as shown in a report by a Certified Public Account delivered by the Borrowers to the Trustee), upon which the Trustee may conclusively rely, (ii) no Event of Default, or event which with the passage of time or the giving of notice or both would constitute an Event of Default, has occurred and is continuing, (iii) the Debt Service Reserve Requirement and the required Repair and Replacement Fund deposits have been fully funded, and (iv) the Borrowers have delivered to the Trustee the financial reports and certificates required under the Loan Agreement, then within two Business Days after written request by the Borrowers’ Representative to the Trustee, the Trustee will disburse from the Surplus Fund to the Borrowers amounts in the Surplus Fund available on the date of disbursement (the “Surplus Cash”) as follows, provided however, such payments of Surplus Cash shall not result in the Borrowers having funds in an amount less than the Liquidity Requirement:

(i) to the Holder of the Series 2017C Bonds, an amount equal to the aggregate accrued and unpaid interest then due on the Series 2017C Bonds; then

(ii) to the Holder of the Series 2017C Bonds, interest then due and payable under the Series 2017C Bonds as of such date; then

(iii) to the Borrowers, 25% of the remaining monies after the payments described in (i) and (ii) above; then

(iv) to the Holder of the Series 2017C Bonds, all remaining monies to be applied towards the payment of principal on the Series 2017C Bonds.

Bonds Not Presented for Payment. In the event any Bonds will not be presented for payment when the principal thereof becomes due on any Bond Payment Date, if money sufficient to pay such Bonds are held by the

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Trustee, the Trustee will segregate and hold such money in trust, without liability for interest thereon, for the benefit of Holders of such Bonds who will, except as provided in the following paragraph, thereafter be restricted exclusively to such funds for the satisfaction of any claim of whatever nature on their part under the Indenture or relating to said Bonds.

Money Held In Trust. All money required to be deposited with or paid to the Trustee for deposit into any Fund or Account (other than the Rebate Fund) and all money withdrawn from the Bond Fund and held by the Trustee will be held by the Trustee, in trust, and such money (other than money held pursuant to the Indenture) will, while so held, constitute part of the Trust Estate and be subject to the lien of the Indenture. Money held in an Account in the Bond Fund will constitute a separate trust fund for the Holders of the related Series and will not constitute property of the Authority or the Borrowers.

Payment to the Borrowers. After the right, title and interest of the Trustee in and to the Trust Estate and all covenants, agreements and other obligations of the Authority to the Holders will have ceased, terminated and become void and will have been satisfied and discharged in accordance with the Indenture, and after payment in full of all Administration Expenses and all fees, expenses and other amounts payable to the Trustee and the Authority pursuant to any provision of the Indenture will have been paid in full, any money remaining in the Funds and Accounts under the Indenture will be paid or transferred to the Borrowers upon the written request of a Borrowers’ Representative; provided that amounts on deposit in the Rebate Fund will be retained therein to the extent required by the Tax Agreement.

Deposit of Extraordinary Revenues. Any money representing Net Proceeds of Insurance Proceeds or Condemnation Awards upon damage to, destruction of or governmental taking of the Projects and deposited with the Trustee pursuant to the Loan Agreement will be deposited by the Trustee in the Project Fund.

At the direction of the Borrowers’ Representative, the Trustee will disburse such money in the Project Fund as provided in the Loan Agreement to enable a Borrower to undertake a restoration of a Project if such restoration is permitted by law; provided that, if a Borrower exercise or is deemed to exercise its option to apply such money to the payment of the Note or the conditions of the Loan Agreement are not satisfied, or an excess of such money exists after restoration of a Project, such money will be transferred by the Trustee to the applicable Special Redemption Account of the Bond Fund and applied to redeem or prepay the Bonds pursuant to the Indenture, in a principal amount equal to the amount so transferred or the next lowest Authorized Denomination of the Bonds.

Title insurance proceeds will be used to remedy any title defect resulting in the payment thereof or deposited in the Bond Fund for use in redeeming Bonds pursuant to the Indenture.

The proceeds of any rental loss, use and occupancy or business interruption insurance will be deposited in the Revenue Fund.

Subordination of Subordinate Bonds and Junior Subordinate Bonds. Deposits made to the Accounts in the Bond Fund for the Subordinate Bonds and payment of Debt Service on the Subordinate Bonds will be subordinate to the deposits to be made to the Accounts in the Bond Fund for the Senior Bonds under the Indenture and to the payment when due of Debt Service on the Senior Bonds. The Accounts in the Bond Fund for any Bonds have been specifically pledged and set aside to secure or provide for the payment of principal of and interest on such Series of Bonds. Payments of Debt Service on the Junior Subordinate Bonds are subordinate to the payment of Debt Service Payments on the Subordinate Bonds.

Investments

Money in all Funds and Accounts established under the Indenture will, at the written direction of the Borrowers’ Representative at least two Business Days before the making of such investment (any oral direction to be promptly confirmed in writing), be invested and reinvested by the Trustee in Investment Securities. Subject to the further provisions of this Section, such investments will be made by the Trustee as directed and designated by the Borrowers’ Representative in a certificate of, or telephonic advice promptly confirmed by a certificate of a Borrowers’ Representative. As long as no Event of Default will have occurred and be continuing, the Borrowers’ Representative will have the right to designate the investments to be sold and otherwise to direct the Trustee in the sale or conversion to cash of the investments made with the money in any Fund or Account. The Borrowers will not

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direct that any investment be made of any funds which would violate the covenants set forth in the Indenture. Unless otherwise confirmed in writing, an account statement delivered by the Trustee to the Borrowers’ Representative will be deemed written confirmation by the Borrowers that the investment transactions identified therein accurately reflect the investment directions given to the Trustee by the Borrowers, unless the Borrowers’ Representative notifies the Trustee in writing to the contrary within 30 days after the date of such statement. Moneys held as part of any fund or account for which no written direction for investment has been given to the Trustee will remain uninvested.

Money in any Fund or Account will be invested in Investment Securities with respect to which payments of principal thereof and interest thereon are scheduled to be paid or are otherwise payable (including Investment Securities payable at the option of the holder) not later than the earlier of (a) the date on which it is estimated that such money will be required by the Trustee, or (b) six (6) months after the date of acquisition thereof by the Trustee.

The Trustee may make any and all such investments through its own banking, trust or investment department or through any affiliate. All income attributable to money deposited in any Fund or Account created under the Indenture will be credited to the Revenue Fund, except that income on money (a) in the Project Fund will be credited to the Project Fund, (b) in the Rebate Fund will be credited to the Rebate Fund, (c) in the Debt Service Reserve Fund will be credited to the Debt Service Reserve Fund to the extent provided in the Indenture and (d) in the Operations and Maintenance Reserve Fund shall be credited to the Operations and Maintenance Reserve Fund to the extent provided in the Indenture. Any net loss realized and resulting from any such investment will be charged to the particular fund or account for whose account such investment was made. The Trustee is authorized and directed to sell and reduce to cash funds a sufficient amount of such investments whenever the cash balance in any fund or account is insufficient to make any withdrawal therefrom as required under the Indenture. The Trustee will not be liable for any depreciation of the value of any investment made pursuant to this Section or for any loss resulting from any such investment on the redemption, sale and maturity thereof.

Investment Securities held in the Debt Service Reserve Fund will be valued at cost on each Interest Payment Date.

The Trustee will at all times maintain accurate records of deposits into each Fund and Account and the sources of such deposits and such records will be made available to the Borrowers upon reasonable written request.

Defeasance

If the Authority will pay or cause to be paid to the Holder of any Bond the principal of, premium, if any, and interest due and payable, and thereafter to become due and payable, upon such Bond, or any portion of such Bond in any Authorized Denomination thereof, such Bond or portion thereof will cease to be entitled to any lien, benefit or security under the Indenture. If the Authority will pay or cause to be paid the principal of, premium, if any, and interest due and payable on all Outstanding Bonds, and thereafter to become due and payable thereon, and will pay or cause to be paid all other sums payable under the Indenture by the Authority, including all fees, compensation and expenses of the Trustee and receipt by the Trustee of an opinion of Counsel that all conditions precedent have been complied with, then the right, title and interest of the Trustee in and to the Trust Estate will thereupon cease, terminate and become void and the Trustee will release or cause to be released the Trust Estate, the Mortgages and any other documents securing the Bonds or execute such documents so as to permit the Trust Estate, the Mortgages and such other documents to be released.

Any Bond will be deemed to be paid within the meaning of this Section and for all purposes of the Indenture when (a) payment of the principal of and premium, if any, on such Bond, plus interest thereon to the due date thereof (whether such due date is by reason of maturity or upon redemption as provided herein) either (i) will have been made or caused to be made in accordance with the terms thereof or (ii) will have been provided for by any irrevocable deposit with the Trustee in trust and irrevocably set aside exclusively for such payment of, (A) funds sufficient to make such payment and/or (B) Government Obligations maturing as to principal and interest in such amounts and at such times as will insure the availability of sufficient money to make such payment, and (b) all fees, compensation and expenses of the Trustee pertaining to the Bond with respect to which such deposit is made accrued and to accrue until final payment of the Bonds, whether at maturity or upon redemption, will have been paid or the payment thereof provided for to the satisfaction of the Trustee. At such times as a Bond will be deemed to be

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paid under the Indenture, as aforesaid, such Bond will no longer be secured by or entitled to the benefits of the Indenture, except for the purposes of any such payment from such funds or Government Obligations.

Notwithstanding the foregoing paragraph, no deposit under clause (a)(ii) of the immediately preceding paragraph will be deemed a payment of such Bond as aforesaid until the Authority or the Borrowers’ Representative, on behalf of the Authority, will have given the Trustee, in form satisfactory to the Trustee, irrevocable written instructions to notify, as soon as practicable, the Holders in accordance with Section 3.06 of the Indenture, that the deposit required by (a)(ii) above has been made with the Trustee and that said Bond is deemed to have been paid in accordance with the Indenture and stating the maturity or redemption date upon which money is to be available for the payment of the redemption price of said Bond, plus interest thereon to the due date thereof; or (b) the maturity of such Bond. In addition to the foregoing, no deposit described in clause (a)(ii) of the immediately preceding paragraph will be deemed a payment of said Bond until the Borrowers have delivered to the Trustee (i) a report of an Independent Certified Public Accountant verifying the sufficiency of the amounts, if any, described in (a)(ii) above to insure payment of such Bond, and (ii) a Favorable Opinion of Bond Counsel addressed to the Authority and the Trustee to the effect that such deposit will not adversely affect the exclusion of interest on the Tax-Exempt Bonds from the gross income of the recipients thereof for federal income tax purposes.

Defaults and Remedies

Events of Default. Each of the following events will constitute an “Event of Default” under the Indenture with respect to the Bonds:

(a) While any Senior Bonds are Outstanding:

(1) a failure to pay the principal of or premium, if any, on any of the Senior Bonds when the same will become due and payable at maturity or upon redemption;

(2) a failure to pay an installment of interest on any of the Senior Bonds when the same will become due and payable;

(b) If no Senior Bonds are Outstanding:

(1) a failure to pay the principal of or premium, if any, on any of the Subordinate Bonds when the same will become due and payable at maturity or upon redemption;

(2) a failure to pay an installment of interest on any of the Subordinate Bonds when the same will become due and payable;

(c) a failure by the Authority to observe and perform any other covenant, condition, agreement or provision (other than as specified in subparagraphs (a) and (b) of this Section) contained in the Bonds or in the Indenture on the part of the Authority to be observed or performed with respect to the Bonds, which failure will continue for a period of thirty (30) days after written notice is provided by the Trustee specifying such failure and requesting that it be remedied, will have been given to the Authority by the Trustee, which may give such notice in its discretion and will give such notice at the written request of the Controlling Holders, unless the Trustee, or the Trustee and Holders which requested such notice, as the case may be, will agree in writing to an extension of such period prior to its expiration; provided, however, that the Trustee, or the Trustee and the Holders of such Bonds, as the case may be, will be deemed to have agreed to an extension of such period if corrective action is initiated by the Authority within such period and is being diligently pursued; provided, further that in no event will such period be extended for more than 180 days after the date of giving of notice of such failure without the consent of the Controlling Holders; or

(d) the occurrence of a “Default” under the Loan Agreement or an “Event of Default” under the Mortgages.

Acceleration; Other Remedies. Upon the occurrence and continuance of an Event of Default, the Trustee, subject to the provisions of the Indenture, may, and at the written request of the Controlling Holders (or in the case of an Event of Default under the Indenture, unanimous written request of the Holders of the Bond Obligation for the

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Senior Bonds, if any Senior Bonds remain Outstanding or unanimous written request of the Holders of the Bond Obligation for the Subordinate Bonds if no Senior Bonds remain Outstanding) will, by written notice to the Authority and the Borrowers, declare the Bonds to be immediately due and payable, whereupon such Bonds will, without further action, become and be immediately due and payable, anything in the Indenture or in the Bonds to the contrary notwithstanding, and the Trustee will give notice thereof to the Authority and the Rating Agency, and will give notice thereof by Mail to Holders the Bonds.

Notwithstanding any other provision of the Indenture to the contrary, (i) if an Event of Default with respect to the payment of the principal of or interest on the Subordinate Bonds occurs (but an Event of Default does not exist with regard to the Senior Bonds) while any Senior Bonds remain Outstanding, then the Trustee will not accelerate the Bonds and will not exercise any of the other remedies available pursuant to the Indenture or applicable law without the consent of the Holders of all of the Senior Bonds.

The provisions of the preceding paragraph are subject to the condition that if, after the principal of the Bonds will have been so declared to be due and payable, and before any judgment or decree for the payment of the money due will have been obtained or entered as hereinafter provided, (i) the Authority will, but only from any payment received from the Borrowers for such purpose, deposit with the Trustee a sum sufficient to pay all matured installments of interest on all Bonds and the principal of any and all Bonds which will have become due otherwise than by reason of such declaration (with interest on such principal on the Default Rate) and such amount as will be sufficient to pay Extraordinary Trustee’s Fees and Expenses, and (ii) all Events of Default under the Indenture with respect to the Bonds other than nonpayment of the principal of such Bonds which will have become due by said declaration will have been remedied, then, in every such case, upon the written consent of the Controlling Holders provided to the Trustee, such Event of Default will be deemed waived and such declaration and its consequences rescinded and annulled, and the Trustee will promptly give written notice of such waiver, rescission or annulment to the Authority and the Rating Agency, and will give notice thereof by Mail to all Holders of Bonds; but no such waiver, rescission and annulment will extend to or affect any subsequent Event of Default or impair any right or remedy consequent thereon.

Upon the occurrence and continuance of any Event of Default, then and in every such case the Trustee in its discretion may, and upon the written direction of the Controlling Holders and receipt of indemnity to its satisfaction will, in its own name and as the Trustee of an express trust, perform any or all of the following:

(a) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Holders under the Indenture or the applicable Bonds, including without limitation requiring the Authority or the Borrowers to carry out any agreements with or for the benefit of the Holders and to perform its or their duties under the Act, the Loan Agreement, the Mortgages, the Land Use Restriction Agreements and the Indenture, provided that any such remedy may be taken only to the extent permitted under the applicable provisions of the Loan Agreement, the Mortgages, the Land Use Restriction Agreements or the Indenture, as the case may be;

(b) bring suit upon the Bonds;

(c) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Holders of Bonds;

(d) foreclose the Mortgages;

(e) file proofs of claim in any bankruptcy or insolvency proceedings related to the Authority, the Borrowers or the Project, necessary or appropriate to protect the interests of the Trustee or the Holders of the Bonds;

(f) exercise any rights and remedies with respect to the Trust Estate as may be available to a secured party under the Uniform Commercial Code in effect in the applicable state.

Notwithstanding anything herein to the contrary, neither the Holders of the Bonds nor the Trustee acting on behalf of the Holders of the Bonds will have any right, and hereby waive any right, to institute a proceeding under the Bankruptcy Code seeking to adjudge the Authority or the Borrowers insolvent or a bankrupt or seeking a reorganization of the Authority or the Borrowers.

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Restoration to Former Position. In the event that any proceeding taken by the Trustee to enforce any rights under the Indenture will have been discontinued or abandoned for any reason, or will have been determined adversely to the Trustee, then the Authority, the Trustee and the Holders will be restored to their former positions and rights under the Indenture, respectively, and all rights, remedies and powers of the Trustee will continue as though no such proceeding had been taken.

Cure by Holders. Any Holder of Bonds may, but will not be obligated to, cure an Event of Default under the Indenture, including the advancing of funds (“Advanced Funds”) to the Trustee for payments required under the Indenture, or to indemnify the Trustee under the Indenture. Any Advanced Funds are to be applied by the Trustee in accordance with the instructions of the Holder providing the same; provided, however, that such Holder will not have a right or interest in the Advanced Funds that is superior to any right or interest any other party has under the Indenture.

Controlling Holders’ Right to Direct Proceedings. Anything in the Indenture to the contrary notwithstanding, the Controlling Holders will have the right, by an instrument in writing executed and delivered to the Trustee, to direct the time, method and place of conducting all remedial proceedings available to the Trustee under the Indenture or exercising any trust or power conferred on the Trustee by the Indenture.

Limitation on Holders’ Right to Institute Proceedings. Unless otherwise provided for in the Indenture, no Holder will have any right to institute any suit, action or proceeding in equity or at law for the execution of any trust or power under the Indenture, or any other remedy under the Indenture or on said Bonds, unless such Holder previously will have given to the Trustee written notice of an Event of Default as hereinabove provided and unless also the Holders of not less than a majority of the Bond Obligation will have made written request of the Trustee to do so after the right to institute said suit, action or proceeding under the Indenture will have accrued, and will have afforded the Trustee a reasonable opportunity to proceed to institute the same in either its or their name, and the Trustee will not have complied with such request within a reasonable time. No one or more of the Holders of the Bonds will have any right in any manner whatever by its or their action to affect, disturb or prejudice the security of the Indenture, or to enforce any right under the Indenture or under the Bonds, except in the manner herein provided, and all suits, actions and proceedings at law or in equity will be instituted, had and maintained in the manner herein provided and for the equal benefit of all Holders of Bonds. Notwithstanding anything to the contrary, the furnishing of indemnity to the Trustee as provided in Section 9.06 of the Indenture is hereby declared in every such case, at the option of the Trustee, to be a condition precedent to the institution of said suit, action or proceeding by the Trustee.

No Remedy Exclusive. No remedy conferred upon or reserved to the Trustee or to Holders is intended to be exclusive of any other remedy or remedies, and each and every such remedy will be cumulative, and will be in addition to every other remedy given under the Indenture, or now or hereafter existing at law or in equity or by statute; provided, however, that any conditions set forth in the Indenture to the taking of any remedy to enforce the provisions of the Indenture or the Bonds will also be conditions to seeking any remedies provided in this summary.

No Waiver of Remedies. No delay or omission of the Trustee or of any Holder to exercise any right or power accruing upon any default will impair any such right or power or will be construed to be a waiver of any such default, or an acquiescence therein; and every power and remedy given by the Indenture to the Trustee and to the Holders, respectively, may be exercised from time to time and as often as may be deemed expedient.

Application of Money. If an Event of Default occurs with respect to the Bonds, any money held in any Fund or Account under the Indenture (excluding the Rebate Fund) or received by any receiver or by the Trustee, by any receiver or by any Holder pursuant to any right given or action taken under the provisions of the Indenture, after payment of (i) the fees, expenses, liabilities or advances payable to or incurred or made by the Trustee, the Trustee Indemnified Persons, the Authority, the Authority Indemnified Persons (including without limitation, indemnification and all other payments due to the Authority and any Authority Indemnified Person in respect of Unassigned Rights) or any Holder; provided, that payment of amounts due to the Authority or the Authority Indemnified Persons under this Section shall not absolve the Borrowers from liability therefore except to the extent of the amounts received from the Trustee, (ii) the costs and expenses of the proceedings resulting in the collection of such money, and (iii) Operating Expenses of the Projects as determined to be appropriate by the Trustee (and the Trustee may, in its discretion, rely on the direction of the Controlling Holders or the Budget to make such determination), will be deposited in the Revenue Fund; and all money so deposited in the Revenue Fund during the continuance of an Event of Default (other than money for the payment of Bonds which have matured or otherwise

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become payable prior to such Event of Default or for the payment of interest due prior to such Event of Default) will be applied (except as otherwise provided in the Indenture with respect to money deposited in a Bond Fund Account for the benefit of the Holders of the Bonds) as follows:

(a) Unless the principal of all the Bonds will have been declared due and payable, all such money will be applied (A) first, together with any amounts on deposit in the Debt Service Reserve Account relating to the Senior Bonds, to the payment to the persons entitled thereto of all installments of interest then due on the Senior Bonds and any Senior Parity Indebtedness, with interest on overdue installments, if lawful, at the Default Rate, in the order of maturity of the installments of such interest and, if the amount available will not be sufficient to pay in full any particular installment of interest, then to the payment ratably, according to the amounts due on such installment of interest on the Senior Bonds and any Senior Parity Indebtedness on a parity and pro rata basis, (B) second, together with any amounts on deposit in the Debt Service Reserve Accounts relating to the Senior Bonds, to the payment to the persons entitled thereto of the unpaid principal of any of the Senior Bonds and any Senior Parity Indebtedness which will have become due (other than Senior Bonds called for redemption for the payment of which money is held pursuant to the provisions of the Indenture) with interest on such Senior Bonds and any Senior Parity Indebtedness at the Default Rate from the respective dates upon which they became due and, if the amount available will not be sufficient to pay in full Senior Bonds and any Senior Parity Indebtedness due on any particular date, together with such interest, then to the payment ratably, according to the amount of principal and interest due on such date, in each case to the persons entitled thereto, without any discrimination or privilege, (C) third, together with any amounts on deposit in the Debt Service Reserve Account relating to the Subordinate Bonds and any Subordinate Parity Indebtedness, to the payment to the persons entitled thereto of all installments of interest then due on the Subordinate Bonds with interest on overdue installments, if lawful, at the Default Rate, in the order of maturity of the installments of such interest and, if the amount available will not be sufficient to pay in full any particular installment of interest, then to the payment ratably, according to the amounts due on such installment of interest on the Subordinate Bonds and any Subordinate Parity Indebtedness on a parity and pro rata basis; and (D) fourth, together with any amounts on deposit in the Debt Service Reserve Account relating to the Subordinate Bonds, to the payment to the persons entitled thereto of the unpaid principal of any of the Subordinate Bonds and any Subordinate Parity Indebtedness which will have become due (other than the Subordinate Bonds called for redemption the payment of which money is held pursuant to the provisions of the Indenture) with interest on such Subordinate Bonds and any Subordinate Parity Indebtedness at the Default Rate from the respective dates upon which they became due and, if the amount available will not be sufficient to pay in full the Subordinate Bonds and any Subordinate Parity Indebtedness due on any particular date, together with such interest, then to the payment ratably, according to the amount of principal and interest due on such date, in each case to the persons entitled thereto, without any discrimination or privilege.

(b) If the principal of all the Bonds will have been declared due and payable, all such moneys will be applied: (A) first, to the payment of the principal and interest then due and unpaid upon the Senior Bonds and any Senior Parity Indebtedness, with interest on overdue interest and principal, as aforesaid at the Default Rate, if lawful, without preference or priority of principal over interest or interest over principal, or of any installment of interest over any other installment of interest, or of any Senior Bond or any Senior Parity Indebtedness over any other Senior Bond or any Senior Parity Indebtedness ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or privilege and (B) second, to the payment of the principal and interest then due and unpaid upon the Subordinate Bonds and any Subordinate Parity Indebtedness, with interest on overdue interest and principal, as aforesaid at the Default Rate, if lawful, without preference or priority of principal over interest or interest over principal, or of any installment of interest over any other installment of interest, or of any Subordinate Bond or any Subordinate Parity Indebtedness over any other Subordinate Bond or any Subordinate Parity Indebtedness, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or privilege.

(c) If the principal of all the Bonds will have been declared due and payable, and if such declaration will thereafter have been rescinded and annulled under the provisions of the Indenture, then, subject to the provisions of clause (b) of this Section which will be applicable in the event that the principal of all the Bonds will later become due and payable, the money will be applied in accordance with the provisions of clause (a) of this Section.

Whenever money is to be applied pursuant to the provisions of this Section, such money will be applied at such times, and from time to time, as the Trustee will determine, having due regard to the amount of such money

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available for application and the likelihood of additional money becoming available for such application in the future. Whenever the Trustee will apply such funds, it will fix the date (which will be an Interest Payment Date unless it will deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal and interest to be paid on such date will cease to accrue. The Trustee will give notice of the deposit with it of any such money and of the fixing of any such date by Mail to all Holders of the Bonds and will not be required to make payment to any Holder of a Bond until such Bond will be presented to the Trustee for appropriate endorsement or for cancellation if fully paid.

Notice of Event of Default. If an Event of Default occurs and continues for five (5) Business Days after the Trustee has received written notice of the same as provided in the Indenture, then the Trustee will give notice thereof by Mail to the Holders, the Borrowers, the Authority and the Rating Agency.

Trustee

Limitations on Liability. The Trustee may execute any of the trusts or powers under the Indenture and perform the duties required of them under the Indenture by or through attorneys, agents, receivers or employees selected by them, and will be entitled to advice of counsel concerning all matters of trust and its duty under the Indenture and to obtain the opinion of Counsel acceptable to the Trustee prior to taking action under the Indenture, and may in all cases pay such reasonable compensation to all such attorneys, agents, receivers or employees as is deemed necessary in connection with the performance of the Trustee’s duties under the Indenture, and the Trustee will not be answerable for the default or misconduct of any such attorney, agent or employee selected by it. The Trustee may act upon the advice of any attorney and the Trustee will not be responsible for any loss or damage from any action or non-action taken upon such opinion or advice. Without limitation, the Trustee will be entitled to the benefit of the foregoing sentence with respect to the delegation to the Trustee’s duties under the Indenture with respect to payment of principal, premium, if any, or interest on, or redemption of, the Bonds, the authentication and delivery thereof, and exchange and transfer thereof. The Trustee will not be answerable for the exercise of any discretion or power under the Indenture or for anything whatsoever in connection with the trust created hereby, except only for its own negligence or willful misconduct.

Notice of Events of Default. The Trustee will not be required to take notice, or be deemed to have notice, of any default or Event of Default under the Indenture, other than a failure to pay principal or interest on the Bonds, unless a Responsible Officer of the Trustee will have received actual knowledge or will have been specifically notified in writing of such default or Event of Default by the Authority, the Borrowers or by the Holders of at least 25% of the Bond Obligation. The Trustee may, however, at any time, in its discretion, and will, upon the request of at least 25% of the Bond Obligation, require of the Borrowers full information and advice as to the performance of any of the covenants, conditions and agreements contained herein.

Resignation of Trustee. The Trustee may resign and be discharged of the trusts created by the Indenture by executing an instrument in writing resigning such trust and specifying the date when such resignation will take effect, and filing the same with the Authority and the Borrowers, and by giving notice of such resignation by Mail, not less than 15 days prior to such resignation date, to all Holders. Such resignation will only take effect on the day a successor Trustee will have been appointed as hereinafter provided.

Removal of Trustee. The Trustee may be removed at any time by the Borrowers or by the Holders of not less than a majority of the Bond Obligation with the consent of the Borrowers (not to be unreasonably withheld), by filing with the Trustee so removed, and with the Authority an instrument or instruments in writing appointing a successor, executed by a Borrowers’ Representative if the Trustee has been removed by the Borrowers (and notice thereof given by Mail to the Holders and the Authority), or executed by said Holders of Bonds if the Trustee was removed by said Holders; provided that the Borrowers may not remove the Trustee, and the consent of the Borrowers will not be required (in the case of removal by the Holders), if an Event of Default has occurred and is continuing under the Indenture or a Default has occurred and is continuing under the Loan Agreement.

Appointment of Successor Trustee.

If at any time the Trustee will resign, be removed, or be dissolved, or if its property or affairs will be taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy, or for any other reason become incapable of acting, then a vacancy will forthwith and ipso facto exist in the office of Trustee

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and the Borrowers, with written notice to the Authority, will promptly appoint a successor Trustee. Any such appointment will be made by a written instrument executed by a Borrowers’ Representative. Copies of such instrument will be promptly delivered by the Borrowers to the predecessor Trustee and to the Trustee so appointed. The successor Trustee will give notice of such appointment by Mail, at least once within 30 days of such appointment, to all Holders. If, in a proper case, no appointment of a successor Trustee will be made pursuant to the preceding paragraph within 60 days after the receipt by the Authority and the Borrowers of the Trustee’s notice of resignation given pursuant to the Indenture or of removal of the Trustee pursuant to the Indenture, the retiring Trustee, at the expense of the Borrowers, or any Holder may apply to any court of competent jurisdiction to appoint a successor Trustee. The court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee. Any new Trustee so appointed as presented in the Indenture will immediately and without further act be superseded by a Trustee appointed in the manner above provided.

Qualifications of Trustee. The Trustee and every successor Trustee, if any, (a) will be a bank or trust company duly organized under the laws of the United States or any state thereof authorized by law to perform all the duties imposed upon it by the Indenture, (b) will at the time of appointment have trust assets under management of at least $500,000,000, (c) will be permitted under applicable law to perform the duties of Trustee and (d) will be acceptable to the Authority.

Judicial Appointment of Trustee. If at any time the Trustee resigns and no appointment of a successor Trustee is made prior to the date specified in the notice of resignation as the date when such resignation is to take effect and otherwise in accordance with the Indenture, the resigning Trustee may forthwith apply to a court of competent jurisdiction for the appointment of a successor Trustee. If no appointment of a successor Trustee is made pursuant to the Indenture within six (6) months after a vacancy shall have occurred in the office of Trustee, any Holder may apply to any court of competent jurisdiction to appoint a successor Trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor Trustee.

Paying Agent. The Authority is appointing the Trustee as the paying agent for the Bonds.

Modification of Bond Documents

Limitations. Neither the Indenture nor any of the Borrowers’ Documents will be amended in any respect subsequent to the Closing Date except as provided in and in accordance with and subject to the provisions of the Indenture. Notwithstanding any provisions of the Indenture, the Tax Agreement and the Land Use Restriction Agreements may be amended pursuant to the provisions thereof.

Supplemental Indentures Without Holder Consent. The Authority and the Trustee may, from time to time and at any time, without the consent of any Holder and with prompt notice to the Holders and the Rating Agency, enter into Supplemental Indentures as follows:

(i) to cure any formal defect, omission, inconsistency or ambiguity in the Indenture;

(ii) to add to the covenants and agreements of the Authority in the Indenture other covenants and agreements, or to surrender any right or power reserved or conferred upon the Authority if such surrender will not, in the judgment of the Trustee, materially adversely affect the interests of the Holders, the Trustee being authorized to rely on an opinion of Counsel with respect thereto;

(iii) to confirm, as further assurance, any pledge of or lien on the Loan Agreement or of any other moneys, securities or funds subject to the lien of the Indenture;

(iv) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended;

(v) to preserve the exclusion of interest on the Tax-Exempt Bonds from gross income for federal income tax purposes, as set forth in an opinion of Bond Counsel;

(vi) to make changes in order to obtain, maintain or restore the rating of the Bonds from the Rating Agency;

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(vii) to provide for any amendment specifically authorized or required by any provision of the Indenture;

(viii) in connection with any Additional Bonds or Parity Indebtedness; or

(ix) with respect to any other Amendment which does not have a material adverse effect on the Holders of the Bonds.

Supplemental Indentures Requiring Holders’ Consent. Except for any Supplemental Indenture entered into and not requiring the consent of the Holders, subject to the terms and provisions contained in this Section and not otherwise, Holders of not less than a majority of the Bond Obligation will have the right from time to time to consent to and approve the execution and delivery by the Authority and the Trustee of any Supplemental Indenture deemed necessary or desirable by the Authority for the purposes of modifying, altering, amending, supplementing or rescinding, in any particular, any of the terms or provisions contained in the Indenture; provided, however, that, unless approved in writing by all Holders of Bonds, nothing herein contained will permit, or be construed as permitting, (i) a change in the times, amounts or currency of payment of the principal of or interest on any Outstanding Bond or a reduction in the principal amount or redemption price of any Outstanding Bond or the rate of interest borne thereon (ii) the creation of a claim or lien upon, or a pledge of, the Trust Estate ranking prior to or on a parity with the claim, lien or pledge created by the Indenture, (iii) a reduction in the aggregate amount of the Bond Obligation or (iv) any change to the subheading “Subordination of Subordinate Bonds” hereof relating to the subordination of the Subordinate Bonds.

Amendment of Borrowers’ Documents Without Holder Consent. Without the consent of but with notice to the Holders, the Trustee may consent to any Amendment of any Borrowers’ Document from time to time as follows:

(i) to cure any formal defect, omission, inconsistency or ambiguity in such Borrowers’ Document;

(ii) to add to the covenants and agreements of the Authority or the Borrowers in such document other covenants and agreements, or to surrender any right or power reserved or conferred upon the Authority or the Borrowers, if such surrender will not, in the judgment of the Trustee, materially adversely affect the interests of the Holders, the Trustee being authorized to rely on an opinion of Counsel with respect thereto;

(iii) to confirm, as further assurance, any lien on or pledge of the Projects or the revenues therefrom or of any other property, money, securities or funds subject to the Mortgages or any other security for the Loan Agreement;

(iv) to preserve the exclusion of interest on the Tax-Exempt Bonds from gross income for federal income tax purposes, as set forth in an opinion of Bond Counsel;

(v) to make changes required to obtain or maintain the rating on the Bonds from the Rating Agency;

(vi) to provide for any amendment specifically authorized or required by any provision of any Borrowers’ Document;

(vii) in connection with any Additional Bonds or Parity Indebtedness; or

(viii) with respect to any other Amendment which does not have a material adverse effect on the Holders of the Bonds.

Amendment of Borrowers’ Documents Requiring Holder Consent. Except in the case of Amendments referred to under the heading “Amendment of Borrowers’ Documents Without Holder Consent,”

the Authority and the Trustee will not enter into, and will not consent to, any amendment of the Borrowers’ Documents without the written approval or consent of the Holders of the Bonds then Outstanding, given and procured as provided under the heading “Procedures for Amendments;” provided that the foregoing will not permit

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or be construed as permitting any change referred to in clause (i) under the heading “Supplemental Indentures Requiring Holders’ Consent” (substituting for such purpose the word “Note” for the word “Bond”) without the consent of all Holders given and obtained in the manner set forth under such heading. If at any time the Authority requests the consent of the Trustee to any such proposed modification, alteration, amendment or supplement, the Trustee will, at the sole expense of the Borrowers, cause notice thereof to be given in the same manner as provided under the heading “Procedures for Amendments” with respect to Supplemental Indentures. Such notice will briefly set forth the nature of such proposed modification, alteration, amendment or supplement and will state that copies of the instrument embodying the same are on file at the Designated Office of the Trustee for inspection by all Holders. The Authority and the Trustee may enter into, or may consent to, any such proposed modification, alteration, amendment or supplement subject to the same conditions and with the same effect as provided under the heading “Supplemental Indentures Requiring Holders’ Consent” with respect to Supplemental Indentures.

Procedures for Amendments. If at any time the Trustee will be requested to enter into any Supplemental Indenture requiring the consent of the Holders or to consent to any Amendment to Borrowers’ Documents requiring the consent of the Holders, the Trustee will, at the sole expense of the Borrowers, cause notice of the proposed Supplemental Indenture or other Amendment to be given by Mail to all Holders. Such notice will briefly set forth the nature of the proposed Supplemental Indenture or other amendment and will state that a copy thereof is on file at the office of the Trustee for inspection by all Holders. No more than two (2) months after the date of the first giving of such notice, the Authority and the Trustee may enter into such Supplemental Indenture or the Trustee may consent to such Amendment in substantially the form described in such notice, but only if there will have first been delivered to the Trustee (i) the required consents, in writing, of Holders and (ii) the opinion of Bond Counsel required by the Indenture.

If Holders of not less than the amount of Bond Obligation required under the headings “Supplemental Indentures Requiring Holders’ Consent” and “Amendment of Borrowers’ Documents Requiring Holders’ Consent”, as applicable, will have consented to and approved the execution and delivery thereof as provided in the Indenture, no Holder will have any right to object to the execution and delivery of such Supplemental Indenture, or other Amendment, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the execution and delivery thereof, or to enjoin or restrain the Authority or the Trustee from executing and delivering or consenting to the same or from taking or permitting any action pursuant to the provisions thereof.

Opinions; Certificate. The Trustee will not enter into or consent to any Amendment of any provision of any Bond Document unless there will have been delivered to the Authority and the Trustee an opinion of Bond Counsel stating that such Amendment is authorized or permitted by the applicable Bond Documents and such Amendment will not adversely affect the exclusion of interest on the Tax–Exempt Bonds from the gross income of the recipients thereof for federal income tax purposes. In addition, the Trustee (i) may obtain, and will be protected in relying on, an opinion of Counsel to the effect that such Amendment is authorized or permitted by the Indenture and complies with the terms under the Indenture; and (ii) may require, as a condition to entering into or consenting to any such Amendment, a Compliance Certificate from the Borrowers.

Effect of Amendments; Other Consents. Upon the execution and delivery of any Supplemental Indenture or any Amendment to a Borrowers’ Document pursuant to the Indenture or such Borrowers’ Document will be, and be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under the Bond Documents of the Authority, the Trustee, the Borrowers and all Holders will thereafter be determined, exercised and enforced under the Bond Documents subject in all respects to such modifications and amendments.

Notwithstanding anything herein to the contrary, (i) the Trustee will not be required to enter into or consent to any Amendment of any Bond Document which, in the sole judgment of the Trustee, might adversely affect the rights, obligations, powers, privileges, indemnities, immunities or other security provided the Trustee herein or therein; and (ii) except as otherwise required hereby, the Trustee will not enter into or consent to any Amendment of any Bond Document which affects the rights or obligations of the Borrowers or the Authority unless the Borrowers or the Authority enters into or consents to such Amendment.

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THE LOAN AGREEMENT

The following is a brief summary of certain provisions of the Loan Agreement. The summary does not purport to be complete or definitive and is qualified in its entirety by reference to the Loan Agreement, a copy of which is on file with the Trustee.

Issuance of Series 2017 Bonds; Deposit of Proceeds

Under the Loan Agreement, to provide funds to assist the Borrowers in financing the acquisition, renovation, furnishing and equipping of the Projects, the Authority, concurrently with the execution and delivery of the Loan Agreement, and upon satisfaction of the conditions to the delivery of the Series 2017 Bonds set forth the Indenture, will issue, sell and deliver the Series 2017 Bonds and will deposit the proceeds of the Series 2017 Bonds with the Trustee in accordance with the Indenture.

The Loan; Basic Loan Payments; and Additional Payments

The Borrowers will cause all Project Revenues to be deposited with the Trustee upon receipt by the Borrowers or the Manager. The Project Revenues will be used to pay the Basic Loan Payments and the Additional Loan Payments, as provided in subparagraph (ii) below.

(i) Basic Loan Payments. The Project Revenues will be used to pay, as Basic Loan Payments, the following amounts:

(1) on or before the 12th day of each month, commencing August 12, 2017, until such time as the principal of and the premium, if any, and interest on, the Bonds will have been paid in full, or provisions made for such full payment in accordance with the provisions of the Indenture, to the Trustee for deposit in the Interest Account in the Bond Fund provided for in the Indenture, a sum equal to the Interest Requirement on then Outstanding Bonds for such month; and

(2) on or before the 12th day of each month, commencing August 12, 2017, to the Trustee for deposit in the respective Principal Account in the Bond Fund, a sum equal to the Principal Requirement on then Outstanding Bonds for such month.

The monthly installments of Basic Loan Payments described in (1) and (2) above payable by the Borrowers under the Loan Agreement are expected to equal in the aggregate an amount that, with other funds in the respective Accounts in the Bond Fund then available for the payment of principal and interest on the Bonds, will be sufficient to provide for the payment in full of the interest on, premium, if any, and principal on the Bonds as they become due and payable.

Except as otherwise provided in the Indenture, the Project Revenues will also be used to pay, as Basic Loan Payments, to the Trustee for deposit in the Bond Fund, such amounts as will, together with any other money available, therefor be sufficient to pay all amounts, if any, required to redeem each Series of Bonds pursuant to the provisions of Article III of the Indenture as and when they become subject to redemption pursuant thereto, together with any related redemption premium associated therewith, with all such payments to be made by the Borrowers to the Trustee, for deposit into the Bond Fund Accounts on or before the date such money is required by said provisions of the Indenture.

(ii) Additional Loan Payments. In addition to the Basic Loan Payments, the Borrowers will cause the Project Revenues to be remitted to the Trustee from time to time in amounts fully sufficient to timely pay the following costs and expenses (to the extent such costs and expenses are not paid from the proceeds of the sale of the Bonds), which are the Additional Loan Payments:

(1) the Ordinary Trustee’s Fees and Expenses and Extraordinary Trustee’s Fees and Expenses, and all other fees and other costs of the Trustee, including without limitation, reasonable fees and expenses of counsel to the Trustee, payable to the Trustee for services or indemnity under the Indenture and the Borrowers’ Documents (including services in connection with the administration and enforcement thereof and compliance therewith);

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(2) the reasonable fees and expenses of such accountants, consultants, attorneys and other experts as may be engaged by the Authority or the Trustee to prepare audits, financial statements, reports, opinions or provide such other services required under the Loan Agreement, the Borrowers’ Documents or the Indenture, including, but not limited to, any audit or inquiry by the Internal Revenue Service or any other governmental body;

(3) the Authority Annual Fee and the reasonable fees and expenses of the Authority or any agent or attorney selected by the Authority to act on its behalf in connection with the Loan Agreement, the Borrowers’ Documents, the Bonds or the Indenture, including, without limitation, any and all reasonable expenses incurred in connection with the authorization, issuance, sale and delivery of any such Bonds or in connection with any litigation, investigation, inquiry or other proceeding which may at any time be instituted involving the Loan Agreement, the Borrowers’ Documents, the Bonds or the Indenture or any of the other documents contemplated thereby, or in connection with the reasonable supervision or inspection of the Borrowers, their properties, assets or operations or otherwise in connection with the administration of the Loan Agreement and the Borrowers’ Documents;

(4) all taxes and assessments of any type or character charged to the Authority or to the Trustee affecting the amount available to the Authority or the Trustee from payments to be received under the Loan Agreement or in any way arising due to the transactions contemplated hereby (including taxes and assessments assessed or levied by any public agency or governmental authority of whatsoever character having power to levy taxes or assessments); provided, however, that the Borrowers will have the right to protest any such taxes or assessments and to require the Authority or the Trustee, at the Borrowers’ expense, to protest and contest any such taxes or assessments levied upon them and that the Borrowers will have the right to withhold payment of any such taxes or assessments pending disposition of any such protest or contest unless such withholding, protest or contest would adversely affect the rights or interests of the Authority or the Trustee;

(5) all amounts advanced by the Authority or the Trustee under authority of the Indenture or any of the Borrowers’ Documents that the Borrowers are obligated to repay;

(6) any amounts required to be deposited in the Debt Service Reserve Fund in order to satisfy the applicable Debt Service Reserve Requirement pursuant to the Indenture; and should funds be withdrawn from a Debt Service Reserve Requirement, the Borrowers will restore the difference between the amount on deposit in the Debt Service Reserve Fund and the related Debt Service Reserve Requirement from the next available deposits of Project Revenues and other deposits to the Revenue Fund made in accordance with the Indenture;

(7) amounts sufficient to maintain balances in the Repair and Replacement Fund and the Insurance and Tax Escrow Fund, equal to the amounts required pursuant to the Indenture;

(8) all fees and expenses of the Rebate Analyst to provide the rebate calculations required under the Tax Agreement, and if a deposit is required to be made to the Rebate Fund as a result of any calculation made pursuant to the Tax Agreement, the Borrowers will cause to be paid from Project Revenues the amount of such deposit in accordance with the terms of the Indenture;

(9) amounts required to be deposited in the Operating Fund sufficient to pay the Operating Expenses of the Projects, as provided for in the Budget and in the Indenture;

(10) the Dissemination Agent Fee payable in accordance with and as provided under the Indenture and Continuing Disclosure Agreement;

(11) the Rating Agency Fee; and

(12) the costs and expenses associated with any audit of the Tax-Exempt Bonds by the Internal Revenue Service;

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Such Additional Payments shall be billed to the Borrowers by the Authority or the Trustee from time to time, together with a statement certifying that the amount billed has been incurred or paid by the Authority or the Trustee for one or more of the above items. After such demand, amounts so billed shall be paid by the Borrowers within forty-five (45) days after receipt of the invoice by the Borrowers. Notwithstanding the foregoing, the Authority may, but shall not be required to, submit a bill to the Borrowers for payment of the Authority Annual Fee. Such annual fee shall be paid in semiannual installments on the six (6)-month anniversary of the Closing Date and subsequently on the same day every sixth (6th) month thereafter. The amount of each semiannual payment shall be in an amount determined by multiplying (i) the principal amount of Bonds Outstanding as of the last day of the calendar month preceding the installment payment due date by (ii) 0.03% percent by (iii) one-half (1/2). Any invoice furnished to the Borrowers by the Authority or the Trustee pursuant to the provisions of the Loan Agreement shall be deemed to constitute a written notice sufficient to commence the 45-day notice period specified in the Loan Agreement.

(iii) As security for its obligations to make the payments described in subsections (i) and (ii) above, the Borrowers will pay all Project Revenues from the Projects, upon receipt, to the Trustee for deposit in the Revenue Fund.

(iv) In the event the Borrowers will fail to pay, or fail to cause to be paid, any Loan Payments (except to the extent certain amounts due in connection with the Loan and the Bonds are paid from amounts on deposit in the Debt Service Reserve Fund, the Repair and Replacement Fund, the Operations and Maintenance Reserve Fund or the Surplus Fund), the payment not paid will continue as an obligation of the Borrowers until the unpaid amount has been fully paid, and the Borrowers will pay, or cause to be paid, the same with interest thereon from the date of non-payment until the date so paid at the Default Rate.

Obligations Unconditional; Limited Recourse

The payments required under the Loan Agreement and the covenants to perform and observe the other agreements contained in the Loan Agreement are a joint and several obligation of the Borrowers and will be absolute and unconditional and will not be subject to any defense or any right of setoff, counterclaim or recoupment arising out of any breach by the Authority or the Trustee of any obligation to the Borrowers whether under the Indenture or otherwise, or out of any Indebtedness or liability at any time owing to the Borrowers by the Authority or the Trustee. Until such time as the principal of, premium, if any, and interest on the Bonds, and any costs incidental thereto, will have been fully paid or provision for the payment thereof will have been made in accordance with the Indenture, the Borrowers (a) will not suspend or discontinue any payments described under the heading “The Loan; Basic Loan Payments; and Additional Payments,” (b) will perform and observe all other agreements contained in the Loan Agreement, and (c) except as provided in the Loan Agreement, will not terminate the Loan Agreement for any cause, including, without limiting the generality of the foregoing, failure of the Borrowers to complete the acquisition renovation, furnishing and equipping of the Project, the occurrence of any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Projects, the taking by eminent domain of title to or temporary use of any or all of the Projects, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either or any failure of the Authority or the Trustee to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Loan Agreement or otherwise.

Nothing contained in this Section “Obligations Unconditional; Limited Recourse” will be construed to release the Authority from the performance of any of the agreements on its part, and in the event the Authority or the Trustee fails to perform any such agreement on its part, the Borrowers may institute such action against the Authority or the Trustee as the Borrowers may deem necessary to compel performance so long as such action does not abrogate the obligations of the Borrowers contained in the first sentence of the paragraph above. The Borrowers may, at their own cost and expense and in their names with proper notice to the Authority, prosecute or defend any action or proceeding or take any other action involving third persons which the Borrowers deem reasonably necessary in order to secure or protect the Borrowers’ right of possession, occupancy and use of the Projects, and in such event the Authority hereby agrees to cooperate fully with the Borrowers, at the Borrowers’ sole cost and expense.

Notwithstanding the foregoing or any other provision or obligation to the contrary contained in the Loan Agreement or any other Bond Document, with the exception of any and all indemnities provided in the Bond

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Documents, (including, without limitation, the Borrowers’ obligation to indemnify the Trustee, the Trustee Indemnified Persons, the Authority and the Authority Indemnified Persons, including pursuant to the Loan Agreement), which such indemnities will be a general obligation of the Borrowers, (i) the liability of the Borrowers under the Loan Agreement and the other Bond Documents to any person or entity, including, but not limited to, the Trustee or the Authority and their successors and assigns, is limited to the Borrowers’ interest in the Projects, the Project Revenues and the amounts held in the Funds and Accounts created under the Indenture or other Bond Documents or any rights of the Borrowers under any guarantees relating to the Projects, and such persons and entities will look exclusively thereto, to such other security as may from time to time be given for the payment of obligations arising out of the Loan Agreement or any other agreement securing the obligations of the Borrowers under the Loan Agreement; and (ii) from and after the date of the Loan Agreement, no deficiency or other personal judgment, nor any order or decree of specific performance (other than pertaining to the Loan Agreement, any agreement pertaining to the Projects or any other agreement securing the Borrowers’ obligations under the Loan Agreement), will be rendered against the Borrowers nor any member of the Borrowers, the assets of the Borrowers (other than the Borrowers’ interest in the Projects, the Loan Agreement, amounts held in the Funds and Accounts created under the Indenture, any rights of the Borrowers under the Bond Documents, their officers, directors or members (including specifically the Sole Member) or their respective heirs, personal representatives, successors, transferees assigns, as the case may be, in any action or proceeding arising out of the Loan Agreement and the Indenture or any agreement securing the obligations of the Borrowers under the Loan Agreement, or any judgment, order or decree rendered pursuant to any such action or proceeding.

Assignment of Authority’s Rights

As security for the payment of the Bonds, the Authority in the Indenture assigns to the Trustee certain of the Authority’s rights under the Loan Agreement, including the right to receive payments under the Indenture (except for any deposits to the Rebate Fund and the Unassigned Rights), and the Borrowers hereby assent to such assignment and agree to make payments directly to the Trustee, without defense or set off by reason of any dispute between the Borrowers and the Authority or the Trustee. By virtue of such assignment and certain obligations of the Borrowers to the Trustee, the Authority will have no obligation to, and instead the Trustee will have the right without further direction from or action by the Authority, to enforce the obligations of the Borrowers under the Loan Agreement (except for the Unassigned Rights), subject to the limitations hereof, including the limitations in the Loan Agreement.

The Projects

Disbursement of Project Fund. Amounts in the Project Fund will be disbursed by the Trustee as provided in the Indenture, upon delivery by the Borrowers to the Trustee of a requisition executed by a Borrowers’ Representative setting forth the nature of the amounts to be paid and the name of the payee and certifying that the amounts being paid are Costs of the Project. The execution of each requisition submitted for disbursements by the Borrowers will constitute the certification, warranty, and agreement of the Borrowers as follows:

(a) the Projects are free and clear of all liens and encumbrances except Permitted Encumbrances;

(b) all evidence, statements, and other writings required to be furnished under the terms of the Loan Agreement and the Indenture are true and omit no material fact, the omission of which may make them misleading;

(c) all monies previously disbursed from the Project Fund with respect to the particular Project have been used solely to pay for costs allowed by the Loan Agreement, and the Borrowers have written evidence to support this item of warranty;

(d) none of the items for which payment is requested have formed the basis for any payment previously made from the Project Fund; and

(e) all bills for labor, materials, and fixtures used, or on hand and to be used, in the rehabilitation or equipping of the Project have been paid.

Rate Covenant; Coverage. The Borrowers will fix, charge and collect, or cause to be fixed, charged and collected rents, fees and charges in connection with the operation and maintenance of the Projects such that for each

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Fiscal Year ending December 31, 2017, the Debt Service Coverage Ratio will not be less than the applicable Coverage Test, determined as of the end of each such Fiscal Year based on and supported by Audited Financial Statements.

Failure to Meet Rate Covenant; Retention of Management Consultant. If the Coverage Test in any Fiscal Year beginning on or after January 1, 2017, as set forth in the certificate delivered pursuant to the Loan Agreement, is not satisfied, the Borrowers will retain a Management Consultant to prepare recommendations with respect to the operations of the Projects and the sufficiency of the rates, fees and charges imposed by the Borrowers.

The Management Consultant’s report will (a) include the projection of the Project Revenues, Operating Expenses and Net Income Available for Debt Service on a quarterly basis for not less than the next two Fiscal Years, and (b) make such recommendations to the Borrowers as the Management Consultant believes are appropriate to enable the Borrowers to increase the Debt Service Coverage Ratio to satisfy the Coverage Test for the current calendar year. If, in the judgment of the Management Consultant, it is not possible for the Borrowers to meet such requirements, the report of the Management Consultant will so indicate and will project the Debt Service Coverage Ratio which could be achieved if the recommendations of the Management Consultant are followed. Continuous retention of a Management Consultant during the years that are the subject of the Management Consultant’s report will not be required, however, if a Borrower Representative delivers a certificate to the Trustee, within 45 days after the end of each calendar quarter, setting forth the actual results for such quarter (which may be based on unaudited financial statements) and such results show that the Debt Service Coverage Ratio as projected by the Management Consultant is being met. The Borrowers will, to the extent lawful and feasible and consistent with the preservation of the Sole Member’s 501(c)(3) status and compliance with the Land Use Restriction Agreements, follow the recommendations of the Management Consultant.

Failure of the Borrowers to satisfy the Coverage Test covenant constitutes a Default under the Loan Agreement only if (a) the Borrowers fail to engage the Management Consultant or, (b) to the extent that the Rating Agency agrees with such recommendations, the Borrowers fail to implement the Management Consultant’s reasonable recommendations, to the extent possible and to the extent consistent with the charitable mission of the Sole Member, as required by the Loan Agreement.

Maintenance and Modification of Projects. The Borrowers agree that during the term of the Loan Agreement they will at their own expense (i) keep the Projects in a safe condition, (ii) keep the buildings and all other improvements forming a part of the Projects in good repair and in good operating condition (reasonable wear and tear excepted), making from time to time all necessary and proper repairs thereto and renewals and replacements thereof, including external and structural repairs, renewals, and replacements, and (iii) use the Equipment in the regular course of their business only, within the normal capacity of the Equipment, without abuse, and in a manner contemplated by the manufacturer thereof, and cause the Equipment to be maintained in accordance with the manufacturer’s then currently published standard maintenance contract and recommendations. The Borrowers may, also at their own expense, from time to time make any Modifications to the Projects they may deem desirable for their business purposes that do not, in the opinion of an Independent Architect filed with the Trustee, adversely affect the operation or value of the Projects, and provided further, that such Modifications will not cause the Debt Service Coverage Ratio to fall below the required Coverage Test for any Series of Bonds. Modifications to the Projects so made by the Borrowers will be on the Mortgaged Property, will become a part of the Projects, and will become subject to the lien of the Mortgages. Any contract for such Modifications which is in an amount in excess of $500,000 will be made only by a contractor who furnishes performance and labor and material payment bonds in the full amount of such contract, made by the contractor thereunder as the principal and a surety company or companies rated “A” or higher by A. M. Best & Company, Inc. Such bonds must name the respective Borrower, the Authority, and the Trustee as obligees, and all Net Proceeds received under such bonds will be paid over to the Trustee and deposited in the Project Fund to be applied to the completion of the Modifications. Such money held by the Trustee in the Project Fund will be invested from time to time, as provided in the Indenture.

Forbearance and Subordination of Fees. The Borrowers agree that they, any member of the Borrowers, the Sole Member, and any Manager which is an Affiliate of the Borrowers, will forbear from taking any management, administration, development or other fees, or any portions thereof, in the event and to the extent that money in the Revenue Fund are insufficient in any month to make all current and deferred deposits (other than deposits to the Surplus Fund) provided in the Indenture, and that the payment of such fees be made and in accordance with the

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Indenture. The Borrowers agree that any Management Agreement entered into with respect to a Project during the term of the Loan Agreement will be subject to this Section.

Taxes and Impositions. Subject to the Loan Agreement, the Borrowers agree to pay, prior to delinquency, all real property taxes and assessments, general and special, and all other taxes and assessments of any kind or nature whatsoever, which are assessed or imposed upon the Projects, or become due and payable, and which create, may create or appear to create a lien upon the Projects, or any part thereof, or upon any personal property, equipment or other facility used in the operation or maintenance thereof (all of which taxes, assessments and other governmental and non-governmental charges of like nature are hereinafter referred to as “Impositions”); provided, however, that if, by law, any such Imposition is payable, or may at the option of the taxpayer be paid, in installments, the Borrowers may pay the same together with any accrued interest on the unpaid balance of such Imposition in installments as the same become due and before any fine, penalty, interest or cost may be added thereto for the nonpayment of any such installment and interest. Payments made by the Trustee on behalf of the Borrowers from funds held under the Indenture in the Insurance and Tax Escrow Fund will, to the extent of such payments, discharge the Borrowers’ obligations under the Loan Agreement.

Subject to the applicable state law provisions, the Borrowers will have the right before any delinquency occurs to contest or object to the amount or validity of any Imposition by appropriate legal proceedings.

The Borrowers will deposit with the Trustee amounts sufficient to pay the annual Impositions as set forth in the Budget to be next due on the Projects, in accordance with the provisions of the Indenture.

Utilities. The Borrowers will pay, or cause to be paid, when due, all utility charges which are incurred for the benefit of the Projects or which may become a charge or lien against the Projects for gas, electricity, water or sewer services furnished to the Projects and all other taxes, assessments or charges of a similar nature, whether public or private, affecting the Projects or any portion thereof, whether or not such taxes, assessments or charges are liens thereon.

Insurance; Damage, Destruction and Condemnation; Use of Net Proceeds

Required Insurance. The Borrowers will procure and maintain continuously in effect during the term of the Loan Agreement policies of insurance with respect to the Projects insuring against such hazards and risks and in such amounts as are customary for a prudent owner of properties comparable to those comprising the Projects, which will include the insurance set forth in the Loan Agreement.

Insurance Proceeds; Casualty and Condemnation. After the occurrence of any casualty or condemnation to the Projects, or any part thereof, the Borrowers will give prompt written notice thereof to the Trustee and each insurer and promptly submit a claim to insurer for payment of insurance proceeds; the Borrowers will provide the Trustee with a copy of such claim.

All Insurance Proceeds and Condemnation Awards with respect to the Projects will be paid to the Trustee. Any Insurance Proceeds and Condemnation Awards will be applied as provided in the Loan Agreement and in the Indenture. Damage or destruction of the Projects will not affect the lien of the Mortgages or the obligations of the Borrowers under the Loan Agreement, and the Trustee is authorized, at the Trustee’s option, to compromise and settle all loss claims on said policies if not adjusted promptly by the Borrowers.

All net of Insurance Proceeds or Condemnation Awards will be applied at the option of the Borrowers either (i) to the payment of the Bonds in accordance with the Indenture and the Loan Agreement, or (ii) to the restoration of the Projects (if permitted by law, and to the extent not permitted by law, such Insurance Proceeds and Condemnation Awards will be applied to the payment of the Bonds), except that the proceeds of any loss of rents insurance will be deposited in the Revenue Fund under the Indenture and applied as therein provided.

Unless the Borrowers apply the Insurance Proceeds or Condemnation Awards to the payment of the Bonds, which payment shall be made in accordance with the provisions of the Loan Agreement and of the Indenture, and so long as any Bonds will be Outstanding and unpaid, and whether or not Insurance proceeds or Condemnation Awards are sufficient or available therefor, the Borrowers will promptly commence and complete with all reasonable diligence the Restoration of the Project as nearly as possible to the same value and revenue producing capacity

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which existed immediately prior to such loss or damage in accordance with plans and specifications prepared by an Independent Architect in compliance with all legal requirements (the “Restoration Plans”). Any Restoration will be effected in accordance with procedures to be first submitted to and approved by the Trustee as provided in the Loan Agreement. The Borrowers will pay all costs of such Restoration to the extent not paid from net proceeds of Insurance Proceeds available therefor pursuant to the Loan Agreement. If such Restoration is not permitted by law, the Insurance Proceeds will be applied to the payment of the Bonds.

Other Agreements

Assignment, Selling and Leasing. Except as otherwise provided in the Mortgages, or permitted under the provisions of the Land Use Restriction Agreements, after the completion of the acquisition, renovation, furnishing and equipping of the Projects as described in the Loan Agreement, the Loan Agreement may be assigned and the Projects sold or leased (other than by reason of foreclosure or deed in lieu of foreclosure), as a whole, by the Borrowers only as permitted by the Loan Agreement or subject to conditions contained in the Loan Agreement.

Continued Existence. The Borrowers agree that during the term of the Loan Agreement they will maintain their existence, will continue to be limited liability companies in good standing, will not dissolve or otherwise dispose of all or substantially all of their assets and will not consolidate with or merge into another legal entity or permit one or more other legal entities to consolidate with or merge into them; provided that a Borrower may, without violating the agreement contained in the Loan Agreement, consolidate with or merge into another legal entity, or permit one or more legal entities to consolidate with or merge into it, or sell or otherwise transfer to another legal entity all or substantially all of its assets as an entirety and thereafter dissolve; provided (a) that a Favorable Opinion of Bond Counsel is provided regarding such acquisition, consolidation, merger or transfer; (b) that if the surviving, resulting or transferee legal entity, as the case may be, is not a Borrower, then such legal entity will be a legal entity organized and existing under the laws of one of the states of the United States of America, will be a 501(c)(3) organization or a limited liability company whose sole member is a 501(c)(3) organization will be qualified to do business in the state where a Borrower’s respective Project is located, will be a single purpose entity whose only business operations will be operation of the respective Project and whose only assets and liabilities will be a Project (and assets and liabilities related thereto) and the Borrowers’ Documents and permitted debt under the Loan Agreement, and will assume in writing in form and substance satisfactory to the Authority and the Trustee all of the obligations of a Borrower under the Loan Agreement and the other Borrowers’ Documents; (c) that in the opinion of Independent Counsel delivered to the Authority and the Trustee, the Loan Agreement will be a valid and enforceable obligation of such surviving, resulting or transferee entity; (d) that no Event of Default has occurred and is continuing under the Loan Agreement; (e) that prior to such acquisition, consolidation, merger or transfer, the Borrowers will furnish a Compliance Certificate to the Authority and the Trustee; and (f) that the Trustee will have consented to such transfer pursuant to the Land Use Restriction Agreements, unless such consent is not required pursuant to the Loan Agreement.

Other Indebtedness

The Borrowers will not incur any Indebtedness with respect to the Projects, other than the Loan and other debts permitted or anticipated in the Loan Agreement, or incurred in the ordinary course of business which do not give rise to a lien or encumbrance on the Projects except for Permitted Encumbrances. In addition, the Borrowers are permitted to incur the following:

(a) Indebtedness incurred as a result of the issuance of Additional Bonds;

(b) such Short-Term Indebtedness as the Borrowers, in their judgment, deem expedient; provided that the aggregate amount of Short-Term Indebtedness outstanding at any time does not exceed ten percent (10%) of the total Operating Expenses of the Borrowers for the preceding Fiscal Year;

(c) any Short-Term Indebtedness which is incurred for the purpose of providing working capital may be secured by a security interest on the Project Revenues on a parity with the security interest created under the Mortgages with respect to the Bonds, and if so secured, the agreement for the repayment of such Short-Term Indebtedness and instruments evidencing or securing the same shall provide that: (i) any Default shall be an event of default thereunder; and (ii) if any event of default shall have occurred with respect to such Short-Term Indebtedness, the holder thereof shall be entitled only to such rights to exercise, consent to or direct the exercise of remedies (other

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than remedies relating to any funds established under the Indenture) as are available to the Trustee, and that all such remedies are, except as otherwise provided in the Loan Agreement, to be exercised solely by the Trustee for the equal and ratable benefit of all holders of Bonds and all holders of Short-Term Indebtedness so secured, subject to the priorities provided in the Indenture with respect to (i) the Senior Bonds and any Senior Parity Indebtedness and (ii) the Subordinate Bonds and any Subordinate Parity Indebtedness. Any agreement for the repayment of such Short-Term Indebtedness and instruments evidencing or securing the same shall provide for notices to be given to the Trustee regarding defaults by the Borrowers, and shall specify the rights of the Trustee to pursue remedies upon the receipt of such notice, and the sharing of the rights of the Trustee to control the exercise of remedies with the holder of such Short-Term Indebtedness. Short-Term Indebtedness which is incurred for the purpose of providing working capital may also be secured by a security interest in Project Revenues which is subordinate to the security interest therein created under the Mortgages; and

(d) such Long-Term Indebtedness as the Borrowers, in their judgment, deem expedient; provided that prior to incurring, assuming, or guaranteeing any Long-Term Indebtedness the Borrowers must furnish to the Authority and the Trustee (i) a Certificate setting forth the terms of such Long-Term Indebtedness and that the incurrence of such Long Term Indebtedness will not cause the Debt Service Coverage Ratio to fall below the Coverage Test and (ii) the Confirmation of Rating stating that the incurrence of such Long-Term Indebtedness will not result in a qualification, downgrade or withdrawal of the then current ratings on the Outstanding Bonds.

The Borrowers may secure Indebtedness incurred or assumed pursuant to (c) above by a lien on and security interests in all or any portion of the Projects and the Project Revenues, secured on an equal and ratable basis with then Outstanding Bonds, as applicable; provided, however, the following conditions are satisfied:

(A) The Indebtedness is being incurred or assumed for any of the same purposes for which Additional Bonds may be issued under the Indenture, or for the purpose of refunding or refinancing any Outstanding Bonds or other Indebtedness permitted under the Loan Agreement;

(B) The Indebtedness (other than Additional Bonds) will not be secured by the moneys and investments held in any fund established under the Indenture;

(C) All Modifications to be financed will become part of the Projects;

(D) Any agreement for the repayment of such Indebtedness and instruments evidencing or securing the same must provide:

(i) That any Event of Default will be an event of default thereunder,

(ii) That, if any event of default has occurred in respect of such Indebtedness, the holder thereof will be entitled only to such rights to exercise, consent to or direct the exercise of remedies (other than remedies relating to any funds established under the Indenture) as are available to the Trustee, and that all such remedies are, except as otherwise provided in the Loan Agreement, to be exercised solely by the Trustee for the equal and ratable benefit of all Bondholders and all holders of Indebtedness so secured, but subject to the priorities provided in the Indenture with respect to Senior Bonds and Senior Parity Indebtedness and the Subordinate Bonds and Subordinate Parity Indebtedness;

(E) If the proposed Indebtedness is further secured by liens on properties and revenues other than the Projects and/or the Project Revenues, a lien of equal rank and priority will be granted upon the same properties and revenues to secure the Bonds.

(F) For the purpose only of being entitled to remedies under the Loan Agreement and of consenting to or directing actions to be taken in respect to such remedies, the holders of any such Indebtedness will be treated as Bondholders and the Indebtedness held by such persons will be treated as Additional Bonds.

Any Short-Term Indebtedness or any Long-Term Indebtedness which is incurred for the purpose of providing working capital may be secured by a security interest on the Project Revenues on a parity with the security interest created under the Mortgages with respect to the Bonds, and if so secured, the agreement for the repayment of such Short-Term Indebtedness and instruments evidencing or securing the same will provide that: (i) any Default

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will be an event of default thereunder; and (ii) if any event of default will have occurred with respect to such Short-Term Indebtedness, the holder thereof will be entitled only to such rights to exercise, consent to or direct the exercise of remedies as are available to the Trustee, and that all such remedies are, except as otherwise provided in the Loan Agreement, to be exercised solely by the Trustee for the equal and ratable benefit of all holders of Bonds and all holders of Short-Term Indebtedness so secured. Any agreement for the repayment of such Indebtedness and instruments evidencing or securing the same will provide for notices to be given to the Trustee regarding defaults by the Borrowers, and will specify the rights of the Trustee to pursue remedies upon the receipt of such notice, and the sharing of the rights of the Trustee to control the exercise of remedies with the holder of such Indebtedness. Short-Term Indebtedness or Long-Term Indebtedness which is incurred for the purpose of providing working capital may also be secured by a security interest in Project Revenues which is subordinate to the security interest therein created under the Mortgages.

Defaults and Remedies

Defaults. Each of the following constitutes a “Default” or “Event of Default” under the Loan Agreement:

(a) Failure by the Borrowers to pay any Basic Loan Payments; provided that failure to make a Basic Loan Payment will not constitute a Default to the extent that the amounts on deposit in the Surplus Fund, the Bond Fund, the Repair and Replacement Fund, the Operating Fund and the Debt Service Reserve Fund are sufficient and available to pay principal, premium (if any) and interest due on the related Series of Bonds on the next Bond Payment Date; and provided further that failure to pay the portion of the Loan related to the Subordinate Bonds will not constitute a Default under the Loan Agreement while any Senior Bonds are Outstanding.

(b) Failure by the Borrowers to make, or cause to be made, any Additional Loan Payment or amounts required to be paid under certain provisions of the Loan Agreement on or before the date due.

(c) Failure by the Borrowers to meet the Coverage Test covenant if (a) the Borrowers fail to engage a Management Consultant or (b) to the extent that the Rating Agency, if any, agrees with such recommendations, the Borrowers fail to implement any of the Management Consultant’s reasonable recommendations to the extent possible, and to the extent consistent with the charitable mission of the Sole Member, as provided in the Loan Agreement.

(d) Failure by the Borrowers to perform or observe any of their covenants or agreements contained in the Loan Agreement, the Tax Agreement or the Land Use Restriction Agreements other than as specified in clauses (a) through(c) immediately above, and such failure will continue for the period and after the notice specified in the Loan Agreement.

(e) The dissolution or liquidation of a Borrower or the filing by a Borrower of a voluntary petition in bankruptcy, or adjudication of a Borrower as a bankrupt, or assignment by a Borrower for the benefit of its creditors or the entry by a Borrower into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to a Borrower in any proceeding instituted under the provisions of State law or the federal bankruptcy statute, as amended, or under any similar act which may hereafter be enacted. The term “dissolution or liquidation of a Borrower,” as used in this paragraph, will not be construed to include the cessation of the existence of a Borrower resulting either from a merger or consolidation of a Borrower into or with another entity or a dissolution or liquidation of a Borrower following a transfer of all or substantially all of its assets as an entirety, under the conditions permitting such actions contained in the Loan Agreement.

(f) The occurrence or continuance of a “default,” a “Default,” an “event of Default” or “Event of Default” under the Mortgages, the Land Use Restriction Agreements or the Indenture.

The provisions of (d) of this Section are subject to the following limitation: if by reason of Force Majeure the Borrowers are unable in whole or in part to carry out any of its agreements contained in the Loan Agreement (other than its obligations to pay certain amounts under the Loan Agreement), the Borrowers will not be deemed in Default during the continuance of such inability, if, but only if, such default is cured as provided in the Loan Agreement. The Borrowers agree, however, to remedy with all reasonable dispatch the cause or causes preventing the Borrowers from carrying out their agreements, provided that, subject to the preceding sentence, the settlement of strikes and other industrial disturbances will be entirely within the discretion of the Borrowers and the Borrowers

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will not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the Borrowers unfavorable to the Borrowers.

Notice of Default; Opportunity to Cure. Except as provided below, no default under subsection (d) of the section entitled “Defaults” above will constitute a Default until:

(a) The Trustee or the Authority, by Mail, will give notice to the Borrowers of such default specifying the same; and

(b) The Borrowers will have had 30 days after receipt of such notice to correct the default and will not have corrected it or, if such default cannot be corrected within 30 days, will have failed to initiate and diligently pursue appropriate corrective action, provided, that in any event such default must be remedied within 120 days after the date of occurrence thereof.

Remedies. Whenever any Default under the Loan Agreement has happened and is continuing, any or all of the following remedial steps will be available:

(a) The Trustee may, and at the written request of the Controlling Holders of the Bonds will, declare the outstanding principal balance and interest accrued on the Loan and all payments required to be made by the Borrowers under the Loan Agreement with respect to the Bonds for the remainder of the term of the Loan Agreement to be immediately due and payable, whereupon the same will become immediately due and payable. Upon any such acceleration of the Loan, the Bonds will be subject to mandatory redemption as provided in the Indenture or default and acceleration as directed by the Controlling Holders under the Indenture.

(b) The Trustee, for and on behalf of the Authority, may, and with the consent of the Controlling Holders of the Bonds will, take whatever action at law or in equity may appear necessary or desirable to collect the payments required to be made by the Borrowers under the heading “Issuance of Bonds; Loan to Borrowers; Related Obligations” then due and thereafter to become due, including, without limitation, pursuing remedies under the appropriate Mortgage and the remedies under the Indenture.

(c) The Authority or the Trustee may take whatever action at law or in equity as may be necessary or desirable to enforce performance and observance of any obligation, agreement or covenant of the Borrowers under the Loan Agreement.

The provisions of clause (a), however, are subject to the condition that if, at any time after the Loan will have been so declared due and payable, and before any judgment or decree for the payment of the money due will have been obtained or entered, there will have been deposited with the Trustee a sum sufficient to pay all the principal of the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal as provided in the Loan Agreement, and the reasonable expenses of the Trustee, and any and all other Defaults known to the Trustee (other than in the payment of principal of and interest on the Loan due and payable solely by reason of such declaration) will have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate will have been made therefor, then, and in every such case, the Controlling Holders of the Bonds by written notice to the Authority and to the Trustee, may, on behalf of the Holders of all the Bonds, rescind and annul such declaration and its consequences and waive such default; provided that no such rescission and annulment will extend to or will affect any subsequent default, or will impair or exhaust any right or power consequent thereon.

Options to Terminate Agreement

Grant of Option to Terminate. The Borrowers have the option to terminate the Loan Agreement at any time the Borrowers declare they will cease to use one or more of the Projects by reason of:

(a) the damage or destruction of all or a significant portion of the Projects (with property damage equal to at least $100,000) to such extent that, in the reasonable opinion of the Borrowers, the Restoration thereof would not be economical;

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(b) the condemnation of all or part of the Projects or the taking by condemnation of such part, use or control of the Projects (with the value of the property so taken or condemned equaling at least $100,000) as to render it unsatisfactory to the Borrowers for their intended use, provided that any temporary taking by condemnation will not give rise to the option unless, in the Borrowers’ reasonable opinion, such temporary taking will render the Projects unsatisfactory to the Borrowers for their intended use for a period of at least six months;

(c) any changes in the Constitution of the States of Florida, North Carolina, South Carolina or Wisconsin or the Constitution of the United States or of legislative or administrative action (whether state, federal, or local), by which the Loan Agreement will become void or unenforceable or impossible of performance in accordance with the intent and purposes hereof;

(d) the determination that the continued operation of one or more Projects would have a material adverse effect on the ability of the Borrowers to meet the financial covenants set forth herein, as established by a report of a Management Consultant; or

(e) the Borrowers may also prepay the Loan in whole and terminate the Loan Agreement if the Loan is prepaid in whole and in amounts necessary to redeem the Bonds pursuant to the Indenture.

Exercise of Option to Terminate. To exercise such options, the Borrowers will, within 90 days following the event authorizing such termination, if any, give written notice to the Authority and the Trustee, and will specify therein the date of termination, which date will be not less than 30 days nor more than 180 days from the date such notice is mailed, and will make arrangements for the giving of the required notice of redemption of all of the Bonds. In order to exercise such option, the Borrowers will pay, or cause to be paid, on or prior to the applicable redemption date, to the Trustee, an amount equal to the sum of the following:

(a) An amount of money which, when added to the amounts then on deposit under the Indenture and available for such purpose will be sufficient to retire and redeem all the Outstanding Bonds on the earliest possible redemption date after notice as provided in the Indenture, including, without limitation, the principal amount thereof, all interest to accrue to such redemption date; plus

(b) An amount of money equal to the Ordinary Trustee’s Fees and Expenses and Extraordinary Trustee’s Fees and Expenses under the Indenture accrued and to accrue until such final payment and redemption of the Bonds, including fees and expenses related to such redemption; plus

(c) An amount of money equal to the Authority’s Fees and Expenses under the Loan Agreement accrued and to accrue until such final payment and redemption of the Bonds.

Any prepayment is conditioned upon: (1) deposit with the Trustee of Available Moneys in an amount equal to the principal, premium, if any, and interest on the Bonds to be redeemed; (2) the opinion of nationally recognized counsel experienced in bankruptcy matters to the effect that such prepayment will not constitute a voidable preference in the event of the filing of a petition in bankruptcy (or other commencement of a bankruptcy or similar proceeding) by or against any Borrower or the Authority or any affiliate of either under any applicable bankruptcy, insolvency, reorganization or similar law; (3) on the redemption date a certificate of the applicable Borrower to the effect that there has not occurred at any time during or after the preceding 123-day period any filing by or against such Borrower under any bankruptcy act or similar law for the relief of debtors; (4) confirmation by the Rating Agency that any then-existing rating on any of the Bonds will not be terminated, downgraded or modified as a result of any partial prepayment; and (5) a verification opinion or report by an accountant or nationally recognized law firm (which may be counsel to the Borrowers) to the effect that the amounts paid by the Borrowers are sufficient on the required date to pay amounts described in (i)-(iii) above.

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MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, FIXTURE FILING, AND ENVIRONMENTAL INDEMNITY AGREEMENT

(NORTH CAROLINA PROJECTS)

The following is a brief summary of certain provisions of the Mortgages entered into between (i) 2017 IAVF Cedar Chesterfield LLC, as grantor, and Wilmington Trust, National Association, as beneficiary, (ii) 2017 IAVF Cedar Twin City LLC, as grantor, and Wilmington Trust, National Association, as beneficiary, and (iii) 2017 IAVF Cedar Silas LLC, as grantor, and Wilmington Trust, National Association, as beneficiary. The Summary does not purport to be complete or definitive and is qualified in its entirety by reference to the Mortgages, a copy of which is on file with the Trustee.

Granting Clause

In order to secure to the Trustee the repayment of the Indebtedness evidenced by the Bond Mortgage Note payable by Grantor to the Issuer, which Note has been assigned to Beneficiary by Issuer pursuant to the terms of the Note, Loan Agreement, and the Indenture, and all renewals, extensions and modifications of the Indebtedness, and the performance of the covenants and agreements of Grantor contained in the Note, Grantor mortgages, warrants, grants, conveys and assigns, with power of sale, to Trustee, its successors and assigns, in trust with the power of sale, under and subject to the terms and conditions of the Deed of Trust, for the benefit of Beneficiary all of Grantor’s right, title, and interest in, to, and under the Mortgaged Property as further described in the Deed of Trust.

UCC Security Agreement

The Deed of Trust is also a security agreement statement under the UCC for any of the Mortgaged Property which, under applicable law, may be subject to a security interest under the UCC, whether acquired now or in the future, and all products and cash and non-cash proceeds thereof (collectively, “UCC Collateral”), and Grantor grants to Beneficiary a security interest in the UCC Collateral. The Deed of Trust also constitutes a financing statement pursuant to the terms of the UCC with respect to any part of the Mortgaged Property that is or may become a Fixture under applicable law, and will be recorded as a “fixture filing” in accordance with the UCC. Without the prior written consent of Beneficiary, Grantor shall not create or permit to exist any other lien or security interest in any of the UCC Collateral. If an Event of Default has occurred and is continuing, Beneficiary shall have the remedies of a secured party under the UCC, in addition to all remedies provided by the Deed of Trust or existing under applicable law.

Assignment of Rents

As part of the consideration for the Indebtedness, Grantor absolutely and unconditionally assigns and transfers to Beneficiary all Rents. It is the intention of Grantor to establish a present, absolute and irrevocable transfer and assignment to Beneficiary of all Rents and to authorize and empower Beneficiary to collect and receive all Rents without the necessity of further action on the part of Grantor. Promptly upon request by Beneficiary, Grantor agrees to execute and deliver such further assignments as Beneficiary may from time to time require. Grantor and Beneficiary intend such assignment of Rents to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only. For purposes of giving effect to such absolute assignment of Rents, and for no other purpose, Rents shall not be deemed to be a part of the “Mortgaged Property,” as that term is defined in the Deed of Trust. However, if such present, absolute and unconditional assignment of Rents is not enforceable by its terms under the laws of the Property Jurisdiction, then the Rents shall be included as a part of the Mortgaged Property and it is the intention of the Grantor that in this circumstance the Deed of Trust create and perfect a lien on Rents in favor of Beneficiary, which lien shall be effective as of the date of the Deed of Trust.

After the occurrence of an Event of Default, Grantor authorizes Beneficiary to collect, sue for and compromise Rents and directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Beneficiary, and Grantor shall, upon Grantor’s receipt of any Rents from any sources, pay the total amount of such receipts to the Beneficiary. However, until the occurrence of an Event of Default, Beneficiary hereby grants to Grantor a revocable license to collect and receive all Rents, to hold all Rents in trust for the benefit of Beneficiary and to apply all Rents for the payment of any amounts then due and payable under the Note or the Deed of Trust, and to pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property,

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including utilities, taxes and insurance premiums, tenant improvements and other capital expenditures. So long as no Event of Default has occurred and is continuing, the Rents and payments remaining after application pursuant to the preceding sentence may be retained by Grantor free and clear of, and released from, Beneficiary’s rights with respect to Rents under this Instrument. From and after the occurrence of an Event of Default, and without the necessity of Beneficiary entering upon and taking and maintaining control of the Mortgaged Property directly, or by a receiver, Grantor’s license to collect Rents shall automatically terminate and Beneficiary shall without notice be entitled to all Rents as they become due and payable, including Rents then due and unpaid. Grantor shall pay to Beneficiary upon demand all Rents to which Beneficiary is entitled. At any time on or after the date of Beneficiary’s demand for Rents, Beneficiary may give, and Grantor hereby irrevocably authorizes Beneficiary to give, notice to all tenants of the Mortgaged Property instructing them to pay all Rents to Beneficiary, no tenant shall be obligated to inquire further as to the occurrence or continuance of an Event of Default, and no tenant shall be obligated to pay to Grantor any amounts which are actually paid to Beneficiary in response to such a notice. Grantor shall not interfere with and shall cooperate with Beneficiary’s collection of such Rents.

If an Event of Default has occurred and is continuing, Beneficiary may, regardless of the adequacy of Beneficiary’s security or the solvency of Grantor and even in the absence of waste, enter upon and take and maintain full control of the Mortgaged Property in order to perform all acts that Beneficiary in its discretion determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property, including the execution, cancellation or modification of Leases, the collection of all Rents, the making of repairs to the Mortgaged Property and the execution or termination of contracts providing for the management, operation or maintenance of the Mortgaged Property, for the purposes of enforcing the assignment of Rents pursuant the Deed of Trust, protecting the Mortgaged Property or the security of the Deed of Trust, or for such other purposes as Beneficiary in its discretion may deem necessary or desirable. Alternatively, if an Event of Default has occurred and is continuing, regardless of the adequacy of Beneficiary’s security, without regard to Grantor’s solvency and without the necessity of giving prior notice (oral or written) to Grantor, Beneficiary may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged Property to take any or all of the actions set forth in the preceding sentence. If Beneficiary elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Grantor, by its execution of the Deed of Trust, expressly consents to the appointment of such receiver, including the appointment of a receiver ex parte if permitted by applicable law. Beneficiary or the receiver, as the case may be, shall be entitled to receive a reasonable fee for managing the Mortgaged Property. Immediately upon appointment of a receiver or immediately upon the Beneficiary’s entering upon and taking possession and control of the Mortgaged Property, Grantor shall surrender possession of the Mortgaged Property to Beneficiary or the receiver, as the case may be, and shall deliver to Beneficiary or the receiver, as the case may be, all documents, records (including records on electronic or magnetic media), accounts, surveys, plans, and specifications relating to the Mortgaged Property and all security deposits and prepaid Rents. In the event Beneficiary takes possession and control of the Mortgaged Property, Beneficiary may exclude Grantor and its representatives from the Mortgaged Property. Grantor acknowledges and agrees that the exercise by Beneficiary of any of the rights conferred under this section shall not be construed to make Beneficiary a mortgagee-in-possession of the Mortgaged Property so long as Beneficiary has not itself entered into actual possession of the Land and Improvements.

Assignment of Leases

As part of the consideration for the Indebtedness, Grantor absolutely and unconditionally assigns and transfers to Beneficiary all of Grantor’s right, title and interest in, to and under the Leases, including Grantor’s right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease. It is the intention of Grantor to establish a present, absolute and irrevocable transfer and assignment to Beneficiary of all of Grantor’s right, title and interest in, to and under the Leases. Grantor and Beneficiary intend this assignment of the Leases to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only. For purposes of giving effect to this absolute assignment of the Leases, and for no other purpose, the Leases shall not be deemed to be a part of the “Mortgaged Property,” as that term is defined herein. However, if this present, absolute and unconditional assignment of the Leases is not enforceable by its terms under the laws of the Property Jurisdiction, then the Leases shall be included as a part of the Mortgaged Property and it is the intention of the Grantor that in this circumstance this Instrument create and perfect a lien on the Leases in favor of Beneficiary, which lien shall be effective as of the date of this Instrument.

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Until Beneficiary gives notice to Grantor of Beneficiary’s exercise of its rights under this section, Grantor shall have all rights, power and authority granted to Grantor under any Lease (except as otherwise limited by this section or any other provision of the Deed of Trust), including the right, power and authority to modify the terms of any Lease or extend or terminate any Lease. Upon the occurrence of an Event of Default, the permission given to Grantor pursuant to the preceding sentence to exercise all rights, power and authority under Leases shall automatically terminate. Grantor shall comply with and observe Grantor’s obligations under all Leases, including Grantor’s obligations pertaining to the maintenance and disposition of tenant security deposits.

Grantor represents and warrants to Beneficiary that the sole ownership of the entire lessor’s interest in the Leases is vested in Grantor, Grantor has not executed any prior assignment of Leases (other than an assignment of Leases securing indebtedness that will be paid off and discharged concurrently with the execution and delivery of the Loan Agreement to Beneficiary), and Grantor has not performed, and Grantor covenants and agrees that it will not perform, any acts and has not executed, and shall not execute, any instrument which would prevent Beneficiary from exercising its rights under this section.

Grantor acknowledges and agrees that the exercise by Beneficiary, either directly or by a receiver, of any of the rights conferred under this section shall not be construed to make Beneficiary a mortgagee-in-possession of the Mortgaged Property so long as Beneficiary has not itself entered into actual possession of the Land and the Improvements. The acceptance by Beneficiary of the assignment of the Leases pursuant to the Deed of Trust shall not at any time or in any event obligate Beneficiary to take any action under the Deed of Trust or to expend any money or to incur any expenses. Beneficiary shall not be liable in any way for any injury or damage to person or property sustained by any person or persons, firm or corporation in or about the Mortgaged Property. Prior to Beneficiary’s actual entry into and taking possession of the Mortgaged Property, Beneficiary shall not (i) be obligated to perform any of the terms, covenants and conditions contained in any Lease (or otherwise have any obligation with respect to any Lease); (ii) be obligated to appear in or defend any action or proceeding relating to the Lease or the Mortgaged Property; or (iii) be responsible for the operation, control, care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property. The execution of the Deed of Trust by Grantor shall constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Mortgaged Property is and shall be that of Grantor, prior to such actual entry and taking of possession.

Upon delivery of notice by Beneficiary to Grantor of Beneficiary’s exercise of Beneficiary’s rights under this section at any time after the occurrence of an Event of Default, and without the necessity of Beneficiary entering upon and taking and maintaining control of the Mortgaged Property directly, by a receiver, or by any other manner or proceeding permitted by the laws of the Property Jurisdiction, Beneficiary immediately shall have all rights, powers and authority granted to Grantor under any Lease, including the right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease.

Events of Default; Remedies

The occurrence of a “Default” as defined in the Loan Agreement shall constitute an “Event of Default” under the Deed of Trust.

Upon the occurrence of an Event of Default, Beneficiary may foreclose the lien of the Deed of Trust pursuant to the power of sale granted by the Deed of Trust or by judicial proceeding. The Trustee is granted the power of sale and may sell the Property (together with any Personalty), or such other part or parts thereof or interest therein as the Beneficiary may select after first having given such notice of hearing as to commencement of foreclosure proceedings and obtained such findings or leave of court as then may be required by law and then having given such notice and advertised the time and place of such sale in such manner as then may be provided by law, and upon such sale and upon compliance with the law then relating to foreclosure proceedings, to convey title to the purchaser. Trustee may offer the Property for sale by the method which produces the highest price. Following a foreclosure sale, Trustee shall deliver to the Purchaser the Trustee’s Deed (and Bill of Sale as to any Personalty) conveying the Property so sold without any covenant or warranty, express or implied. Trustee shall apply the proceeds of such sale in the following order: (a) to all costs and expenses of the sale, including but not limited to, reasonable Trustee’s fees of not more than five percent (5%) of the gross sales price and costs of title evidence; (b) to all sums secured by the Deed of Trust; and (c) the excess, if any, to the person or persons legally entitled thereto. Trustee’s commission in the event of a completed foreclosure shall be the amount of money as is awarded

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by the court in such proceeding but in no event to exceed five percent (5%) of the gross proceeds of the sale for a completed foreclosure.

Upon any such foreclosure sale, Beneficiary may bid for and purchase the Mortgaged Property and, upon compliance with the terms of sale, may hold, retain and possess and dispose of such property in its own absolute right without further accountability. Upon any such foreclosure sale, Beneficiary may, if permitted by law, after allowing for the proportion of the total purchase price required to be paid in cash and for the costs and expenses of the sale, compensation and other charges, in paying the purchase price apply any portion of or all sums due to Beneficiary under the Note, the Deed of Trust or any other instrument securing the Note, in lieu of cash, to the amount which shall, upon distribution of the net proceeds of such sale, be payable thereon.

Beneficiary may proceed by a suit or suits in equity or at law, whether for collection of the indebtedness secured by the Deed of Trust, the specific performance of any covenant or agreement contained in the Deed of Trust or in aid of the execution of any power granted in the Deed of Trust, or for any foreclosure under the Deed of Trust or for the sale of the Mortgaged Property under the judgment or decree of any court or courts of competent jurisdiction.

Each right and remedy provided in the Deed of Trust or the Loan Agreement is distinct from all other rights or remedies under the Deed of Trust or the Loan Agreement or afforded by applicable law, and each shall be cumulative and may be exercised concurrently, independently, or successively, in any order.

Additional Amounts Secured

Pursuant to the provisions of Section 45-67, et seq. of the General Statutes of North Carolina, this Deed of Trust secures all present and future loan disbursements made by the Beneficiary (on behalf of the Issuer) under the Note, and all other sums from time to time owing to the Beneficiary (for the benefit of the Issuer) by the Borrower under the Loan Documents. The amount of the present disbursement secured hereby is [SPELL OUT PRINCIPAL AMOUNT] Dollars ($[PRINCIPAL AMOUNT]), and the maximum principal amount which may be secured hereby at any one time is [SPELL OUT PRINCIPAL AMOUNT] Dollars ($[PRINCIPAL AMOUNT]). The time period within such future disbursements are to be made is the period between the date hereof and the date fifteen (15) years from the date hereof. Disbursements secured hereby shall not be required to be evidenced by “written instrument or notation” as described in Section 45-68(2) of the North Carolina General Statutes, it being the intent of the parties that the requirements of Section 45-68(2) for a “written instrument or notation” for each advance shall not be applicable to disbursements made under the Loan Documents and Note.

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MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, FIXTURE FILING, AND ENVIRONMENTAL INDEMNITY AGREEMENT (SOUTH CAROLINA PROJECT)

The following is a summary of certain provisions of the Mortgage entered into between 2017 IAVF Whispering LLC, as borrower, and Wilmington Trust National Association, as trustee. The summary does not purport to be complete and is qualified in its entirety by reference to the Mortgage.

Granting Clause

In order to secure the repayment of the Indebtedness evidenced by the Note payable by Borrower to the Issuer, which Note has been assigned to Trustee by Issuer pursuant to the terms of the Note, Loan Agreement, and the Indenture, and all renewals, extensions and modifications of the Indebtedness, and the performance of the covenants and agreements of Borrower contained in the Note, Borrower mortgages, warrants, grants, conveys and assigns to Trustee with all powers of sale and statutory rights and covenants in the State of South Carolina, all of Borrower’s estate, right, title and interest in, to and under the Mortgaged Property, including the Land described in the Mortgage and grants to Trustee a first and prior security interest in the Personalty and any and all of the following, whether now owned or held or hereafter acquired or owned by Borrower: (a) all Leases; (b) all profits and sales proceeds including, without limitation, earnest money and other deposits, now or hereafter becoming due by virtue of any contract or contracts for the sale of Borrower’s interest in the Property; and (c) all proceeds (including claims thereto or demands therefor) of the conversion, voluntary or involuntary, permitted or otherwise, of any of the foregoing into cash or liquidated claims.

To have and to hold all and singular the Property unto Trustee and the successors or assigns of Trustee forever.

For the purpose of the securing the following obligations of the Borrower to the Trustee, in such order of priority as Trustee may elect: (1) payment of the Note together with any renewals or extensions or modifications thereof upon the same or different terms or at the same or different rate of interest and also to secure in accordance with Section 29-3-50, as amended, Code of Laws of South Carolina (1976): (i) all future advances and re-advances that may subsequently be made to Borrower by Trustee evidenced by the aforesaid Note, or by other promissory notes, and all modifications, renewals and extensions thereof; and (ii) all other indebtedness of Borrower to Trustee, now or hereafter existing, whether direct or indirect, the maximum amount of all indebtedness outstanding at any one time secured hereby not to exceed $[PRINCIPAL AMOUNT], plus interest thereon, all charges and expenses of collection actually incurred by Trustee including court costs and reasonable attorney’s fees; (2) payment of such additional sums with interest thereon which may hereafter be loaned to Borrower by Trustee, even if the sum of the amounts outstanding at any time exceeds the Note Amount; and (3) due, prompt and complete observance, performance, fulfillment and discharge of each and every obligation, covenant, condition, warranty, agreement and representation contained in the Loan Documents.

UCC Security Agreement

The Mortgage is also a security agreement under the UCC for any of the Mortgaged Property which, under applicable law, may be subject to a security interest under the UCC, whether acquired now or in the future, and all products and cash and non-cash proceeds thereof (collectively, “UCC Collateral”), and Borrower grants to Trustee a security interest in the UCC Collateral. The Mortgage also constitutes a financing statement pursuant to the terms of the UCC with respect to any part of the Mortgaged Property that is or may become a Fixture under applicable law, and will be recorded as a “fixture filing” in accordance with the UCC. Without the prior written consent of Trustee, Borrower shall not create or permit to exist any other lien or security interest in any of the UCC Collateral. If an Event of Default has occurred and is continuing, Trustee shall have the remedies of a secured party under the UCC, in addition to all remedies provided by the Mortgage or existing under applicable law.

Assignment of Rents

As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Trustee all Rents. It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Trustee of all Rents and to authorize and empower Trustee to collect and receive all Rents without the necessity of further action on the part of Borrower. Promptly upon request by Trustee, Borrower agrees to

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execute and deliver such further assignments as Trustee may from time to time require. Borrower and Trustee intend such assignment of Rents to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only. For purposes of giving effect to such absolute assignment of Rents, and for no other purpose, Rents shall not be deemed to be a part of the “Mortgaged Property,” as that term is defined in the Mortgage. However, if such present, absolute and unconditional assignment of Rents is not enforceable by its terms under the laws of the Property Jurisdiction, then the Rents shall be included as a part of the Mortgaged Property and it is the intention of the Borrower that in this circumstance the Mortgage create and perfect a lien on Rents in favor of Trustee, which lien shall be effective as of the date of Mortgage.

After the occurrence of an Event of Default, Borrower authorizes Trustee to collect, sue for and compromise Rents and directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Trustee, and Borrower shall, upon Borrower’s receipt of any Rents from any sources, pay the total amount of such receipts to the Trustee. However, until the occurrence of an Event of Default, Trustee hereby grants to Borrower a revocable license to collect and receive all Rents, to hold all Rents in trust for the benefit of Trustee and to apply all Rents for the payment of any amounts then due and payable under the Note or the Mortgage, and to pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property, including utilities, taxes and insurance premiums, tenant improvements and other capital expenditures. So long as no Event of Default has occurred and is continuing, the Rents and payments remaining after application pursuant to the preceding sentence may be retained by Borrower free and clear of, and released from, Trustee’s rights with respect to Rents under this Instrument. From and after the occurrence of an Event of Default, and without the necessity of Trustee entering upon and taking and maintaining control of the Mortgaged Property directly, or by a receiver, Borrower’s license to collect Rents shall automatically terminate and Trustee shall without notice be entitled to all Rents as they become due and payable, including Rents then due and unpaid. Borrower shall pay to Trustee upon demand all Rents to which Trustee is entitled. At any time on or after the date of Trustee’s demand for Rents, Trustee may give, and Borrower hereby irrevocably authorizes Trustee to give, notice to all tenants of the Mortgaged Property instructing them to pay all Rents to Trustee, no tenant shall be obligated to inquire further as to the occurrence or continuance of an Event of Default, and no tenant shall be obligated to pay to Borrower any amounts which are actually paid to Trustee in response to such a notice. Borrower shall not interfere with and shall cooperate with Trustee’s collection of such Rents.

If an Event of Default has occurred and is continuing, Trustee may, regardless of the adequacy of Trustee’s security or the solvency of Borrower and even in the absence of waste, enter upon and take and maintain full control of the Mortgaged Property in order to perform all acts that Trustee in its discretion determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property, including the execution, cancellation or modification of Leases, the collection of all Rents, the making of repairs to the Mortgaged Property and the execution or termination of contracts providing for the management, operation or maintenance of the Mortgaged Property, for the purposes of enforcing the assignment of Rents pursuant the Mortgage, protecting the Mortgaged Property or the security of the Mortgage, or for such other purposes as Trustee in its discretion may deem necessary or desirable. Alternatively, if an Event of Default has occurred and is continuing, regardless of the adequacy of Trustee’s security, without regard to Borrower’s solvency and without the necessity of giving prior notice (oral or written) to Borrower, Trustee may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged Property to take any or all of the actions set forth in the preceding sentence. If Trustee elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of the Mortgage, expressly consents to the appointment of such receiver, including the appointment of a receiver ex parte if permitted by applicable law. Trustee or the receiver, as the case may be, shall be entitled to receive a reasonable fee for managing the Mortgaged Property. Immediately upon appointment of a receiver or immediately upon the Trustee’s entering upon and taking possession and control of the Mortgaged Property, Borrower shall surrender possession of the Mortgaged Property to Trustee or the receiver, as the case may be, and shall deliver to Trustee or the receiver, as the case may be, all documents, records (including records on electronic or magnetic media), accounts, surveys, plans, and specifications relating to the Mortgaged Property and all security deposits and prepaid Rents. In the event Trustee takes possession and control of the Mortgaged Property, Trustee may exclude Borrower and its representatives from the Mortgaged Property. Borrower acknowledges and agrees that the exercise by Trustee of any of the rights conferred under this section shall not be construed to make Trustee a mortgagee-in-possession of the Mortgaged Property so long as Trustee has not itself entered into actual possession of the Land and Improvements.

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Assignment of Leases

As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Trustee all of Borrower’s right, title and interest in, to and under the Leases, including Borrower’s right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease. It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Trustee of all of Borrower’s right, title and interest in, to and under the Leases. Borrower and Trustee intend this assignment of the Leases to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only. For purposes of giving effect to this absolute assignment of the Leases, and for no other purpose, the Leases shall not be deemed to be a part of the “Mortgaged Property,” as that term is defined herein. However, if this present, absolute and unconditional assignment of the Leases is not enforceable by its terms under the laws of the Property Jurisdiction, then the Leases shall be included as a part of the Mortgaged Property and it is the intention of the Borrower that in this circumstance this Instrument create and perfect a lien on the Leases in favor of Trustee, which lien shall be effective as of the date of this Instrument.

Until Trustee gives notice to Borrower of Trustee’s exercise of its rights under this section, Borrower shall have all rights, power and authority granted to Borrower under any Lease (except as otherwise limited by this section or any other provision of the Mortgage), including the right, power and authority to modify the terms of any Lease or extend or terminate any Lease. Upon the occurrence of an Event of Default, the permission given to Borrower pursuant to the preceding sentence to exercise all rights, power and authority under Leases shall automatically terminate. Borrower shall comply with and observe Borrower’s obligations under all Leases, including Borrower’s obligations pertaining to the maintenance and disposition of tenant security deposits.

Borrower represents and warrants to Trustee that the sole ownership of the entire lessor’s interest in the Leases is vested in Borrower, Borrower has not executed any prior assignment of Leases (other than an assignment of Leases securing indebtedness that will be paid off and discharged concurrently with the execution and delivery of the Loan Agreement to Trustee), and Borrower has not performed, and Borrower covenants and agrees that it will not perform, any acts and has not executed, and shall not execute, any instrument which would prevent Trustee from exercising its rights under this section.

Borrower acknowledges and agrees that the exercise by Trustee, either directly or by a receiver, of any of the rights conferred under this section shall not be construed to make Trustee a mortgagee-in-possession of the Mortgaged Property so long as Trustee has not itself entered into actual possession of the Land and the Improvements. The acceptance by Trustee of the assignment of the Leases pursuant to the Mortgage shall not at any time or in any event obligate Trustee to take any action under the Mortgage or to expend any money or to incur any expenses. Trustee shall not be liable in any way for any injury or damage to person or property sustained by any person or persons, firm or corporation in or about the Mortgaged Property. Prior to Trustee’s actual entry into and taking possession of the Mortgaged Property, Trustee shall not (i) be obligated to perform any of the terms, covenants and conditions contained in any Lease (or otherwise have any obligation with respect to any Lease); (ii) be obligated to appear in or defend any action or proceeding relating to the Lease or the Mortgaged Property; or (iii) be responsible for the operation, control, care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property. The execution of the Mortgage by Borrower shall constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Mortgaged Property is and shall be that of Borrower, prior to such actual entry and taking of possession.

Upon delivery of notice by Trustee to Borrower of Trustee’s exercise of Trustee’s rights under this section at any time after the occurrence of an Event of Default, and without the necessity of Trustee entering upon and taking and maintaining control of the Mortgaged Property directly, by a receiver, or by any other manner or proceeding permitted by the laws of the Property Jurisdiction, Trustee immediately shall have all rights, powers and authority granted to Borrower under any Lease, including the right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease.

Events of Default; Remedies

The occurrence of a “Default” as defined in the Loan Agreement shall constitute an “Event of Default” under the Mortgage.

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Upon the occurrence of an Event of Default, Trustee may foreclose the lien of the Mortgage and sell, as an entirety or in separate lots or parcels, the Mortgaged Property, under the judgment or decree of a court or courts of competent jurisdiction. Trustee, at its option, is authorized to foreclose the Mortgage subject to the rights of any tenants of the Mortgaged Property and the failure to make any such tenants parties defendant to any such foreclosure proceedings and to foreclose their rights will not be, nor be asserted by Borrower to be, a defense to any proceedings instituted by Trustee to collect the sums secured hereby or to collect any deficiency remaining unpaid after the foreclosure sale of the Mortgaged Property.

Upon any such foreclosure sale, Trustee may bid for and purchase the Mortgaged Property and, upon compliance with the terms of sale, may hold, retain and possess and dispose of such property in its own absolute right without further accountability. Upon any such foreclosure sale, Trustee may, if permitted by law, after allowing for the proportion of the total purchase price required to be paid in cash and for the costs and expenses of the sale, compensation and other charges, in paying the purchase price apply any portion of or all sums due to Trustee under the Note, the Mortgage or any other instrument securing the Note, in lieu of cash, to the amount which shall, upon distribution of the net proceeds of such sale, be payable thereon.

Trustee may proceed by a suit or suits in equity or at law, whether for collection of the indebtedness secured by the Mortgage, the specific performance of any covenant or agreement contained in the Mortgage or in aid of the execution of any power granted in the Mortgage, or for any foreclosure under the Mortgage or for the sale of the Mortgaged Property under the judgment or decree of any court or courts of competent jurisdiction.

If default shall be made in the payment of any amount due under the Note, the Mortgage or any other instrument securing the Note, then, upon Trustee’s demand, Borrower will pay to Trustee the whole amount due and payable under the Note and all other sums secured hereby; and if Borrower shall fail to pay the same forthwith upon such demand, Trustee shall be entitled, subject to provision of the Mortgage, to sue for and to recover judgment for the whole amount so due and unpaid together with costs and expenses including the reasonable compensation, expenses and disbursements of Trustee’s agents and attorneys actually incurred in connection with such suit and any appeal in connection therewith. Trustee shall be entitled to sue and recover judgment as aforesaid either before, after or during the pendency of any proceedings for the enforcement of the Mortgage and the right of Trustee to recover such judgment shall not be affected by any taking, possession or foreclosure sale hereunder, or by the exercise of any other right, power or remedy for the enforcement of the terms of the Mortgage, or the foreclosure of the lien hereof. At the foreclosure, Trustee shall be entitled to bid and to purchase the Property and shall be entitled to apply the debt secured hereby, or any portion thereof, in payment for the Property. In case of a foreclosure sale of all or any part of the Property and of the application of the proceeds of sale to the payment of the sums secured by the Mortgage, subject to the provision of the Mortgage, Trustee shall be entitled to enforce payment of and to receive all amounts then remaining due and unpaid and to recover judgment for any portion thereof remaining unpaid, with interest. Without in any way limiting the generality of the foregoing, Trustee shall also have the following specific rights and remedies: (i) to make any repairs to the collateral which Trustee deems necessary or desirable for the purposes of sale; (ii) to exercise any and all rights of set-off which Trustee may have against any account, fund or property of any kind, tangible or intangible, belonging to Borrower which shall be in Trustee’s possession or under its control; (iii) to cure such defaults, with the result that all costs and expenses incurred or paid by Mortgagee in effecting such cure shall be additional charges on the Note which bear interest at the interest rate of the Note and are payable upon demand; and (iv) if the Note is secured by a lien on any real property, to foreclose on such real property and to pursue any and all remedies available to Trustee at law or in equity, and in any order Trustee may desire, in Trustee’s sole discretion.

Each right and remedy provided in the Mortgage or the Loan Agreement is distinct from all other rights or remedies under the Mortgage or the Loan Agreement or afforded by applicable law, and each shall be cumulative and may be exercised concurrently, independently, or successively, in any order.

Additional Amounts Secured

All future advances and readvances that may subsequently be made to Borrower by Trustee, evidenced by the Note, or any other promissory notes, and all renewals and extensions thereof shall be secured by the Mortgage; the maximum amount of all Indebtedness outstanding at any one time secured by the Mortgage shall not exceed $[_______], plus interest thereon, all charges and expenses of collection incurred by Trustee, including court costs, and reasonable attorneys’ fees; provided, however, that nothing contained in the Mortgage shall create an obligation

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on the part of Trustee to make future advances or readvances to Borrower. Therefore, to secure the performance and observance by Borrower of all covenants and conditions contained in the Note, Loan Documents and in any renewal, extension or modification of them, in the Mortgage and in all other instruments securing the Note and to secure in accordance with South Carolina Code Annotated Section 29-3-50, as amended, (i) for and in consideration of the premises, Property and other valuable consideration, the receipt of which is acknowledged, Borrower has in the Mortgage granted, bargained, sold, aliened, remised, released, conveyed, assigned, transferred, mortgaged, hypothecated, pledged, delivered, set over, warranted and confirmed to Trustee, its successors and assigns forever, all right, title and interest of Borrower in and to this Property and (ii) to the extent provided in the Note and/or Mortgage, interest or discount will be deferred, accrued or capitalized.

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THE LAND USE RESTRICTION AGREEMENTS

The following is a brief summary of certain provisions of the Land Use Restriction Agreements among (i) the Authority, the Trustee, and 2017 IAVF Cedar Twin City LLC, (ii) the Authority, the Trustee and 2017 IAVF Cedar Silas LLC, (iii) 2017 IAVF Cedar Chesterfield LLC, and (iv) the Authority, the Trustee, and 2017 IAVF Cedar Whispering LLC. Each Land Use Restriction Agreement is in a form substantially similar to this summary. The summary does not purport to be complete or definitive and is qualified by reference to each Land Use Restriction Agreement, copies of which are on file with the Trustee.

Each Borrower has entered into a Land Use Restriction Agreement, by and among such Borrower, the Authority and the Trustee (collectively, the “Land Use Restriction Agreements”), that will restrict such Borrower’s use of the applicable Project so as to satisfy the requirements of Section 142(d) of the Internal Revenue Code of 1986, as amended (the “Code”).

Covenant with Respect to Tax Status of the Tax-Exempt Bonds

The Authority and the Borrowers will not knowingly take, or permit to be taken, or fail to take, any action that would adversely affect the excludability from gross income for federal income tax purposes of interest on the Tax-Exempt Bonds, and the Trustee covenants that it will not invest or use any of the proceeds of the Bonds except as otherwise directed by the respective Borrower in writing.

Qualified Residential Rental Project Requirements

The Project will, throughout the Qualified Project Period, unless the Land Use Restriction Agreement is earlier terminated, satisfy the following terms and conditions, limitations and restrictions:

(a) Satisfaction of Applicable Legal Requirements. The Projects are being acquired, rehabilitated, equipped and installed for the purpose of providing multifamily Residential Rental Units, and the Projects will be owned, managed and operated as multifamily Residential Rental Units, all in accordance with the qualified residential rental project requirements of Section 142(d) of the Code and the applicable residential rental project provisions of Treas. Reg. § 1.103-8(b) and the administrative guidance issued thereunder;

(b) Similarly Constructed Residential Rental Units. All of the Residential Rental Units in the respective Project will be similarly constructed;

(c) Transient Use. During the term of the respective Land Use Restriction Agreement, (i) none of the Residential Rental Units in the Project will at any time be utilized on a transient basis, (ii) none of the Residential Rental Units in the Project will ever be leased or rented for a period of less than thirty (30) days and (iii) neither the Project nor any portion thereof will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, hospital, sanitarium, nursing home, rest home, trailer court or park or for any other use on a transient basis;

(d) General Public Availability. During the term of the respective Land Use Restriction Agreement, (i) the Residential Rental Units in the Project will be leased and rented or made available for rental on a continuous basis to members of the general public and (ii) the Borrower will not give preference in renting Residential Rental Units in the Project to any particular class or group of persons, other than Qualified Tenants as provided in the Land Use Restriction Agreement; provided, however, that Residential Rental Units in the Project may be occupied by maintenance, security or managerial employees of the Borrower or its property manager who are reasonably required to maintain residences in the Project, but only to the extent such occupation does not cause the Project to cease to be a qualified residential rental project under Section 142(d) of the Code;

(e) Use of Related Facilities by Tenants. Any functionally related and subordinate facilities (e.g., parking areas, laundry facilities, tenant offices, physical therapy rooms, dining rooms, meeting rooms, common areas, swimming pools, tennis courts, etc.) (the “Related Facilities”) for the Project will be made available to all tenants of the Project on an equal basis. Fees charged to residential tenants for use of the Related Facilities will be commensurate with fees charged for similar facilities at similar residential rental properties in the surrounding area and, in no event will any such fees charged to tenants of the Project be discriminatory or exclusionary as to the Low

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and Moderate Income tenants of the Project. No Related Facilities will be made available to persons other than tenants or their guests. Parking, if available, will be made available to all tenants on a first come, first served basis;

(f) No Continual or Frequent Nursing, Medical or Psychiatric Services. No continual or frequent nursing, medical or psychiatric services will be provided to the residents of the Project at any time or in any manner;

(g) Ownership, Structure and Financing. Each Project will consist of one or more buildings or structures, all of which will be (i) owned by the same person for federal tax purposes, (ii) located on a single tract of land, consisting of any parcel of land or two or more parcels of land that are contiguous except for being separated only by a road, street, stream or similar property (parcels are contiguous if their boundaries meet at one or more points) and (iii) financed with proceeds of the Tax-Exempt Bonds or otherwise pursuant to a common plan of financing. Each such building or structure is a discrete edifice or other man-made construction consisting of an independent foundation, outer walls and roof and containing five or more similarly constructed units;

(h) Condominium Ownership. During the term of the Land Use Restriction Agreement, the Borrower will not convert the Project to condominium ownership;

(i) Borrower Rentals. During the term of the Land Use Restriction Agreement, no Residential Rental Unit in the Project will be occupied by the Borrower (or a Related Person) at any time unless the Borrower (or a Related Person) resides in a Residential Rental Unit in a building or structure that contains at least five Residential Rental Units and unless the resident of such Residential Rental Unit is a resident manager or other necessary employee (e.g., maintenance and security personnel);

(j) Certificate of Project Commencement. The Qualified Project Period with respect to the Bonds and the Project begins on the date on which 10 percent of the Residential Rental Units in the Project are occupied;

(k) No Discrimination. During the term of the Land Use Restriction Agreement, the Borrower will not discriminate on the basis of age, race, color, creed, national origin, religion, sex or marital status in the lease, use or occupancy of the Project or in connection with the employment or application for employment of persons for the operation and management of the Project; and the Borrower will not refuse to lease units or deny occupancy in the Project to persons whose family includes minor dependents who will occupy such unit, unless such refusal is based upon factors not related to the presence of such minors in the family;

(l) Payment of Expenses. During the term of the Land Use Restriction Agreement, the Borrower will make timely payment of the fees and expenses, if any, of the Trustee in accordance with the provisions of the Land Use Restriction Agreement, the Indenture and the Loan Agreement, including any expenses incurred by the Trustee in the performance of its duties and obligations under the Land Use Restriction Agreement;

(m) Certification of Income. As a condition of occupancy, each Qualified Tenant will be required to sign and deliver to the Borrower a Certification of Income, in a form designed to establish compliance with the applicable provisions of the Code and the Treasury Regulations, or as otherwise required by the Internal Revenue Service. Such Qualified Tenant will also be required to provide whatever other information, documents or certifications are deemed necessary by the Borrower or the Authority to substantiate the Certification. All Certifications of Income with respect to each Qualified Tenant who resides in a Residential Rental Unit in the Project or resided in a Residential Rental Unit during the immediately preceding calendar year will be maintained on file at the main business office of the Project and will be available for inspection by the Authority and the Trustee;

(n) Annual Determinations. The determination of whether a resident of the Project is a Qualified Tenant will be made at least annually on the basis of the current income of all the residents of the Residential Rental Unit. Each lease to a Qualified Tenant entered into after the date of the Land Use Restriction Agreement will require the tenant to sign the Certification of Income annually, attesting to the combined income of all the occupants of each Residential Rental Unit and at any other time as the Borrower may reasonably request;

(o) Subsequent Changes to Income. If a tenant is a Qualified Tenant upon commencement of occupancy of a Residential Rental Unit, the income of such tenant will be treated as Low or Moderate Income. The preceding sentence will not apply to any tenant whose income as of the most recent annual determination under paragraph (n) of this Section exceeds 140% of Low and Moderate Income if, after such determination, but before the

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next annual determination, any Residential Rental Unit of comparable or smaller size in (i) the same building (within the meaning of Section 42 of the Code), provided that the Project is eligible for low-income housing tax credits under Section 42 of the Code or (ii) the Project, if the Project is not eligible for low-income housing tax credits under Section 42 of the Code, is occupied by a new tenant who does not qualify as a Qualified Tenant;

(p) Form of Lease. Any lease used in renting any Residential Rental Unit in the Project to a Qualified Tenant will provide for termination of the lease and consent by such tenant to immediate eviction, subject to applicable provisions of laws of the State in which the Project is located, for failure to qualify as a Qualified Tenant as a result of any material misrepresentation made by such person with respect to any Certification of Income. Each Qualified Tenant occupying a Residential Rental Unit will be required to execute a written lease that will be effective for a term of at least six (6) months. No meals or other services will be provided to tenants of the Project;

(q) Borrower’s Certification. On the first day of each month after any Residential Unit in the Project is available for occupancy, the Borrower will prepare a record of the percentage of Residential Rental Units of the Project occupied (and treated as occupied) by Qualified Tenants during the preceding month. Such record will be maintained on file at the main business office of the Project, will be available for inspection by the Authority and the Trustee and will contain such other information and be in the form required by the Authority and/or Trustee, as applicable;

(r) Occupancy Standards. The Project will satisfy the Occupancy Standards; and

(s) Records Maintenance and Inspection. During the term of the Land Use Restriction Agreement, the Borrower will (i) maintain complete and accurate records pertaining to the Residential Rental Units occupied or to be occupied by Qualified Tenants, and (ii) permit any duly authorized representative of the Trustee, the Authority, the Department of the Treasury or the Internal Revenue Service to inspect the books and records of the Borrower pertaining to the income of and Certificate of Income of Qualified Tenants residing in the Project upon reasonable notice and at reasonable times.

Transfer Restrictions

For the Qualified Project Period, except with respect to foreclosure or deed in lieu of foreclosure or other involuntary loss described in Treas. Reg. § 1.103-8(b)(6)(iii)(a) and not otherwise described in paragraph (b) thereof, the Borrower will not Transfer the Project or any interest therein, in whole or in part, except in accordance with the terms of the Loan Agreement and under this Section. Any Transfer of the Project or any interest therein, in whole or in part, will only be permitted if: (1) the Borrower will not be in default of the Land Use Restriction Agreement; (2) the purchaser or assignee will assume in writing in a form acceptable to the Authority, all duties and obligations of the Borrower under the Land Use Restriction Agreement and execute any necessary or appropriate document with respect to assuming its obligations under the Land Use Restriction Agreement and the Financing Agreements in the form of an Assumption Agreement, which document will be recorded in the legally appropriate office for recording; (3) the Trustee will have received an opinion of Bond Counsel to the effect that such transfer will not adversely affect the exclusion of the interest on the Bonds from gross income of the owners thereof for federal income tax purposes; (4) [omitted]; (5) the Borrower will deliver to the Trustee an opinion of counsel to the transferee that the transferee has duly assumed the obligations of the Borrower under the Land Use Restriction Agreement and that such obligations and the Agreement are binding on the transferee; and (6) such other conditions are met as are set forth in or referred to in the Financing Agreements (i) to protect the exclusion of the interest on the Tax-Exempt Bonds from gross income of the owners thereof for federal income tax purposes, (ii) to ensure that the Project is not acquired by a person that has pending against it, or that has a history of, building code violations, as identified by municipal, county, state or federal regulatory agencies, and (iii) to provide to the satisfaction of the Authority and the Trustee, in their respective sole discretion, that indemnification of the Authority and the Trustee under the Land Use Restriction Agreement is assumed by the purchaser or assignee. The Borrower will deliver the Assumption Agreement and the items specified in Clauses (3), (4) and (5) above to the Trustee, with copies to the Authority, at least ten (10) business days prior to a proposed Transfer.

Enforcement

The Borrower further represents, warrants and covenants that:

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(a) Examination of Records. The Borrower will permit, after two (2) business days' prior notice, any duly authorized representative of the Authority and the Trustee to inspect any books and records of the Borrower regarding the Project, particularly with respect to the incomes of Qualifying Tenants that pertain to compliance with the provisions of the Agreement and Section 142(d) of the Code. Any certification, records or other documents deemed necessary by the Authority or the Trustee to show the Project’s compliance with Section 142(d) of the Code will be maintained on file at the Project site until the later of (i) the date that the Bonds (and any tax-exempt obligations used to refund any of the Bonds) remain outstanding and for four (4) years thereafter or (ii) the end of the Qualified Project Period;

(b) Other Information. The Borrower will provide such other information, documents or certifications requested by the Authority or the Trustee that the Authority or the Trustee, as applicable, deems reasonably necessary, to substantiate the Borrower’s continuing compliance with the provisions of the Agreement and Section 142(d) of the Code; and

(c) Reliance on Borrower or Tenant Certification. In the enforcement of the Land Use Restriction Agreement, the Authority or the Trustee may rely on any certificate delivered by or on behalf of the Borrower or any tenant concerning the Project.

Violations

(a) Notice. The Borrower will inform the Authority and the Trustee by written notice of any violation of the Borrower’s obligations under the Land Use Restriction Agreement or the occurrence or existence of any situation or event (an “Adverse Development”) that would cause the interest of the Tax-Exempt Bonds to become includable in the gross income of their holders for federal income tax purposes within five (5) days after discovering any such adverse development, and the Trustee covenants and agrees to inform the Borrower by written notice of any Adverse Development that, in the opinion of Bond Counsel, would cause the interest on the Bonds to become includable in the gross income of their holders for federal income tax purposes within thirty (30) days after discovering such Adverse Development;

(b) Time to Correct. The Borrower will correct or rectify any adverse development no later than thirty (30) days after such Adverse Development is first discovered or should have been discovered by the Borrower’s exercise of reasonable diligence. The Authority and the Trustee covenant and agree to provide the Borrower a period of time, which will be at least thirty (30) days after the date such Adverse Development is first discovered or should have been discovered by the Borrower’s exercise of reasonable diligence, or if later, within such further time which may be approved in an opinion of Bond Counsel, in which to correct any Adverse Development. If any such Adverse Development is not corrected to the satisfaction of the Authority (relying solely upon the advice of Bond Counsel) within the period of time specified by the Authority or the Trustee, without further notice, the Authority or the Trustee, as applicable, may declare a default under the Land Use Restriction Agreement, effective on the date of such declaration of default, and upon such default, the Borrower will pay to the Trustee an amount equal to any rents or other amounts received by the Borrower for any Residential Rental Units in the Project that were occupied in violation of the Land Use Restriction Agreement during the period such violation continued and the Trustee will deliver such amounts to the Authority within ten (10) business days;

(c) Specific Performance. The Authority and/or the Trustee and/or, to the extent permitted in the Indenture, to the extent permitted in the Financing Agreements (as defined in the Land Use Restriction Agreement), any owner of any of the Bonds, may also apply, individually or collectively, to any court, state or federal, for specific performance of the Land Use Restriction Agreement, or for an injunction against any violation of the Agreement, or for any other remedies at law or in equity or for any such other actions as will be necessary or desirable so as to correct non-compliance with the Land Use Restriction Agreement.

Amendment

The Land Use Restriction Agreement may be amended to reflect changes in Section 142(d) of the Code, the applicable Regulations and administrative guidance promulgated thereunder. The Authority and the Borrower each will take any lawful action (including amendment of the Agreement) (in the case of the Trustee, upon payment of its fees and expenses related to such action) if, in the opinion of Bond Counsel, such action is necessary to comply fully with all applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or

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proposed by the Department of the Treasury or the Internal Revenue Service from time to time pertaining to obligations issued under Section 142(d) of the Code and affecting the Project. No amendment of the Land Use Restriction Agreement will be made without the prior written approval of the Authority, the Trustee and the Company and an approving opinion of Bond Counsel that such amendment will not adversely affect the tax-exempt status of the Bonds.

Termination

The Land Use Restriction Agreement will terminate:

(a) Completion. Upon the termination of the Qualified Project Period;

(b) Involuntary Non-Compliance. In the event of an involuntary non-compliance caused by unforeseen events, such as fire, seizure, requisition, change in a federal law or an action of a federal agency after the date of issuance of the Tax-Exempt Bonds that prevents the Authority or the Trustee from enforcing the provisions of the Agreement or condemnation or similar event, provided that: (i) the Tax-Exempt Bonds are retired at their first applicable available call date, or (ii) any insurance proceeds or condemnation award or other amounts received as a result of such loss or destruction are used to provide a project that meets the requirements of Section 142(d) of the Code and Treas. Reg. § 1.103-8(b) as amended, or any successor law or regulation; or

(c) Certain Transfers. In the event of foreclosure, transfer of title by deed in lieu of foreclosure, or similar event, following which and within a reasonable period of time the Tax-Exempt Bonds are redeemed or the amounts received as a consequence of such event are used to provide a qualified residential rental project meeting the applicable requirements of the Code and the Regulations, unless, at any time subsequent to such event and during the Qualified Project Period, the Borrower or any direct successor in interest, or any transferee from the Borrower or its successor subject to an Assumption Agreement, or any Related Person to such persons, or any other person who was, prior to the event of foreclosure or other such event, an obligor on any Purpose Investment issued in connection with any financing for the Project, obtains an ownership interest in the Project for tax purposes;

(d) Opinion of Bond Counsel. Upon the delivery of an opinion of Bond Counsel acceptable to the Authority and the Trustee that continued compliance with the requirements of the Land Use Restriction Agreement is not required in order for interest on the Tax-Exempt Bonds to be and continue to be excludible from gross income of the holders of the Tax-Exempt Bonds for federal income tax purposes;

(e) Redemption of Bonds. Upon defeasance or redemption of the Bonds, the Trustee will have no further obligation under the Land Use Restriction Agreement.

Post-Defeasance

If the Tax-Exempt Bonds are defeased but the Land Use Restriction Agreement remains in full force and effect, the Borrower will contract, at Borrower’s expense, with a compliance monitoring agent reasonably satisfactory to the Authority, to review compliance by the Borrower with the requirements of the Land Use Restriction Agreement.

Covenants Run with the Land; Successors Bound

The Borrower subjects the Real Estate to the covenants, reservations and restrictions set forth in the Land Use Restriction Agreement. The Authority, the Trustee and the Borrower declare their express intent that the covenants, reservations and restrictions set forth in the Land Use Restriction Agreement will be deemed covenants, reservations and restrictions running with the land to the extent permitted by law and will pass to and be binding upon the Borrower’s successors in title to the Real Estate throughout the term of the Land Use Restriction Agreement. Each and every contract, deed, mortgage, or other instrument hereafter executed covering or conveying the Real Estate or any portion thereof or interest therein will conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed, mortgage or other instrument.

APPENDIX C

FORM OF BOND COUNSEL OPINION

The form of the approving legal opinion of Butler Snow LLP, bond counsel, is set forth below. The actual opinion will be delivered on the date of delivery of the Bonds referred to therein and may vary from the form set forth to reflect circumstances both factual and legal at the time of such delivery. Recirculation of the Official Statement shall create no implication that Butler Snow LLP has reviewed any of the matters set forth in such opinion subsequent to the date of such opinion.

[Closing Date]

Public Finance Authority Madison, Wisconsin

RE: $______ Public Finance Authority Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project) Series 2017A (the “Series 2017A Bonds”)

$______ Public Finance Authority Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project) Subordinate Series 2017B (the “Series 2017B Bonds”) $______ Public Finance Authority Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project) Junior Subordinate Series 2017C (the “Series 2017C Bonds” and collectively with the Series 2017A Bonds and the Series 2017B Bonds, the “Bonds”)

Ladies and Gentlemen:

We are acting as bond counsel (the “Bond Counsel”) in connection with the issuance of the above captioned Bonds. In such capacity, we have examined such law, certified proceedings, and other documents as we have deemed necessary to render this opinion.

The Bonds are issued pursuant to Sections 66.0301, 66.0303 and 66.0304 of the Wisconsin Statutes, as amended (the “Act”), and a resolution (the “Bond Resolution”) duly adopted by the board of directors of the Public Finance Authority (the “Issuer”) on July 12, 2017. The Bonds are being issued under a Trust Indenture, dated as of July 1, 2017 (the “Indenture”) between the Issuer and Wilmington Trust, National Association, as trustee (the “Trustee”). The Issuer and 2017 IAVF Cedar Twin City, LLC, 2017 IAVF Cedar Silas LLC, 2017 IVAF Cedar Chesterfield LLC, 2017 IAVF Cedar Whispering LLC and their authorized successors and assigns (collectively, the “Borrowers”), has entered into a Loan Agreement dated as of July 1, 2017 (the “Loan Agreement”), pursuant to which the Borrowers have agreed, jointly and severally, to pay to the Issuer such loan payments as will be sufficient to pay the principal of, premium, if any, and interest on the Bonds as the same become due. The Bonds are payable solely from the Trust Estate (as such term is defined in the Indenture).

The sole member of the Borrowers is America’s Veterans Foundation, Inc., a Florida nonprofit

corporation (the “Sole Member”), and its successors and assigns. Reference is hereby made to, and we have relied on, an opinion of Brennan Manna Diamond,

Jacksonville, Florida, dated the date hereof, relating, among other matters, to the status of the Sole Member as an exempt organization described in Section 501(c)(3) of the of the Internal Revenue Code of 1986, as amended (the “Code”), and exempt from federal income taxation under Section 501(a) of the Code and the status of the Borrowers as a disregarded entities for federal income tax purposes.

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Public Finance Authority [Closing Date] Page 2

As to questions of fact material to our opinion, we have relied upon (a) certified representations of the Issuer, the Sole Member and the Borrowers, (b) certified proceedings and other certifications of the Issuer and other public officials furnished to us, and (c) certifications furnished to us by or on behalf of the Borrowers (including certifications made in the Tax Regulatory Agreement and No-Arbitrage Certificate (the “Tax Agreement”) among the Issuer, the Sole Member and the Borrowers and acknowledged and agreed to by the Trustee, dated as of July 1, 2017, which are material to Paragraph 4 below), without undertaking to verify the same by independent investigation. In all such examinations, we have assumed the genuineness of all signatures, the authenticity of all documents presented to us as originals, and the conformity to original documents of all copies submitted to us as certified, conformed, or photographic copies. As to certificates, we have assumed the same to be properly given and to be accurate. With respect to matters of fact relevant to this opinion, we have relied, without independent verification of the accuracy or completeness of the matters set forth therein, on the representations and warranties of the parties thereto set forth in the documents and instruments pursuant to which the Bonds are being issued and secured, as well as in certificates of officers of the Issuer, the Sole Member and the Borrowers delivered in connection with the issuance of the Bonds.

In our capacity as Bond Counsel, we have not been engaged or undertaken to express and we do not

express any opinion (other than as may be expressly set forth herein) with respect to (a) the legal existence or the due authorization, execution, or delivery by or enforcement against the Borrowers of any instrument or agreement in connection with the project financed or refinanced with the proceeds of the Bonds (the “Projects”), (b) title to the Projects or compliance with zoning, land use, and related laws, (c) the status of any lien or matter of record or security interest purported to be created in connection with the foregoing, (d) the accuracy, completeness, or sufficiency of the official statement relating to the Bonds dated July [__], 2017 (the “Official Statement”) (except to the extent stated in our supplemental opinion dated the date hereof) or any other offering material relating to the Bonds or (e) the financial condition or capabilities of the Issuer or the Borrowers.

Based upon the foregoing and subject to the qualifications that follow, we are of the opinion, as of the date hereof and under existing statutes, regulations, rulings, and court decisions, that:

1. The Issuer has the power and authority to issue, sell, and deliver the Bonds and to

enter into and perform its obligations under the Loan Agreement and the Indenture, and create the assignment, pledge, and security interest under the Indenture in the Trust Estate in favor of the owners of the Bonds.

2. The Indenture and Loan Agreement constitute valid and binding obligations of the Issuer enforceable upon the Issuer.

3. The Bonds (a) have been duly authorized, executed, and issued by the Issuer and delivered to the Trustee for authentication and (b) are valid and binding special limited obligations of the Issuer payable solely from the Trust Estate.

4. Under the laws, regulations, rulings and judicial decisions in effect as of the date

hereof, interest on the Bonds is excludible from gross income for federal income tax purposes. Furthermore, interest on the Bonds will not be treated as a specific item of tax preference under Section 57(a)(5) of the Internal Revenue Code of 1986, as amended (the “Code”), in computing the alternative minimum tax for individuals and corporations. In rendering the opinions in this paragraph, we have assumed continuing compliance with certain covenants in the Tax Agreement and the Loan Agreement designed to meet the requirements of the Code. Failure to comply with such covenants may cause interest on the Bonds to be includable in gross income retroactively to the date of the

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Public Finance Authority [Closing Date] Page 3

issuance of the Bonds. In rendering the foregoing opinion, we have relied upon the opinion of Brennan Manna Diamond, counsel to the Borrowers, regarding the status of the Sole Member as an organization described in Section 501(c)(3) of the Code and the characterization of the Borrowers as disregarded entities for federal income tax purposes.

We do not express any opinion with respect to the exemption, for Wisconsin income tax purposes, of the interest on the Bonds or with respect to any other federal or Wisconsin tax matters related to the Bonds. With respect to matters in (1) and (2) above, we are relying on the legal opinion of von Briesen & Roper, s.c., as counsel to the Issuer, as to the due authorization, execution and delivery by and enforceability against the Issuer of the Bonds, the Indenture and the Loan Agreement.

Except as expressly stated above, we express no opinion as to any other federal or any other state income tax consequences of acquiring, carrying, owning, or disposing of the Bonds. Owners of the Bonds should consult their tax advisors as to the applicability of any collateral tax consequences of ownership of the Bonds, which may include purchase at a market discount or at a premium, taxation upon sale, redemption, or other disposition, and various withholding requirements.

It is to be understood that the rights of the owners of the Bonds and the enforceability of the Bonds, the Indenture, and the Loan Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors’ rights generally and by equitable principles, whether considered at law or in equity.

This opinion is given as of the date hereof and we assume no obligation to update, revise, or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. This opinion is given solely for the use and benefit of the addressee hereof, and only in connection with the issuance and delivery of the Bonds and may not be used or relied upon by any other person or in connection with any other transaction, except with express consent of this firm.

Very truly yours,

C-3

APPENDIX D

COMPILATION OF HISTORICAL FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL PROJECTIONS

~ s ~

Sandra A. Durke Certified Public Accountant

San Marcos, TX

PRO FORMA FINANCIAL INFORMATION WITH ACCOUNTANT'S COMPILATION REPORT AND INDEPENDENT ACCOUNTANT'S REPORT ON

APPLYING AGREED-UPON PROCEDURES

CEDAR GROVE PORTFOLIO

DECEMBER 31, 2015, 2016, 2017


TABLE OF CONTENTS

INDEPENDENT ACCOUNTANT'S COMPILATION REPORT

PRO FORMA PROFIT AND LOSS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ASSUMPTIONS

AGREED-UPON PROCEDURES REPORT

EXHIBIT A

EXHIBIT B

PAGE

3

5

8

12

15

17

s ~

Sandra A. Durke Certified Public Accountant

San Marcos, TX

INDEPENDENT ACCOUNTANT'S COMPILATION REPORT

To Standard & Poor's

I have compiled the accompanying pro forma financial information of Cedar Grove Portfolio (the "Project") for the periods from January 1, 2015 through December 31, 2016. I have not audited or reviewed the accompanying pro forma financial information and, accordingly, do not express an opinion or provide any assurance about whether the pro forma financial information is in accordance with accounting principles generally accepted in the United States of America.

Management is responsible for the preparation and fair presentation of the pro forma financial information in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the pro forma financial information.

My responsibility is to conduct the compilation in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. The objective of a compilation is to assist management in presenting financial information in the form of pro forma financial information without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the pro forma financial information.

Management has elected to omit substantially all of the disclosures ordinarily included in pro forma financial information. The omitted disclosures might have added significant information regarding the company's pro forma financial position and results of operations. Accordingly, this pro forma financial information is not designed for those who are not informed about such matters.

129 Old Settlers Drive - San Marcos, TX 78666 210-842-4349 Page 3

I have also compiled the accompanying forecasted profit and loss of Cedar Grove Portfolio for the year ending December 31,2017, in accordance with attestation standards established by the American Institute of Certified Public Accountants.

A compilation is limited to presenting in the form of a forecast, information that is the representation of management and does not include evaluation of the support for the assumptions underlying the forecast. I have not examined the forecast and, accordingly, do not express an opinion or any other form of assurance on the accompanying statements or assumptions. Furthermore, there will usually be differences between the forecasted and actual results because events and circumstances frequently do not occur as expected, and those differences may be material. I have no responsibility to update this report for events and circumstances occurring after the date of this report.

Sandra A. Durke May 25, 2017


CEDAR GROVE PORTFOLIO Pro Forma Profit and Loss

For the fiscal years ended December 31, 2016 and 2015 (Historical) and for the fiscal year ending December 31, 2017 (Forecast)

Revenue Gross Potential Rent

less: Concessions/Bad Debt/Vacancy loss

Plus: Utility Income

Collection Income/Cancellation Fees

late Fees Application Fees

Court Fees

All Other Income

Totallnc:ome

Expenses

Management Fee

Marketing

Administrative

Payroll

Utilities

Maintenance and Repairs

Real Estate Taxes

P&L Insurance

Replacement Reserves

Total Operating Expenses

Net Operating Income

Revenue Gross Potenti:;!1 Rent

less: Concessions/Bad Debt/Vacancy loss

Plus: Utilitiy Income


Late Fees

Application Fees

Court Fees

All Other Income

Total Income

Expenses

Management Fee

Marketing

Administrative

Payroll

Utilities


Real Estate Taxes

P&llnsurance




129 Old Settlers Drive, San Marcos, TX

CONSOLIDATED

Forecast Historical

12/31/2017 12/31/2016 12/31/2015

8,755,944 8,700,895 7,941,834

(687,262) (1,334,704) (1,687,597)

263,459 172,138 863

40,965 18,122 47,474

166,320 79,979 27,096

44,760 24,534 9,508

41,789 27,676

89,884 55,311 163,908

8,715,859 7,673,425 6,530,762

348,634 272,675 136,946

51,960 58,135 SO,233

172,072 186,007 137,910

1,076,458 1,028,586 1,190,432

783,553 688,400 844,878

648,540 595,731 934,270

513,742 419,233 473,161

201,224 207,127 296,638

563,238 131,721

4,359,421 3,455,894 4,226,188

4,356,438 4,217,531 2,304,574

CHESTERFIELD APARTMENTS

Forecast Historical

12/31/2017 12/31/2016 12/31/2015

2,270,100 2,102,357 1,981,'159

(lSO,182) (250,620) (336,904)

13,263 7,999 25,010

45,524 13,682 18,497

12,000 3,690 5,025

10,921 27,676

16,898 2,246 11,016

2,188,524 1,879,354 1,731,779

87,541 64,083 52,297

13,320 8,560 14,334

44,410 41,153 72,197

260,864 178,753 328,432

214,079 195,885 203,816

174,300 180,596 378,304

108,480 103,480 105,687

59,686 59,686 80,516

172,578

1,135,258 832,196 1,235,583

1,053,266 1,047,158 496,196

(See accountant's report on compilation) PageS

Revenue

Gross Potential Rent

Less: Concessions/Bad Debt/Vacancy Loss




Court Fees

All Other Income

Total Income

Expenses

Management Fee

Marketing

Administrative

Payroll

Utilities


Real Estate Taxes

P&llnsurance





less: Concessions/Sad Debt/Vacancy loss



Late Fees

Application Fees

Court Fees

All Other Income

Total Income

Expenses

Management Fee

Marketing

Administrative

Payroll

Utilities


Real Estate Taxes

P&llnsurance




SILAS CREEK APARTMENTS

Forecast Historical

12/31/2017 12/31/2016

1,773,216 1,789,968

(155,818) (623,400)

8,892

28,182 2,238

8,760 1,320

8,692

16,698 19,102

1,688,622 1,189,228

67,545 42,450

11,820 9,288

39,375 35,714

231,932 239,062

173,306 161,670

128,220 139,260

110,322 42,779

38,849 38,849

70,200

871,569 709,072

817,053 480,156

TWIN CITY APARTMENTS

Forecast Historical

12/31/2017 12/31/2016

2,245,428 2,428,503

(151,608) (191,188)

99,604 66,021

9,026

38,614 26,955

12,000 6,992

10,587

27,655 8,903

2,291,306 2,303,336

91,652 84,905

13,080 21,538

40,563 55,696

293,627 268,511

132,286 119,233

160,300 146,047

160,250 145,850

41,304 48,376

226,860

1,159,922 890,156

1,131,384 1,413,180

42,369

1,653,704

(929,606)

8,599

4,483

3,151

740,331

25,835

26,191

26,971

338,970

220,560

199,059

104,592

61,866

(263,712)

'11/30/2015

2,205,158

(421,087)

149,741

1,933,812

58,814

19,868

18,621

198,294

169,967

149,875

134,631

97,922

71,250

919,242

1,014,570

· Historical Dec 2015 numbers not available from previous owner. Twelve months include Dec 2014 through Nov 2015

129 Old Settlers Drive, San Marcos, TX (See accountant's report on compilation) Page 6


Less: Concessions/Bad Debt/Vacancy loss Plus: Utilitiy Income

Collection Income/Cancellation fees


Court Fees

All Other Income

Total Income

Expenses

Management Fee

Marketing

Administrative

Payroll

Utilities


Real Estate Taxes P&llnsurance Replacement Reserves



129 Old Settlers Drive. San Marcos. TX

WHISPERING PINES APARTMENTS

Forecast Historical

12/31/2017 12/31/2016

2,467,200 2,380,067

(199,654) (269,496)

163,855 106,117

9,784 10,123

54,000 37,104

12,000 12,532

11,589

28,633 25,060

2,547,407 2,301,507

101,896 81,237

13,740 18,749 47,724 53,444

290,035 342,260

263,882 211,612

185,720 129,828

134,690 127,124

61,385 60,216

93,600

1.192,672 1,024,470

1,354,735 1,277,037

(See accountant's report on compilation)

12/31/2015

2,101,513

863

22,464

2,124,840

19,840

20,121

324,736

250,535

207,032

128,251

56,33'

60,471

1,067,320

1,057,520

Page 7


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ASSUMPTIONS For the fiscal years ended December 31, 2016 and 2015 (Historical)

and for the fiscal year ending December 31, 2017 (Forecast)

NOTE 1 - Project Overview

The Cedar Grove Portfolio (the "Project") is a portfolio of 4 existing multifamily residential rental housing apartment complexes with 1,125 total units located in North Carolina and South Carolina. The portfolio includes:

1. Chesterfield Apartments consisting of 294 units with 264,023 square feet of rentable area located in Winston-Salem NC. This property was purchased by the current owner in March 2016.

2. Silas Creek Apartments consisting of234 units with 205,752 square feet of rentable area located in Winston-Salem NC. This property was purchased by the current owner in May 2016.

3. Twin City Apartments consisting of 285 units with 296,975 square feet of rentable area located Winston-Salem NC. This property was purchased by the current owner in December 2015.

4. Whispering Pines Apartments consisting of 312 units with 289,272 square feet of rental area located in Spartansburg, SC. This property was purchased by the current owner in March 2016.

1A VF Cedar Chesterfield, LLC, 1A VF Cedar Silas LLC, 1A VF Cedar Twin City LLC, and IA VF Cedar Whispering, LLC, (the "Borrowers") will issue tax-exempt and taxable bonds (the "Bonds") to (i) finance the cost of the acquisition, renovation and equipping of the Project, (ii) fund an account in the Debt Service Reserve Fuod and (iii) pay certain cost of issuance on the Bonds.

NOTE 2 - Summary of Significant Assumptions

Financial Forecast This financial forecast presents, to the best of the Borrower's knowledge and belief, the expected adjusted net income available for debt service for the Project for the forecast period. Accordingly, the forecast reflects the Borrower's judgement as of April 20, 2017, the date of this forecast, of expected conditions and its expected course of action. The assumptions disclosed herein are those of that the Borrower believes are significant to the forecast. There will usually be differences between the forecast and actual results, because events and circumstances frequently do no occur as expected, and those differences may be material.

Revenue Assumptions

Gross Potential Rent The Borrower developed the gross potential rent forecast by using current residential leases at the Project. The gross potential rent for residential units is listed in the table below by each property in the portfolio.

CHESTERFIELD APARTMENTS RENT CONFIGURATION

#of Total Average Rent Rent Unit Type Units SOFT SOFT Rent Rent/SOFT (Month) (Annual)

2BD/ 1.5BA 7 913 6391 $640 $0.70 $4,480 $53,760

2BDII.5BA (Type B) 83 913 75779 $640 $0.70 $53,120 $637,440

2BDIIBA 193 882 170226 $635 $0.72 $122,555 $1,470,660

3BD/2BA 11 1057 11627 $820 $0.78 $9,020 $108,240

TOTAL 294 264023 $189,175 $2,270,100


SILAS CREEK APARTMENTS RENT CONFIGURATION

#of Total Average Rent Rent Unit Type Units SQFT SQFT Rent RentlSQFT (Month) (Annual)

IBDIIBA 32 690 22080 $509 $0.74 $16,288 $195,456

IBD/ IBA (Type B) 24 676 16224 $505 $0.75 $12,120 $145,440

2BD12BA 4 1026 4104 $675 $0.66 $2,700 $32,400

2BD/I.5BA 48 818 39264 $635 $0.78 $30,480 $365,760

2BD/1.5BA (Type B) 74 868 64232 $640 $0.74 $47,360 $568,320

3BD/I.5BA 24 1082 25968 $725 $0.67 $17,400 $208,800

3BD/1.5BA (Type B) 28 1210 33880 $765 $0.63 $21,420 $257,040

TOTAL 234 205752 $147,768 SI,773,216

TWIN CITY APARTMENTS RENT CONFIGURATION

#of Total Average Rent Rent Unit Type Units SQFT SQFT Rent RentlSQFT (Month) (Annual)

IBDIIBA 12 725 8700 $549 $0.76 $6,588 $79,056

IBD/ IBA (Type B) 64 800 51200 $570 $0.71 $36,480 $437,760

2BD/1.5BA 76 1100 83600 $625 $0.57 $47,500 $570,000

2BD/2BA 59 1200 70800 $675 $0.56 $39,825 $477,900

3BD/2.5BA 40 1250 50000 $739 $0.59 $29,560 $354,720

3BD/2BA 34 1400 47600 $799 $0.57 $27,166 $325,992

TOTAL 285 311900 S187,119 $2,245,428

WHISPERING PENES APARTMENTS RENT CONFIGURATION

#of Total Average Rent Rent Unit Type Units SOFT SOFT Rent RentlSQFT (Month) (Annual)

IBDIIBA 56 627 35112 $600 SO.96 $33,600 $403,200

2BD/2BA 144 967 139248 $650 $0.67 $93,600 $1,123,200

3BD/2BA 112 1026 114912 $700 $0.68 $78,400 $940,800

TOTAL 312 289272 $205,600 $2,467,200


Vacancy Loss Management has assumed a physical occupancy rate of95% and an economic occupancy rate ranging from 91% to 84% for purposes of the forecast. The physical occupancy rate is the proportion of units that are occupied by tenants. The economic occupancy rate is the proportion of the gross potential rent that is collected. As such, economic occupancy takes into consideration items such as model units, employee units, concessions, rent incentives and loss to lease. The chart below sets forth the physical occupancy rate and the economic occupancy rate for the Project for the fiscal years ending December 31 of each year.

CHESTERFIELD APARTMENTS OCCUPANCY TRENDS 12/31/2016 12/31 /2015

Physical Occupancy 97% 84% Economic Occupancy 61% 82%

SILAS CREEK APARTMENTS OCCUPANCY TRENDS 12/3112016 12/31 /2015


TWIN CITY APARTMENTS OCCUPANCY TRENDS 12/3112016 12/3112015


WHISPERING PINES APARTMENTS OCCUPANCY TRENDS 12/3112016 12/3112015


Operating Expense Assumptions

Operating Expenses Forecasted operating expenses are based on historical operating expenses adjusted for the implementation of the Borrower's post acquisition operating plan. All operating expenses and maintenance expenses are based on standard physical requirements with a stabilized (non-liquidating) operational plan with preventive maintenance procedures in place to protect and enhance the economic life of the Project.

Payroll The Borrower's estimate of payroll includes office salaries, repair and maintenance payroll and employee taxes and benefits. The payroll expense is forecasted based upon historical operations of the Project. The Borrower plans to maintain the same number of staff post-closing.

Property Management Fee


Pursuant to the Property Management Agreement (the "Property Manager"), the forecasted property management ree will be 4% of effective gross income. The Lynd Company has provided the forecast and the property is currently managed by the seller

Utilities The Borrower's estimate of utilities includes electricity, gas, water and sewer and trash removal. These expenses are forecasted based upon the historical operations of the Project.

Maintenance and Repair The Borrower's estimate of maintenance and repair expenses includes supplies, contract work, pest control, landscaping and other costs incurred to keep the Project operating at its current condition. The maintenance and repair expense is forecasted based upon historical operations of the Project.

Property Insurance The Borrower's estimate is based on the insurance premium quoted by its insurance carrier. The property and liability insurance will conform to Standard & Poor's insurance requirements which are found in the Loan Agreement.

Repair and Replacement Reserve Deposit The repair and replacement reserve deposit are forecasted to be $575 per unit per year.

129 Old Settlers Drive, San Marcos. TX (See accountant's report on compilation) Page 11

INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES

To Standard & Poor's

I have performed the procedures enumerated below, which were agreed to by The Lynd Company, solely to assist you in evaluation of the cash flows of Cedar Grove Portfolio (the Project) in the absence of financial statements audited in accordance with Generally Accepted Auditing Standards and presented in accordance with Generally Accepted Accounting Principles. The Project's management is responsible for the below report. This agreed-upon procedures engagement was performed in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of those parties specified in the report. Consequently I make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

I obtained the following:

I. A.

B.

C. D. E. F. G. H.

GENERAL Income statements of the Project for the period from January 1, 2015 through December 31, 2016; Bank statements and reconciliations for all operating accounts for December 31 of the above periods; Check registers for the periods listed above; Budgets of the Project for 2015 and 2016; Rent rolls and occupancy reports for 2015 and 2016; General Ledger detail of repair and Maintenance for December of 2015 and 2016; Management Agreements and Amendments for the periods listed above; Management's list of assumptions.

II. REVENUE

To correlate recorded revenue with cash received and to analyze the predictability of future

reven ue streams, I:

1. Compared total revenue recorded per the income statements for the period to total cash deposited per the bank statements for the same period. I have determined the reasons for any variances covered by the report. I have set a 5% variance threshold which will require management explanation.


Findings: While comparing recorded revenue as compared to cash deposited at Exhibit A-1, I noted some variances at the year-end cut off period ending on December 31 of each period. I can report that in December 2016, deposits included draw funds received for rehab expenses and transfers between bank accounts; and once deducted from the total, there was a very close correlation between revenue recorded and cash deposited. The variances on a total basis are less than the established threshold of 5%.

2. Compared revenue per the rent rolls obtained to revenue per the income statements for those periods. I reported any variances noted, and obtained an explanation/documentation for any variances over 5%.

Findings: I compared revenue from the rent rolls to the recorded revenue in the income statements at Exhibit A-II. Any variances are noted; however, the total variance for each year did not exceed the established threshold of 5%.

III. EXPENSES

To correlate recorded expenses with cash expenditures and to analyze the predictability of future cash outflows, I:

1. Compared cash disbursements for the period listed above per the income statements to the cash outflows per the check registers and bank statements obtained. I investigated discrepancies and determined if any disbursements were made that were not included in the income statement that should be considen:~d as either an expense of the Project or as a

capital item. I noted any items found and included them in the final report.

Findings: I compared cash expenditures from check registers and bank statements to recorded expenses in the income statements at Exhibit B-1. I obtained check registers for the period listed above that included detailed check information, as well as bank statements for information regarding ACH and wire transfers. I noted some variances which appeared to be merely timing differences. I excluded owner distributions, principal mortgage payments and security deposits refunded. I did note, as shown on the attached exhibits, that on a total basis, there was a close correlation between expenses recorded and cash outflows per the check registers and bank statements. The variance on a total basiS is less than the established threshold of 5%.

129 Old Settlers Drive - San Marcos, TX 78666 210-B42-4349 Page 13

2. Compared disbursements per the check registers obtained to the disbursement items clearing the bank statements during the period listed above. I investigated any items clearing the bank that are not included in the check registers. I noted any items that should be considered an outflow of the Project as either an expense of the Project or as a capital item.

Findings: I made the comparison of disbursements per the check registers to the disbursements clearing the bank statements at Exhibit B-II. I noted some variances and compared them to the outstanding checks listed on the bank reconciliations. The variances appeared reasonable and appeared to be merely timing differences that are explained by the bank reconciliations.

3. Reviewed the management fee agreement and compared the terms of the agreement to the expenses that were paid and recorded. I noted any discrepancies.

Findings: I reviewed the management fee agreement and compared recorded management fees to the terms of the agreement. I noted no variances.

4. Compared payroll expenses per the payroll reports to the recorded payroll expenses per the income statements and noted any differences.

Findings: I compared payroll expenses per the payroll reports provided by the third party administrator to the payroll expenses included in the income statements at Exhibit B-II. I noted variances that appeared to be immaterial in nature.

5. Compared the property tax and insurance bills to the expenses recorded and noted any differences.

Findings: I compared the property tax and insurance bills to the property tax and insurance expenses recorded. I noted no variance.

Sandra A. Durke May 2S, 2017


I. REVENUES - CASH DEPOSITS

Total Revenue per Income Statement

Cash Depsoited per Bank Statement

Variance

Percentage of Variance

II. REVENUE - RENT ROLL

Revenue per Rent Rolls

Rent Revenue Per Income Statement

Variance

Average Rent per Unit

Chesterfield

Apartments

157,135

151,378

5,757 3.66%

Chesterfield

Apartments

163,016

157,135

5,881 3.61%

EXHIBIT A

Month ended Dec 31, 2016

Whispering Pines

Silas Creek Apartments Twin City Apartments Apartments

128,442 191,960 204,223

122,885 196,522 202,470

5,557 (4,562) 1,753

4.33% -2.38% 0.86%


Whispering Pines

Silas Creek Apartments Twin City Apartments Apartments

131,329 187,119 205,515

128,442 191,960 204,223

2,887 (4,841) 1,292 2.20% -2.59% 0.63%

15

I. EXPENSES-INCOME STATEMENT

Expenses per Income Statement

Expenses per Check Register

Wires and ACH on Bank Statement

Variance


II. CASH DISBURSEMENTS-BANK STATEMENT

Cash Disbursements per General Ledger

Cash Disbursements per Bank Statement

Variance


Chesterfield

Apartments

100,060

19,222

83,771

(2,933)

-2.93%

Chesterfield

Apartments

19,222

19,714

(492)

-2 .56%

EXHIBIT B


Silas Creek Apartments Twin City Apartments

102,347

107,181

(4,834)

-4.72%

87,002

57,467

27,525

2,010

2.31%



318,657 100,523

324,131 103,513

(5,474) (2,990)

-1.72% -2.97%

16

Whispering Pines

Apartments

47,993

16,174

29,930

1,889

3.94%

Whispering Pines

Apartments

54,022

55,365

(1,343)

-2.49%

III. PAYROll EXPENSES PER PAYROll REPORTS

Payroll Expenses per Payroll Reports

Payroll Expenses per Income Statement

Variance


Chesterfield

Apartments

178,464

178,753

(289) -0.16%

EXHIBIT B

Year Ended December 31, 2016


155,992 278,268 161,789 268,511

(5,797) 9,757 -3.72% 3.51%

17

Whispering Pines

Apartments

260,872

265,767

(4,895) -1.88%

APPENDIX E

FORM OF CONTINUING DISCLOSURE AGREEMENT

THIS CONTINUING DISCLOSURE AGREEMENT, dated as of July 1, 2017 (this “Disclosure Agreement”), is executed and delivered by 2017 IAVF Cedar Whispering LLC, 2017 IAVF Twin City LLC, 2017 IAVF Cedar Silas LLC and 2017 IAVF Cedar Chesterfield LLC (collectively, the “Obligated Party”) and Disclosure Advisors LLC, as Dissemination Agent (the “Dissemination Agent”), in connection with the issuance by the Public Finance Authority (the “Authority”) of its Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project), Series 2017A and Subordinate Series 2017B (collectively, “Bonds”).

W I T N E S S E T H :

WHEREAS, in connection with the issuance of the Bonds, the Obligated Party has agreed to enter into this Disclosure Agreement to provide certain financial and operating information, as well as notice of the occurrence of certain events, during the life of the Bonds, all in accordance with section (b)(5) of the Rule (as hereinafter defined); and

WHEREAS, the Obligated Party desires to appoint Disclosure Advisors LLC as Dissemination Agent to assist the Obligated Party with carrying out its obligations under this Disclosure Agreement, and Disclosure Advisors LLC is willing to accept such appointment in accordance with the terms hereof.

NOW, THEREFORE, IN CONSIDERATION OF THE COVENANTS AND PROMISES HEREIN CONTAINED, the Obligated Party and the Dissemination Agent agree as follows:

Section 1. Purpose of this Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Obligated Party and the Dissemination Agent for the benefit of the Beneficial Owners of the Bonds and to assist the Participating Underwriter (as defined herein) in complying with the Rule. The Obligated Party represents that it is the only Obligated Person (as defined in the Rule) with respect to the Bonds and that no other person is expected to become an Obligated Person at any time after the issuance of the Bonds.

Section 2. Definitions. In addition to the definitions set forth in the Authorizing Instrument (as defined herein), which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined herein, the following capitalized terms shall have the following meanings:

“Annual Financial Information” means the financial information and operating data described in Section 4 and in EXHIBIT A hereto.

“Annual Report” means the Annual Financial Information and the Audited Financial Statements for any Fiscal Year, as more fully described in Section 4 hereof.

“Annual Reporting Certificate” means the certificate of the Obligated Party with respect to its Annual Report, the form of which is attached hereto as Exhibit B.

“Annual Report Date” means June 30 of each year.

“Annual Report Disclosure” means the dissemination of the Annual Report as set forth in Section 4 hereof.

“Audited Financial Statements” means the audited financial statements of the Project, prepared pursuant to the standards and as described in Section 4 hereof.

“Authorizing Instrument” means the Trust Indenture dated as of July 1, 2017 by and between Wilmington Trust, National Association, and Authority, which sets forth the terms of the Bonds.

E–2

“Beneficial Owner” means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, the Bonds (including persons holding such Bonds through nominees, depositories or other such intermediaries).

“Business Day” means any day other than a Saturday, Sunday, legal holiday or a day on which the Dissemination Agent or banking institutions in New York, New York are authorized or required by law to close.

“Commission” means the Securities and Exchange Commission.

“EMMA” means the MSRB’s Electronic Municipal Market Access system for municipal securities disclosure, currently located at http://emma.msrb.org. Until otherwise designated by the MSRB or the Commission, filings with the MSRB are to be made through the EMMA website.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Listed Events” means any of the events with respect to the Bonds described in Section 5(a) hereof.

“Listed Events Disclosure” means dissemination of a notice of the occurrence of a Listed Event as set forth in Section 5 hereof.

“Material” with respect to information, means information as to which a substantial likelihood exists that a reasonably prudent investor would attach importance thereto in deciding to buy or sell a Bond or, if not disclosed, would significantly alter the total information otherwise available to an investor from the offering document related to the Bonds, information disclosed hereunder, or information generally available to the public. Notwithstanding the foregoing, “Material” information includes information that would be deemed “material” for purposes of the purchase or sale of a Bond within the meaning of applicable federal securities laws, as interpreted at the time of discovery of the information.

“MSRB” means the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Commission to receive reports pursuant to the Rule.

“Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated and each other broker, dealer or municipal securities dealer acting as an underwriter in any primary offering of the Bonds.

“Prescribed Form” means, with regard to the filing of the Annual Report, each notice of the occurrence of a Listed Event and other notices described herein with the MSRB, such electronic format, accompanied by such identifying information, as shall have been prescribed by the MSRB and which shall be in effect on the date of filing of such information.

“Project” means collectively, Whispering Pines Apartments, Twin City Apartments, Silas Creek Apartments, and Chesterfield Apartments, the acquisition of which was financed with the issuance of the Bonds.

“Rule” means Rule 15c2-12 adopted by the Commission under the Exchange Act, as the same may be amended from time to time.

“State” means the State of Florida.

Section 3. CUSIP Number/Final Official Statement. The CUSIP Number of the final maturity of the Bonds is 74441X ____. The final Official Statement relating to the Bonds is dated on or about July __, 2017 (the “Final Official Statement”).

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Section 4. Annual Report Disclosure.

(a) Provision of Annual Report.

(i) On or before each Annual Report Date, the Obligated Party shall provide, or shall cause the Dissemination Agent to provide, to the MSRB, the Annual Report. The Annual Report shall be submitted in Prescribed Form, and it may cross-reference other information as provided in Section 4(b) below. The Audited Financial Statements may be submitted separately from the balance of the Annual Report if not available by the Annual Report Date. The Annual Financial Information need not be separately provided if included in the Audited Financial Statements. The Annual Report shall identify the Bonds by name and CUSIP number.

(ii) Not later than forty-five (45) days prior to each Annual Report Date, the Dissemination Agent shall submit to the Obligated Party the form of Annual Reporting Certificate attached hereto as Exhibit B and shall request that the Obligated Party return the completed certificate along with the Annual Report prior to the date set forth in subsection 4(a)(iii) below.

(iii) Not later than fifteen (15) days prior to the Annual Report Date, the Obligated Party shall provide the Annual Report and the completed Annual Reporting Certificate to the Dissemination Agent. Promptly upon its receipt of the Annual Report, but no later than the Annual Report Date, the Dissemination Agent shall send the Annual Report to the MSRB in Prescribed Form. The Dissemination Agent shall notify the Obligated Party in writing of the date the Dissemination Agent provided the Annual Report to the MSRB.

(iv) If the Dissemination Agent has not received a copy of the Annual Report by the date set forth in subsection (a)(iii) above, the Dissemination Agent shall contact the Obligated Party to determine if the Obligated Party has submitted the Annual Report as required by subsection (a)(i) above. If the Dissemination Agent is unable to verify that the Annual Report has been provided to the MSRB by the Annual Report Date, the Dissemination Agent shall send a notice in a timely manner to the MSRB and the Obligated Party in substantially the form attached as Exhibit C not later than ten (10) days after the Annual Report Date.

(b) Contents of Annual Report.

(i) The Annual Report prepared at the direction of the Obligated Party shall contain (or incorporate by reference as described below) the following: (A) the Audited Financial Statements of the Project for the previous Fiscal Year, prepared in accordance with generally accepted accounting principles; provided that if the Audited Financial Statements of the Project are not available prior to the Annual Report Date, then (I) the Obligated Party shall file, or shall cause the Dissemination Agent to file, unaudited financial statements, if prepared, and (II) the Audited Financial Statements shall be provided to the MSRB when they become available, and (B) the Annual Financial Information specified on EXHIBIT A hereto for the previous Fiscal Year; provided, however, that to the extent all or portions of the Annual Financial Information are included in the Audited Financial Statements, such information need not be separately provided, but the Obligated Person shall file, or shall cause the Dissemination Agent to file, a notice to such effect to accompany the Audited Financial Statements.

(ii) Any or all of the items listed above may be included by specific reference to other documents, including official statements or prospectuses of debt issues of the Obligated Party or related public entities, which have been previously provided to the MSRB or the Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The Obligated Party shall clearly identify in the Annual Report each such other document so included by reference.

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(iii) If any part of the Annual Report can no longer be generated because the operations to which they are related have been materially changed or discontinued, the Obligated Party will provide notice of the same to the MSRB in Prescribed Form for the year in which such event first occurs.

Section 5. Disclosure of Listed Events.

(a) Upon the occurrence of any of the following Listed Events, the Obligated Party (or the Dissemination Agent on behalf of the Obligated Party) shall give notice of the occurrence of such event to the MSRB in accordance with this Section 5:

(i) principal and interest payment delinquencies;

(ii) nonpayment related defaults, if Material;

(iii) unscheduled draws on debt service reserves reflecting financial difficulties;

(iv) unscheduled draws on credit enhancements reflecting financial difficulties;

(v) substitution of credit or liquidity providers, or their failure to perform;

(vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds;

(vii) modifications to rights of Bondholders, if Material;

(viii) Bond calls, if Material, and tender offers;

(ix) defeasances;

(x) release, substitution, or sale of property securing repayment of the Bonds, if Material;

(xi) rating changes;

(xii) bankruptcy, insolvency, receivership or similar event of the Obligated Party*;

(xiii) the consummation of a merger, consolidation, or acquisition involving the Obligated Party or the sale of all or substantially all of the assets of the Obligated Party, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if Material;

(xiv) appointment of a successor or additional Trustee/Paying Agent or the change of name of a Trustee/Paying Agent, if Material; and

* For the purposes of the event identified in clause (xii) above, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Obligated Party in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or government authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Party, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Obligated Party.

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(xv) Any Regulatory Agreement with respect to the Project is in default.

(b) Within one (1) Business Day of obtaining actual knowledge of the occurrence of a Listed Event, the Dissemination Agent shall contact the Obligated Party, inform such person of the occurrence of such event, and request that the Obligated Party promptly notify the Dissemination Agent in writing whether to report the occurrence of the Listed Event pursuant to subsection 5(f).

(c) When the Obligated Party obtains knowledge of the occurrence of a Listed Event, whether because of a notice from the Dissemination Agent pursuant to subsection 5(b) or otherwise, the Obligated Party shall promptly determine whether notice of such occurrence is required to be disclosed pursuant to the Rule.

(d) If the Obligated Party determines that the occurrence of a Listed Event is required to be disclosed pursuant to the Rule, the Obligated Party shall promptly instruct the Dissemination Agent in writing to report the occurrence pursuant to subsection 5(f).

(e) If, in response to a request from the Dissemination Agent pursuant to subsection 5(b), the Obligated Party determines that the occurrence of a Listed Event is not required to be disclosed pursuant to the Rule, the Obligated Party shall promptly direct the Dissemination Agent in writing not to report the occurrence pursuant to subsection (f).

(f) If the Obligated Party has instructed the Dissemination Agent to report the occurrence of a Listed Event, the Dissemination Agent shall promptly file a notice of such occurrence with the MSRB in Prescribed Form not later than ten (10) Business Days after the occurrence of the Listed Event; provided, however, that the Dissemination Agent shall be allowed a minimum of one (1) Business Day to prepare and file a notice of a Listed Event, which time frame shall be in addition to any time that the Dissemination Agent is waiting on the Obligated Party to provide the Dissemination Agent with the information necessary to fully prepare and complete such notice of a Listed Event.

(g) If the Obligated Party provides the Dissemination Agent with additional information in accordance with Section 9 hereof and directs the Dissemination Agent to deliver such information to the MSRB, the Dissemination Agent shall deliver such information in a timely manner to the MSRB in Prescribed Form.

Section 6. Termination of Reporting Obligation. The Obligated Party’s obligations under this Disclosure Agreement shall terminate when the Obligated Party shall have no legal liability for any obligation on or relating to the repayment of the Bonds, including a legal defeasance of the Bonds.

Section 7. Dissemination Agent. The Obligated Party has appointed Disclosure Advisors LLC as Dissemination Agent to assist the Obligated Party with carrying out its obligations under this Disclosure Agreement and Disclosure Advisors LLC has accepted its appointment as Dissemination Agent. The Obligated Party may discharge the Dissemination Agent upon 30 days’ written notice to the Dissemination Agent, with or without appointing a successor. The Obligated Party may appoint additional Dissemination Agents without the consent of any existing Dissemination Agent. The Dissemination Agent may resign hereunder upon 30 days’ written notice to the Obligated Party. If at any time during the term of this Disclosure Agreement the Obligated Party has not appointed a Dissemination Agent, then the Obligated Party shall be deemed to be the Dissemination Agent and shall be solely responsible for all obligations hereunder.

The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Obligated Party pursuant to this Disclosure Agreement. The Obligated Party agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the

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Obligated Party under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

Section 8. Amendment or Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Obligated Party and the Dissemination Agent may amend this Disclosure Agreement (and, to the extent that any such amendment does not materially change or increase its obligations hereunder, the Dissemination Agent shall agree to any amendment so requested by the Obligated Party), and any provision of this Disclosure Agreement may be waived, if (a) permitted by the Rule or (b):

(i) The amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Obligated Party or the type of business conducted;

(ii) This Disclosure Agreement, as amended, or the provision, as waived, would have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(iii) The amendment or waiver either (A) is approved by the Bondholders in the same manner as provided in the Authorizing Instrument for amendments thereto with the consent of Bondholders, or (B) does not, in the opinion of the Dissemination Agent or nationally recognized bond counsel, materially impair the interests of the Bondholders.

Following any amendment or waiver of a provision of this Disclosure Agreement, the Obligated Party shall give notice in the same manner as for the occurrence of a Listed Event under subsection 5(f) and shall include, as applicable, an explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Obligated Party in the Annual Report.

Section 9. Dissemination of Additional Information. The Obligated Party may disseminate, or may cause the Dissemination Agent to disseminate, additional information with the Annual Report, notice of the occurrence of an event other than a Listed Event, or any other information in addition to that which is required by this Disclosure Agreement by means of dissemination set forth in this Disclosure Agreement or any other means of communication. Such information shall be provided in Prescribed Form. The Obligated Party shall have no obligation under this Disclosure Agreement or the Rule to update such additional information, to include it with any future Annual Report or to provide notice of any future occurrence of such event.

Section 10. Default. If the Obligated Party or the Dissemination Agent fails to comply with any provision of this Disclosure Agreement, any Bondholder may seek specific performance by court order to cause the Obligated Party or the Dissemination Agent, as applicable, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Authorizing Instrument, and the sole remedy under this Disclosure Agreement upon any failure of the Obligated Party or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance.

Section 11. Transmission of Information and Notices. Notwithstanding anything in this Disclosure Agreement to the contrary, unless otherwise required by law, all notices, documents and information provided to the MSRB shall be provided in Prescribed Form. The Dissemination Agent shall determine each year prior to the Annual Report Date whether a change has occurred in the MSRB’s email address or filing procedures and requirements under the Rule or with respect to EMMA.

Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Obligated Party, the Dissemination Agent, each Participating Underwriter and the Beneficial Owners of the Bonds, and shall create no rights in any other person or entity.

Section 13. Recordkeeping. The Obligated Party and the Dissemination Agent shall maintain records of all Annual Report Disclosures and Listed Event Disclosures, including the content of such disclosures, the names of

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the entities with whom such disclosure was filed and the date of filing such disclosure. Such records shall be kept for at least five years after the respective dates of such filings.

Section 14. Assignment. The Obligated Party shall not transfer its obligations under this Disclosure Agreement unless the transferee agrees to assume all obligations of the Obligated Party under this Disclosure Agreement or to execute a continuing disclosure undertaking under the Rule. Any corporation or association (a) into which the Dissemination Agent is merged or with which it is consolidated, (b) resulting from any merger or consolidation to which the Dissemination Agent is a party, or (c) succeeding to all or substantially all of the corporate trust business of the Dissemination Agent shall be the successor Dissemination Agent without the execution or filing of any document or the taking of any further action.

Section 15. Compensation. The Dissemination Agent shall receive the annual Dissemination Agent Fee (as defined and set forth in the Authorizing Instrument); provided, however, that if the Obligated Party has the Dissemination Agent file more than one notice of a Listed Event under Section 5 hereof within a given calendar year or if the Obligated Party has the Dissemination Agent file any additional information under Section 9 hereof in filings that are filed separately from the scheduled filing of the Annual Report or from the notice of a Listed Event, then the Dissemination Agent shall be separately compensated for such additional filings in such amount(s) as the Obligated Party and the Dissemination Agent shall agree.

Section 16. Notices. All notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been duly given or made when delivered personally or by mail (including electronic mail) to the party to which such notice, request, demand or other communication is required or permitted to be given or made under this Disclosure Agreement and addressed as set forth below or telecopied to the telecopier number of the recipient, with confirmation of transmission, indicated below:

If to the Obligated Party, at:

2017 IAVF Cedar Whispering LLC et. al. c/o Invest in America’s Veterans Foundation, Inc. 4820 Leonard Street Cape Coral, FL 33904 Attention: Ralph Santillo Telephone: (239) 541-8704 Invest in America’s Veterans Foundation, Inc. 4820 Leonard Street Cape Coral, FL 33904 Attention: Ralph Santillo Telephone: (239) 541-8704 Email: ____________________

If to Dissemination Agent, at:

Disclosure Advisors LLC Attention: Benjamin J. Allen 2602 Oakstone Drive Columbus, Ohio 43231 Phone: (614) 423-8155, ext. 100 Fax: (614) 423-8155 email: [email protected]

Section 17. Governing Law. The provisions of this Disclosure Agreement shall be governed by the laws of the State.

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Section 18. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

[Signature pages to follow]

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EXECUTED AND DATED on behalf of the Obligated Party and the Dissemination Agent by their duly authorized representatives as of the date first written above.







[Signature Page to Cedar Grove Portfolio Project Continuing Disclosure Agreement]

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DISCLOSURE ADVISORS LLC, as Dissemination Agent

By: Name: Title:

[Signature Page to Cedar Grove Portfolio Project Continuing Disclosure Agreement]

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EXHIBIT A

CONTENTS OF ANNUAL FINANCIAL INFORMATION

“Annual Financial Information” means updates of the following tabular information contained in the body of the Official Statement, to the extent not otherwise included in the Audited Financial Statements:

• THE BORROWERS AND THE PROJECTS—The Whispering Pines Project Gross Potential Rent table

• THE BORROWERS AND THE PROJECTS—The Twin City Project Gross Potential Rent table • THE BORROWERS AND THE PROJECTS—The Silas Creek Project Gross Potential Rent table • THE BORROWERS AND THE PROJECTS—The Chesterfield Project Gross Potential Rent table • THE BORROWERS AND THE PROJECTS—Occupancy—The Whispering Pines Apartments

Historical Occupancy Trends • THE BORROWERS AND THE PROJECTS—Occupancy—The Twin City Apartments Historical

Occupancy Trends • THE BORROWERS AND THE PROJECTS—Occupancy—The Silas Creek Apartments

Historical Occupancy Trends • THE BORROWERS AND THE PROJECTS—Occupancy—The Chesterfield Apartments

Historical Occupancy Trends

To the extent all or portions of the Annual Financial Information are included in the Audited Financial Statements, such information need not be separately provided, but the Obligated Party shall file, or shall cause the Dissemination Agent to file, a notice to such effect to accompany the Audited Financial Statements.

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EXHIBIT B

FORM OF ANNUAL REPORTING CERTIFICATE

DATE:

Disclosure Advisors LLC [City, State]

Re: Public Finance Authority Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project)

Pursuant to the Continuing Disclosure Agreement, dated as of July 1, 2017 (the “Disclosure Agreement”), between 2017 IAVF Cedar Whispering LLC, 2017 IAVF Twin City LLC, 2017 IAVF Cedar Silas LLC and 2017 IAVF Cedar Chesterfield LLC (collectively, the “Obligated Party”) and Disclosure Advisors LLC (the “Dissemination Agent”), the Obligated Party has agreed to provide the Annual Report.

Attached hereto is the Annual Report for the fiscal year ended December 31, 20 which includes the Audited Financial Statements of the Project and the financial information and operating data set forth in Appendix A to the Disclosure Agreement, as set forth below:

Attached

Included in Audit

_____

_____

THE BORROWERS AND THE PROJECTS—The Whispering Pines Project Gross Rent Potential Rent Table

_____

_____

THE BORROWERS AND THE PROJECTS—The Twin City Apartments Project Gross Rent Potential Rent Table

_____

_____

THE BORROWERS AND THE PROJECTS—The Silas Creek Project Gross Rent Potential Rent Table

_____

_____

THE BORROWERS AND THE PROJECTS—The Chesterfield Project Gross Rent Potential Rent Table

_____

_____

THE BORROWERS AND THE PROJECTS—Occupancy—The Whispering Pines Apartments Historical Occupancy Trends

_____

_____

THE BORROWERS AND THE PROJECTS—Occupancy—The Twin City Apartments Historical Occupancy Trends

_____

_____

THE BORROWERS AND THE PROJECTS—Occupancy—The Silas Creek Apartments Historical Occupancy Trends

_____

_____

THE BORROWERS AND THE PROJECTS—Occupancy—The Chesterfield Apartments Historical Occupancy Trends

[Signature Page to Follow]

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[Signature Page to Cedar Grove Portfolio Project Annual Reporting Certificate]

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EXHIBIT C

NOTICE OF FAILURE TO FILE ANNUAL REPORT

Name of Obligated Party: 2017 IAVF Cedar Whispering LLC, 2017 IAVF Twin City LLC, 2017 IAVF Cedar Silas LLC and 2017 IAVF Cedar Chesterfield LLC

Name of Bond Issue: Public Finance Authority Multifamily Housing Revenue Bonds (Cedar Grove Portfolio Project), Series 2017

Date of Issuance: [_______________], 2017

BASE CUSIP: 74441X

NOTICE IS HEREBY GIVEN that the Obligated Party has not provided the Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement relating to such Bonds, between the Obligated Party and the Dissemination Agent, and Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. The Obligated Party anticipates that the Annual Report will be filed by .

Dated:

Disclosure Advisors LLC, on behalf of the Obligated Party

By: Its:

cc: [Obligated Party]

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