post_os_concordia_university_2005 by yanyanliu123

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									NEW ISSUE - BOOK ENTRY ONLY                                                                                       Rating: Moody’s: "Aa1/VMIG-1"
                                                                                                                               See "Rating" herein

In the opinion of Peck, Shaffer & Williams LLP, Bond Counsel, under existing laws, regulations, rulings and court decisions, assuming compliance with certain
covenants, interest on the Series 2005 Bonds is excludable from gross income for Federal income tax purposes and is not treated as a specific item of tax
preference for purposes of the alternative minimum tax imposed on individuals and corporations under the Internal Revenue Code of 1986, as amended and
under the laws of the state of Colorado. Interest on the Bonds will be excludable from gross income under Colorado laws. The interest may be subject to
certain federal or Colorado state taxes imposed only on certain corporations, including the corporate alternative minimum tax on a portion of that interest.
(See "TAX MATTERS" herein.)



                                               $25,000,000
                    COLORADO EDUCATIONAL AND CULTURAL FACILITIES AUTHORITY
                            Adjustable Rate Demand Revenue Bonds, Series 2005
                                   (Concordia University Irvine Project)

Dated: Date of Initial Delivery                      CUSIP: 196458T45               PRICE: 100%                                Due: December 1, 2035

           The net proceeds of the Series 2005 Bonds will be loaned by the Colorado Educational and Cultural Facilities Authority (the
"Issuer") to ACSI Capital Corporation (the “Educational Institution”), which will loan the proceeds of its loan to Concordia University (the
"Borrower") to pay (i) the costs of financing and refinancing the Project (as defined herein), (ii) capitalized interest on the Series 2005 Bonds
and (iii) certain costs related to the issuance of the Series 2005 Bonds. The Series 2005 Bonds will be issued pursuant to a Trust Indenture
dated as of December 1, 2005 (the "Indenture"), between the Issuer and Wells Fargo Bank, National Association, Los Angeles, California, as
trustee (the "Trustee"). Payment of principal of and interest on the Series 2005 Bonds when due or upon redemption or acceleration will be
secured by an irrevocable direct pay letter of credit (the "Letter of Credit") issued by U.S. Bank National Association (the "Bank").




(the "Bank"). The Letter of Credit will be issued in the total amount of $25,287,672, and will permit the Trustee to draw (a) up to
$25,000,000, which equals the principal amount of the Series 2005 Bonds, in order to pay principal on the Series 2005 Bonds when due, upon
redemption or acceleration thereof or to pay the portion of the purchase price thereof corresponding to the principal amount upon certain
tenders, and (b) up to $287,672, initially, which equals 35 days interest on the Series 2005 Bonds, computed at the maximum rate of 12% per
annum, in order to pay accrued interest on the Series 2005 Bonds when due or to pay the portion of the purchase price of the Series 2005
Bonds corresponding to accrued interest. The Letter of Credit will expire on September 30, 2008, unless sooner terminated or extended.

            The interest rate on the Series 2005 Bonds will be the Daily Interest Rate, which will be adjusted daily by the Remarketing Agent,
initially, Stern Brothers & Co., unless and until the Borrower converts the interest rate to a different Interest Rate Mode, as described herein.
Interest will be payable on the first Business Day of each month, commencing January 3, 2006, while the Series 2005 Bonds bear interest at
the Daily Interest Rate, the Weekly Interest Rate, the One Month Interest Rate or the Three Month Interest Rate, and on the first day of each
June and December while the Series 2005 Bonds bear interest at the Six Month Interest Rate, the One Year Interest Rate, the Five Year
Interest Rate or the Fixed Interest Rate (the "Interest Payment Dates"). Interest will be payable by check or draft mailed by the Trustee on
each Interest Payment Date to the holders as they appear on the registration books (the "Holders") on the day next preceding an Interest
Payment Date (the "Regular Record Date"); provided that upon request of a Holder of the Series 2005 Bonds, interest shall be paid by wire
transfer in immediately available funds.

         THE SERIES 2005 BONDS AND THE INTEREST THEREON SHALL NOT CONSTITUTE A DEBT OR INDEBTEDNESS OF
THE ISSUER OR THE STATE OF COLORADO WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY
LIMITATION OR RESTRICTION. THE SERIES 2005 BONDS DO NOT CONSTITUTE A DEBT OR LIABILITY OF OR CHARGE
AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE STATE OF COLORADO, ITS LEGISLATURE OR ANY OF ITS
POLITICAL SUBDIVISIONS OR AGENCIES, INCLUDING THE ISSUER. THE ISSUER IS NOT AUTHORIZED TO LEVY OR
COLLECT ANY TAXES OR ASSESSMENTS TO PAY THE SERIES 2005 BONDS OR FOR ANY OTHER PURPOSE. The right to
payment of the principal, any premium and interest is limited to the revenues pledged therefor in the Indenture. Payments sufficient for the
prompt payment when due of the principal of, premium, if any, and interest on the Series 2005 Bonds are to be paid to the Trustee for the
account of the Issuer and deposited in special accounts created by the Indenture and have been duly pledged and assigned for that purpose.

         The Series 2005 Bonds are offered, subject to prior sale, when, as and if issued by the Issuer and received by Stern Brothers & Co.
(the "Underwriter"), subject to approval of certain legal matters by Powers Phillips, P.C., Denver, Colorado, as general counsel to the Issuer;
by Peck, Shaffer & Williams LLP, as Bond Counsel; by The Stolar Partnership LLP, St. Louis, Missouri, as counsel to the Borrower; by
Thompson Coburn LLP, St. Louis, Missouri, as counsel to the Bank; by Gilmore & Bell, P.C., Kansas City, Missouri, as counsel for the
Underwriter, and certain other conditions. BD Advisors, LLC has served as Financial Advisor to the Issuer. It is expected that the Series
2005 Bonds will be available for delivery through the facilities of DTC, on or about December 15, 2005, against payment therefor.




                                               The date of this Official Statement is December 9, 2005
(THIS PAGE LEFT BLANK INTENTIONALLY)
          While the Series 2005 Bonds are in the Daily Interest Rate Mode, Holders or beneficial owners have the
option to tender their Series 2005 Bonds or beneficial ownership interests to the Trustee for purchase on any
Business Day. While the Series 2005 Bonds are in the Weekly Interest Rate Mode, Holders or beneficial owners
have the option to tender their Series 2005 Bonds or beneficial ownership interests to the Trustee for purchase on a
Business Day not prior to the seventh day and not later than the fifteenth day next succeeding the date notice is
given by the Holders or beneficial owners. While the Series 2005 Bonds are in an Interest Rate Mode other than the
Daily Interest Rate Mode or the Weekly Interest Rate Mode, the Holders or beneficial owners have the option to
tender their Series 2005 Bonds or beneficial ownership interests to the Trustee for purchase on any date the interest
rate is subject to adjustment (the "Interest Rate Adjustment Date"). Holders or beneficial owners are required to
deliver the Series 2005 Bonds or beneficial ownership interests to the Trustee for purchase, and the Series 2005
Bonds or beneficial ownership interests are deemed to be tendered, upon any conversion to a different Interest Rate
Mode, unless such Holders or beneficial owners affirmatively elect to retain their Series 2005 Bonds or beneficial
ownership interests. The Series 2005 Bonds will no longer be subject to optional tender by the Holders after the
interest rate has been converted to the Fixed Interest Rate. The Series 2005 Bonds are also subject to optional,
extraordinary optional and mandatory redemption prior to maturity, as set forth herein. See "THE SERIES 2005
BONDS."

         The Series 2005 Bonds are issuable only as fully registered bonds, without coupons, in denominations of
$100,000 and any integral multiples of $5,000 in excess of $100,000 while the Series 2005 Bonds bear interest at the
Daily, Weekly, One Month or Three Month Interest Rate and $5,000 and whole multiples thereof when the Series
2005 Bonds are in any other Interest Rate Mode, and, when issued, will be registered initially in the name of Cede &
Co. as sole registered Holder of the Series 2005 Bonds and nominee for The Depository Trust Company ("DTC"),
New York, New York. Purchases of Series 2005 Bonds will be made in book entry form only, and purchasers will
not receive certificates representing their interest in Series 2005 Bonds so purchased. So long as Cede & Co. is the
registered Holder of the Series 2005 Bonds, as nominee of DTC, references herein to the registered Holders of the
Series 2005 Bonds or registered owners thereof shall mean Cede & Co., in such capacity, and shall not mean the
purchasers of beneficial interests in the Series 2005 Bonds ("Beneficial Owners"), and payments with respect to the
Series 2005 Bonds will be made directly to such registered Holder. Disbursement of such payments by DTC to the
DTC Participants and by the DTC Participants to the Beneficial Owners is more fully described herein. See "THE
SERIES 2005 BONDS - Book Entry" herein. So long as Cede & Co. is the sole registered Holder of the Series 2005
Bonds, the principal and redemption price of and interest on the Series 2005 Bonds will be payable in Federal funds
transmitted to Cede & Co.

          The information set forth herein relating to the Issuer under the headings "THE ISSUER" and "ABSENCE
OF LITIGATION AFFECTING THE SERIES 2005 BONDS – The Issuer" has been obtained from the Issuer, and
all other information herein (except under the caption “UNDERWRITING” and the price reflected on the cover
hereof) has been obtained by the Underwriter from the Borrower, the Educational Institution, the Bank and other
sources deemed by the Underwriter to be reliable, but is not to be construed as a representation by, the Issuer or the
Underwriter. The Issuer has not reviewed or approved any information in this Official Statement except information
relating to the Issuer under the headings "THE ISSUER" and "ABSENCE OF LITIGATION AFFECTING THE
SERIES 2005 BONDS – The Issuer". The information herein is subject to change without notice, and neither the
delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the Issuer, the Bank or the Borrower since the date hereof.




                                                           i
                      REGARDING USE OF THIS OFFICIAL STATEMENT

         This Official Statement does not constitute an offering of any security, other than the
original offering by the Colorado Educational and Cultural Facilities Authority (the "Issuer") of
its Adjustable Rate Demand Revenue Bonds, Series 2005 (Concordia University Irvine Project)
(the "Series 2005 Bonds") specifically offered hereby. No dealer, broker, salesman or other
person has been authorized to give any information or to make any representation with respect to
the Series 2005 Bonds other than those contained in this Official Statement and, if given or
made, such other information or representation not so authorized must not be relied upon as
having been authorized. This Official Statement does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of, the Series 2005 Bonds by any
person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation
or sale.

         The information and descriptions in this Official Statement do not purport to be
comprehensive or definitive. Statements regarding specific documents (including the Series
2005 Bonds), instruments and statutes are descriptions of selected provisions of and subject to
the detailed provisions of such documents, instruments and statutes, respectively, and are
qualified in their entirety by reference to the full text of each such document, instrument or
statute. Copies of the documents will be on file with the Trustee and will be furnished upon
request. This Official Statement has been approved by the Borrower and the Educational
Institution, and its use and distribution for the purposes set forth above have been authorized by
the Borrower, the Educational Institution, the Issuer and the Bank. The information and
expressions of opinion herein are subject to change without notice, and neither the delivery of
this Official Statement nor any sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Issuer, the Borrower, the
Educational Institution or the Bank since the date hereof.

        Upon issuance, the Series 2005 Bonds will not be registered under the Securities Act of
1933, as amended, or any state securities law, and will not be listed on any stock or other
securities exchange. Neither the Securities and Exchange Commission nor any other Federal,
state, municipal or other governmental entity or agency will have passed upon the accuracy or
adequacy of this Official Statement nor, except the Issuer (to the extent described herein),
approved the Series 2005 Bonds for sale. Any representation to the contrary is a criminal
offense.




                                                ii
                                                               TABLE OF CONTENTS                                                                                         Page
INTRODUCTORY STATEMENT ............................................................................................................. V
INTRODUCTION ........................................................................................................................................ 1
THE ISSUER................................................................................................................................................ 3
THE EDUCATIONAL INSTITUTION ....................................................................................................... 3
THE BORROWER ....................................................................................................................................... 4
THE BANK .................................................................................................................................................. 4
PURPOSE OF SERIES 2005 BOND ISSUE AND PLAN OF FINANCING ............................................. 4
ESTIMATED SOURCES AND USES OF FUNDS .................................................................................... 5
THE SERIES 2005 BONDS......................................................................................................................... 5
     General Description................................................................................................................................................5
     Sources of Payment and Security for the Series 2005 Bonds.................................................................................6
     Borrower Payments ................................................................................................................................................6
     Interest ....................................................................................................................................................................6
     Interest Rate Modes on Series 2005 Bonds ............................................................................................................7
     Conversion Between Interest Rate Modes..............................................................................................................9
     Mandatory Tender Upon Conversion to a Different Interest Rate Mode .............................................................10
     Mandatory Tender Upon Delivery of an Alternate Letter of Credit .....................................................................11
     Mandatory Tender Upon Expiration of Letter of Credit.......................................................................................12
     Mandatory Tender Upon Default Under the Reimbursement Agreement ............................................................12
     Holders’ or Beneficial Owners’ Tender Options..................................................................................................12
     Payment of Purchase Price; Miscellaneous ..........................................................................................................14
     Book Entry ...........................................................................................................................................................14
     Redemption Prior to Maturity...............................................................................................................................17
SECURITY AND SOURCE OF PAYMENT FOR THE SERIES 2005 BONDS..................................... 22
THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT ........................................ 23
     The Letter of Credit ..............................................................................................................................................23
     The Reimbursement Agreement ...........................................................................................................................25
THE LOAN AGREEMENT ....................................................................................................................... 28
THE INDENTURE..................................................................................................................................... 31
BONDHOLDERS’ RISKS ......................................................................................................................... 41
     General .................................................................................................................................................................41
     Basis of Credit Analysis .......................................................................................................................................41
     Prepayment of the Series 2005 Bonds ..................................................................................................................42
     Enrollment ............................................................................................................................................................42
     General Risks of Private Universities...................................................................................................................43
     Financial Aid ........................................................................................................................................................43
     Tuition ..................................................................................................................................................................43
     Gifts, Grants and Bequests ...................................................................................................................................43
     Project Completion...............................................................................................................................................43
     Bankruptcy ...........................................................................................................................................................44
     Other Factors Affecting the Financial Performance of the Borrower...................................................................45
     Tax-Exempt Status of the Borrower .....................................................................................................................45
     Certain Matters Relating to Enforceability...........................................................................................................46
     Marketability ........................................................................................................................................................46
     Investment Ratings ...............................................................................................................................................47
     Additional Bonds..................................................................................................................................................47
     Establishment Clause............................................................................................................................................47
                                                                                      iii
FINANCIAL INFORMATION .................................................................................................................. 48
RATING ..................................................................................................................................................... 48
TAX MATTERS......................................................................................................................................... 48
LEGAL MATTERS.................................................................................................................................... 50
UNDERWRITING ..................................................................................................................................... 50
ABSENCE OF LITIGATION AFFECTING THE SERIES 2005 BONDS............................................... 51
      The Issuer .............................................................................................................................................................51
      The Educational Institution ..................................................................................................................................51
      The Borrower .......................................................................................................................................................51


MISCELLANEOUS ..................................................................................................................................S-1

APPENDIX A – INFORMATION REGARDING THE BANK............................................................. A-1

APPENDIX B – FORM OF OPINION OF BOND COUNSEL.............................................................. B-1

APPENDIX C – CONCORDIA UNIVERSITY – ORGANIZATION AND OPERATIONS................ C-1

APPENDIX D – INDEPENDENT ACCOUNTANTS’ REPORT AND AUDITED FINANCIAL
             STATEMENTS ............................................................................................................ D-1




                                                                                     iv
                               INTRODUCTORY STATEMENT
This introductory statement is subject in all respects to the more complete information
appearing elsewhere in this Official Statement. The introductory statement is not to be
read or used without reference to the entire Official Statement.

        The Issuer: The Colorado Educational and Cultural Facilities Authority, an independent
public body politic and corporate, constituting a public instrumentality and political subdivision
of the State of Colorado (the "Issuer"). Pursuant to Article 15, Title 23 of the Colorado Revised
Statutes (the “Act”) and the Supplemental Public Securities Act, Part 2, Article 57, Title 11 of
the Colorado Revised Statutes (the “Supplemental Act”), and a resolution of the Issuer adopted
on April 27, 2005, the Issuer is authorized to issue revenue bonds to obtain funds to make loans
to assist “educational institutions” within the meaning of the Act (including the hereinafter
defined Educational Institution) in financing the costs of acquiring, constructing and installing
"educational facilities" within the meaning of the Act (including the Project as hereinafter
described), to refund notes previously issued for such purposes, and to pay costs of issuing and
securing such bonds.

        The Educational Institution: ACSI Capital Corporation (the “Educational Institution”),
a Colorado nonprofit corporation that will borrow the proceeds of the Series 2005 Bonds from
the Issuer.

         The Borrower: Concordia University (the "Borrower") is a California nonprofit religious
corporation that will borrow the proceeds of the Series 2005 Bonds from the Educational
Institution.

      The Bank: U.S. Bank National Association is a national banking association (the
"Bank").

         Purposes of the Financing: Proceeds to be realized from the sale of the Series 2005
Bonds will be used by the Issuer to fund a loan to the Educational Institution in the amount of the
Series 2005 Bonds. The Educational Institution will loan such proceeds to the Borrower to (i)
finance and refinance costs of the acquisition, construction and equipping of higher educational
facilities located in Irvine, California (the "Project"), (ii) pay capitalized interest on the Series
2005 Bonds and (iii) pay a portion of the costs of issuance of the Series 2005 Bonds.

         Securities Being Offered: $25,000,000 principal amount of Adjustable Rate Demand
Revenue Bonds, Series 2005 (Concordia University Irvine Project) will be issuable by the Issuer
initially in denominations of $100,000 and any integral multiples of $5,000 in excess thereof. If
the Series 2005 Bonds bear interest at the Six Month, One Year, Five Year or Fixed Interest
Rate, they will be in denominations of $5,000 and any integral multiples thereof. The Series
2005 Bonds will be issuable only in fully registered form. One Series 2005 Bond initially will be
delivered to The Depository Trust Company or its nominee. See "THE SERIES 2005 BONDS."

     THE SERIES 2005 BONDS AND THE INTEREST THEREON SHALL NOT
CONSTITUTE A DEBT OR INDEBTEDNESS OF THE ISSUER OR THE STATE OF
COLORADO WITHIN THE MEANING OF ANY CONSTITUTIONAL OR
STATUTORY LIMITATION OR RESTRICTION. THE SERIES 2005 BONDS DO NOT


                                                 v
CONSTITUTE A DEBT OR LIABILITY OF OR CHARGE AGAINST THE GENERAL
CREDIT OR TAXING POWER OF THE STATE OF COLORADO, ITS LEGISLATURE
OR ANY OF ITS POLITICAL SUBDIVISIONS OR AGENCIES, INCLUDING THE
ISSUER. THE ISSUER IS NOT AUTHORIZED TO LEVY OR COLLECT ANY TAXES
OR ASSESSMENTS TO PAY THE SERIES 2005 BONDS OR FOR ANY OTHER
PURPOSE.

       Underwriter and Remarketing Agent: Stern Brothers & Co.

        Letter of Credit: An irrevocable direct pay letter of credit will be issued by the Bank and
will secure payment of $25,000,000 principal amount of the Series 2005 Bonds, plus $287,672
which is equal to 35 days’ accrued interest thereon while the Series 2005 Bonds bear interest at
the Daily, the Weekly, the One Month or the Three Month Interest Rate computed at the
maximum rate of 12% per annum, calculated on the basis of a 365-day year and will expire
September 30, 2008, unless extended or earlier terminated. See "SECURITY AND SOURCE
OF PAYMENT FOR THE SERIES 2005 BONDS." If, at the Borrower’s election, the Series
2005 Bonds bear interest at the Six Month, the One Year, the Five Year or the Fixed Interest
Rate, the Borrower will be required to deliver an Alternate or amended Letter of Credit which
will secure 195 days’ accrued interest on the Series 2005 Bonds, computed at the maximum rate
of 12% per annum, calculated on the basis of a 360-day year of twelve 30-day months. Payment
of principal of and interest on the Series 2005 Bonds at maturity or upon redemption or
acceleration will be made first from moneys obtained by the Trustee pursuant to draws on the
Bank under the Letter of Credit. Payment of the purchase price of the Series 2005 Bonds or
beneficial ownership interests therein upon tenders for purchase by Holders or beneficial owners
will be made first from moneys consisting of remarketing proceeds held in the Remarketing
Reimbursement Fund and then from draws on the Bank under the Letter of Credit.

        Interest Rate Modes: At the option of the Borrower, upon certain conditions, the interest
rate may be converted on one or more occasions to a Daily Interest Rate, a Weekly Interest Rate,
a One Month Interest Rate, a Three Month Interest Rate, a Six Month Interest Rate, a One Year
Interest Rate or a Five Year Interest Rate (collectively, with the Fixed Interest Rate, the "Interest
Rate Modes") unless or until converted to a Fixed Interest Rate for the remaining term of the
Series 2005 Bonds.

        The following chart sets forth for each Interest Rate Mode, other than the Fixed Interest
Rate, the Interest Rate Determination Date, which is the date the Remarketing Agent determines
the interest rate on the Series 2005 Bonds, the Interest Rate Adjustment Date, which is the date
on which the interest rate on the Series 2005 Bonds is adjusted, either as the result of the
conversion of the interest rate on the Series 2005 Bonds to a different Interest Rate Mode or by
adjustment of the interest rate on the Series 2005 Bonds within the applicable Interest Rate
Mode, and the Interest Rate Period for each Interest Rate Mode:




                                                 vi
                                                                    INTEREST RATE
INTEREST                    INTEREST RATE                           DETERMINATION
RATE MODE                   ADJUSTMENT DATE                         DATE          *               INTEREST RATE PERIOD

Daily                       Each Business Day                       11:00 a.m. New York           One day
                                                                    City time on each
                                                                    Business Day

Weekly                      Thursday of each                        3:00 p.m. New                 One week commencing
                            week                                    York City time on             Thursday**
                                                                    Wednesday of each
                                                                    week, or the next
                                                                    preceding Business
                                                                    Day if Wednesday is
                                                                    Not a Business Day**

One Month                   First Business                          7th Business Day              One month commencing
                            Day of each month                       before the                    the first Business Day
                                                                    Interest Rate                 of the month
                                                                    Adjustment Date

Three Month                 First Business Day                      10th Business                 Three months commencing
                            of any month, and                       Day before the                the first Business Day of
                            thereafter the first                    Interest Rate                 March, June, September
                            Business Day of                         Adjustment Date               and December**
                            March, June, September
                            and December

Six Month                   First Business Day                      10th Business,                Six months commencing
                            of any month, and                       Day before the                June 1 and December 1***
                            thereafter                              Interest Rate
                            June 1 and                              Adjustment Date
                            December 1

One Year                    First Business                          10th Business                 One year commencing
                            Day of any month,                       Day before the                June 1 or December 1 ***
                            and thereafter June 1                   Interest Rate
                            or December 1                           Adjustment Date
                            commencing the
                            next Interest Rate
                            Period

Five Year                   First Business                          10th Business                 Five years commencing
                            Day of any month,                       Day before the                June 1 or December 1 ***
                            and thereafter                          Interest Rate
                            June 1 or December 1                    Adjustment Date
                            commencing the
                            next Interest Rate
                            Period
*        See "THE SERIES 2005 BONDS -- Holders’ Tender Options" for a description of applicable notice and delivery
         deadlines.

**       When converting from another Interest Rate Mode, the Interest Rate Determination Date for the Weekly Interest Rate
         Mode is not later than 3:00 p.m. New York City time on the Business Day (as defined below) before the Interest Period
         Reset Date. The first Interest Rate Period would commence on the Interest Period Reset Date and continue through the
         following Wednesday.

***      The first Interest Rate Period may be less than the indicated period when converting from another Interest Rate Mode.


                                                             vii
       The Interest Rate Determination Date for the Fixed Interest Rate is the tenth Business
Day before the Interest Period Reset Date, which is the first day of a month following the
conclusion of the preceding Interest Rate Period and which is also the Interest Rate Adjustment
Date. No further conversion to other Interest Rate Modes can be made after conversion to the
Fixed Interest Rate. (See "THE SERIES 2005 BONDS -- Interest Rate Modes on Series 2005
Bonds," and "-- Conversion Between Interest Rate Modes.")

        Interest Period Reset Date: The Interest Period Reset Date is the date on which the
interest rate on the Series 2005 Bonds converts from the Interest Rate Mode applicable to the
Series 2005 Bonds prior to such date to a new Interest Rate Mode, which shall occur on the first
Business Day of the month, provided that upon conversion from a Six Month, One Year or Five
Year Interest Rate Mode, the Interest Period Reset Date shall occur on the first day of a month,
and further that except when converting from a Weekly Interest Rate Mode, an Interest Period
Reset Date may not occur prior to the end of the preceding Interest Rate Period.

        Interest Rate: From the date of initial delivery, unless the Borrower, with the consent of
the Bank, shall have elected to convert the interest rate to a different Interest Rate Mode, the
interest rate will be the Daily Interest Rate.

        Interest Payment Dates: Interest on the Series 2005 Bonds is payable on the first
Business Day of each month, commencing January 3, 2006 while the Series 2005 Bonds bear
interest at the Daily, the Weekly, the One Month or the Three Month Interest Rate, and on each
June 1 and December 1 while the Series 2005 Bonds bear interest at the Six Month, the One
Year, the Five Year or the Fixed Interest Rate.

        Mandatory Redemption Upon Determination of Taxability: Upon the occurrence of a
Determination of Taxability, as defined herein, the Series 2005 Bonds are subject to mandatory
redemption in whole at a redemption price of 100% of the outstanding principal amount thereof,
plus accrued interest to the redemption date, at the earliest practicable date selected by the
Trustee, after consultation with the Borrower, but in no event later than 45 days following the
Trustee’s notification of the Determination of Taxability. See "THE SERIES 2005 BONDS -
Redemption Prior to Maturity - Mandatory Redemption Upon Determination of Taxability"
herein.

        Optional Redemption: At the option of the Issuer, upon the direction of the Borrower,
with the written consent of the Bank if required pursuant to the provisions of the Reimbursement
Agreement, the Series 2005 Bonds may be redeemed, (1) if the Series 2005 Bonds do not bear
interest at the Fixed Interest Rate, in whole or in part (in integral multiples of $5,000, provided
that while the Series 2005 Bonds bear interest at the Daily, Weekly, One Month or Three Month
Interest Rate, the unredeemed portion of any Series 2005 Bond shall be $100,000 or more) on
any date at 100% of the principal amount plus accrued interest to the date of redemption, and (2)
if the Series 2005 Bonds bear interest at the Fixed Interest Rate, in whole or in part (in integral
multiples of $5,000) at any time on or after the First Optional Redemption Date, as hereafter
defined, at a declining premium above the principal amount plus accrued interest to the date of
redemption. See "THE SERIES 2005 BONDS -- Redemption Prior to Maturity -- Optional
Redemption."



                                               viii
        Extraordinary Optional Redemption: The Series 2005 Bonds are also subject to
optional redemption in whole and, under certain limited circumstances, in part upon the
occurrence of certain calamities and unforeseen events at a redemption price equal to 100% of
the principal amount redeemed, plus interest accrued to the redemption date. See "THE SERIES
2005 BONDS -- Redemption Prior to Maturity -- Extraordinary Optional Redemption."

        Optional Tender: While the Series 2005 Bonds bear interest at the Daily Interest Rate,
the Holders or Beneficial Owners of the Series 2005 Bonds or Beneficial Ownership Interests
have the option to tender their Series 2005 Bonds or Beneficial Ownership Interests to the
Trustee for purchase on any Business Day. While the Series 2005 Bonds bear interest at the
Weekly Interest Rate, the Holders or Beneficial Owners of the Series 2005 Bonds or Beneficial
Ownership Interests have the option to tender their Series 2005 Bonds or Beneficial Ownership
Interests to the Trustee for purchase on a Business Day not prior to the seventh day and not later
than the fifteenth day next succeeding the date notice is given by the Holders or Beneficial
Owners. While the Series 2005 Bonds are in an Interest Rate Mode other than the Daily Interest
Rate, the Weekly Interest Rate or the Fixed Interest Rate Mode, the Holders or Beneficial
Owners of the Series 2005 Bonds or Beneficial Ownership Interests have the option to tender
their Series 2005 Bonds to the Trustee for purchase on any Interest Rate Adjustment Date. To
exercise such option, when the interest rate is in an Interest Rate Mode other than the One Month
Interest Rate, the Daily Interest Rate or the Weekly Interest Rate, the Holder or Beneficial
Owner must give notice to the Trustee no later than 11:30 a.m. New York City time on the eighth
Business Day prior to the applicable purchase date and, in the case of a Holder, deliver to the
Trustee the Series 2005 Bonds to be purchased no later than 11:30 a.m. New York City time on
the seventh day preceding the applicable purchase date (or the next preceding Business Day if
such seventh day is not a Business Day); and in the case of a Beneficial Owner, cause the
transfer of the Beneficial Owner’s Beneficial Ownership Interest on the records of DTC by 9:30
a.m. New York City time on the applicable purchase date. To exercise such option when the
interest rate is the One Month Interest Rate, the Holder or Beneficial Owner must give notice to
the Trustee no later than 11:30 a.m. New York City time on the fifth Business Day prior to the
applicable purchase date and, in the case of a Holder, deliver to the Trustee the Series 2005
Bonds to be purchased no later than 11:30 a.m. New York City time on the fourth day preceding
the applicable purchase date (or the next preceding Business Day if such fourth day is not a
Business Day); and in the case of a Beneficial Owner, cause the transfer of the Beneficial
Owner’s Beneficial Ownership Interest on the records of DTC by 9:30 a.m. New York City time
on the applicable purchase date. To exercise such option when the interest rate is the Daily
Interest Rate, the Holder or Beneficial Owner must give notice to the Trustee no later than 11:00
a.m. New York City time on the purchase date, and, in the case of a Holder, deliver to the
Trustee the Series 2005 Bonds to be purchased no later than 12:30 p.m. New York City time on
the purchase date; and in the case of a Beneficial Owner, cause the transfer of the Beneficial
Owner’s Beneficial Ownership Interest on the records of DTC by 12:30 p.m. New York City
time on the purchase date. To exercise such option when the interest rate is the Weekly Interest
Rate, the Holder or Beneficial Owner shall no earlier than fifteen days before the purchase date
and no later than 11:30 a.m. New York City time on the seventh day prior to the purchase date
give notice to the Trustee of the applicable purchase date which is not prior to the seventh day
and not later than the fifteenth day next succeeding the date notice is given and, in the case of a
Holder, deliver to the Trustee the Series 2005 Bonds to be purchased no later than 11:30 a.m.
New York City time on the second Business Day prior to the applicable purchase date; and in the


                                                ix
case of a Beneficial Owner, cause the transfer of the Beneficial Owner’s Beneficial Ownership
Interest on the records of DTC by 9:30 a.m. New York City time on the applicable purchase date.
Upon tender, Series 2005 Bonds in the principal amount of $100,000 or integral multiple of
$5,000 in excess thereof (provided that the untendered portion of any Series 2005 Bond will be
$100,000 or more in principal amount) will be purchased at a price equal to 100% of the
principal amount thereof plus accrued interest thereon. See "THE SERIES 2005 BONDS -
Holders’ Tender Options."

        Mandatory Tender: The Series 2005 Bonds or Beneficial Ownership Interests are
subject to mandatory tender (1) if the Issuer, at the direction of the Borrower, converts the then
current Interest Rate Mode on the Series 2005 Bonds to a different Interest Rate Mode on any
Interest Period Reset Date, (2) upon delivery by the Borrower to the Trustee of an Alternate
Letter of Credit, (3) on the date that is five Business Days prior to the termination date of the
Letter of Credit, if the Letter of Credit has not been extended or an Alternate Letter of Credit has
not been provided or (4) upon receipt by the Trustee of written notice from the Bank stating that
an event of default has occurred and is continuing under the Reimbursement Agreement and
stating that the Letter of Credit will expire 15 days from the date of such notice, subject, in the
case of clauses (1) and (2) above, to each Holder’s or Beneficial Owner’s option to continue to
hold such Holder’s or Beneficial Owner’s Series 2005 Bonds or Beneficial Ownership Interests.
Upon tender, Series 2005 Bonds or Beneficial Ownership Interests will be purchased at a
purchase price equal to 100% of the principal amount thereof plus accrued interest thereon. Any
Series 2005 Bonds or Beneficial Ownership Interests not delivered for tender, for which notice
of a Holder’s or Beneficial Owner’s option to continue to hold such Series 2005 Bonds or
Beneficial Ownership Interests has not been received, will be deemed to have been delivered for
purchase and sold by the Holder or Beneficial Owner thereof. See "THE SERIES 2005 BONDS
-- Mandatory Tender Upon Conversion to a Different Interest Rate Mode", "-- Mandatory Tender
Upon Delivery of an Alternate Letter of Credit" and “—Mandatory Tender Upon Expiration of
the Letter of Credit”.

         Business Day: A day, other than (a) a Saturday, Sunday or legal holiday, (b) a day on
which banking institutions in any city in which the principal office of the Trustee is located (and,
if different, in the city in which the office of the Bank at which draws under the Letter of Credit
are to be honored is located) are required or authorized by law to remain closed or (c) a day on
which The Depository Trust Company is closed for business.

       The Trustee: Wells Fargo Bank, National Association, Los Angeles, California (the
"Trustee"), is a national banking association and duly authorized to exercise corporate trust
powers under the laws of the United States of America, and initially serves as the Trustee under
the Indenture.

         The Project: The Borrower will use the loan of the proceeds of the Series 2005 Bonds to
finance and refinance the cost of the acquisition, construction and equipping of higher
educational facilities located in Irvine, California. Each of the Issuer and the Educational
Institution makes no warranty or representation, whether express or implied, with respect to the
Project or the location, use, operation, design, merchantability, fitness for particular purpose,
condition or durability thereof. The Issuer will make such loan to the Educational Institution,
and the Educational Institution will make such loan to the Borrower, all pursuant to a Loan
Agreement dated as of December 1, 2005 (the "Loan Agreement") among the Issuer, the

                                                 x
Educational Institution and the Borrower. The monthly loan payments to be made by the
Borrower, on behalf of itself and on behalf of the Educational Institution, under the Loan
Agreement and the related Note will correspond, as to amount, to the principal and premium, if
any, and interest (collectively "Bond Service Charges") due on the Series 2005 Bonds.



                            [This Space Intentionally Left Blank]




                                              xi
(THIS PAGE LEFT BLANK INTENTIONALLY)
                                  OFFICIAL STATEMENT

                               relating to the original issuance of

                            $25,000,000
     COLORADO EDUCATIONAL AND CULTURAL FACILITIES AUTHORITY
        ADJUSTABLE RATE DEMAND REVENUE BONDS, SERIES 2005
              (CONCORDIA UNIVERSITY IRVINE PROJECT)


                                       INTRODUCTION
        This Official Statement, including the cover page, Introductory Statement and
Appendices, is furnished in connection with the original issuance of $25,000,000 principal
amount of Adjustable Rate Demand Revenue Bonds, Series 2005 (Concordia University Irvine
Project) (the "Series 2005 Bonds") of the Colorado Educational and Cultural Facilities Authority
(the "Issuer"). The Series 2005 Bonds are being issued pursuant to a Trust Indenture dated as of
December 1, 2005 (the "Indenture"), between the Issuer and Wells Fargo Bank, National
Association, Los Angeles, California, as trustee (the "Trustee"). The Series 2005 Bonds will be
dated as of and bear interest from the date of their initial delivery to Stern Brothers & Co. (the
"Underwriter").

         The proceeds received from the sale of the Series 2005 Bonds will be loaned to ACSI
Capital Corporation, a Colorado nonprofit corporation (the “Educational Institution”). The
Educational Institution will loan such proceeds to Concordia University, a California nonprofit
religious corporation (the "Borrower"). Such loans will be made pursuant to the terms of a Loan
Agreement dated as of December 1, 2005 among the Borrower, the Educational Institution and
the Issuer (the "Loan Agreement"). The Borrower will be liable under the Loan Agreement for
the amount of the loan, which is being made to (i) finance and refinance the cost of the
acquisition, construction and equipping of higher educational facilities located in Irvine,
California (the "Project"), (ii) pay capitalized interest on the Series 2005 Bonds and (iii) pay a
portion of the costs of issuance of the Series 2005 Bonds. Pursuant to the Loan Agreement, the
Borrower will agree to make payments, on behalf of itself and on behalf of the Educational
Institution, by the times and in the amounts necessary to pay the principal of, premium (if any)
and interest on the Series 2005 Bonds when due (the "Bond Service Charges"). To evidence
such obligation, the Borrower also will execute and deliver to the Educational Institution, and the
Educational Institution will endorse and assign to the Trustee, a promissory note (the "Note") in
a principal amount equal to the principal amount of the Series 2005 Bonds.

        Concurrently with, and as a condition to, the issuance of the Series 2005 Bonds, the
Borrower will cause to be delivered to the Trustee an irrevocable direct pay Letter of Credit (the
"Letter of Credit") of U.S. Bank National Association, a national banking association (together
with the issuer of any Alternate Letter of Credit, the "Bank"). The Trustee will be entitled to
draw under the Letter of Credit an amount not exceeding $25,287,672 which consists of (a) up to
$25,000,000, which amount equals the principal amount of the Series 2005 Bonds, in order to
pay the principal on the Series 2005 Bonds when due or upon redemption or acceleration or to
pay the portion of the purchase price thereof corresponding to the principal amount upon certain
tenders by Holders, plus (b) $287,672, initially, and for so long as the Series 2005 Bonds bear
interest at the Daily, Weekly, One Month or Three Month Interest Rate, which amount equals 35
days’ interest on the principal amount of the Series 2005 Bonds, computed at the maximum rate
of 12% per annum, in order to pay accrued interest on the Series 2005 Bonds when due or to pay
the portion of the purchase price of the Series 2005 Bonds or Beneficial Ownership Interests
corresponding to accrued interest. If the Series 2005 Bonds are to bear interest at the Six
Month, One Year, Five Year or Fixed Interest Rate, then the Borrower will be required to
provide an amended or Alternate Letter of Credit which will cover, along with the principal
amount described above, the amount of interest at least equal to 195 days’ interest on the
principal amount of the Series 2005 Bonds then outstanding, computed at the maximum rate of
12% per annum. The Letter of Credit expires on September 30, 2008, unless terminated or
extended pursuant to its terms.

       The Series 2005 Bonds are to be issued in accordance with the laws of the State of
Colorado, particularly Article 15, Title 23 of the Colorado Revised Statutes (the “Act”) and the
Supplemental Public Securities Act, Part 2, Article 57, Title 11 of the Colorado Revised Statutes
(the “Supplemental Act”), a resolution of the Issuer expected to be adopted on December 14,
2005 and the Indenture.

       To secure the issuance of the Letter of Credit, the Borrower and the Bank have entered
into a Letter of Credit Reimbursement Agreement dated as of December 1, 2005 (the
"Reimbursement Agreement"), pursuant to which the Borrower is obligated to reimburse the
Bank for drawings made under the Letter of Credit.

       The Borrower’s operation of the Project will be subject to the terms of a Tax Regulatory
Agreement, dated as of December 1, 2005 (the "Tax Regulatory Agreement"), among the
Borrower, the Educational Institution, the Trustee and the Issuer, which contains covenants
required to maintain the exclusion of interest on the Series 2005 Bonds from gross income for
Federal income tax purposes.

        Except for the information contained herein under the captions "THE ISSUER" and
"ABSENCE OF LITIGATION AFFECTING THE SERIES 2005 BONDS – The Issuer" the
Issuer has not provided any of the information contained in this Official Statement. The Issuer is
not responsible for and does not certify as to the accuracy or sufficiency of the disclosures made
herein or any other information provided by the Borrower, the Educational Institution, the Bank,
the Underwriter or any other person.

     ANY PREMIUM PAYABLE ON THE SERIES 2005 BONDS UPON THEIR
OPTIONAL REDEMPTION WHILE THEY BEAR INTEREST AT THE FIXED INTEREST
RATE (SEE "THE SERIES 2005 BONDS - OPTIONAL REDEMPTION" HEREIN) IS NOT
SECURED BY THE LETTER OF CREDIT.

       Herein follow brief descriptions of the Issuer and the Series 2005 Bonds, together with
summaries of the Letter of Credit, the Reimbursement Agreement, the Loan Agreement and the
Indenture. Information regarding the Bank is included in Appendix A hereto. The descriptions
and summaries of the Letter of Credit, the Reimbursement Agreement, the Loan Agreement, the
Indenture and other documents contained herein do not purport to be comprehensive or definitive
and are qualified in their entirety by reference to those documents, and all references to Series
2005 Bonds are qualified in their entirety by the definitive form thereof included in the
Indenture. Copies of such documents will be available at the offices of the Underwriter, Stern
Brothers & Co., 8000 Maryland, Suite 800, St. Louis, Missouri 63105, until the issuance and
                                                2
delivery of the Series 2005 Bonds, and thereafter at the corporate trust office of the Trustee,
presently Wells Fargo Bank, National Association, 707 Wilshire Boulevard, 17th Floor, Los
Angeles, California 90017, Attention: Corporate Trust Department.

                                          THE ISSUER
        The Issuer, created in 1981, is an independent public body politic and corporate
constituting a public instrumentality and political subdivision of the State. The Issuer is not an
agency of state government and is not subject to administrative direction by any department,
commission, board or agency of the State. The Issuer is authorized by the Act to provide
financing for educational institutions and cultural institutions and to acquire, construct,
reconstruct, repair, alter, improve, extend, own, lease and dispose of properties to the end that the
Issuer may be able to promote the welfare of the people of the State. The Issuer was formerly
known as the Colorado Postsecondary Educational Facilities Authority.

       The Issuer has offered and plans to offer other obligations from time to time to finance
other educational facilities and cultural institutions with respect to facilities located in Colorado
and, subject to the satisfaction of certain requirements, other states. Such obligations have been
and will be issued pursuant to and secured by instruments separate and apart from the Indenture.

        The Issuer has not prepared or assisted in the preparation of this Official Statement
except for statements relating to the Issuer under the sections captioned "THE ISSUER" and
“ABSENCE OF LITIGATION AFFECTING THE SERIES 2005 BONDS – The Issuer” and,
except as aforesaid, the Issuer is not responsible for any statements made in this Official
Statement. Except for the execution and delivery of documents required to effect the issuance of
the Series 2005 Bonds, the Issuer has not otherwise assisted in the public offer, sale or
distribution of the Series 2005 Bonds. Accordingly, except as aforesaid, the Issuer disclaims
responsibility for the disclosures set forth in this Official Statement or otherwise made in
connection with the offer, sale and distribution of the Series 2005 Bonds. The Series 2005 Bonds
are limited obligations of the Issuer payable solely from the payments made by the Borrower
under the Agreement and from the moneys and securities held by the Trustee under the
Indenture. Neither the Issuer nor its directors or officers are personally liable with respect to the
Series 2005 Bonds. Accordingly, no financial information with respect to the Issuer or its
directors or officers has been included in this Official Statement.

                            THE EDUCATIONAL INSTITUTION
        The Association of Christian Schools International ("ACSI") is a California nonprofit
corporation, duly registered as a foreign nonprofit corporation in the State of Colorado, with
substantial operations at its principal Colorado office located in Colorado Springs, Colorado.
ACSI was originally incorporated on June 30, 1964 in California as "California Association of
Christian Schools". However, it was organized and constituted in its current form in 1978 as the
result of a consolidation of several Christian school associations throughout the United States
and Canada. In the 1978 reorganization, the original California corporation, as the survivor
corporation, changed its corporate name to Association of Christian Schools International. The
ACSI Capital Corporation (the "Educational Institution") is a Colorado nonprofit corporation
incorporated in May, 2004, with the same Colorado principal office as ACSI. ACSI is the sole
member of the Educational Institution. Members of ACSI, including the Borrower, are schools
and universities providing educational services in their respective communities. Through their

                                                 3
operations and activities, ACSI and the Educational Institution provide support for the
educational purposes, services, and programs of member schools and universities. The
Educational Institution is formed to provide support for the common educational goals and
purposes of ACSI, the Educational Institution and the Borrower by assisting in the financing of
educational projects.

       The Educational Institution is an “educational institution” under the Act.

     THE SERIES 2005 BONDS ARE NOT BEING OFFERED ON THE BASIS OF THE
FINANCIAL STRENGTH OF THE EDUCATIONAL INSTITUTION. ACCORDINGLY, NO
FINANCIAL INFORMATION WITH RESPECT TO THE EDUCATIONAL INSTITUTION IS
INCLUDED IN THIS OFFICIAL STATEMENT OR THE APPENDICES.

                                      THE BORROWER
       The Borrower is a California nonprofit religious corporation that owns and operates a
university on its campus in Irvine, California. The Borrower is an organization described in
Section 501(c)(3) of the Internal Revenue Code. The Borrower is a “cultural institution” under
the Act. See “APPENDIX C: CONCORDIA UNIVERSITY – ORGANIZATION AND
OPERATIONS.”

       Audited financial statements of the Borrower as of and for the fiscal year ended June 30,
2005, are included in APPENDIX D to this Official Statement.

                                          THE BANK
         The Bank is the issuer of the Letter of Credit. Certain information concerning the Bank,
including certain financial information, has been provided by the Bank and is contained in
Appendix A to this Official Statement. None of the Issuer, the Borrower, the Educational
Institution and the Underwriter makes any representation or warranty as to the accuracy or
completeness thereof. Except for information concerning the Bank, the Reimbursement
Agreement and the Letter of Credit in the sections of this Official Statement captioned "THE
BANK" “THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT” and in
Appendix A, none of the information in this Official Statement has been supplied or verified by
the Bank, and the Bank makes no representation or warranty, express or implied, is not
responsible for and does not certify as to the accuracy, sufficiency or completeness of any other
information contained in this Official Statement or provided by the Borrower, the Issuer, the
Underwriter, the Educational Institution or any other person.

         PURPOSE OF SERIES 2005 BOND ISSUE AND PLAN OF FINANCING
        The Series 2005 Bonds are being issued for the purpose of making funds available to the
Borrower to (i) finance and refinance the cost of the acquisition, construction and equipping of
higher educational facilities located in Irvine, California, including without limitation, (1)
construction of the approximately 45,000 square foot Education, Business and Technology
building, consisting of (A) offices supporting the School of Business and the School of Adult
Studies, open office space for faculty and staff members and providing all student services (e.g.,
registration, financial aid, etc.) in a “one-stop shop” environment; (B) class rooms; (C) one or
more lecture halls; (D) computer labs; (E) administrative office space and board room; and (F)
one or more multi-purpose meeting rooms with small kitchen facilities; (2) renovation of existing
                                                4
dormitories to add approximately 150 beds of capacity; and (3) addition of new track, soccer and
other athletic field surfaces and other improvements to athletic facilities (the "Project"), (ii) pay
capitalized interest on the Series 2005 Bonds and (iii) pay a portion of the costs of issuance of
the Series 2005 Bonds.

                        ESTIMATED SOURCES AND USES OF FUNDS
       The proceeds of the Series 2005 Bonds, exclusive of investment earnings, will be applied
by the Trustee, under the provisions of the Indenture and the Loan Agreement for the following
uses and in the following respective estimated amounts.

Source of Funds:

       Series 2005 Bond Proceeds                                    $25,000,000

       Total Sources of Funds                                       $25,000,000

Uses of Funds:

       Costs of the Project                                         $23,533,873
       Capitalized Interest                                             779,819
       Costs of Issuance(1)                                             686,308

       Total Uses of Funds                                          $25,000,000

(1)    The Costs of Issuance consist of the Underwriter’s discount, initial fees for the Letter of Credit, fees of the
       Issuer, the Educational Institution, the Remarketing Agent and the Trustee, and legal, accounting, rating
       agency and other incidental costs. The amount of these costs, exclusive of any Letter of Credit fees, paid
       from the proceeds of the Series 2005 Bonds will not exceed 2% of the proceeds of the Series 2005 Bonds.


                                       THE SERIES 2005 BONDS
General Description

        Upon issuance, the Series 2005 Bonds will be registered in the names of the Holders (as
defined below) thereof and will be dated the date of their issuance. The Series 2005 Bonds will
mature on December 1, 2035, subject to prior mandatory or optional redemptions described
below. The Series 2005 Bonds will be issued in fully registered form without coupons and will
be in denominations of $100,000 and any integral multiples of $5,000 in excess thereof while the
Series 2005 Bonds bear interest at the Daily, Weekly, One Month or Three Month Interest Rate,
and $5,000 and any integral multiple thereof while the Series 2005 Bonds are in any other
Interest Rate Mode. Principal of and premium, if any, on the Series 2005 Bonds will be payable
when due to the registered holders (the "Holders"), upon presentation and surrender thereof, at
the principal corporate trust office of the Trustee. Interest will be payable on the first Business
Day of each month so long as the Series 2005 Bonds bear interest at the Daily, Weekly, One
Month or Three Month Interest Rate, commencing January 3, 2006, and on each June 1 and
December 1 while the Series 2005 Bonds are in any other Interest Rate Mode (the "Interest
Payment Dates"). Interest will be payable by check mailed by the Trustee on each Interest
Payment Date to the Holders of the Series 2005 Bonds on the applicable Regular Record Date;

                                                         5
provided that upon request of a Holder interest may be paid by wire transfer in immediately
available funds.

Sources of Payment and Security for the Series 2005 Bonds

        The payment of principal of and interest on the Series 2005 Bonds at maturity or upon
redemption or acceleration will be made first from moneys obtained by the Trustee pursuant to
draws on the Bank under the Letter of Credit. In the case of payment of the purchase price of
Series 2005 Bonds or Beneficial Ownership Interests upon certain tenders by Holders or
Beneficial Owners, such payment will be made first from the Remarketing Reimbursement Fund
and then from moneys obtained by the Trustee pursuant to draws on the Bank under the Letter of
Credit. See "SECURITY AND SOURCE OF PAYMENT FOR THE SERIES 2005 BONDS."
The Letter of Credit may not be drawn upon to pay any amount which constitutes a premium on
the Series 2005 Bonds. Such premium must be paid by the Borrower with Eligible Funds, as
hereafter defined. See "SOURCES OF PAYMENT AND SECURITY FOR THE SERIES 2005
BONDS." Under the Reimbursement Agreement, the Borrower is obligated to reimburse the
Bank for draws on the Bank under the Letter of Credit.

Borrower Payments

       In the event amounts are not available under the Letter of Credit sufficient to pay the
principal of and interest on the Series 2005 Bonds, then the principal of and interest on the Series
2005 Bonds are payable directly from the payments made by the Borrower under the Loan
Agreement, including the moneys, securities, funds and accounts held by the Trustee (including
investment earnings thereon) available for that purpose under the Indenture.

Interest

       Interest will be payable on each Interest Payment Date, commencing on January 3, 2006.

        The Series 2005 Bonds will bear interest in one of eight different Interest Rate Modes:
the Daily Interest Rate, the Weekly Interest Rate, the One Month Interest Rate, the Three Month
Interest Rate, the Six Month Interest Rate, the One Year Interest Rate, the Five Year Interest
Rate or the Fixed Interest Rate. The Interest Rate Modes are described below under "Interest
Rate Modes on Series 2005 Bonds." The Borrower on behalf of the Issuer and with the written
consent of the Bank may elect to convert the Interest Rate Mode on the Series 2005 Bonds on
one or more occasions until it is converted to the Fixed Interest Rate, as described under
"Conversion Between Interest Rate Modes" below.

        While the Series 2005 Bonds bear interest in one of the Interest Rate Modes, they bear
interest in such mode for a period of time generally corresponding to the title of that Interest Rate
Mode (the "Interest Rate Period") at a rate determined by the Remarketing Agent. However,
when converting to an Interest Rate Mode other than the Daily Interest Rate Mode, the first
Interest Rate Period may be less than the indicated period. The Remarketing Agent determines
the rate for a particular Interest Rate Period on the Interest Rate Determination Date for such
Interest Rate Period. The Interest Rate Periods and Interest Rate Determination Dates for each
Interest Rate Mode are described below under "Interest Rate Modes on Series 2005 Bonds."



                                                 6
        The Series 2005 Bonds, unless and until converted to a different Interest Rate Mode, will
bear interest at the Daily Interest Rate.

Interest Rate Modes on Series 2005 Bonds

        While the Series 2005 Bonds bear interest in one of the Interest Rate Modes other than
the Fixed Interest Rate, the interest rate for a particular Interest Rate Period is determined by the
Remarketing Agent on the Interest Rate Determination Date. Such interest rate is effective on
the Interest Rate Adjustment Date for the succeeding Interest Rate Period.

        The interest rate determined by the Remarketing Agent on the Interest Rate
Determination Date is to be that rate of interest determined by the Remarketing Agent to be the
interest rate necessary, during the Interest Rate Period commencing on the next Interest Rate
Adjustment Date in the judgment of the Remarketing Agent (taking into consideration current
transactions and comparable securities with which the Remarketing Agent is involved or of
which it is aware and prevailing financial market conditions), to produce as nearly as practical a
par bid (plus accrued interest, if any) for the Series 2005 Bonds on the Interest Rate
Determination Date. In the event that the Remarketing Agent has been removed or has resigned
and no successor has been appointed or the Remarketing Agent has failed to determine the
appropriate interest rate on the Interest Rate Determination Date for whatever reason, or the
appropriate interest rate cannot be determined for whatever reason, then with respect to Series
2005 Bonds that have not been converted to the Fixed Rate Mode, the interest rate then in effect
with respect to the Series 2005 Bonds, without adjustment, will continue for the next Interest
Rate Period. In no event may the interest rate on the Series 2005 Bonds exceed 12% per annum.

       On the Interest Rate Determination Date, the Remarketing Agent will give the Borrower,
the Trustee and the Bank notice of the interest rate to be borne by the Series 2005 Bonds for the
following Interest Rate Period.

       The determination of any interest rate by the Remarketing Agent is binding and
conclusive upon the Holders of the Series 2005 Bonds.

      The Interest Rate Modes and their respective Interest Rate Determination Dates, Interest
Rate Adjustment Dates and Interest Rate Periods are as follows:

Daily Interest Rate Mode

      In the Daily Interest Rate Mode, the Interest Rate Period is a period of one day
commencing on any Business Day. The Interest Rate Determination Date in the Daily Interest
Rate Mode is not later than 11:00 a.m. New York City time on each Business Day. The Interest
Rate Adjustment Date for the Daily Interest Rate Mode is each Business Day.

Weekly Interest Rate Mode

        In the Weekly Interest Rate Mode, the Interest Rate Period is a period of one week
commencing on Thursday. The Interest Rate Determination Date in the Weekly Interest Rate
Mode is not later than 3:00 p.m. New York City time on Wednesday of each week, or the next
preceding Business Day if Wednesday is not a Business Day. The Interest Rate Adjustment Date
for the Weekly Interest Rate Mode is Thursday of each week. In the event of a conversion to the

                                                 7
Weekly Interest Rate Mode from a different Interest Rate Mode, the first Interest Rate Period
may be less than one week, ending on the next succeeding Wednesday. Such first Interest Rate
Period commences on the Interest Period Reset Date, which may be the first day of any month
and ends on the next succeeding Wednesday. In such event, the Interest Rate Determination
Date is not later than 3:00 p.m. New York City time on the Business Day preceding the Interest
Period Reset Date. In the event of a conversion from the Weekly Interest Rate Mode to a
different Interest Rate Mode, the last Interest Rate Period may be less than one week as a result
of the last Interest Rate Period ending on the day preceding the first Business Day or the first day
of a month.

One Month Interest Rate Mode

       In the One Month Interest Rate Mode, the Interest Rate Adjustment Date is the first
Business Day of the month and the Interest Rate Period is approximately one month
commencing on the Interest Rate Adjustment Date and terminating on the day immediately
preceding the following Interest Rate Adjustment Date. The Interest Rate Determination Date is
the seventh Business Day preceding the Interest Rate Adjustment Date.

Three Month Interest Rate Mode

        In the Three Month Interest Rate Mode, the Interest Rate Adjustment Date is the first
Business Day of each March, June, September and December and the Interest Rate Period
commences on the Interest Rate Adjustment Date and continues up to and including the day
preceding the next Interest Rate Adjustment Date. The Interest Rate Determination Date is the
tenth Business Day before the Interest Rate Adjustment Date. (In the event of a conversion from
another Interest Rate Mode to the Three Month Interest Rate Mode, the first Interest Rate
Adjustment Date would be the Interest Period Reset Date for the Three Month Interest Rate
Mode which may be the first Business Day or the first day of any month. Accordingly, the first
Interest Rate Period may be shorter than a full three months.)

Six Month Interest Rate Mode

        In the Six Month Interest Rate Mode, the Interest Rate Adjustment Dates are June 1 and
December 1 and the Interest Rate Period commences on the Interest Rate Adjustment Date and
continues up to and including the day preceding the next Interest Rate Adjustment Date. The
Interest Rate Determination Date is the tenth Business Day preceding the Interest Rate
Adjustment Date. (Upon a conversion from another Interest Rate Mode to the Six Month Interest
Rate Mode, the first Interest Rate Adjustment Date is the Interest Period Reset Date for the Six
Month Interest Rate Mode, which may be the first Business Day or the first day of any month.
Accordingly, the first Interest Rate Period may be shorter than a full six months.)

One Year Interest Rate Mode

         In the One Year Interest Rate Mode, the Interest Rate Adjustment Date is either June 1 or
December 1 and the Interest Rate Period is a one year period commencing on the appropriate
Interest Rate Adjustment Date and ending on either May 31 or November 30. The Interest Rate
Determination Date is the tenth Business Day preceding the Interest Rate Adjustment Date.
(Upon a conversion from another Interest Rate Mode to the One Year Interest Rate Mode the
first Interest Rate Adjustment Date would be the Interest Period Reset Date for the One Year
                                                 8
Interest Rate Mode, which may be the first Business Day or the first day of any month.
Accordingly, the first Interest Rate Period may be shorter than one full year.)

Five Year Interest Rate Mode

         In the Five Year Interest Rate Mode, the Interest Rate Adjustment Date is either June 1 or
December 1 and the Interest Rate Period is a five year period commencing on the appropriate
Interest Rate Adjustment Date and ending on either May 31 or November 30. The Interest Rate
Determination Date is the tenth Business Day preceding the Interest Rate Adjustment Date.
(Upon a conversion to the Five Year Interest Rate Mode from another Interest Rate Mode the
first Interest Rate Adjustment Date would be the Interest Period Reset Date for the Five Year
Interest Rate Mode, which may be the first Business Day or the first day of any month.
Accordingly, the first Interest Rate Period may be shorter than five full years.)

Fixed Interest Rate Mode

        In the Fixed Interest Rate Mode there is only one Interest Rate Adjustment Date and that
is the Interest Period Reset Date upon which such Interest Rate Mode commences, which is the
first day of a month. The Interest Rate Period commences on such Interest Rate Adjustment
Date and continues to the final maturity of the Series 2005 Bonds. The Interest Rate
Determination Date is the tenth Business Day preceding the Interest Rate Adjustment Date.

Conversion Between Interest Rate Modes

        The Interest Rate Mode applicable to the Series 2005 Bonds may be changed, at the
written direction of the Borrower, on behalf of the Issuer, as of an Interest Period Reset Date in
the manner described below. "Interest Period Reset Date" means the date on which the interest
rate on the Series 2005 Bonds converts from one Interest Rate Mode to a new Interest Rate
Mode. An Interest Period Reset Date must be the first Business Day of a month; provided that
upon conversion from a Six Month, One Year or Five Year Interest Rate Mode, an Interest
Period Reset Date must be the first day of the month and, except when converting from a Weekly
Interest Rate Mode, an Interest Period Reset Date may not occur prior to the conclusion of the
preceding Interest Rate Period.

         On any Interest Period Reset Date the interest rate on the Series 2005 Bonds may be
converted to a different Interest Rate Mode upon receipt by the Trustee and the Remarketing
Agent, with a copy to the Bank, of a written direction from the Borrower on behalf of the Issuer,
not less than 30 days prior to such Interest Period Reset Date, to convert the interest rate on the
Series 2005 Bonds to an Interest Rate Mode other than the Interest Rate Mode then in effect.
Except when converting from the Weekly Interest Rate Mode, no Interest Period Reset Date
shall be earlier than the day after the end of the Interest Rate Period in effect on the date of such
direction from the Borrower. Such direction to convert the interest rate on the Series 2005
Bonds to a different Interest Rate Mode must be accompanied by (a) an opinion of bond counsel
selected by the Borrower delivered to the Issuer, the Bank, the Trustee, the Educational
Institution and the Remarketing Agent, stating that such conversion to the specified Interest Rate
Mode will not adversely affect the exclusion of the interest on the Series 2005 Bonds from gross
income for Federal income tax purposes, (b) a written certificate of the Remarketing Agent
stating that the interest coverage period provided by the Letter of Credit is appropriate for the
Interest Rate Mode directed to be in effect and that the expiration date of the Letter of Credit or
                                                 9
Alternate Letter of Credit, as such date may be extended from time to time (the “Letter of Credit
Termination Date”) is no earlier than 15 days after the end of the new Interest Rate Period, or if
the conversion is to the Fixed Interest Rate, that the Letter of Credit Termination Date is no
earlier than 15 days after the First Optional Redemption Date, as defined below, (c) if the
conversion is to the Six Month Interest Rate, One Year Interest Rate, Five Year Interest Rate or
Fixed Interest Rate, the Trustee receives from the Borrower evidence of the written consent of
the Bank to such conversion, and (d) a written certificate of the Remarketing Agent stating that it
has received certifications, opinions or other evidence satisfactory to it that there has been or will
be compliance with any applicable state or Federal securities law requirements. If the Series
2005 Bonds bear interest at the Daily Interest Rate, the Weekly Interest Rate, the One Month
Interest Rate or the Three Month Interest Rate, the interest coverage period for the Letter of
Credit shall be at least 35 days of interest at the Maximum Rate. If the Series 2005 Bonds bear
interest at the Six Month Interest Rate, the One Year Interest Rate, the Five Year Interest Rate or
the Fixed Interest Rate, then the interest coverage period for the Letter of Credit shall be at least
195 days of interest at the Maximum Rate. The Borrower shall be required to provide a Letter of
Credit or an Alternate Letter of Credit which will provide the appropriate interest coverage. No
conversion shall be effective if (i) the proposed conversion is to a One Year Interest Rate, Five
Year Interest Rate or Fixed Interest Rate and the Borrower makes an election on or prior to the
day immediately succeeding any Interest Rate Determination Date not to proceed with the
proposed conversion, (ii) the Remarketing Agent has failed to determine the interest rate to be
effective following such conversion or (iii) the Trustee has not received on the effective date of
such conversion an opinion of Bond Counsel to the same effect as described in clause (a) of this
paragraph above. In any such event, the Interest Rate Mode for the Series 2005 Bonds will
remain as the Interest Rate Mode then in effect for the Series 2005 Bonds without regard to any
proposed conversion. The Series 2005 Bonds or Beneficial Ownership Interests will continue to
be subject to tender for purchase on the scheduled effective date of the proposed conversion
without regard to the failure of such proposed conversion. If the Trustee shall have sent any
notice to Holders regarding the proposed conversion, then in the event of a failure of such
conversion, as specified above, the Trustee shall promptly notify all Holders of such failure, of
the reason for such failure, and of the continuation of the Interest Rate Mode then in effect.

        If the interest rate on the Series 2005 Bonds is converted to a different Interest Rate
Mode, at least 25 days prior to the Interest Period Reset Date, the Trustee shall notify the
Holders of all outstanding Series 2005 Bonds by first class mail to all Holders, that upon such
Interest Period Reset Date the Series 2005 Bonds shall be converted to a different Interest Rate
Mode, which Interest Rate Mode shall be specified, and that all Series 2005 Bonds or Beneficial
Ownership Interests shall be subject to mandatory tender, subject to the right of Holders or
Beneficial Owners to affirmatively elect to waive the mandatory tender and retain their Series
2005 Bonds or Beneficial Ownership Interests. Such notice shall also set forth that any rating on
the Series 2005 Bonds may be subject to reduction or withdrawal as a result of such conversion
to a different Interest Rate Mode. See "Mandatory Tender Upon Conversion to Different Interest
Rate Mode" immediately below.

Mandatory Tender Upon Conversion to a Different Interest Rate Mode

       Upon conversion of the Series 2005 Bonds to a different Interest Rate Mode in
accordance with the provisions of the Indenture as described above, the Series 2005 Bonds or
Beneficial Ownership Interests will be subject to mandatory tender by the Holders or Beneficial

                                                 10
Owners thereof for purchase on the Interest Period Reset Date upon which such conversion is
effective at a purchase price equal to the principal amount thereof plus accrued interest, if any, to
the Interest Period Reset Date. Notwithstanding such mandatory tender, any Holder or
Beneficial Owner may elect to retain such Holder’s or Beneficial Owner’s Series 2005 Bonds or
Beneficial Ownership Interests by delivering to the Trustee a written notice not later than 11:30
a.m. New York City time on the eighth Business Day prior to such Interest Period Reset Date, or
by 11:30 a.m. New York City time on the fifth Business Day prior to such Interest Period Reset
Date if the Interest Rate Mode is to be converted to the One Month Interest Rate, which notice
shall state that (a) such Holder or Beneficial Owner realizes that the Series 2005 Bonds are being
converted to bear interest at the applicable Interest Rate Mode, (b) unless the interest rate on the
Series 2005 Bonds is being converted to the Daily Interest Rate or the Weekly Interest Rate, such
Holder or Beneficial Owner realizes that the next date upon which Series 2005 Bonds or
Beneficial Ownership Interests may be tendered for purchase is the next Interest Rate
Adjustment Date, or if such Series 2005 Bonds are being converted to the Fixed Interest Rate,
such Series 2005 Bonds or Beneficial Ownership Interests may no longer be tendered for
purchase, (c) such Holder or Beneficial Owner realizes that any securities ratings on the Series
2005 Bonds may be withdrawn or lowered, and (d) such Holder or Beneficial Owner
affirmatively elects to hold his Series 2005 Bonds or Beneficial Ownership Interests and receive
interest at the applicable Interest Rate Mode.

       Series 2005 Bonds or Beneficial Ownership Interests with respect to which the Trustee
shall not have received the election to retain as described in the preceding paragraph will be
deemed to have been tendered for purchase whether or not the Holders or Beneficial Owners
thereof shall have delivered such Series 2005 Bonds or Beneficial Ownership Interests to the
Trustee, and subject to the right of the Holders or Beneficial Owners of such Series 2005 Bonds
or Beneficial Ownership Interests to receive the purchase price of such Series 2005 Bonds or
Beneficial Ownership Interests pursuant to a draw on the Letter of Credit and to receive interest
accrued thereon to the Interest Period Reset Date, such Series 2005 Bonds or Beneficial
Ownership Interests shall be null and void.

Mandatory Tender Upon Delivery of an Alternate Letter of Credit

        If at any time the Borrower provides for the delivery to the Trustee of an Alternate Letter
of Credit as provided in the Indenture, all Series 2005 Bonds or Beneficial Ownership Interests
are subject to mandatory tender by the Holders or Beneficial Owners thereof for purchase on the
date such Alternate Letter of Credit is to take effect (the "Replacement Date") at a purchase price
equal to the principal amount thereof plus accrued interest to that date. Notwithstanding such
mandatory tender, any Holder or Beneficial Owner may elect to retain his Series 2005 Bonds or
Beneficial Ownership Interests by delivering to the Trustee a written notice no later than 11:30
a.m. New York City time on the eighth Business Day prior to such Replacement Date, which
notice must state that (a) such Holder or Beneficial Owner has received notice of and realizes
that the Borrower is delivering an Alternate Letter of Credit to the Trustee pursuant to the
Indenture, (b) such Holder or Beneficial Owner realizes that any securities rating on the Series
2005 Bonds may be withdraw or lowered and (c) such Holder or Beneficial Owner affirmatively
elects to hold his Series 2005 Bonds or Beneficial Ownership Interests.




                                                 11
Mandatory Tender Upon Expiration of Letter of Credit

        All Series 2005 Bonds or Beneficial Ownership Interests shall be subject to mandatory
tender by the Holders or Beneficial Owners thereof for purchase on the date (a “Bond Purchase
Date”) that is five (5) Business Days prior to the Letter of Credit Termination Date, at a purchase
price equal to the principal amount thereof plus accrued interest to that date, unless, at least 30
days prior to any such Bond Purchase Date, (a) the Bank shall have agreed to an extension or
further extension of the Letter of Credit Termination Date to a date not earlier than thirty (30)
days from the Letter of Credit Termination Date being extended or (b) as described herein, the
Borrower shall have obtained and delivered to the Trustee an Alternate Letter of Credit with a
termination date not earlier than one year from the Letter of Credit Termination Date for the
Letter of Credit it replaces (in which case the Series 2005 Bonds shall be subject to mandatory
tender for purchase pursuant to the preceding paragraph). Notice of the expiration of the Letter
of Credit shall be provided by the Trustee to the registered owners of the Bonds outstanding at
least 15 days and not more than 30 days prior to the Bond Purchase Date. Such notice to the
Bondholders shall state that all Series 2005 Bonds shall be subject to mandatory tender pursuant
to Section 2.05 of the Indenture, and shall be mailed to the Bondholders in accordance with
Section 4.04 of the Indenture.

Mandatory Tender Upon Default Under the Reimbursement Agreement

        All Series 2005 Bonds or Beneficial Ownership Interests shall be subject to mandatory
tender by the Holders or Beneficial Owners thereof for purchase, at a purchase price equal to the
principal amount thereof plus accrued interest to that date, upon receipt by the Trustee of written
notice from the Bank stating that an event of default has occurred and is continuing under the
Reimbursement Agreement and stating that the Letter of Credit shall expire 15 days from the
date of such notice. In no event shall the Bond Purchase Date be later than 7 days from the date
of receipt of such notice of default by the Trustee. The Trustee shall give notice of such
mandatory tender to the registered owners of the Bonds as soon as practicable and shall establish
the purchase date in such notice to be a date not less than 4 and not more than 7 days from the
date such notice is given by the Trustee, and such notice shall be mailed to the Bondholders in
accordance with Section 4.04 of the Indenture.

Holders’ or Beneficial Owners’ Tender Options

       Holders or Beneficial Owners of Series 2005 Bonds or Beneficial Ownership Interests
may elect to have their Series 2005 Bonds or Beneficial Ownership Interests, or portions thereof,
in denominations of $100,000 or integral multiples of $5,000 in excess thereof (provided that the
untendered portion shall be $100,000 or more in principal amount), purchased by the Trustee at a
purchase price equal to 100% of the principal amount thereof plus accrued interest thereon, if
any, on the applicable Bond Purchase Dates (as described below) and upon satisfaction of the
applicable tender and notice requirements set forth below.

Daily Interest Rate Period

       During any Daily Interest Rate Period, on the demand of the Holders or Beneficial
Owners thereof, Series 2005 Bonds or Beneficial Ownership Interests will be purchased by the
Trustee first from remarketing proceeds held in the Remarketing Reimbursement Fund and, to
the extent that moneys from such Fund are not sufficient, from draws made on the Bank under
                                                12
the Letter of Credit, on any Business Day (the "Bond Purchase Date") at a purchase price equal
to the principal amount thereof plus accrued interest at the Daily Interest Rate, if any, to the
Bond Purchase Date. To exercise such option the Holder or Beneficial Owner must (a) give
notice to the Trustee by telecopy or in writing by 11:00 a.m. New York City time on the Bond
Purchase Date which states (i) the name and address of the Holder or Beneficial Owner, (ii) the
principal amount, CUSIP number and Bond numbers of the Series 2005 Bonds to be purchased,
(iii) the date on which the Series 2005 Bonds or Beneficial Ownership Interests are to be
purchased, which Purchase Date shall be a Business Day, and (iv) that such notice is irrevocable;
and (b) in the case of a Holder, no later than 12:30 p.m. New York City time on the Bond
Purchase Date, deliver to the principal corporate trust office of the Trustee the Series 2005 Bonds
to be purchased in proper form, accompanied by fully completed and executed Instructions to
Sell, the form of which shall be printed on the Series 2005 Bonds; and (c) in the case of a
Beneficial Owner, cause the transfer of the Beneficial Ownership Interest on the records of DTC
by 12:30 p.m. New York City time on the Bond Purchase Date.

Weekly Interest Rate Period

        During any Weekly Interest Rate Period, on the demand of the Holders or Beneficial
Owners thereof, Series 2005 Bonds or Beneficial Ownership Interests will be purchased by the
Trustee first from remarketing proceeds held in the Remarketing Reimbursement Fund and, to
the extent that moneys from such Fund are not sufficient, from draws made on the Bank under
the Letter of Credit, on any Business Day (the "Bond Purchase Date") at a purchase price equal
to the principal amount thereof plus accrued interest at the Weekly Interest Rate, if any, to the
Bond Purchase Date. To exercise such option the Holder or Beneficial Owner must (a) give
notice to the Trustee no earlier than fifteen days before the Bond Purchase Date and no later than
11:30 a.m. New York City time on the seventh day prior to the Bond Purchase Date by telecopy
or in writing which states (i) the name and address of the Holder or Beneficial Owner, (ii) the
principal amount, CUSIP number and Bond numbers of the Series 2005 Bonds, (iii) the date on
which the Series 2005 Bonds or Beneficial Ownership Interests are to be purchased, which
Purchase Date shall be a Business Day not prior to the seventh day and not later than the
fifteenth day next succeeding the date of giving of such notice to the Trustee and, if the interest
rate on the Series 2005 Bonds is to be converted from the Weekly Interest Rate to a new Interest
Rate Mode, is a date prior to the Interest Period Reset Date with respect to the new Interest Rate
Mode, and (iv) that such notice is irrevocable; and (b) in the case of a Holder, no later than 11:30
a.m. New York City time on the second Business Day immediately preceding the applicable
Bond Purchase Date, deliver to the principal corporate trust office of the Trustee the Series 2005
Bonds to be purchased in proper form, accompanied by fully completed and executed
Instructions to Sell, the form of which is printed on the Series 2005 Bonds; and (c) in the case of
a Beneficial Owner, cause the transfer of the Beneficial Ownership Interest on the records of
DTC by 9:30 a.m. New York City time on the Bond Purchase Date. In the case of a Series 2005
Bond or Beneficial Ownership Interest or portion thereof to be purchased prior to an Interest
Payment Date and after the Regular Record Date in respect thereof, if the Holder is other than a
Depository or its nominee, the Holder or Beneficial Owner shall deliver a due-bill check, in form
satisfactory to the Trustee, for interest due on such Interest Payment Date.




                                                13
Other Interest Rate Periods

        During any One Month Interest Rate Period, Three Month Interest Rate Period, Six
Month Interest Rate Period, One Year Interest Rate Period or Five Year Interest Rate Period, on
the demand of the Holders or Beneficial Owners thereof, Series 2005 Bonds or Beneficial
Ownership Interests will be purchased by the Trustee first from remarketing proceeds held in the
Remarketing Reimbursement Fund and, to the extent that moneys from such Fund are not
sufficient, from draws made on the Bank under the Letter of Credit, on any Interest Rate
Adjustment Date (the "Bond Purchase Date"), at a purchase price equal to the principal amount
thereof plus accrued interest, if any, to the Purchase Date. To exercise such option the Holder or
Beneficial Owner must (a) give notice to the Trustee by telecopy or in writing, no earlier than
fifteen days prior to the Bond Purchase Date and no later than 11:30 a.m. New York City time,
with respect to the One Month Interest Rate Period, on the fifth Business Day preceding such
Interest Rate Adjustment Date and with respect to the other Interest Rate Periods described
above, on the eighth Business Day preceding such Interest Rate Adjustment Date, which states
(i) the name and address of the Holder or Beneficial Owner, (ii) the principal amount, CUSIP
number and Bond numbers of the Series 2005 Bonds or Beneficial Ownership Interests to be
purchased, (iii) that the Series 2005 Bonds or Beneficial Ownership Interests are to be purchased
pursuant to the provisions of the Indenture, and (iv) that such notice is irrevocable; and (b) in the
case of a Holder, no later than 11:30 a.m. New York City time, with respect to the One Month
Interest Rate Period, on the fourth Business Day preceding the applicable Bond Purchase Date,
or, with respect to the other Interest Rate Periods described above, on the seventh day preceding
the applicable Bond Purchase Date, deliver to the principal corporate trust office of the Trustee
the Series 2005 Bonds to be purchased in proper form accompanied by fully completed and
executed Instructions to Sell, the form of which is printed on the Series 2005 Bonds; and (c) in
the case of a Beneficial Owner, cause the transfer of the Beneficial Ownership Interest on the
records of DTC by 9:30 a.m. New York City time on the Bond Purchase Date.

Payment of Purchase Price; Miscellaneous

        The purchase price of Series 2005 Bonds or Beneficial Ownership Interests purchased
will be paid to a Holder or Beneficial Owner by check or by draft. The options granted to the
Holders or Beneficial Owners are subject to the additional conditions that any tendered Series
2005 Bonds or Beneficial Ownership Interests (or the applicable portion thereof) will not be
purchased if the Series 2005 Bonds or Beneficial Ownership Interests have been theretofore
selected for redemption or have matured prior to the applicable Bond Purchase Date.

Book Entry

        The following information regarding DTC and Cede & Co. has been furnished by DTC.
The Issuer, the Borrower, the Bank, the Trustee and the Underwriter do not assume any
responsibility for the accuracy or completeness of the information set forth under this caption
"Book Entry," and the Issuer, the Borrower, the Bank, the Trustee and the Underwriter are not
required to supervise, and will not supervise, the operation of the book entry system described
herein.

               1.      The Depository Trust Company ("DTC"), New York, New York, will act
       as securities depository for the Series 2005 Bonds. The Series 2005 Bonds will be issued
       as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership
                                                 14
nominee) or such other name as may be requested by an authorized representative of
DTC. One fully-registered Series 2005 Bond certificate will be issued for the Series 2005
Bonds in the aggregate principal amount of such issue, and will be deposited with DTC.

        2.      DTC, the world’s largest depository, is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2
million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues,
and money market instruments from over 85 countries that DTC’s participants ("Direct
Participants") deposit with DTC. DTC also facilitates the post-trade settlement among
Direct Participants of sales and other securities transactions in deposited securities,
through electronic computerized book-entry transfers and pledges between Direct
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, in turn, is owned by a number of Direct Participants of DTC and
Members of the National Securities Clearing Corporation, Government Securities
Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing
Corporation, (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well
as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the
National Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as both U.S. and non-U.S. securities brokers and dealers, banks,
trust companies, and clearing corporations that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules
applicable to its Participants are on file with the Securities and Exchange Commission.
More information about DTC can be found at www.dtcc.com.

        3.      Purchases of Series 2005 Bonds under the DTC system must be made by
or through Direct Participants, which will receive a credit for the Series 2005 Bonds on
DTC’s records. The ownership interest of each actual purchaser of each Series 2005
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 Series 2005 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 Series 2005 Bonds, except in the event that use
of the book-entry system for the Series 2005 Bonds is discontinued.

       4.      To facilitate subsequent transfers, all Series 2005 Bonds deposited by
Direct Participants with DTC are registered in the name of DTC’s partnership nominee,

                                        15
Cede & Co., or such other name as may be requested by an authorized representative of
DTC. The deposit of Series 2005 Bonds with DTC and their registration in the name of
Cede & Co. or such other DTC nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2005
Bonds; DTC’s records reflect only the identity of the Direct Participants to whose
accounts such Series 2005 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.

        5.      Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements among
them, subject to any statutory or regulatory requirements as may be in effect from time to
time. Beneficial Owners of Series 2005 Bonds may wish to take certain steps to augment
the transmission to them of notices of significant events with respect to the Series 2005
Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Series
2005 Bond documents. For example, Beneficial Owners of Series 2005 Bonds may wish
to ascertain that the nominee holding the Series 2005 Bonds for their benefit has agreed
to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners
may wish to provide their names and addresses to the registrar and request that copies of
notices be provided directly to them.

       6.      Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent
or vote with respect to Series 2005 Bonds unless authorized by a Direct Participant in
accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus
Proxy to the Issuer 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
Series 2005 Bonds are credited on the record date (identified in a listing attached to the
Omnibus Proxy).

        7.      Redemption proceeds, distributions, and dividend payments on the Series
2005 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
Issuer 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 securities held for the
accounts of customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC nor its nominee, the Trustee, or the
Issuer, subject to any statutory or regulatory requirements as may be in effect from time
to time. Payment of redemption proceeds, distributions, and dividend payments to Cede
& Co. (or such other nominee as may be requested by an authorized representative of
DTC) is the responsibility of the Issuer 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.

       8.     A Beneficial Owner shall give notice to elect to have its Series 2005
Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect
delivery of such Series 2005 Bonds by causing the Direct Participant to transfer the
                                    16
       Participant’s interest in the Securities, on DTC’s records, to the Trustee. The requirement
       for physical delivery of Series 2005 Bonds in connection with an optional tender or a
       mandatory purchase will be deemed satisfied when the ownership rights in the Series
       2005 Bonds are transferred by Direct Participants on DTC’s records and followed by a
       book-entry credit of tendered Securities to the Trustee’s DTC account.

              9.      DTC may discontinue providing its services as depository with respect to
       the Series 2005 Bonds at any time by giving reasonable notice to the Issuer or the
       Trustee. Under such circumstances, in the event that a successor depository is not
       obtained, Series 2005 Bond certificates are required to be printed and delivered.

               10.    The Issuer may decide to discontinue use of the system of book-entry
       transfers through DTC (or a successor securities depository). In that event, Series 2005
       Bond certificates will be printed and delivered.

              11.    The information in this section concerning DTC and DTC’s book-entry
       system has been obtained from sources that the Issuer, the Borrower, the Bank, the
       Underwriter and the Trustee believe to be reliable, but the Issuer, the Borrower, the Bank,
       the Underwriter and the Trustee take no responsibility for the accuracy thereof.

     NONE OF THE ISSUER, THE BORROWER, THE EDUCATIONAL INSTITUTION
AND 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 SERIES 2005 BONDS; (2)
THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT
PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE TIMELY OR ULTIMATE
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 SERIES 2005 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 INDENTURE TO BE GIVEN TO REGISTERED OWNERS; (5) THE
SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT
OF ANY PARTIAL REDEMPTION OF THE SERIES 2005 BONDS; OR (6) ANY CONSENT
GIVEN OR OTHER ACTION TAKEN BY DTC AS REGISTERED OWNER.

Redemption Prior to Maturity

       The Series 2005 Bonds are subject to redemption in the circumstances and in the manners
described below.

Mandatory Redemption Upon Determination of Taxability

        Upon the occurrence of a Determination of Taxability, as defined below, the Series 2005
Bonds are subject to mandatory redemption in whole by the Issuer at a redemption price of 100%
of the outstanding principal amount thereof, plus accrued interest to the redemption date, at the
earliest practicable date selected by the Trustee, after consultation with the Borrower, but in no
event later than 45 days following the Trustee’s notification of the Determination of Taxability.
                                               17
        The occurrence of a Determination of Taxability with respect to the Series 2005 Bonds
will not constitute an Event of Default under the Indenture and the sole remedy of the Holders
under the Indenture will be mandatory redemption of the Series 2005 Bonds in accordance with
the preceding paragraph. No redemption premium will be payable and no increase in the interest
payable with respect to the Series 2005 Bonds will occur in the event of a Determination of
Taxability occurs.

        "Determination of Taxability" means and shall occur when, (i) the Trustee receives
written notice from the Borrower, supported by an opinion of Bond Counsel, that interest on the
Series 2005 Bonds is includible in the gross income of Holders of the Series 2005 Bonds for
Federal income tax purposes, or (ii) the Internal Revenue Service shall claim in writing that
interest on the Series 2005 Bonds is includible in the gross income of Holders of the Series 2005
Bonds for Federal income tax purposes; provided, that such a claim shall not be deemed a
Determination of Taxability unless the Borrower is afforded reasonable opportunity (at its sole
expense and for a period not to exceed 3 years) to pursue in good faith any judicial or
administrative remedy available to the Borrower with respect to such claim.

Optional Redemption

        Unless previously redeemed, the Series 2005 Bonds are subject to redemption, by the
Issuer, upon the direction of the Borrower, with the written consent of the Bank if required
pursuant to the provisions of the Reimbursement Agreement, (a) if the Series 2005 Bonds do not
bear interest at the Fixed Interest Rate, in whole or in part (in integral multiples of $5,000,
provided, while the Series 2005 Bonds bear interest at the Daily, Weekly, One Month or Three
Month Interest Rate, that the unredeemed portion of any Series 2005 Bond redeemed in part shall
be $100,000 or more) on any date at a redemption price of 100% of the principal amount
redeemed plus accrued interest thereon to the redemption date, and (b) after commencement of
the Fixed Interest Rate Mode and on or after the First Optional Redemption Date (as defined
following the table below), in whole at any time or in part (in integral multiples of $5,000) at any
time at a redemption price equal to the following percentages of the principal amount redeemed,
plus in each case accrued interest to the date fixed for redemption.

                  Optional Redemption Date                        Redemption Price

        First Optional Redemption Date, through the                       103%
        following last day of November

        First anniversary of the First Optional                           102
        Redemption Date, through the following last
        day of November

        Second anniversary of the First Optional                          101
        Redemption Date, through the following last
        day of November

        Third anniversary of the First Optional                           100
        Redemption Date and thereafter


                                                  18
      "First Optional Redemption Date" means the December 1 occurring in the year which is a
number of years after the Interest Period Reset Date for the Fixed Interest Rate equal to the
number of full years between such Interest Period Reset Date and the maturity date of the Series
2005 Bonds, multiplied by one-half and rounded up to the nearest whole number.

          Optional Redemption Pursuant to the Reimbursement Agreement.

        (a)     Under the terms of the Reimbursement Agreement, the Borrower is obligated to
effect an optional redemption of the Series 2005 Bonds (so long as the Series 2005 Bonds do not
bear interest at the Fixed Interest Rate) on the following dates and in the following amounts:

 Date of Redemption             Amount             Date of Redemption              Amount

     December 1, 2007           $265,000             December 1, 2022         $      415,000
     December 1, 2008            270,000             December 1, 2023                425,000
     December 1, 2009            280,000             December 1, 2024                440,000
     December 1, 2010            290,000             December 1, 2025                450,000
     December 1, 2011            295,000             December 1, 2026                465,000
     December 1, 2012            305,000             December 1, 2027                480,000
     December 1, 2013            315,000             December 1, 2028                495,000
     December 1, 2014            325,000             December 1, 2029                510,000
     December 1, 2015            335,000             December 1, 2030                525,000
     December 1, 2016            345,000             December 1, 2031                540,000
     December 1, 2017            355,000             December 1, 2032                560,000
     December 1, 2018            365,000             December 1, 2033                575,000
     December 1, 2019            380,000             December 1, 2034                595,000
     December 1, 2020            390,000             December 1, 2035*            13,610,000
     December 1, 2021            400,000
*Final Maturity.


This optional redemption schedule may be changed at any time upon the mutual agreement
of the Borrower and the Bank and without the consent of the Holders of the Series 2005
Bonds.

        (b)    Under the terms of the Reimbursement Agreement the Borrower is also required
to cause the optional redemption of Bonds on a quarterly basis on the first Business Day of each
March, June, September and December (each a “Pledge Redemption Date”) in an amount equal
to the amount of all pledges of contributions received with respect to the Borrower’s capital
campaign for the Education, Business and Technology Building, which EBT Building is part of
the Project, and investment earnings on deposit in the capital campaign account maintained with
the Bank on the date next preceding such Pledge Redemption Date. At the option of the
Borrower, but solely with the prior written consent of the Bank and the Guarantor (as defined
herein), the Borrower may apply all or a portion of the amount of pledges on deposit in the
capital campaign account maintained with the Bank in satisfaction of its obligation to deposit
funds for the redemption of Bonds under subparagraph (a) above, rather than as provided in this
subparagraph (b).




                                              19
       Although failure by the Borrower to deposit pledges in the capital campaign account
maintained with the Bank and/or failure by the Borrower to redeem any Series 2005 Bonds on
any optional redemption date will not constitute a default under the Indenture or the Loan
Agreement, such failure could constitute an event of default under the Reimbursement
Agreement. See “THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT
– The Reimbursement Agreement – Events of Default and Remedies” and “THE INDENTURE
– Events of Default and Remedies” herein.

Extraordinary Optional Redemption

        The Series 2005 Bonds are also subject to redemption by the Issuer (a) in whole on any
date in the event of the exercise by the Borrower of its option, with the written consent of the
Bank if required pursuant to the Reimbursement Agreement, to direct that redemption upon
occurrence of damage or destruction to or condemnation of all or a significant part of the
Facility, if the Loan Agreement becomes void, unenforceable or impossible to perform as
contemplated, or unreasonable burdens or excessive liabilities have been imposed upon the
Issuer or the Borrower with respect to the Project, or (b) in whole or in part on the occurrence of
events permitting a partial redemption at the option of the Borrower upon the occurrence of
damage or destruction to or condemnation of all or a significant portion of the Facility; in each
case, at a redemption price of 100% of the principal amount redeemed, plus interest accrued to
the redemption date.

Use of Letter of Credit Moneys to Redeem Series 2005 Bonds

        The Trustee shall draw on the Letter of Credit to pay the principal of and interest on any
Series 2005 Bonds called for redemption and shall pay to the Bank, as a reimbursement under
the Reimbursement Agreement for such drawing, an amount equal to but not to exceed such
drawing from any moneys held in the Bond Fund pursuant to the Indenture and available
therefor. No amounts will be drawn on the Letter of Credit to pay premium on the Series 2005
Bonds. Any premium must be paid with Eligible Funds as hereafter defined.

Purchase in Lieu of Redemption

        When Series 2005 Bonds are subject to optional or extraordinary optional redemption,
Series 2005 Bonds paid by the Borrower or paid from a draw under the Letter of Credit or
otherwise paid by or on behalf of the Bank shall be purchased in lieu of redemption on the
applicable redemption date at a purchase price equal to the principal amount thereof, plus
accrued interest thereon to but not including the date of such purchase, if the Trustee has
received a written request on or before said purchase date from the Borrower or the Bank, as the
case may be, specifying that the moneys provided or to be provided by such party shall be used
to purchase Series 2005 Bonds in lieu of redemption. No purchase of Series 2005 Bonds by the
Borrower or the Bank pursuant to this Indenture or advance or use of any moneys to effectuate
any such purchase shall be deemed to be a payment or redemption of the Series 2005 Bonds or
any portion thereof, and such purchase shall not operate to extinguish or discharge the
indebtedness evidenced by such Series 2005 Bonds. Series 2005 Bonds purchased pursuant to
this paragraph shall not be remarketed by the Remarketing Agent except in accordance with the
provisions of the Indenture. If a Letter of Credit is in effect on the date Series 2005 Bonds are to
be purchased in lieu of redemption, the moneys used to purchase Series 2005 Bonds in lieu of
redemption shall be Eligible Funds.
                                                20
Selection of Series 2005 Bonds for Redemption

        If fewer than all of the Series 2005 Bonds are to be redeemed, the selection of Series
2005 Bonds to be redeemed, or portions thereof in amounts of $5,000 or any integral multiple
thereof, shall be made by lot by the Trustee in any manner which the Trustee may determine;
provided, while the Series 2005 Bonds bear interest at the Daily, Weekly, One Month or Three
Month Interest Rate, that the Trustee shall select Series 2005 Bonds for redemption so as to
assure that after such redemption no Holder shall retain Series 2005 Bonds in an aggregate
amount of less than $100,000. In the case of a partial redemption of Series 2005 Bonds by lot
when Series 2005 Bonds of denominations greater than $5,000 are then outstanding, each $5,000
unit of face value of principal thereof shall be treated as though it were a separate Series 2005
Bond of the denomination of $5,000. Any Pledged Bonds, as defined in the Reimbursement
Agreement (or book entry interests therein), pledged to the Bank pursuant to the Reimbursement
Agreement shall be selected for redemption prior to the selection of any other Series 2005
Bonds.

        So long as DTC is the sole registered Holder of the Series 2005 Bonds, if less than all of
the Series 2005 Bonds are called for redemption, after notice to DTC by the Trustee of such
redemption, the selection of the beneficial interests in the Series 2005 Bonds to be redeemed will
be in the sole discretion of DTC and the DTC Participants.

Notice of Redemption and Payment of Redeemed Series 2005 Bonds

        Unless waived by any Holder of Series 2005 Bonds to be redeemed, official notice of
redemption shall be given by the Registrar on behalf of the Issuer by mailing a copy of an
official redemption notice by first class mail postage prepaid to the Issuer and to each Holder of
each Series 2005 Bonds to be redeemed, at the address of such Holder shown on the registration
books maintained by the Trustee (the "Register"), not less than 30 days nor more than 60 days
prior to the date fixed for redemption.

       All official notices of redemption shall state:

               (a)    The redemption date,

               (b)    The redemption price,

               (c)     If less than all outstanding Series 2005 Bonds are to be redeemed, the
       identification by designation, letters, numbers or other distinguishing marks (and, in the
       case of partial redemption, the respective principal amounts) of the Series 2005 Bonds to
       be redeemed,

               (d)      That on the redemption date the redemption price will become due and
       payable upon each such Series 2005 Bonds or portion thereof called for redemption, and
       that interest thereon shall cease to accrue from and after said date,

               (e)      The place where such Series 2005 Bonds are to be surrendered for
       payment of the redemption price, which place of payment shall be the principal corporate
       trust office of the Registrar, and


                                                 21
              (f)     that the notice of redemption is conditioned upon there being deposited
       with the Trustee prior to the date of redemption moneys sufficient to pay the redemption
       price of the Series 2005 Bonds to be redeemed and, in the case of any redemption
       premium on the Series 2005 Bonds, that there be on deposit Eligible Funds sufficient to
       pay such redemption premium.

        Except with the prior written consent of the Bank, in the event of any optional or
extraordinary optional redemption of Series 2005 Bonds, Eligible Funds, as defined below, in an
amount of money sufficient to pay the redemption price of all Series 2005 Bonds or portions of
Series 2005 Bonds which are to be so redeemed, are required to be on deposit with the Trustee.

        If funds for the redemption of all of the Series 2005 Bonds and portions thereof to be
redeemed, together with interest accrued thereon to the redemption date, are held by the Trustee
or any Paying Agent on the redemption date, so as to be available for redemption on that date
and if notice of redemption has been given as described above, then from and after the
redemption date those Series 2005 Bonds and portions thereof called for redemption shall cease
to bear interest and no longer shall be considered to be outstanding.

       SECURITY AND SOURCE OF PAYMENT FOR THE SERIES 2005 BONDS
      Under the terms of the Loan Agreement, the Borrower is obligated to make loan
payments sufficient to pay the Bond Service Charges on the Series 2005 Bonds.

        The Letter of Credit is issued to the Trustee for the account of the Borrower for the
benefit of the Holders of the Series 2005 Bonds. The Letter of Credit is an unconditional and
irrevocable obligation of the Bank to pay to the Trustee an aggregate amount not to exceed
$25,287,672 consisting of (a) up to $25,000,000, which equals the principal amount of the Series
2005 Bonds, which may be drawn on to pay the principal amount of the Series 2005 Bonds when
due at maturity, upon redemption or acceleration, and to pay the portion of the purchase price
thereof corresponding to the principal amount in the event of certain tenders of the Series 2005
Bonds or Beneficial Ownership Interests, and (b) up to $287,672 initially, for so long as the
Series 2005 Bonds bear interest at the Daily, Weekly, One Month, or Three Month Interest Rate,
which may be drawn on for the payment of up to 35 days’ interest on the Series 2005 Bonds or to
pay the portion of the purchase price on the Series 2005 Bonds or Beneficial Ownership Interests
corresponding to accrued interest, computed at the Maximum Rate of 12% per annum, on the
basis of a 365-day year. In the event the Borrower exercises its option to convert the interest rate
on the Series 2005 Bonds to a Six Month, One Year, Five Year or Fixed Interest Rate, the
Borrower will be required to provide an amended Letter of Credit or Alternate Letter of Credit
which, in addition to the principal coverage described above, provides an amount sufficient for
the payment of up to 195 days of interest on the Series 2005 Bonds computed at the Maximum
Rate of 12% per annum on the basis of a 360-day year of twelve 30-day months. If the Borrower
does not provide such a Letter of Credit or an Alternate Letter of Credit, such conversion to a
different Interest Rate Mode will not be effected.

        Pursuant to the terms of the Reimbursement Agreement and in consideration for the
issuance of the Letter of Credit, the Borrower is obligated to repay the Bank for any draws under
the Letter of Credit.



                                                22
       THE SERIES 2005 BONDS AND THE INTEREST THEREON SHALL NOT
CONSTITUTE A DEBT OR INDEBTEDNESS OF THE ISSUER OR THE STATE OF
COLORADO WITHIN THE MEANING OF ANY CONSTITUTIONAL OR
STATUTORY LIMITATION OR RESTRICTION. THE SERIES 2005 BONDS DO NOT
CONSTITUTE A DEBT OR LIABILITY OF OR CHARGE AGAINST THE GENERAL
CREDIT OR TAXING POWER OF THE STATE OF COLORADO, ITS LEGISLATURE
OR ANY OF ITS POLITICAL SUBDIVISIONS OR AGENCIES, INCLUDING THE
ISSUER. THE ISSUER IS NOT AUTHORIZED TO LEVY OR COLLECT ANY TAXES
OR ASSESSMENTS TO PAY THE SERIES 2005 BONDS OR FOR ANY OTHER
PURPOSE. The right to payment of the principal, any premium and interest is limited to
the revenues pledged therefor in said Indenture. Payments sufficient for the prompt
payment when due of the principal of, premium, if any, and interest on the Series 2005
Bonds are to be paid to the Trustee for the account of the Issuer and deposited in special
accounts created by the Indenture and have been duly pledged and assigned for that
purpose.

        The State has pledged to and agreed with the registered owners of bonds, notes and other
obligations issued under the Act, and with those parties who may enter into contracts with the
Issuer pursuant to the provisions of the Act, that the State will not limit, alter, restrict or impair
the rights vested in the Issuer to acquire, construct, reconstruct, maintain and operate any facility
as defined in the Act or to establish, revise, charge and collect rates, rents, fees and other charges
as may be convenient or necessary to produce sufficient revenues to meet the expenses of
maintenance and operation thereof and to fulfill the terms of any agreements made with the
registered owners of bonds, notes or other obligations authorized and issued by the Act and with
the parties who may enter into contracts with the Issuer pursuant to the Act and will not in any
way impair the rights or remedies of the registered owners of such bonds, notes or other
obligations of such parties until such bonds, notes and other obligations, together with interest
thereon and all costs and expenses in connection with any action or proceeding by or on behalf
of such registered owners, are fully met and discharged and such contracts are fully performed
on the part of the Issuer. Nothing in the Act precludes such limitation or alteration if and when
adequate provision is made by law for the protection of the registered owners of such bonds,
notes or other obligations of the Issuer or those entering into such contracts with the Issuer.

       THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT
        The following, in addition to the information provided elsewhere in this Official
Statement, summarizes certain provisions of the Letter of Credit and the Reimbursement
Agreement. Reference is hereby made to the Letter of Credit and the Reimbursement Agreement
for the detailed terms and provisions thereof, copies of which are available for inspection from
the Trustee.

The Letter of Credit

        The Bank will deliver the Letter of Credit to the Trustee concurrently with the issuance
and delivery of the Series 2005 Bonds. The Letter of Credit constitutes the irrevocable
obligation of the Bank to pay to the Trustee upon timely request up to $25,287,672 (the “Original
Stated Amount”), consisting of $25,000,000, which may be drawn for the purpose of paying the
principal or the principal portion of the purchase price of Bonds (the “Principal Amount”) and
$287,672 (an amount equal to 35 days of interest computed at the rate of 12% per annum) for the
                                                 23
purpose of paying interest on or the interest portion of the purchase price of the Series 2005
Bonds (the “Interest Amount”). The Letter of Credit will expire at the close of business on
September 30, 2008 (the “Scheduled Expiration Date”), unless earlier terminated or extended
and is subject to reduction, as hereinafter described.

        The Letter of Credit provides that the Bank will pay to the Trustee up to the Original
Stated Amount, the Principal Amount or the Interest Amount as applicable, upon presentation by
the Trustee to the Bank of payment documents indicating whether such draw is for the purpose
of paying principal, interest or the purchase price of Bonds. Under the Indenture, the Trustee is
directed to draw under the Letter of Credit to pay when due the principal of and interest on the
Series 2005 Bonds and to make any necessary payments of the purchase price of Bonds tendered
for payment, by submitting a draw request to the Bank on or before specified times on the
required payment date.

        After payment by the Bank of a drawing under the Letter of Credit (A) to pay principal of
the Series 2005 Bonds, the Principal Amount will be permanently reduced by the amount so paid
and the Original Stated Amount will be permanently reduced by the amount so paid plus an
amount equal to 35 days of interest (computed at the rate of 12% per annum) on the amount of
such principal reduction; (B) to pay interest on the Series 2005 Bonds, the Original Stated
Amount and the Interest Amount will be reduced by the amount so paid, provided that both
amounts will be automatically reinstated in the full amount of such payment at the close of
business on the date of such payment; or (C) to pay the purchase price (in respect of principal
and interest) on the Series 2005 Bonds being purchased, the Original Stated Amount will be
reduced by the amount so paid and the Principal Amount and the Interest Amount will be
reduced by the amount of such draw allocable to each, provided that such amounts so reduced
will be increased upon receipt by the Trustee of notice from the Bank.

         The Letter of Credit will expire upon the earliest of: (i) the Bank’s close of business on
September 30, 2008, unless earlier terminated or extended as provided in the Letter of Credit;
(ii) the date which is 15 days following the date upon which all Bonds are converted to a Fixed
Rate Period; (iii) the Bank’s close of business on the date of receipt by the Bank from the Trustee
stating that (A) no Bonds remain Outstanding within the meaning of the Indenture and all
drawings required to be made under the Indenture and available under the Letter of Credit have
been made and honored, or (B) an effective Alternate Letter of Credit has been issued to the
replace the Letter of Credit in accordance with the Indenture and the Reimbursement Agreement;
(iv) the date which is 15 days after the Trustee's receipt of notice from the Bank specifying the
occurrence and continuation of an event of default and directing the Trustee to cause a
mandatory tender of the Series 2005 Bonds; or (v) when the Trustee has drawn and the Bank has
paid to the Trustee the Stated Amount of the Letter of Credit.

        Prior to its expiration, the Letter of Credit may be extended as provided therein or
replaced with an Alternate Letter of Credit. Expiration or termination of the Letter of Credit,
substitution of an Alternate Letter of Credit for the then existing Letter of Credit, a default under
the Reimbursement Agreement, will result in a mandatory tender of the Series 2005 Bonds
pursuant to the Indenture.




                                                 24
The Reimbursement Agreement

        The following summarizes certain provisions of the Reimbursement Agreement.
Reference is made to the Reimbursement Agreement in its entirety for the detailed provisions
thereof, copies of which are available for inspection from the Trustee. Capitalized terms used in
this section of the Official Statement but not otherwise defined shall have the respective
meanings given to such terms in the Reimbursement Agreement.

        The Letter of Credit will be issued pursuant to the Reimbursement Agreement that
provides for, among other things, repayment by the Borrower of amounts drawn under the Letter
of Credit. Under the Reimbursement Agreement, the Bank will also agree that any drawing that
is used to pay the purchase price of Bonds tendered for purchase for which the Bank has not been
reimbursed will constitute a term loan to the Borrower payable as provided in the
Reimbursement Agreement, provided there does not then exist any “event of default” or any
event which, with the giving of notice or lapse of time or both, would constitute an “event of
default” under the Reimbursement Agreement.

        The Borrower has made certain affirmative representations and covenants to the Bank as
described in the Reimbursement Agreement. These covenants are exclusively for the benefit of
the Bank and may be waived, modified or enforced as the Bank may determine. These
covenants include, but are not limited to, matters such as that the Borrower will (a) maintain
appropriate insurance coverage, (b) pay its applicable indebtedness and taxes; (c) provide the
Bank with financial statements; (d) provide notices of certain events to the Bank; (e) observe
certain covenants regarding restrictions on mergers and sales of assets; and (f) comply with
certain financial ratios and other financial covenants.

       Upon the occurrence of an “event of default” under the Reimbursement Agreement, the
Bank will be able to exercise various rights and remedies, including notification to the Trustee of
such event in order that the Trustee may effect a mandatory tender of all Series 2005 Bonds.

      Each of the following events will constitute an “event of default” under the
Reimbursement Agreement:

      Payment Defaults. The Borrower fails to make or cause to be made when due any
payment to the Bank required to be made pursuant to any of the Credit Documents.

       Other Covenant Defaults. The Borrower fails to perform or observe any other covenant
or provision contained in the Credit Documents and fails to remedy such default within 30 days
after written notice thereof, unless the nature of the default is such that it cannot be remedied
within the 30-day period and the Borrower has instituted corrective action within a period of
time reasonably agreed to by the Bank and diligently pursues such action until the default is
remedied.

      Default Under Bond Documents. The occurrence of any “default” as defined in any of
the Bond Documents or the breach of any of the terms or provisions of any of the Bond
Documents which default is continuing beyond any applicable cure period.




                                                25
        Warranties or Representations. Any material warranty or representation by or on behalf
of the Borrower contained in the Reimbursement Agreement or in any of the Credit Documents
or in any certificate or other instrument furnished to the Bank in connection herewith or with any
of the Credit Documents is false in any material respect when made.

      Insolvency. The occurrence of an Act of Insolvency with respect to the Borrower or the
Guarantor.

        Other Defaults. The Borrower or the Guarantor shall be declared by the Bank to be in
default on or pursuant to the terms of any other obligation to the Bank or any affiliate thereof,
including but not limited to the Application for Letter of Credit and Reimbursement Agreement
between the Borrower and the Bank relating to certain Series 2001 Bonds issued for the benefit
of the Borrower and secured by a letter of credit issued by the Bank, any other letter of credit,
line of credit, revolving credit, loan or industrial revenue bond financing, private activity revenue
bond financing or any other agreement purporting to convey to the Bank or any affiliate thereof a
lien upon, security interest in or encumbrance upon any of the Property of the Borrower or the
Guarantor, or the default by the Borrower or the Guarantor of the payment of any obligations
with respect to Indebtedness for money borrowed aggregating in excess of $250,000 ($500,000
in the case of the Guarantor), or any event or condition that would permit, assuming the lapse of
time or giving of notice, any person to cause Indebtedness for money borrowed aggregating in
excess of $250,000 ($500,000 in the case of the Guarantor) to become due and payable prior to
its maturity.

        Contests. Any Credit Document shall at any time for any reason cease to be in full force
and effect or shall be declared to be null and void, or the validity or enforceability thereof shall
be contested by the Borrower or the transactions contemplated hereunder shall be contested by
the Borrower or if the Borrower shall deny in writing that it has any or further liability or
obligation under the Reimbursement Agreement.

        Credit Documents. The occurrence of any “default” as defined in any of the Credit
Documents or the breach of any of the terms or provisions of any of the Credit Documents which
default is continuing beyond any applicable cure period.

       Judgments. A final judgment for the payment of money in excess of $250,000 shall be
rendered against the Borrower and shall remain undischarged for a period of 30 days during
which execution shall not be effectively stayed.

        Pension Plans and Welfare Plans. The occurrence of a Reportable Event with respect to
any Pension Plan; the filing of a notice of intent to terminate a Pension Plan by the Borrower or
any ERISA Affiliate which termination would have a Material Adverse Effect upon the
Borrower, the institution of proceedings to terminate a Pension Plan by the PBGC or any
successor thereto; the withdrawal in a “complete withdrawal” or a “partial withdrawal” as
defined in Sections 4203 and 4205 of ERISA, respectively, by the Borrower or any ERISA
Affiliate from any Multiemployer Plan; or the incurrence of any material increase in the
contingent liability of the Borrower or any Affiliate with respect to any “employee welfare
benefit plan” as defined in Section 3(1) of ERISA which covers retired employees and their
beneficiaries;


                                                 26
         Pension Plans. The institution by the Borrower or any ERISA Affiliate of steps to
terminate any Pension Plan if, in order to effectuate such termination, the Borrower or any
ERISA Affiliate would be required to make a contribution to such Pension Plan or would incur a
liability or obligation to such Pension Plan, in excess of $250,000; or the institution by the PBGC
of steps to terminate any Pension Plan.

       Guarantor Default. The occurrence of an event of default under the Guaranty
Agreement dated as of December 1, 2005 (the “Guaranty Agreement”), from the Lutheran
Church Extension Fund – Missouri Synod (the “Guarantor”) to the Bank, which Guaranty
Agreement provides the unconditional guaranty of the Guarantor of an amount not to exceed
$12,000,000 of the obligations of the Borrower to the Bank under the Reimbursement
Agreement.

       Default Under Agreement with Guarantor. The Guarantor provides written notice to the
Bank of an event of default under the Agreement dated as of December 1, 2005 (the “LCEF
Agreement”), between the Guarantor and the Borrower, which LCEF Agreement provides for
reimbursement of Guarantor by the Borrower in the event that the Guarantor is required to make
payment to the Bank under the Guaranty Agreement and which shall remain in effect for so long
as any bank obligations under the Reimbursement Agreement remain outstanding; provided such
notice shall only be effective if the Guarantor provides the Bank with Available Moneys for
reimbursement of the Bank of all amounts due and owing by the Borrower to the Bank.

        Upon the happening of an event of default under the Reimbursement Agreement (other
than an event of default as described in the preceding paragraph labeled “Default Under
Agreement with Guarantor”), the Bank may by written notice to the Borrower declare the entire
principal amount of all obligations of the Borrower under the Reimbursement Agreement then
outstanding, including interest accrued thereon, to be immediately due and payable without
presentment, demand, protest, notice of protest or dishonor or other notice of default of any kind,
and proceed to enforce all other remedies available to it under the Reimbursement Agreement,
the Credit Documents, the Note and applicable law. Any moneys held by the Bank in the
exercise of Remedies under the Reimbursement Agreement shall be applied first to the costs and
expenses (including reasonable attorney’s fees and expenses) incurred by the Bank, then to the
payment of any obligations (in such order as the Bank, in its sole discretion, shall determine)
then owing pursuant to the Reimbursement Agreement and the remainder shall be held by the
Bank, in escrow to be applied, from time to time as and when due, to the payment of obligations
thereafter arising pursuant to the Reimbursement Agreement (in such order as the Bank, in its
sole discretion, shall determine). The remedies under the Reimbursement Agreement are to be
cumulative and in addition to any other remedy available to the Bank and the exercise of any one
or more such remedies shall not preclude the simultaneous or later exercise by such holders of
any or all such other remedies.

        Upon the happening of an event of default as described in the paragraph labeled “Default
Under Agreement with Guarantor,” the Bank may exercise any and all remedies, legal or
equitable, to collect the amounts due from the Borrower, pursuant to the Reimbursement
Agreement, and upon direction from the Guarantor, shall notify the Trustee that an event of
default has occurred and shall instruct the Trustee to cause a mandatory tender of the Series 2005
Bonds .


                                                27
       The Reimbursement Agreement may be amended, and the observance of any term of the
Reimbursement Agreement may be waived, with the written consent of the Borrower and the
Bank. Accordingly, Bondholders should not anticipate the Bank’s enforcement of any particular
event of default occurring under the Reimbursement Agreement.

        Other than with respect to information concerning the Bank in Appendix A hereto, and
information concerning the Letter of Credit and the Reimbursement Agreement contained under
the caption “THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT”
herein, none of the information in this Official Statement or any appendix hereto has been
supplied or verified by the Bank, and the Bank makes no representation or warranty, express or
implied, as to the accuracy or completeness of such information, the validity of the Series 2005
Bonds, or the tax status of the interest on the Series 2005 Bonds.

                                 THE LOAN AGREEMENT
        The following summarizes certain provisions of the Loan Agreement between the Issuer
and the Borrower. Reference is hereby made to the Loan Agreement for the detailed provisions
thereof.

        Under the Loan Agreement, the Issuer agrees to issue the Series 2005 Bonds and to loan
the proceeds thereof to the Educational Institution. Also under the Loan Agreement, the
Educational Institution loans the proceeds of such loan to the Borrower. A portion of such
proceeds will be deposited in the Project Fund and, together with other moneys provided by the
Borrower, used to pay a portion of the issuance costs of the Series 2005 Bonds and to finance
and refinance the costs of renovating, constructing, installing and equipping the Project.

       The Borrower agrees to make payments corresponding, as to amount, to debt service
payments on the Series 2005 Bonds and to make such payments at the times required by the
Loan Agreement and the Note delivered to the Educational Institution, and endorsed and
assigned by the Educational Institution to the Trustee, in connection with the issuance of the
Series 2005 Bonds. The Borrower’s obligation to make such payments will be absolute and
unconditional.

       Amounts on deposit in the Project Fund will be applied only to pay a portion of the
issuance costs relating to the Series 2005 Bonds, to pay interest on the Series 2005 Bonds and to
finance the costs of the Project.

       Any obligations of the Educational Institution arising out of the Agreement shall be
payable solely out of revenues received by the Educational Institution from the Borrower for
payment under the Agreement and shall not constitute, and no breach of the Agreement by the
Educational Institution shall impose, a pecuniary liability upon the Educational Institution or a
charge upon the Educational Institution’s general credit.

        Optional Prepayment. Subject to the requirements, if any, of the Reimbursement
Agreement, including, without limitation, the written consent of the Bank, the Borrower is given
options in the Loan Agreement to prepay the amounts payable thereunder. Such prepayment
options correspond to the optional redemption provisions applicable to the Series 2005 Bonds
(see "THE SERIES 2005 BONDS - Redemption Prior to Maturity - Optional Redemption"
herein).

                                               28
       Mandatory Prepayment. The Borrower is obligated under the Loan Agreement to prepay
the amounts payable thereunder in full upon the occurrence of certain conditions. Such
prepayment obligations correspond to the mandatory redemption provisions applicable to the
Series 2005 Bonds in such cases (see "THE SERIES 2005 BONDS - Redemption Prior to
Maturity - Mandatory Redemption" herein).

        The Borrower makes various representations, warranties and covenants designed to
ensure that interest on the Series 2005 Bonds will be and remain excluded from the gross income
of the Holders for Federal income tax purposes.

       The Loan Agreement provides that each of the following shall be an "Event of Default":

                (a)    The Borrower or the Educational Institution shall fail to observe and
       perform any agreement, term or condition contained in the Loan Agreement, and the
       continuation of such failure for a period of 30 days after notice thereof shall have been
       given to the Borrower or the Educational Institution by the Issuer, the Borrower, the
       Educational Institution or the Trustee at the direction of the Bank, or for such longer
       period as the Trustee and the Bank may agree to in writing; provided, that if the failure is
       other than the payment of money and is of such nature that it can be corrected but not
       within the applicable period, that failure shall not constitute an Event of Default so long
       as the Borrower or the Educational Institution, as the case may be, institutes curative
       action within the applicable period and diligently pursues that action to completion within
       60 days from the date of the original notice given to the Borrower or the Educational
       Institution, as the case may be, or such longer period as the Trustee and the Bank may
       agree to in writing; and provided further that no such failure shall constitute an Event of
       Default solely because it results in a Determination of Taxability;

               (b)     The Borrower shall: (i) admit in writing its inability to pay its debts
       generally as they become due; (ii) have an order for relief entered in any case
       commenced by or against it under the Federal bankruptcy laws, as now or hereafter in
       effect; (iii) commence a proceeding under any other Federal or state bankruptcy,
       insolvency, reorganization or similar law, or have such a proceeding commenced against
       it and either have an order of insolvency or reorganization entered against it or have the
       proceeding remain undismissed and unstayed for 90 days; (iv) make an assignment for
       the benefit of creditors; or (v) have a receiver or trustee appointed for it or for the whole
       or any substantial part of its property; or

               (c)    There shall occur an "Event of Default" as defined in the Indenture;

provided, however, that so long as the Letter of Credit is in full force and effect and the Bank is
not in default of its obligations thereunder, an Event of Default (except for any Event of Default
relating to Unassigned Issuer’s Rights) shall be declared under the Agreement only with the
written consent of the Bank.

         Notwithstanding the foregoing, if, by reason of Force Majeure (defined in the Loan
Agreement to include various events, causes and circumstances beyond the control of the
Borrower or the Educational Institution, as the case may be), the Borrower or the Educational
Institution, as the case may be, is unable to perform or observe any agreement, term or condition
which would give rise to an Event of Default under paragraph (a) above, the Borrower or the
                                                29
Educational Institution, as the case may be, shall not be deemed in default during the
continuance of such inability provided that such inability is other than the payment of money.
However, the Borrower or the Educational Institution, as the case may be, shall promptly give
notice to the Trustee, the Issuer and the Borrower of the existence of an event of Force Majeure
and shall use its best efforts to remove the effects thereof; which best efforts, in the case of
settlement of strikes or other industrial disturbance shall be limited to settlements entirely within
the discretion of the Borrower or the Educational Institution, as the case may be.

        The provisions of paragraph (b) above are subject to the condition that the declaration of
an Event of Default due to any of the facts or circumstances specified therein, and the exercise of
remedies upon any such declaration, shall be subject to any applicable limitations of the United
States Bankruptcy Code affecting or precluding such declaration or exercise during the pendency
of or immediately following any bankruptcy, liquidation or reorganization proceedings.

        If any Event of Default occurs and continues, and if and only if the payment of the Series
2005 Bonds is accelerated pursuant to the Indenture, the Trustee shall declare all payments
payable by the Borrower under the Loan Agreement and the Note to be immediately due and
payable. The Trustee may also exercise any remedies provided in the Indenture or pursue any
remedies at law or in equity to collect all amounts due and thereafter to become due under the
Loan Agreement or the Note, or to enforce the performance and observance of any other
obligation or agreement of the Borrower or the Educational Institution under the Loan
Agreement. Notwithstanding the foregoing, so long as the Letter of Credit is in full force and
effect and the Bank is not in default of their respective obligations thereunder, any remedies to
be exercised upon an Event of Default hereunder (except for remedies in connection with
enforcement of Unassigned Issuer’s Rights) shall be pursued only at the written direction of the
Bank.

        The Loan Agreement, the Note or the Letter of Credit may only be amended as permitted
by the Indenture. As provided in the Indenture, without the consent of or notice to the Holders of
Series 2005 Bonds, but with the written consent of the Bank and the Borrower, the Loan
Agreement, the Note or the Letter of Credit as may be amended, changed or modified as may be
required (i) by the provisions of the Loan Agreement, the Letter of Credit or the Indenture, (ii) in
connection with the issuance of Additional Bonds under the Indenture, (iii) for the purpose of
curing any ambiguity, inconsistency or formal defect or omission in the Loan Agreement, the
Note, the Letter of Credit or the Indenture, (iv) in connection with an amendment or to effect any
purposes for which there could be an amendment of the Indenture without Holder consent, or (v)
in connection with any other change therein which, in the judgment of the Trustee, is not to the
prejudice of the Trustee or the Holders of any Series 2005 Bonds then outstanding. Except for
such amendments, changes or modifications, neither the Issuer nor the Trustee will consent to (i)
any amendment, change or modification of the Loan Agreement, the Note or the Letter of Credit
which would change the amounts or times of payments to be made by the Borrower under the
Loan Agreement or the Note or drawings to be paid under the Letter of Credit without the giving
of notice as provided in the Indenture and the written approval or consent thereto of the Bank
and the Holders of all Series 2005 Bonds then outstanding or (ii) any other amendment, change
or modification of the Loan Agreement, the Note or the Letter of Credit, without the giving of
notice as provided in the Indenture and the written approval or consent thereto of the Bank and
of the Holders of not less than a majority in aggregate principal amount of all Series 2005 Bonds
then outstanding.

                                                 30
                                      THE INDENTURE
        The following summarizes certain provisions of the Indenture between the Trustee and
the Issuer. Reference is hereby made to the Indenture for the detailed provisions thereof.

       Pursuant to the Indenture, the Issuer will assign and pledge to the Trustee, as security for
the payment of the Series 2005 Bonds, all of the Issuer’s rights and interest in the Loan
Agreement (other than the rights of the Issuer to certain fees, expenses, reimbursement and
indemnity provisions), the Note and all moneys and securities on deposit in the Funds created
under the Indenture, subject to their application as provided in the Indenture, and any other
property subsequently pledged, assigned or transferred as additional security by the Issuer. The
Indenture establishes as special funds, in the custody of the Trustee, the Bond Fund, the
Remarketing Reimbursement Fund and the Project Fund.

Application of Project Fund

        All moneys received upon the sale of the Series 2005 Bonds will be deposited in the
Project Fund created by the Indenture and disbursed from the Project Fund, in accordance with
the provisions of the Loan Agreement, to finance and refinance the costs of the Project and to
pay the costs of issuance of the Series 2005 Bonds.

Revenues and Bond Fund

       Any amounts which are to be applied to the payment of Bond Service Charges on the
Series 2005 Bonds, including all Revenues (as defined in the Indenture) with respect to the
Series 2005 Bonds, capitalized interest on the Series 2005 Bonds and all moneys received upon
drawings for such purpose made under the Letter of Credit, will be deposited in the Bond Fund
created by the Indenture and maintained with the Trustee. Moneys in the Bond Fund are to be
used for the payment of Bond Service Charges on the Series 2005 Bonds in the following order:

             1.     Amounts drawn by the Trustee under the Letter of Credit (provided that no
       amount drawn on the Letter of Credit may be used to pay any premium on the Series
       2005 Bonds);

               2.     Any Eligible Funds on deposit in the Bond Fund; and

               3.     Any other amounts available in the Bond Fund.

         "Eligible Funds" means (i) amounts on deposit in the Bond Fund (other than funds
derived from a draw on the Letter of Credit) for a period of not less than 123 days during which
there shall not have occurred the filing of a voluntary or involuntary petition in bankruptcy under
the United States Bankruptcy Code, or proceeding under any other applicable laws concerning
insolvency, reorganization or bankruptcy, by or against the Borrower, the Issuer, the Educational
Institution, any guarantor of the Series 2005 Bonds, or any "insider" (as that term is defined for
Federal bankruptcy law purposes) of the Issuer, the Borrower, the Educational Institution or any
such guarantor, (ii) moneys which in the opinion of nationally recognized bankruptcy counsel
acceptable to the Trustee are not subject to recapture by a bankruptcy court as a "preference"
item pursuant to applicable Federal or state bankruptcy law, and (iii) investment income derived
from the investment of moneys described in clauses (i) and (ii) above.

                                                31
       Amounts remaining in the Bond Fund after payment or provision for payment of all Bond
Service Charges and the fees and expenses of the Trustee, the Registrar and any Paying or
Authenticating Agent are to be paid to the Bank or, if no amounts are then due under the
Reimbursement Agreement, to the Borrower.

Remarketing Reimbursement Fund

       The Indenture creates the Remarketing Reimbursement Fund, to be held by the Trustee
and administered in accordance with the terms of the Indenture for the deposit of amounts
derived from the remarketing of Series 2005 Bonds or from the payment of the purchase price of
Series 2005 Bonds by the Bank under the Letter of Credit. While the Series 2005 Bonds are
outstanding, moneys in the Remarketing Reimbursement Fund will be used solely for the
payment of the purchase price of Series 2005 Bonds upon their optional or mandatory tender for
purchase, and are not subject to the lien of the Indenture.

Investment of Funds

        Moneys held in the above described Funds are to be invested by the Trustee at the
direction of the Borrower, in Eligible Investments.

       "Eligible Investments" means, without regard to gradation, to the extent permitted by
law, dollar denominated investments in any of the following:

       (a)    direct obligations of the United States of America or obligations the full and
              timely payment of the principal of and interest on which is unconditionally
              guaranteed by the United States of America (“Government Obligations);

       (b)    debt obligations which are (i) issued by any state or political subdivision thereof
              or any agency or instrumentality of such state or political subdivision, and (ii) at
              the time of purchase, rated “AAA” by Standard & Poor’s Ratings Services
              (“S&P”), rated “AAA” by Fitch Ratings (“Fitch”) or rated “Aaa” by Moody’s
              Investor’s Services (“Moody’s”);

       (c)    any bond, debenture, note, participation certificate or other similar obligation
              which is either (i) issued or guaranteed by the Federal National Mortgage
              Association, the Federal Home Loan Bank System, the Federal Home Loan
              Mortgage Corporation, the Federal Farm Credit Bank or the Student Loan
              Marketing Association, or (ii) backed by the full faith and credit of the United
              States of America;

       (d)    U.S. denominated deposit account, demand deposits, including interest-bearing
              money market accounts, trust deposits, certificates of deposit and banker’s
              acceptances with domestic commercial banks, including the Trustee or its
              affiliates, which have a short-term “Bank Deposit” rating on the date of purchase
              of “A-1” or better by S&P, “F1+” or better by Fitch or “P-1” or better by
              Moody’s, and which matures not more than 360 days after the date of purchase;




                                               32
(e)   commercial paper which is rated at the time of purchase within the classification
      or higher, “A-1” by S&P, “F1+” by Fitch or “P-1” by Moody’s, and which
      matures not more than 270 days after the date of purchase;

(f)   bonds, notes, debentures or other evidences of indebtedness issued or guaranteed
      by a corporation which are, at the time of purchase, rated by S&P, Moody’s or
      Fitch in any of the three highest rating categories;

(g)   investment agreements with banks, including the Trustee or any of its affiliates,
      that at the time such agreement is executed are rated by S&P, Fitch or Moody’s in
      one of the three highest rating categories assigned by S&P, Fitch or Moody’s or
      investment agreements with non-bank financial institutions which, (1) all of the
      unsecured, direct long-term debt of either the non-banking financial institution or
      the related guarantor of such non-bank financial institution is rated by S&P, Fitch
      or Moody’s at the time such agreement is executed in one of the three highest
      rating categories for obligations of that nature; or (2) if such non-bank financial
      institutions have no outstanding long-term debt that is rated, all of the short-term
      debt of either the non-banking financial institution or the related guarantor of such
      non-bank financial institution is rated by S&P, Fitch or Moody’s in the highest
      rating category assigned to short term indebtedness by S&P, Fitch or Moody’s;
      provided that if at any time after purchase the provider of the investment
      agreement drops below the three highest rating categories assigned by S&P, Fitch
      or Moody’s, the investment agreement must, within 30 days, either (1) be
      assigned to a provider rated in one of the three highest rating categories or (2) be
      secured by the provider with collateral securities the fair market value of which,
      in relation to the amount of the investment agreement including principal and
      interest, is equal to at least 102%; investment agreements with banks or non-bank
      financial institutions shall not be permitted if no rating is available with respect to
      debt of the investment agreement provider or the related guarantor of such
      provider;

(h)   repurchase agreements with respect to and secured by Government Obligations or
      by obligations described in clause (b) and (c) above, which agreements may be
      entered into with a bank (including without limitation the Trustee or any of its
      affiliates), a trust company, financial services firm or a broker dealer which is a
      member of the Securities Investors Protection Corporation, provided that (i) the
      Trustee or a custodial agent of the Trustee has possession of the collateral and that
      the collateral is, to the knowledge of the Trustee, free and clear of third-party
      claims, (ii) a master repurchase agreement or specific written repurchase
      agreement governs the transaction, (iii) the collateral securities are valued no less
      frequently than monthly, and (iv) the fair market value of the collateral securities
      in relation to the amount of the repurchase obligation, including principal and
      interest, is equal to at least 103%, and (v) such obligations must be held in the
      custody of the Trustee’s agent;

(i)   shares of a fixed income mutual fund, Exchange Traded Fund or other collective
      investment fund registered under the federal Investment Company Act of 1940,
      whose shares are registered under the Securities Act of 1933, and whose
      investments consist solely of Eligible Investments as defined in paragraphs (a)
                                     33
               through (h) above, 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 subcustodian, notwithstanding
               that (a) the Trustee or an affiliate of the Trustee receives fees from such funds for
               services rendered, (b) the Trustee charges and collects fees for services rendered
               pursuant to this Indenture, which fees are, separate from the fees received from
               such funds, and (c) services performed for such funds and pursuant to this
               Indenture may at times duplicate those provided to such funds by the Trustee or
               its affiliates;

       (j)     shares of a money market mutual fund or other collective investment fund
               registered under the federal Investment Company Act of 1940, whose shares are
               registered under the federal Securities Act of 1933, having assets of at least
               $100,000,000, and having a rating AAAm or AAAm-G or its equivalent by a
               Rating Service, including money market mutual funds from which the Trustee or
               its affiliates derive a fee for investment advisory or other services to the fund; and

       (k)     obligations approved in writing by the Bank which are not unacceptable to the
               Trustee;

provided, however, that "Eligible Investments" with respect to any proceeds resulting from a
draw under the Letter of Credit shall mean only Government Obligations maturing as needed to
pay principal of and interest on the Series 2005 Bonds on a timely basis, and in no event more
than thirty days after purchase. In addition, moneys in the Remarketing Reimbursement Fund
may be invested only in Government Obligations which mature no later than the Bond Purchase
Date next following the date of such investment.

        The Trustee shall be entitled to assume that any investment which at the time of purchase
is an Eligible Investment remains an Eligible Investment thereafter, absent receipt of written
notice or information to the contrary.

       Any investments may be purchased from or sold to the Trustee, the Remarketing Agent,
any Authenticating or Paying Agent, the Bank or any bank, trust company or savings and loan
association affiliated with either of them.

       The Trustee shall hold and control all investments of moneys in the Rebate Fund, the
Project Fund, the Remarketing Reimbursement Fund, or the Bond Fund and interest accruing
thereon and any profit realized from such investments will be credited, and any loss will be
charged, to the particular fund from which the investment was made.

Additional Bonds

         At the request of the Borrower and the Educational Institution, the Issuer may issue
additional bonds (the "Additional Bonds") for any purpose permitted under the Act. Any
Additional Bonds shall be on a parity with the Series 2005 Bonds and any Additional Bonds
theretofore or thereafter issued and outstanding as to the assignment to the Trustee of the Issuer’s
right, title and interest in the Revenues and the Loan Agreement to provide for payment of Bond
Service Charges on the Series 2005 Bonds; provided, however, the payment of principal of and
interest on any series of Additional Bonds will not be secured by the Letter of Credit and may or
                                                34
may not be secured and protected from sources or by property or instruments applicable to the
Series 2005 Bonds and any one or more series of Additional Bonds.

Events of Default and Remedies

       The Indenture provides that each of the following shall be an "Event of Default":

              (a)    Failure to pay when due any interest on any Series 2005 Bond or
       Additional Bond.

              (b)     Payment of the principal of or any premium on any Bond shall not be
       made when and as that principal or premium shall become due and payable, whether at
       stated maturity, by redemption, pursuant to any mandatory sinking fund requirements, by
       acceleration or otherwise.

              (c)     Failure to pay on the Bond Purchase Date amounts due to the Holder or
       Beneficial Owner of any Series 2005 Bonds or Additional Bonds or Beneficial
       Ownership Interests tendered or deemed tendered to the Trustee pursuant to the
       Indenture. (See "THE SERIES 2005 BONDS - Holders’ or Beneficial Owners’ Tender
       Options," "Mandatory Tender Upon Conversion to a Different Interest Rate Mode" and
       "Mandatory Tender Upon Delivery of an Alternate Letter of Credit").

               (d)    Failure by the Issuer to observe or perform any other covenant, agreement
       or obligation on its part to be observed or performed contained in the Indenture or the
       Series 2005 Bonds or Additional Bonds, which failure shall have continued for a period
       of 60 days after written notice, by registered or certified mail, to the Issuer, the Bank, the
       Educational Institution and the Borrower specifying the failure and requiring it be
       remedied, which notice may be given by the Trustee in its discretion and shall be given
       by the Trustee at the written request of the Bank or the Holders of not less than 25% in
       the aggregate principal amount of Series 2005 Bonds and any Additional Bonds then
       outstanding.

             (e)      The occurrence and continuation of an Event of Default under the Loan
       Agreement.

               (f)    Receipt by the Trustee of a written notice from the Bank which states that
       an Event of Default under the Reimbursement Agreement has occurred and is continuing
       and directing the Trustee to either (1) cause a mandatory tender of the Bonds or
       (2) accelerate the maturity of the Series 2005 Bonds and any Additional Bonds (see
       "THE REIMBURSEMENT AGREEMENT" above).

              (g)     Failure of the Bank to honor any drawing properly made in accordance
       with the terms of the Letter of Credit and such failure has not been cured.

               (h)    Certain events of insolvency relating to the Bank.

       Upon the occurrence of an Event of Default under items (a), (b), (c), (f)(2) or (g)
described above, the Trustee shall declare the principal of and accrued interest on all outstanding
Series 2005 Bonds and any Additional Bonds to be immediately due and payable. Upon the

                                                35
occurrence of any other Event of Default (except an Event of Default specified in (h) described
above), the Trustee shall, upon the written direction of the Bank, declare the principal of and
accrued interest on all outstanding Series 2005 Bonds and any Additional Bonds to be
immediately due and payable. Upon the occurrence of an Event of Default under item (h)
described above, and if there is not then existing an Event of Default described in (a), (b), (c),
(f)(2) or (g), described above, the Trustee, without the consent of the Bank, may, and upon the
written request of the Holders of not less than 25% in aggregate principal amount of Series 2005
Bonds and any Additional Bonds outstanding shall, declare the principal of and accrued interest
on all outstanding Series 2005 Bonds and any Additional Bonds to be immediately due and
payable. If such a declaration is made, the Trustee is required to draw upon the Letter of Credit
to the extent permitted by the terms thereof and to give notice to Holders of such acceleration.

        Any such declaration shall be by telephonic notice, promptly confirmed by notice in
writing, to the Issuer, the Bank, the Remarketing Agent, and by written notice to the Holders, the
Educational Institution and the Borrower, and, upon said declaration, principal and interest on all
Series 2005 Bonds and any Additional Bonds shall become and be immediately due and payable.
The Trustee promptly upon such declaration shall give notice thereof in the same manner as
provided in the Indenture with respect to the redemption of the Series 2005 Bonds. Such notice
shall specify the date on which payment of principal and interest shall be tendered to the Holders
of the Series 2005 Bonds. Interest shall accrue to the payment date determined by the Trustee
(which date shall be within the period for which principal and interest on the Series 2005 Bonds
and any Additional Bonds is covered by the amounts available under the Letter of Credit)
pursuant to such declaration or the actual payment date, if later. Upon any declaration of
acceleration hereunder, the Trustee shall promptly exercise such rights as it may have under the
Loan Agreement to declare all payments thereunder to be immediately due and payable and shall
draw upon the Letter of Credit to the full extent permitted by the terms thereof.

        Notwithstanding any provision of this Indenture to the contrary, except for Events of
Default described in subsection (g) or (h) above, Bonds secured by a Letter of Credit shall not be
declared immediately due and payable, nor shall they be subject to acceleration, nor shall any
declaration of acceleration be annulled, without (1) the prior written consent to such action by
the Bank (provided the rights of the Bank have not been limited under the Indenture by virtue of
a default by the Bank), and (2) in the case of any annulment or rescission of a declaration of
acceleration, the Letter of Credit shall have been reinstated to the full amount in effect just prior
to any acceleration drawing.

        In addition, upon the happening and continuance of an Event of Default, the Trustee may
pursue any available remedy to remedy any Event of Default or to enforce the observance and
performance of any other covenant, agreement or obligation of the Indenture, the Loan
Agreement or any other instrument providing security for the Series 2005 Bonds and any
Additional Bonds; provided, however, that the Trustee shall not pursue any such remedy without
the prior written consent of the Bank so long as no Event of Default described in (g) or (h) above
has occurred and is continuing.

       The Trustee will also be empowered to enforce each and every right granted to it under
the Loan Agreement as assigned to it.



                                                 36
Right of Holders to Direct Proceedings

        The Holders of at least a majority in aggregate principal amount of Series 2005 Bonds
and Additional Bonds then outstanding will have the right at any time, by an instrument or
instruments in writing executed and delivered to the Trustee, to direct the method and place of
conducting all proceedings to be taken in connection with the enforcement of the terms and
conditions of the Indenture or any other proceedings under the Indenture, provided, that such
direction shall not be otherwise than in accordance with the provisions of law and the Indenture
and that the Trustee shall be indemnified to its satisfaction; provided, however, that so long as no
Event of Default described in (g) or (h) above has occurred and is continuing, the Bank shall
have the exclusive right to give such directions to the Trustee, and the Trustee shall exercise the
remedies provided for under the Indenture only if and as directed in writing by the Bank and
shall not waive any Event of Default without the prior written consent of the Bank; provided that
such direction shall not be otherwise than in accordance with the provisions of law and of this
Indenture.

Waivers of Events of Default

       Subject to the preceding paragraph, the Trustee, but only with the express written consent
of the Bank (other than in the case of an Event of Default described in items (a), (b), (c), (g) or
(h) above), may waive an Event of Default and its consequences and may rescind and annul any
declaration of maturity of principal of the Series 2005 Bonds and any Additional Bonds. The
Trustee shall do so upon the written request of the Bank (other than in the case of an Event of
Default described in items (a), (b), (c), (g) or (h) above). Notwithstanding the foregoing, prior to
waiving any Event of Default, the Trustee shall have received written confirmation from the
Bank (1) that the Letter of Credit has been reinstated to an amount not less than 100% of the
outstanding principal of the Series 2005 Bonds, plus interest on the Series 2005 Bonds at the
Maximum Rate of 12% per annum for a period of 35 days, or 195 days if the Interest Rate Mode
on the Series 2005 Bonds is Six Months or longer and (2) the Bank has rescinded the Event of
Default under the Reimbursement Agreement described in the Notice sent to the Trustee
pursuant to the Indenture.

        There shall not be so waived, however, any Event of Default described in items (a), (b),
(c), (g) or (h) above or any declaration of acceleration in connection therewith rescinded or
annulled except with the written consent of the Holders of all Series 2005 Bonds and any
Additional Bonds then outstanding. In the case of such waiver or rescission and annulment, or in
case any suit, action or proceedings taken by the Trustee on account of any Event of Default
shall have been discontinued, abandoned, or determined adversely to it, the Issuer, the Trustee,
the Bank and the Holders shall be restored to their former positions and rights under the
Indenture. No waiver or rescission shall extend to any subsequent or other Event of Default or
impair any right consequent thereon.

Applications of Moneys Received Pursuant to Right of Action Taken

        All moneys received by the Trustee after acceleration of the maturity of the Series 2005
Bonds and any Additional Bonds and derived from any drawing made upon the Letter of Credit
will be applied by the Trustee only to the payment of principal of or interest on the Series 2005
Bonds. Subject to the foregoing, all money received by the Trustee from remedial action taken
shall be applied to the payment of the costs and expenses of the proceedings resulting in the
                                                37
collection of such money, and the balance of such money shall be deposited in the Bond Fund
and applied to the payment of Bond Service Charges on the Series 2005 Bonds and Additional
Bonds in the manner and in order of priority set forth in the Indenture.

Rights and Remedies of Holders

        No Holder of any Series 2005 Bond will have any right to institute any suit, action or
proceeding for the enforcement of the Indenture, for the execution of any trust under the
Indenture or for the exercise of any other remedy under the Indenture, unless (i) an Event of
Default has occurred and is continuing of which the Trustee has been notified or of which it is
deemed to have notice, (ii) the Holders of not less than 25% in aggregate principal amount of the
Series 2005 Bonds and any Additional Bonds then outstanding have made written request to the
Trustee and have afforded the Trustee reasonable opportunity to proceed to exercise the powers
provided in the Indenture or to institute such action, suit or proceeding and have offered to the
Trustee indemnity as provided for in the Indenture, and (iii) the Trustee thereafter has failed or
refused to exercise its powers under the Indenture or to institute such action, suit or proceeding
in its own name; provided, however, no Holder may institute any suit, action or proceeding at
law or in equity for the enforcement of the Indenture or for the execution of any trust thereof or
the enforcement of any remedy thereunder unless an Event of Default described in (g) or (h)
above has occurred and is continuing.

Supplemental Indentures

        The Issuer and the Trustee, with the consent of the Bank and the Borrower, may enter
into supplemental indentures, without the consent of or notice to any of the Holders, for any one
or more of the following purposes: (a) to cure any ambiguity, inconsistency or formal defect or
omission in the Indenture; (b) to grant to or confer upon the Trustee additional rights, remedies,
powers or authority for the benefit of the Holders; (c) to assign additional revenues under the
Indenture; (d) to accept additional security and instruments and documents of further assurance
with respect to the Project; (e) to add to the covenants, agreements and obligations of the Issuer
contained in the Indenture, other than covenants, agreements and obligations to be observed for
the protection of the Holders, or to surrender or limit any right, power or authority reserved to or
conferred upon the Issuer in the Indenture; (f) to evidence any succession to the Issuer and the
assumption by such successor of the covenants, agreements and obligations of the Issuer
contained in the Indenture, the Loan Agreement and the Series 2005 Bonds and any Additional
Bonds; (g) to permit the exchange of Series 2005 Bonds, at the option of the Holder or Holders
thereof, for coupon Bonds of the same series in an aggregate principal amount not exceeding the
unmatured and unredeemed principal amount of the Predecessor Bonds (as defined in the
Indenture), bearing interest at the same rates and maturing on the same dates, with coupons
attached, if that exchange would not result in the interest on any of the Series 2005 Bonds
outstanding becoming included in the gross income of the Holders for Federal income tax
purposes; (h) to permit the Trustee to comply with any obligations imposed upon it by law; (i) to
specify further the duties and responsibilities of, and to define further the relationship among, the
Trustee, the Registrar, the Remarketing Agent and any Paying Agents or Authenticating Agents;
(j) to achieve compliance of the Indenture with any applicable Federal securities or tax law; (k)
to evidence the appointment of a new Remarketing Agent; (l) to make necessary or advisable
amendments or additions in connection with the issuance of Additional Bonds as do not
materially adversely affect the Holders of the outstanding Series 2005 Bonds or Additional
Bonds; (m) to permit any other amendment which, in the judgment of the Trustee, is not to the
                                                  38
material prejudice of the Trustee or the Holders, including, but not limited to, changes required
in order to obtain or maintain a rating on the Series 2005 Bonds or any Additional Bonds from a
Rating Service; (n) to accept a Supplemental Credit Facility as described in the Indenture; (o) to
modify, alter, amend or supplement the Indenture or the Loan Agreement in any other respect,
including amendments which would otherwise be described in the immediately succeeding
paragraph of the Indenture, if the effective date of such Supplemental Indenture is a date on
which all Bonds affected thereby are subject to mandatory tender for purchase as described
herein or if notice by mail of the proposed Supplemental Indenture is given to Holders of the
affected Bonds at least thirty (30) days before the effective date thereof and, on or before such
effective date, such Holders have the right to demand purchase of their Bonds as described
herein; and (p) to provide additional security and instruments of further assurance for the benefit
of the Bank.

        Exclusive of supplemental indentures for the purposes above summarized, the consent of
the Borrower, the Educational Institution, the Bank and the Holders of not less than a majority in
aggregate principal amount of the Series 2005 Bonds and Additional Bonds then outstanding will
be required to approve any indenture supplementing the Indenture provided that: (i) without the
consent of the Holder of each Series 2005 Bond or Additional Bond affected and the Bank, no
supplemental indenture shall permit an extension of the maturity of the principal of or the
interest on any Series 2005 Bond or Additional Bond, or a reduction in principal amount of any
Series 2005 Bond or Additional Bond, the rate of interest or the redemption premium on any
Series 2005 Bond or Additional Bond (excluding adjustments to interest rates on any Interest
Rate Adjustment Date as provided in the Indenture), or a reduction in the amount or extension of
the time of any payment required by any mandatory sinking fund requirements of the Indenture,
and (ii) without the consent of the Holders of all Series 2005 Bonds and Additional Bonds then
outstanding and the Bank, no supplemental indenture shall permit a privilege or priority of any
Series 2005 Bond or Additional Bond over any other Series 2005 Bond or Additional Bond, or a
reduction in the aggregate principal amount of Series 2005 Bonds and Additional Bonds required
for consent to such supplemental indenture.

Discharge of Lien

       The lien of the Indenture will be discharged if the Issuer shall pay or cause to be paid and
discharged all the outstanding Series 2005 Bonds and Additional Bonds or there shall otherwise
be paid to the Holders of the outstanding Series 2005 Bonds and Additional Bonds all Bond
Service Charges due or to become due thereon, and provisions shall also be made for paying all
other amounts payable under the Indenture and the Loan Agreement.

        Any Series 2005 Bond shall be deemed to be paid and discharged for all purposes of the
Indenture when payment of the principal of and premium, if any, on such Series 2005 Bond, plus
interest thereon to the due date thereof (whether such due date is by reason of maturity or upon
redemption as provided in the Indenture) shall have been made or caused to be made with funds
available therefor on deposit in the Bond Fund (as defined in the Indenture) in accordance with
the terms thereof. All or any part of the outstanding Series 2005 Bonds will be deemed to have
been paid and discharged within the meaning of the Indenture if (a) the Trustee and any Paying
Agent shall have received, in trust for and irrevocably committed thereto, sufficient moneys
which are Eligible Funds or the proceeds of drawings under the Letter of Credit used to make
such payment, or other moneys if accompanied by an opinion of bankruptcy counsel in a form
acceptable to the Trustee and the Rating Service, if any, for the Series 2005 Bonds to the effect
                                                39
that such moneys are not subject to recapture by a bankruptcy court as a “preference” item
pursuant to applicable federal or state bankruptcy law, or (b) the Trustee shall hold in trust for
and irrevocably committed thereto, direct noncallable Government Obligations (purchased with
Eligible Funds or the proceeds of drawings under the Letter of Credit or other moneys if
accompanied by an opinion of bankruptcy counsel in a form acceptable to the Trustee and the
Rating Service if any, for the Series 2005 Bonds), certified by an independent public accounting
firm or other firm of national reputation to be of such maturities or redemption dates and interest
payment dates, and to bear such interest as will, without further investment or reinvestment of
either the principal amount thereof or the interest earnings therefrom, be sufficient together with
moneys referred to in (a) above, for the payment of all Bond Service Charges on the Series 2005
Bonds on and to the next Interest Rate Adjustment Date or prior redemption date, as the case
may be; provided that if any Series 2005 Bonds are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been duly given or irrevocable provision satisfactory to the
Trustee shall have been duly made for the giving of such notice; and further provided that the
Series 2005 Bonds shall not be deemed to be paid and discharged within the meaning of this
paragraph (i) if the Interest Rate Mode of such Series 2005 Bonds is other than the Fixed Interest
Rate, unless such Series 2005 Bonds are to be redeemed on or prior to the next Interest Rate
Adjustment Date for such Series 2005 Bonds and notice of that redemption shall have been duly
given or irrevocable provision satisfactory to the Trustee shall have been duly made for the
giving of that notice, or (ii) if they bear interest at the Daily Interest Rate or the Weekly Interest
Rate. Any moneys so held by the Trustee may be invested by the Trustee, but only in
noncallable Government Obligations, the maturities or redemption dates of which, at the option
of the holder, shall be not later than the date or dates at which said moneys will be required for
the aforesaid purposes.

       Notwithstanding anything herein to the contrary, if any Series 2005 Bonds are then rated
by a Rating Service, no such Series 2005 Bonds shall be deemed to have been paid and
discharged by reason of any deposit pursuant to paragraphs (a) and/or (b) above (other than any
deposit of moneys, or Government Obligations purchased with moneys, which are the proceeds
of drawings under the Letter of Credit) unless each such Rating Service shall have confirmed in
writing to the Trustee that its rating will not be withdrawn or lowered as the result of any such
deposit.

Unclaimed Moneys

        In the event of nonpresentment of Series 2005 Bonds or uncashed checks or drafts for
interest, the moneys sufficient to pay such Series 2005 Bonds or checks or drafts shall be held by
the Trustee, without liability for interest thereon, in a separate account in the Bond Fund;
provided that any moneys which shall be so held by the Trustee and which remain unclaimed by
the Holder of the Series 2005 Bond for a period of four (4) years shall be paid to the Bank,
unless the Bank confirms to the Trustee that no moneys are due under the Reimbursement
Agreement, in which case such moneys will be paid to Borrower. Thereafter, the Holders will be
entitled to look only to the Borrower and only to the extent of the moneys so paid.

The Trustee

      The Trustee is Wells Fargo Bank, National Association, a national banking association
whose designated corporate trust department is located in Los Angeles, California.

                                                 40
        The Trustee will undertake to perform such duties as are specifically set forth in the
Indenture. At the time of an Event of Default and during the continuation thereof, the Trustee
shall exercise such of the rights and powers vested in it by the Indenture, and shall use the same
degree of care and skill in its exercise, as a prudent man would exercise under the circumstances.

        The Indenture provides that the Trustee shall be entitled to act upon opinions of counsel
as specified in the Indenture and shall not be responsible for any loss or damage resulting from
reliance thereon in good faith. In addition, the Indenture provides that the Trustee shall be
entitled to rely on certain other instruments and it shall not be liable for any action reasonably
taken or omitted to be taken by it in good faith and reasonably believed by it to be within the
discretion or power conferred upon it in the Indenture.

Extent of Issuer’s Covenants: No Personal Liability

        All agreements of the Issuer contained in the Indenture shall be effective to the extent
authorized and permitted by applicable law and they shall not be deemed to be a covenant,
stipulation, obligation or agreement of any present or future director, officer, agent or employee
of the Issuer. No official of the Issuer executing the Series 2005 Bonds shall be liable personally
on the Series 2005 Bonds or be subject to any personal liability or accountability by reason of the
issuance thereof.

                                   BONDHOLDERS’ RISKS
        The following is a discussion of certain risks that could affect payments to be made with
respect to the Series 2005 Bonds. Such discussion is not, and is not intended to be, exhaustive
and should be read in conjunction with all other parts of this Official Statement and should not
be considered as a complete description of all risks that could affect such payments. Prospective
purchasers of the Series 2005 Bonds should analyze carefully the information contained in this
Official Statement, including the Appendices hereto, and additional information in the form of
the complete documents summarized, copies of which are available as described herein.

General

        The Series 2005 Bonds are special, limited obligations of the Issuer, payable solely from
amounts drawn under the Letter of Credit and from payments to be made by the Borrower under
the Loan Agreement and certain other funds held by the Trustee under the Indenture. No
representation or assurance can be given that the Borrower will realize revenues in amounts
sufficient to make such payments under the Loan Agreement with respect to the Series 2005
Bonds and to pay other expenses and obligations of the Borrower. The realization of future
revenues is dependent upon, among other things, the capabilities of the management of the
Borrower and future changes in economic and other conditions that are unpredictable and cannot
be determined at this time.

Basis of Credit Analysis

        Except as otherwise provided in the Indenture with respect to Bonds bearing interest at a
Fixed Rate, all principal and interest on the Series 2005 Bonds are intended to be paid solely
from amounts drawn under the Letter of Credit. Subject to extension at the option of the Bank,
the Letter of Credit expires on September 30, 2008 and the Borrower is permitted at any time to

                                                41
deliver an Alternate Letter of Credit in replacement of or substitution for the Letter of Credit
(and any prior Alternate Letter of Credit). So long as a Letter of Credit is in effect, no reliance
should be made on the ability of the Borrower to pay when due the principal or Purchase Price of
or interest on the Series 2005 Bonds, and any person purchasing Bonds in connection with their
original issuance should do so on the basis of a credit evaluation of the Bank and the terms under
which one or more Alternate Letters of Credit may be delivered.

        The ability of the Bank to honor drawings on the Letter of Credit will depend solely on
the Bank’s general credit. There can be no assurance that the Bank will be able to meet its
obligations under the Letter of Credit.

        The Letter of Credit expires on September 30, 2008, subject to extension, at the option of
the Bank, as provided in the Reimbursement Agreement. No assurance can be given that the
Borrower will be able to obtain an extension of the Letter of Credit or to obtain and Alternate
Letter of Credit to secure the Series 2005 Bonds at their stated interest rates and original terms
until and including the final stated maturity of the Series 2005 Bonds. If the Letter of Credit
expires or terminates and an Alternate Letter of Credit is substituted, the Series 2005 Bonds will
be subject to mandatory tender in whole.

        The obligations of the Bank under the Letter of Credit are general obligations of the Bank
and rank equally in priority of payment and in all other respects with all other unsecured
obligations of the Bank. If there is a bankruptcy or insolvency or if for any reason the Bank fails
or is unable to honor a draw on the Letter of Credit, each Bondholder would have to depend
entirely on the ability of the Borrower to pay the principal of, and interest on the Series 2005
Bonds.

Prepayment of the Series 2005 Bonds

        Upon the occurrence of certain events, including, but not limited to, (a) default by the
Borrower of its obligations under the Loan Agreement or the Reimbursement Agreement and (b)
damage to or condemnation of all or a part of the Project, the Series 2005 Bonds may be subject
to prepayment in whole or in part at a price equal to 100% of the principal amount thereof
(without premium), plus accrued interest. In that event, Bondholders would not have the
opportunity to hold the Series 2005 Bonds for a time period consistent with the Bondholder’s
original investment intentions.

Enrollment

        The Borrower’s revenues and financial strength will depend in part upon its maintaining
certain enrollment levels. The Borrower’s enrollment may be adversely impacted by tuition
increases that the Borrower may need to implement to maintain its financial strength in the
future. Due to the costs associated with the Project (including making the Loan Payments), the
Borrower may be required to increase tuition further to pay for these costs, in addition to
allocating funds for further program development, with potential adverse consequences to the
Borrower. The enrollment may also be impacted by adverse events affecting the Borrower,
including adverse publicity respecting the Borrower, its programs, or the existence of
environmental hazards near the Borrower, the administration, faculty or students, receptivity to
specific programs, requirements or educational methodologies adopted by the Borrower,
receptivity to the philosophy and educational tenets of the Borrower and its approach to higher
                                                42
education, general economic downturns, and similar adverse factors. In addition, the Borrower
competes for enrollment with other private universities in southern California, as well as with the
public universities.

General Risks of Private Universities

        There are many diverse factors, not within the Borrower’s control, which have a
substantial bearing on the risks generally incident to the operation of the Borrower. These
factors include generally imposed fiscal policies, adverse use of adjacent or neighboring real
estate, the ability to maintain the Project, community acceptance of the Borrower, changes in
demand for private universities like the Borrower, changes in the number of competing
universities, changes in the costs of operation of the Borrower, changes in the recognition or
accreditation of the Borrower, or withdrawal of accreditation, general economic conditions and
the availability of working capital. There can be no assurance that the Borrower will not
experience one or more of the adverse factors that have caused other universities to fail. Many
other factors may adversely affect the operation of the Borrower and cannot be determined at this
time.

Financial Aid

        A significant percentage of the Borrower’s students receive financial support in the form
of federally supported loans and scholarships and grants from the Borrower. There can be no
assurance that the amount of federally supported loans or other financial aid will remain stable or
increase in the future. If the amount of such loans or other financial aid decreases in the future,
there can be no assurance that the Borrower will be able to increase the amount of financial aid
provided by it. Any change in the availability of financial aid could adversely affect the
Borrower’s enrollment.

Tuition

        A significant portion of the Borrower’s operating revenues is provided through tuition
and related fees. Although the Borrower in the past has been able to raise tuition and related fees
without adversely affecting enrollment, there can be no assurance that it will continue to be able
to do so in the future. Future tuition increases and any adverse change in enrollment could
adversely affect the Borrower’s financial position and results of operations.

Gifts, Grants and Bequests

        The Borrower annually solicits gifts, grants and bequests for both current operating
purposes and other needs. In addition, the Borrower has undertaken a capital campaign intended
to pay for certain costs of the Project. There can be no assurance that the amount of gifts, grants
and bequests received by the Borrower will remain stable or increase in the future or that the
capital campaign will be successful.

Project Completion

       Before construction of portions of the Project can commence, certain approvals, permits,
variances and/or licenses from third parties, generally governmental agencies, are required. See
“THE PROJECT” herein. As of the date hereof, the Borrower has received the Conditional

                                                43
Use Permit necessary to begin construction and expects to acquire any remaining approvals,
permits, variances and licenses required to complete construction of the Project; however, there
can be no assurance that such approvals, permits, variances or licenses will be granted in the
future, or that they will be granted in the form and/or with the content requested or desired, or on
the schedule expected. A delay in completion of the Project may arise from any number of other
causes, including but not limited to, adverse weather conditions, unavailability of subcontractors,
negligence on the part of subcontractors, labor disputes or unanticipated costs of construction or
renovation. Any of these events or occurrences, separately or in combination, could have a
material adverse effect on the Borrower’s ability to complete the Project, or to complete it as
planned and on the schedule as described herein. The Borrower does not believe that inability or
delay in the completion of the Project would adversely impact enrollment, but there can be no
assurance to such effect.

       Construction costs payable by the Borrower may exceed the budget for the Project. In
such event, either the scope of the Project would be reduced or the Borrower would be required
to provide moneys in addition to Bond proceeds and donations to complete construction. In
addition, the actual completion date may occur later than the scheduled completion date.
Furthermore, under certain circumstances, the contractor has the right to terminate the
construction contract. Such termination could lead to increased construction costs and delays in
completion of the Project.

Bankruptcy

        In the event of bankruptcy of the Borrower, the rights and remedies of the Bondholders
are subject to various provisions of the federal Bankruptcy Code. If the Borrower were to file a
petition in bankruptcy, payments made by the Borrower during the 90-day (or perhaps one-year)
period immediately preceding the filing of such petition may be avoidable as preferential
transfers to the extent such payments allow the recipients thereof to receive more than they
would have received in the event of the Borrower’s liquidation. Such a bankruptcy filing would
operate as an automatic stay of the commencement or continuation of any judicial or other
proceeding against the Borrower and its property, and as an automatic stay of any act or
proceeding to enforce a lien upon or to otherwise exercise control over its property as well as
various other actions to enforce, maintain or enhance the rights of the Trustee. If the bankruptcy
court so ordered, the property of the Borrower, including accounts receivable and proceeds
thereof, could be used for the financial rehabilitation of the Borrower.

        The Borrower could file a plan for the adjustment of its debts in any such proceeding
which could include provisions modifying or altering the rights of creditors generally, or any
class of them, secured or unsecured. The plan, when confirmed by a court, binds all creditors
who had notice or knowledge of the plan and, with certain exceptions, discharges all claims
against the debtor to the extent provided for in the plan. No plan may be confirmed unless
certain conditions are met, among which are conditions that the plan be feasible and that it shall
have been accepted by each class of claims impaired thereunder. Each class of claims has
accepted the plan if at least two-thirds in dollar amount and more than one-half in number of the
class cast votes in its favor. Even if the plan is not so accepted, it may be confirmed if the court
finds that the plan is fair and equitable with respect to each class of non-accepting creditors
impaired thereunder and does not discriminate unfairly.


                                                44
Other Factors Affecting the Financial Performance of the Borrower

        One or more of the following factors or events, or the occurrence of other unanticipated
factors or events, could adversely affect the Borrower’s operations and financial performance to
an extent that cannot be determined at this time:

        1.     Changes in Management. Changes in key management personnel that could
affect the capability of management of the Borrower.

        2.      Future Economic Conditions. Increased unemployment or other adverse
economic conditions or changes in demographics in the service area of the Borrower that could
increase the proportion of students who are unable to pay the cost of tuition to the Borrower; cost
and availability of energy; an inability to control expenses in periods of inflation and difficulties
in increasing charges and other fees while maintaining the quality of educational services.

         3.     Competition. Increased competition from other educational institutions, which
could adversely affect the enrollment at or revenues of the Borrower, which could force the
Borrower to offer discounted rates, or which could adversely affect the ability of the Borrower to
attract faculty or other staff.

        4.     Organized Labor Efforts. Efforts to organize employees of the Borrower into
collective bargaining units could result in adverse labor actions or increased labor costs.

       5.      Natural Disasters. The occurrence of natural disasters, such as earthquakes or
floods, could damage the facilities of the Borrower, interrupt services or otherwise impair
operations and the ability of the Borrower to produce revenues.

Tax-Exempt Status of the Borrower

        Tax-exempt Status of Interest on the Series 2005 Bonds. The Code imposes a number
of requirements that must be satisfied for interest on state and local obligations, such as the
Series 2005 Bonds, to be excludable from gross income for federal income tax purposes. These
requirements include limitations on the use of bond proceeds, limitations on the investment
earnings of bond proceeds prior to expenditure, a requirement that certain investment earnings on
bond proceeds be paid periodically to the United States, and a requirement that the issuers file an
information report with the IRS. The Issuer and the Borrower have covenanted in certain of the
documents referred to herein that they will comply with such requirements. Future failure by the
Borrower to comply with the requirements stated in the Code and related regulations, rulings and
policies may result in the treatment of interest on the Series 2005 Bonds as taxable, possibly
from the original date of issuance.

       Tax-exempt Status of the Borrower. The tax-exempt status of the Series 2005 Bonds
presently depends upon the Borrower’s maintenance of its status as an organization described in
Section 501(c)(3) of the Code. The maintenance of such status is contingent on compliance with
general rules promulgated in the Code and related regulations regarding the organization and
operation of tax-exempt entities.




                                                 45
         Currently, the primary penalty available to the IRS under the Code is the revocation of
tax-exempt status. Loss of tax-exempt status by the Borrower could potentially result in loss of
tax exemption of the Series 2005 Bonds and of other tax-exempt debt of the Borrower, if any,
and defaults in covenants regarding the Series 2005 Bonds and other related tax-exempt debt, if
any, would likely be triggered. Loss of tax-exempt status could also result in substantial tax
liabilities on income of the Borrower. For these reasons, loss of tax-exempt status of the
Borrower could have material adverse consequences on the financial condition of the Borrower.

        State Income Tax Exemption and Local Property Tax Exemption. The State of
California has not been as active as the IRS in scrutinizing income tax exemption. However, it is
likely that the loss by the Borrower of federal tax exemption would also trigger a challenge to its
state tax exemption. Depending on the circumstances, such event could be adverse and material.

       In recent years, state, county and local taxing authorities have been undertaking audits
and reviews of the operations of tax-exempt entities with respect to their real property tax
exemptions. All of the real property of the Borrower is exempt from real property taxation.
Although the real property tax exemption of the Borrower is not, to the knowledge of
management of the Borrower, under challenge by such authorities, an investigation or audit
could lead to a challenge that could ultimately affect the real property tax exemption of the
Borrower.

        Unrelated Business Income. In recent years, the IRS and state, county and local taxing
authorities have been undertaking audits and reviews of the operations of tax-exempt entities
with respect to their exempt activities and the generation of unrelated business taxable income
(“UBTI”). When the Borrower participates in UBTI generating activities, it has covenanted in
the Tax Regulatory Agreement to maintain the tax-exempt status on the Series 2005 Bonds and
to comply with federal and state laws for the proper reporting of such income.

Certain Matters Relating to Enforceability

        The remedies available upon a default under the Indenture, the Loan Agreement or the
Letter of Credit will, in many respects, be dependent upon judicial actions, which are often
subject to discretion and delay. Under existing constitutional and statutory law and judicial
decisions, including the United States Bankruptcy Code and state laws concerning the use of
assets of charitable organizations, the remedies specified in the Indenture, the Loan Agreement
and the Letter of Credit may not be readily available or may be limited. The various legal
opinions to be delivered in connection with the issuance of the Series 2005 Bonds will be
expressly subject to the qualification that the enforceability of the Indenture, the Loan
Agreement, the Letter of Credit and other legal documents is limited by bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting the rights of creditors
and by the exercise of judicial discretion in appropriate cases and, with respect to the Borrower,
will be further qualified with respect to the ability to enforce payment from moneys or assets
with are donor-restricted or subject to an express, constructive or charitable trust.

Marketability

       The Underwriter may engage in secondary market transactions with respect to the Series
2005 Bonds but they are under no obligation to do so. There is no assurance that a secondary
market for the Series 2005 Bonds will develop.
                                                46
Investment Ratings

       The lowering or withdrawal of the investment rating initially assigned to the Series 2005
Bonds could adversely affect the market price for and the marketability of the Series 2005
Bonds.

Additional Bonds

      The Indenture permits the issuance of additional bonds on a parity with the Series 2005
Bonds. The issuance of additional bonds could increase the debt service requirements of the
Borrower and could adversely affect debt service coverage on the Series 2005 Bonds.

Establishment Clause

         The “Establishment Clause” of the First Amendment to the United States Constitution
has been interpreted by some courts to restrict public financial assistance to certain sectarian
institutions generally referred to as “pervasively sectarian” institutions. The Colorado
Constitution also contains certain provisions that no governmental entity can use public funds to
aid any church, sectarian society or for any sectarian purpose. The United States Supreme Court
has not directly addressed the question of whether the Establishment Clause restricts the lending
to “pervasively sectarian” institutions of the proceeds of a tax-exempt or taxable bond issue
involving no expenditure of public funds. Also, the Colorado Supreme Court has not addressed
the question of whether the Colorado Constitution prohibits the financing by a state political
subdivision on behalf of a sectarian institution or the financing of a project involving a sectarian
facility if such financing is accomplished with the proceeds of a tax-exempt or taxable bond
issue involving no expenditure of public funds. However, as described below under the caption
“Tax Matters”, Bond Counsel is of the opinion that the Series 2005 Bonds are valid obligations
of the Issuer, based upon, among other things, (i) the analysis of existing United States Supreme
Court and lower court precedent in cases involving the Establishment Clause in various other
contexts and upon the analysis of existing Colorado and lower court precedent in cases involving
the Colorado Constitution in various other contexts and (ii) representations by the Borrower as to
the religious nature of the Borrower and the intended use of the Project.

        If a court were to find the issuance of the Series 2005 Bonds and the use of the proceeds
to finance the Project described in this Official Statement unconstitutional under the federal
and/or Colorado Constitution, and if such an adverse decision were to become final, the Series
2005 Bonds could be declared unenforceable and/or void. Such an adverse decision could
become final if the Borrower does not appeal the adverse decision or if the Borrower were
unsuccessful upon appeal because the adverse decision is upheld by the United States or
Colorado Supreme Court or because the United States or Colorado Supreme Court declined to
review the adverse ruling or such review is not sought. In the event of a final adverse decision,
any interest paid on the Series 2005 Bonds could become includable in gross income for federal
and state tax purposes.

       The Issuer is not obligated to appeal an adverse ruling with respect to the Series 2005
Bonds or any determination that the interest paid on the Series 2005 Bonds is includable in gross
income for federal or state tax purposes. Powers Phillips, P.C., the Issuer’s general counsel, is
not rendering any opinion as to the due authorization, execution, validity or enforceability of the

                                                47
Series 2005 Bonds, the Loan Agreement and the Indenture under the First Amendment to the
United States Constitution or the Colorado Constitution or as to the federal or state tax-exempt
status of the Series 2005 Bonds.

                                FINANCIAL INFORMATION
       The audited financial statements of the Borrower as of and for the fiscal year ended June
30, 2005 are included in APPENDIX D to this Official Statement.

                                           RATING
        Moody’s Investors Service, Inc. ("Moody’s") is expected to assign its municipal bond
rating to the Series 200 Bonds as shown on the Cover Page hereof, based upon the understanding
that the Letter of Credit of the Bank will be issued and delivered in concurrence with the
issuance of the Series 2005 Bonds. No application was made to any other rating agency for the
purpose of obtaining an additional rating on the Series 2005 Bonds. The rating reflects only the
view of Moody’s, and any desired explanation of the significance of such rating should be
obtained from Moody’s. Certain information and materials not included in this Official
Statement were furnished to Moody’s. Generally, rating agencies base their rating on the
information and materials so furnished on investigations, studies and assumptions by the rating
agencies. There is no assurance that a particular rating will be maintained for any given period
of time or that it will not be lowered or withdrawn entirely if, in the judgment of the rating
agency originally establishing the rating, circumstances so warrant. The Underwriter, the Issuer,
the Trustee, the Borrower and the Bank have undertaken no responsibility either to bring to the
attention of the owners of the Series 2005 Bonds any proposed revision or withdrawal of the
rating of the Series 2005 Bonds or to oppose any such proposed revision or withdrawal. Any
such change in or withdrawal of such rating could have an adverse effect on the market price of
the Series 2005 Bonds.

                                       TAX MATTERS
       In the opinion of Peck, Shaffer & Williams LLP, Bond Counsel for the Series 2005
Bonds, based upon an analysis of existing laws, regulations, rulings and court decisions, interest
on the Series 2005 Bonds will be excludible from gross income for Federal income tax purposes.
Bond Counsel for the Series 2005 Bonds is also of the opinion that interest on the Series 2005
Bonds will not be a specific item of tax preference under Section 57 of the Internal Revenue
Code of 1986 (the "Code") for purposes of the Federal individual or corporate alternative
minimum taxes.

      Bond Counsel is also of the opinion that interest on the Series 2005 Bonds is exempt
from Colorado income taxes and is not included in Colorado alternative minimum taxable
income.

      A copy of the opinion of Bond Counsel for the Series 2005 Bonds is set forth in
Appendix B attached hereto.

       The Code imposes various restrictions, conditions, and requirements relating to the
exclusion from gross income for Federal income tax purposes of interest on obligations such as
the Series 2005 Bonds. The Issuer, the Borrower and the Educational Institution have
covenanted to comply with certain restrictions designed to ensure that interest on Series 2005
                                               48
Bonds will not be includable in gross income for Federal income tax purposes. Failure to
comply with these covenants could result in interest on the Series 2005 Bonds being includable
in income for Federal income tax purposes and such inclusion could be required retroactively to
the date of issuance of the Series 2005 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 Series 2005 Bonds may adversely affect the tax status
of the interest on the Series 2005 Bonds.

       The Series 2005 Bonds are "qualified 501(c)(3) bonds" within the meaning of the Code.

        Certain requirements and procedures contained or referred to in the Indenture, the Tax
Regulatory Agreement and other relevant documents may be changed and certain actions
(including, without limitation, defeasance of the Series 2005 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 any Series 2005 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 Peck, Shaffer & Williams LLP.

        Although Bond Counsel for the Series 2005 Bonds is of the opinion that interest on the
Series 2005 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
Series 2005 Bonds may otherwise affect a Bondholder'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 Bondholder or the Bondholder'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 Bondholder or potential Bondholder is urged to consult with tax counsel with respect to
the effects of purchasing, holding or disposing the Series 2005 Bonds on the tax liabilities of the
individual or entity.

         For example, although Bond Counsel for the Series 2005 Bonds is of the opinion that
interest on the Series 2005 Bonds is not a specific item of tax preference for the federal
alternative minimum tax, corporations are required to include all tax-exempt interest in
determining "adjusted current earnings" under Section 56(c) of the Code, which may increase the
amount of any alternative minimum tax owed. Receipt of tax-exempt interest, ownership or
disposition of the Series 2005 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 Railroad Retirement benefits, under
Section 86 of the Code and limiting the use of the Earned Income Credit under Section 32 of the
Code that might otherwise be available. Ownership of any Series 2005 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.



                                                49
                                      LEGAL MATTERS
        Legal matters incident to the authorization, issuance and sale of the Series 2005 Bonds
and with regard to the tax-exempt status of the interest thereon (see "TAX MATTERS" herein)
are subject to the delivery of the legal opinion of Peck, Shaffer & Williams LLP, Bond Counsel.
A signed copy of such opinion, dated and speaking only as of the date of original delivery of the
Series 2005 Bonds, will be delivered to the Underwriter at the time of such original delivery. A
draft of such opinion is attached hereto as Appendix B.

       Certain legal matters in connection with the Series 2005 Bonds will be passed upon for
the Borrower by its counsel, The Stolar Partnership LLP, St. Louis, Missouri; for the
Underwriter by its counsel, Gilmore & Bell, P.C., Kansas City, Missouri; for the Issuer by its
general counsel, Powers Phillips, P.C., and for the Bank by its counsel, Thompson Coburn LLP,
St. Louis Missouri.

                                      UNDERWRITING
        Stern Brothers & Co. (the "Underwriter") has agreed, subject to the terms and provisions
of the Bond Purchase Agreement among the Borrower, the Educational Institution, the Issuer and
the Underwriter (the "Purchase Agreement") to purchase the Series 2005 Bonds from the Issuer
at a purchase price of $24,886,250.00 (which takes into account an Underwriter’s discount of
$113,750.00).

       The obligation of the Underwriter to accept delivery of the Series 2005 Bonds is subject
to various conditions set forth in the Purchase Agreement; provided, however, that the
Underwriter is obligated to purchase all of the Series 2005 Bonds if any are purchased.

        It is intended that the Series 2005 Bonds will be offered to the public initially at the
offering price set forth on the front page of this Official Statement. The initial public offering
price may be changed from time to time by the Underwriter without giving any prior notice;
provided such changes do not cause the issuance costs financed out of the proceeds of the Series
2005 Bonds to exceed 2% of the proceeds of such Bonds. The Underwriter may offer the Series
2005 Bonds to other dealers at prices lower than those offered to the public.

        The Borrower has agreed in the Purchase Agreement to indemnify the Underwriter and
the Issuer against certain liabilities.

        Except for the information under the captions "THE ISSUER," and "ABSENCE OF
LITIGATION AFFECTING THE SERIES 2005 BONDS – The Issuer" the Issuer has not
confirmed, and assumes no responsibility for, the accuracy, completeness or sufficiency of any
of the statements in this Official Statement or in any other disclosure document used by Stern
Brothers & Co. in connection with the offer and sale of the Series 2005 Bonds or any
supplements thereto, or in any reports, financial information, offering or disclosure documents or
other information relating in any way to the facilities described herein or therein, the Borrower,
or the Borrower’s management, operations, organization, history or financial condition, relating
in any way to Stern Brothers & Co., or relating in any way to the Bank as issuer of the Letter of
Credit.



                                               50
          ABSENCE OF LITIGATION AFFECTING THE SERIES 2005 BONDS
The Issuer

        There is not now pending or, to the knowledge of the Issuer, threatened, any litigation
restraining or enjoining the issuance or delivery of the Series 2005 Bonds or questioning or
affecting the validity of the Series 2005 Bonds or the proceedings or authority under which they
are to be issued. There is no litigation pending or, to the Issuer’s knowledge, threatened which in
any manner questions the right of the Issuer to enter into the Indenture or the Loan Agreement or
to secure the Series 2005 Bonds in the manner provided in the Indenture and the Loan
Agreement.

The Educational Institution

        There is not now pending or, to the knowledge of the Educational Institution, threatened,
any litigation material to the issuance or delivery of the Series 2005 Bonds.

The Borrower

       There is not now pending or, to the knowledge of the Borrower, threatened, any litigation
material to the issuance or delivery of the Series 2005 Bonds.




                                                51
                                     MISCELLANEOUS

        The references in this Official Statement to the Series 2005 Bonds, the Letter of Credit,
the Reimbursement Agreement, the Indenture, the Purchase Agreement and the Loan Agreement
are brief outlines of certain provisions thereof. Such outlines do not purport to be complete. For
full and complete statements of such provisions, reference is made to the Series 2005 Bonds, the
Letter of Credit, the Reimbursement Agreement, the Indenture, the Purchase Agreement and the
Loan Agreement, copies of which are on file in the office of the Underwriter and following
delivery of the Series 2005 Bonds will be on file at the principal corporate trust office of the
Trustee.

       The agreement of the Issuer with the holders of the Series 2005 Bonds is fully set forth in
the Indenture, and neither any advertisements of the Series 2005 Bonds nor this Official
Statement is to be construed as constituting an agreement with the purchasers of the Series 2005
Bonds. Statements made in this Official Statement involving matters of opinion, whether or not
expressly so stated, are intended merely as such and not as representations of facts.

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

                                                     CONCORDIA UNIVERSITY IRVINE


                                                     By: /s/ Jacob A. O. Preus
                                                         President


                                                     By: /s/ Alan K. Rudi
                                                         Vice President for Business Operations



                                                     ACSI CAPITAL CORPORATION


                                                     By: /s/ Jere L. Elliott
                                                         Vice President




                                               S-1
                                        APPENDIX A

                               INFORMATION REGARDING

                          U.S. BANK NATIONAL ASSOCIATION

       U.S. Bank National Association (“Bank”) is a national banking association organized
under the laws of the United States and is the largest subsidiary of U.S. Bancorp. At June 30,
2005, the Bank had total assets of $203 billion, total deposits of $128 billion and total
shareholders’ equity of $20 billion.

       The Bank is engaged in the general banking business, principally in domestic markets.
The Bank provides a wide range of products and services to individuals, businesses, institutional
organizations, governmental entities and other financial institutions. Commercial and consumer
lending services are principally offered to customers within the Company's domestic markets, to
domestic customers with foreign operations and within certain niche national venues. Lending
services include traditional credit products as well as credit card services, financing and
import/export trade, asset-backed lending, agricultural finance and other products. Leasing
products are offered through non-bank subsidiaries. Depository services include checking
accounts, savings accounts and time certificate contracts. Ancillary services such as foreign
exchange, treasury management and receivable lock-box collection are provided to corporate
customers. The Bank provides a full range of asset management and fiduciary services for
individuals, estates, foundations, business corporations and charitable organizations.

        Banking and investment services are provided through a network of 2,383 banking
offices principally operating in 24 states in the Midwest and West. USBNA operates a network
of 4,877 automated teller machines (“ATMs”) and provides 24-hour, seven day a week telephone
customer service. Mortgage banking services are provided through banking offices and loan
production offices throughout the Bank’s markets.

        U.S. Bancorp is a multi-state financial holding company with $204 billion in assets at
June 30, 2005, headquartered in Minneapolis, Minnesota. U.S. Bancorp was incorporated in
Delaware in 1929 and operates as a financial holding company and a bank holding company
under the Bank Holding Company Act of 1956. Through its subsidiaries, U.S. Bancorp provides
a full range of financial services, including lending and depository services, cash management,
foreign exchange and trust and investment management services. It also engages in credit card
services, merchant and ATM processing, mortgage banking, insurance, brokerage, leasing and
investment banking. U.S. Bancorp is the parent company of the Bank.

       U.S. Bancorp’s common stock is traded on the New York Stock Exchange under the
ticker symbol USB, and its principal executive offices are located at 800 Nicollet Mall,
Minneapolis, Minnesota 55402. The main office of the Bank is located at 425 Walnut Street,
Cincinnati, Ohio 45202.




                                              A-1
Available Information

         The foregoing financial information regarding the Bank has been derived from and is
qualified in its entirety by the unaudited financial information contained in the Federal Financial
Institutions Examination Council report Form 031, Consolidated Report of Condition and
Income for a Bank with Domestic and Foreign Offices (“Call Report”), for the quarter ended
June 30, 2005. The publicly available portions of the quarterly Call Reports with respect to the
Bank are on file with, and available upon request from, the FDIC, 550 17th Street, NW,
Washington, D.C. 20429 or by calling the FDIC at (877) 275-3342. This office is equipped with
a TTY machine to receive inquiries from the hearing impaired at (800) 925-4618. The FDIC
also maintains an Internet website at www.fdic.gov that contains reports and certain other
information regarding depository institutions such as the Bank. Reports and other information
about the Bank are available to the public at the offices of the Comptroller of the Currency at
One Financial Place, Suite 2700, 440 South LaSalle Street, Chicago, IL 60605.

        U.S. Bancorp is subject to the informational requirements of the Securities Exchange Act
of 1934, as amended, and, in accordance therewith, files reports and other information with the
Securities and Exchange Commission (the “SEC”). Such reports and other information may be
inspected without charge at the public reference facilities maintained by the SEC at 100 F Street,
NE, Room 1580, Washington, D.C. 20549. Members of the public who require assistance in
obtaining copies, including certified copies, of public SEC records (such as corporate filings)
may contact the Public Reference Room at (202) 551-8090. Information on the operation of the
Public Reference Room may be obtained by calling the SEC at (800) SEC-0330. This office is
equipped with a TTY machine to receive inquiries from the hearing impaired at (202) 772-9306.
The SEC also maintains an internet website at www.sec.gov, which contains most corporate
disclosure documents filed since May 1996, such as reports, proxy statements and other
information regarding companies such as U.S. Bancorp that file such materials electronically.
General information is available to the public from the SEC Information Line at (202) 942-8088.
U.S. Bancorp also maintains an internet website at www.usbank.com. Information on U.S.
Bancorp’s website is not part of this document.

        Except for the contents of this section, the Bank and U.S. Bancorp assume no
responsibility for the nature, contents, accuracy or completeness of the information set forth in
this Official Statement.




                                               A-2
                                        APPENDIX B

                         FORM OF BOND COUNSEL’S OPINION



December ____, 2005



Colorado Educational and Cultural Facilities Authority     Stern Brothers & Co.

Denver, Colorado                                           St. Louis, Missouri



U.S. Bank National Association

St. Louis, Missouri



Ladies and Gentlemen:

        We have examined the transcript of proceedings (the “Transcript”) relating to the
issuance by the Colorado Educational and Cultural Facilities Authority (the “Issuer”) of its
$25,000,000 Adjustable Rate Demand Revenue Bonds, Series 2005 (Concordia University Irvine
Project) (the “Series 2005 Bonds”).

The Series 2005 Bonds are issued pursuant to Article 15, Title 23 of the Colorado Revised
Statutes and the Supplemental Public Securities Act, Part 2, Article 57, Title 11 of the Colorado
Revised Statutes, a Trust Indenture dated as of December 1, 2005 (the “Indenture”) between the
Issuer and Wells Fargo Bank, National Association (the “Trustee”), and a resolution of the Issuer
authorizing the execution and delivery of the Series 2005 Bonds (the “Bond Resolution”).
Proceeds of the Series 2005 Bonds are to be loaned to Concordia University, a California
nonprofit religious corporation (the “Borrower”) pursuant to the provisions of the Loan
Agreement dated as of December 1, 2005 (the “Loan Agreement”) among the Issuer, ACSI
Capital Corporation (the “Educational Institution”) and the Borrower. Operation of the facilities
financed with proceeds of the Series 2005 Bonds will be subject to certain covenants contained
in the Loan Agreement. Pursuant to the Loan Agreement, the Borrower has agreed to make
payments sufficient to pay when due the principal of and premium, if any, and interest on the
Series 2005 Bonds (whether at maturity or upon prior redemption). The rights of the Issuer
under the Loan Agreement (except certain rights to indemnification, reimbursements,
administrative fees and notices and the right to perform certain discretionary acts) are pledged
and assigned by the Issuer to the Trustee as security for the Series 2005 Bonds. The Series 2005
Bonds are payable solely from such revenues and funds as are pledged and assigned to the
payment thereof pursuant to the Loan Agreement and the Indenture. Payment of the principal of



                                              B-1
and interest (but not premium) on the Series 2005 Bonds is further secured by an irrevocable
direct pay letter of credit issued by U.S. Bank National Association (the “Letter of Credit”).

The Series 2005 Bonds mature on December 1, 2035 and bear interest at the initial rate set forth
in the Bond Purchase Agreement relating to the Series 2005 Bonds (the “Bond Purchase
Agreement”) among the Issuer, the Borrower, the Educational Institution and Stern Brothers &
Co., as underwriter. The Series 2005 Bonds are subject to mandatory and optional redemption,
in whole or in part upon certain circumstances, terms and conditions described in the Indenture.

The documents in the Transcript examined include an executed counterpart of the following: (i)
the Indenture, (ii) the Loan Agreement, (iii) the Bond Purchase Agreement, and (iv) the Tax
Regulatory Agreement dated as of December 1, 2005 (the “Tax Regulatory Agreement”) among
the Issuer, the Trustee, the Educational Institution and the Borrower. We have also examined
executed Series 2005 Bond No. R-1.

        Based on such examination, we are of the opinion that, under the law existing on the date
of this opinion:

        1.     The Issuer is duly created and validly existing as an independent body corporate
and instrumentality of the State of Colorado, with the power to enter into and perform its
obligations under the Loan Agreement and the Indenture and to issue the Series 2005 Bonds.

        2.     The Series 2005 Bonds, the Loan Agreement, the Tax Regulatory Agreement, the
Indenture and the Bond Purchase Agreement have been duly authorized, executed, issued and
delivered by the Issuer and constitute valid, binding and enforceable obligations of the Issuer
except as the enforceability of the same may be subject to bankruptcy, insolvency,
reorganization, moratorium and other laws in effect from time to time affecting creditors’ rights,
and to the exercise of judicial discretion in accordance with general principles of equity.

       3.      The Series 2005 Bonds constitute special, limited obligations of the Issuer and the
principal of, premium, if any, and interest on Series 2005 Bonds are payable solely from the
revenues and other moneys pledged and assigned by the Indenture to secure that payment.

        4.     The Series 2005 Bonds and the interest thereon shall never constitute a general
obligation, debt or indebtedness of the Issuer within the meaning of any provision or limitation
of the Constitution or statutes of the State of Colorado and shall not constitute or give rise to a
pecuniary liability of the Issuer or charge against its general credit or taxing powers, but are
payable solely from the revenues pledged and assigned to the payment thereof.

        5.      Under the laws, regulations, rulings and judicial decisions in effect as of the date
hereof, interest on the Series 2005 Bonds is excludible from gross income for Federal income tax
purposes, pursuant to the Internal Revenue Code of 1986, as amended (the “Code”).
Furthermore, interest on the Series 2005 Bonds will not be treated as a specific item of tax
preference, under Section 57(a)(5) of the Code, in computing the alternative minimum tax for
individuals and corporations. The Series 2005 Bonds are “qualified 501(c)(3) bonds” within the
meaning of the Code. In rendering the opinions in this paragraph, we have assumed continuing
compliance with certain covenants made by the Issuer, the Educational Institution and the
Borrower designed to meet the requirements of Section 103 of the Code. We express no other


                                                B-2
opinion as to the federal tax consequences of purchasing, holding or disposing of the Series 2005
Bonds.

6.    Interest on the Series 2005 Bonds is excludable from taxable income for Colorado
income tax purposes and from Colorado alternative minimum taxable income under existing law.

       In our capacity as bond counsel, we are not passing upon the Letter of Credit. In
rendering this opinion, we have relied upon certifications and representations of facts, estimates
and expectations by the Issuer, the Educational Institution and the Borrower, contained in the
Transcript, which we have not independently verified. We have also relied upon the opinion of
The Stolar Partnership LLP, St. Louis, Missouri, as counsel for the Borrower, contained in the
Transcript, as to all matters referred to therein.

Very truly yours,




                                               B-3
(THIS PAGE LEFT BLANK INTENTIONALLY)
        APPENDIX C


   CONCORDIA UNIVERSITY

ORGANIZATION AND OPERATIONS
                                                                      APPENDIX C

                                                              TABLE OF CONTENTS


                                                                                                                                                            Page

HISTORY AND BACKGROUND .................................................................................................................. C-1
      General ................................................................................................................................................ C-1
      Concordia University Foundation, Irvine, California.......................................................................... C-1
      The Lutheran Church - Missouri Synod.............................................................................................. C-1
      Concordia University System.............................................................................................................. C-2

GOVERNANCE AND ADMINISTRATION.................................................................................................. C-2
     Board of Regents................................................................................................................................. C-2
     Administration..................................................................................................................................... C-3

FACILITIES ..................................................................................................................................................... C-4
      The University..................................................................................................................................... C-4
      The Project .......................................................................................................................................... C-4

OPERATIONS ................................................................................................................................................. C-5
     Academic Programs ............................................................................................................................ C-5
     History of Student Enrollment ............................................................................................................ C-5
     Enrollment Profile............................................................................................................................... C-6
     Average Entrance Exam Scores .......................................................................................................... C-6
     Demographics of Student Population.................................................................................................. C-6
     Tuition and Fees.................................................................................................................................. C-6
     Faculty................................................................................................................................................. C-7
     Employees ........................................................................................................................................... C-7
     Accreditations ..................................................................................................................................... C-7
     Competition......................................................................................................................................... C-8
     Risk Management and Insurance ........................................................................................................ C-8

RESULTS OF OPERATIONS ......................................................................................................................... C-8
     Financial Records................................................................................................................................ C-8
     Summary Statement of Revenues and Expenses................................................................................. C-8
     Outstanding Debt ................................................................................................................................ C-9
     Pension Liabilities............................................................................................................................... C-9




                                                                                 i
                                        CONCORDIA UNIVERSITY

                                  ORGANIZATION AND OPERATIONS

                                           ____________________


                                     HISTORY AND BACKGROUND

General

         Concordia University (the “University”) is a religious nonprofit corporation incorporated in 1972
under the laws of the State of California (the “State”), and is a tax-exempt charitable organization under
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), exempt from federal
income taxation under Section 501(a) of the Code. The University is located on a 70-acre campus in Irvine,
California 25 miles south of Los Angeles, and has a current enrollment of approximately 1,266 undergraduate
students and over 427 degree-seeking graduate students.

         The story of the University dates back to the mid-1950s when a small group of Southern California
Lutherans began to plan for a Lutheran college to serve the people of the Pacific Southwest. By 1962 the
decision had been made by The Lutheran Church - Missouri Synod to build a new school. An extensive search
for the “perfect” site led to Irvine, California. Construction of the campus began in 1975, and in 1976 classes
were held for the first time at Christ College Irvine, the original name of the University. In February 1993, the
Board of Regents of Christ College Irvine, responding to a decision by The Lutheran Church - Missouri Synod
to incorporate its ten colleges and universities into the Concordia University System, voted to change the name
of Christ College Irvine to Concordia University.

        The University is one of ten Concordia colleges and universities located throughout the United States
that comprise the Concordia University System. The University has no members and no capital stock.

Concordia University Foundation, Irvine, California

        Concordia University Foundation, Irvine, California (the “Foundation”) is a not for profit
corporation incorporated in 1975 under the laws of the State, and is a tax-exempt charitable organization
under Section 501(c)(3) of the Code, exempt from federal income taxation under Section 501(a) of the
Code. The Foundation was organized and is operated to solicit gifts and bequests on behalf of and to
support the University.

The Lutheran Church – Missouri Synod

         Founded in 1847, The Lutheran Church - Missouri Synod (the “Synod”), a national religious
denomination, presently consists of approximately 6,200 member congregations, which have joined together to
carry out their commonly adopted objectives. The Synod functions through a number of separately
incorporated Synodical corporations to support the member congregations in their local ministries. On behalf
of the member congregations, the Synod also administers those ministries that can be accomplished more
effectively through cooperation with other member congregations. As part of this cooperative system, the
Synod is authorized by its constitution and bylaws to support Synodical colleges, universities and seminaries,
including the ten Concordia Colleges and universities. The members of the University’s Board of Regents are
elected by the Synod, the Pacific Southwest District of The Lutheran Church — Missouri Synod (“Pacific
Southwest District-LCMS”) and by its own members.




                                                      C-1
Concordia University System

         The Concordia University System (“CUS”) is one of five Synodical corporations through which the
Synod functions. CUS establishes broad operating and financial policies for all of the Synod’s colleges and
universities. CUS makes an operating line of credit available to the University to support current operations.

     NONE OF THE OTHER CONCORDIA COLLEGES AND UNIVERSITIES, THE
FOUNDATION, CUS OR THE LUTHERAN CHURCH – MISSOURI SYNOD IS LIABLE FOR
REPAYMENT OF THE SERIES 2005 BONDS.

                               GOVERNANCE AND ADMINISTRATION

Board of Regents

         The University is managed by a 13-member Board of Regents (the “Board”), which meets a minimum
of four times each year. Five of the 13 members are elected by the Synod in convention and must include one
ordained minister, one commissioned minister and three lay persons. Three of the 13 members are elected by
the Pacific Southwest District — LCMS, and must include one ordained minister, one commissioned minister
and one lay person. Four lay persons are elected by the Board itself. The final position on the Board is
reserved for the President of the Pacific Southwest District — LCMS. Each member of the Board of Regents
must hold membership in a member congregation of the Synod. No more than two of the elected members of
the Board may be from the same congregation.

        The five Board members that are elected by the Synod and the three Board members that are elected
by the District, are elected for three-year terms, and may serve a maximum of two consecutive three-year
terms. The four members that are elected by the Board itself, are elected for staggered three-year terms, and
may serve a maximum of three consecutive three-year terms.

         The officers of the Board of Regents are elected by the Board for one-year terms. The members of the
Board serve in a voluntary capacity and receive no remuneration for service rendered in such capacity. As of
the date hereof, the members of the University’s Board of Regents are as follows:

                                  Board Office
      Name                         Now Held            Residence                Occupation

      Craig Olson                 Chairperson          Orange, CA               President of a baking
                                                                                company

      Peter Lee                   Vice Chairperson     Camarillo, CA            Operations Director

      Donald J. Tietjen           Secretary            Los Angeles, CA          Retired Aerospace
                                                                                Executive

      Dr. Marian Baden           Member                Orange, CA               Retired University
                                                                                Professor

      Paul Brandt                 Member               Scottsdale, AZ           School Administrator

      Dr. Gene Haertling          Member               Albuquerque, NM          Retired Professor

      Rev. Kevin Kritzer          Member               Long Beach, CA           Pastor

      Melvin Olsen                Member               San Jose, CA             Retired Electrical
                                                                                Engineer


                                                     C-2
                                  Board Office
      Name                         Now Held            Residence                 Occupation

        Patrick Stacker           Member               Cerritos, CA              Attorney

      Kathleen Romsa              Member               Reseda, CA                Teacher

      Rev. Larry Stoterau         Member               Irvine, CA                PSW District President

      Dr. Audrey Williams         Member               Las Vegas, NV             Retired University
                                                                                 Professor
      Rev. Roderick McPherson     Member               Las Vegas, NV             Pastor

Administration

        The University’s Board of Regents has delegated authority for the management and daily operations
of the University to the President and the administrative staff. The President and the principal members of the
executive management staff and selected biographical information are as follows:

         Rev. Dr. Jacob A. O. Preus, President, age 52. Dr. Preus has been the President of the University
since July 1998. His experience includes numerous district and circuit leadership positions within the Synod.
Prior to joining the University, Dr. Preus was Dean of Faculty for Concordia Seminary in St. Louis and liaison
to the Seminary’s Hispanic Institute of Theology. Dr. Preus holds a Bachelor of Arts degree in Theology from
the University of Missouri, and a Master of Divinity, Master of Sacred Theology and a Doctorate degree in
Theology from Concordia Seminary, St. Louis. He was also a Chaplain in the U.S. Navy during Operation
Desert Storm.

          Dr. Gary R. McDaniel, Vice President of Student and Enrollment Services, age 44. Dr. McDaniel
has served as Vice President of Student and Enrollment Services since January 2001. His experience includes
15 years as a teacher, coach, Athletic Director, Dean of Students and Director of Student Affairs for the
University. Dr. McDaniel holds a Bachelor of Arts degree in Education from Concordia University in Seward,
Nebraska, a Master of Arts degree in Curriculum and Instruction from Christ College Irvine and an Ed.D. in
Institutional Management from Pepperdine University.

        Rev. Dr. Dean Vieselmeyer, Executive Vice President of Community and Church Relations, age 56.
Dr. Vieselmeyer has been Executive Vice President of Community and Church Relations since January 2001.
Dr. Vieselmeyer’s experience includes 26 years teaching theology, coaching sports, and conducting various
seminars. He holds a Bachelor of Science degree in Education from Concordia University in Seward,
Nebraska, a Master of Arts degree in Human Development and Family and a Doctorate degree in Education
Administration from the University of Nebraska and a Masters of Divinity degree from Concordia Seminary in
Springfield, Illinois.

        Dr. Hal Whelply, Assistant to the President for Institutional Effectiveness, age 61. Dr. Whelply has
been Assistant to the President since 2003. His experience includes 30 years in teaching, consulting,
educational assessment and media production. Dr. Whelply holds a Bachelor of Science degree in Education
from Concordia University in Seward, Nebraska, a Master of Arts degree in Education from California State
University Long Beach and a Doctorate degree in Instructional Systems Technology from Indiana University.

        Dr. Mary K. Scott, Vice President of Administration, age 46. Dr. Scott has been Vice President of
Administration since 2000. Her experience includes 20 years teaching education, athletic programs, Athletic
Director and Dean of Campus Life at the University. She has a Bachelor of Science degree in Education from
Concordia University in River Forest, Illinois, a Masters of Science degree in Sports Management from
Adelphi College and an Ed.D. in Institutional Management from Pepperdine University.


                                                     C-3
        Alan K. Rudi, Vice President of Business Operations and Information Services, age 50. Mr. Rudi
has been Vice President of Business Operations since 2000. His experience includes 20 years of corporate
management in product development, finance, marketing and business development. He holds a Bachelor of
Science degree in Business from Northern Arizona University, a Masters degree in Business Administration,
Finance and Marketing from Oregon State University and a Masters of Science degree in Technology
Management from Pepperdine University.

         Steven D. Christensen, Executive Vice President of University (Foundation) Relations, age 45. Mr.
Christensen has been Executive Vice President of University (Foundation) Relations since July 2001. His
experience prior to coming to the University includes fund raising with the Boy Scouts, University California
Irvine, California State University San Bernardino, and most recently, he was at Chapman University for six
years. Mr. Christensen is a Certified Fund Raising Executive and holds a Bachelor of Arts degree in Political
Science from California State University in Fullerton, a Master of Arts degree in Public Administration from
California State University San Bernardino and is pursuing an Ed. D. in Education Leadership from the
University of Southern California.


                                                 FACILITIES

The University

        The University’s campus is located on a 70-acre plateau overlooking Orange County, which is 25
miles south of Los Angeles, 80 miles north of San Diego and six miles inland from the Pacific Ocean. The
metropolitan attractions of Los Angeles and San Diego are a one to two hour drive from the campus.

        The campus includes The Center for Worship and the Performing Arts and Library building that
houses the art and theatre departments and a spacious library. Other campus facilities include a variety of
classroom spaces, a science center, residence halls, an administration building, a faculty office building, the
Hallerburg Student Center, the Student Union and Café, a bookstore, a 2,000-seat gymnasium, a large outdoor
amphitheatre, soccer, baseball and softball fields, facilities for tennis, track and field and the Chapel of the
Good Shepherd.

         The University’s library contains a collection of approximately 88,000 volumes, 2,500 audiotapes and
1,100 videotapes, as well as audio-visual equipment. The University also has two interactive video
teleconferencing classrooms. World Wide Web resources available to students both on and off campus include
InfoTrac Web, an index of 2,000 journals, with access to full text in over 1,000 titles, JSTOR, providing over
150 full-run, full-text journals and Lexis-Nexis, which provides full-text articles in business, medicine and law.
All campus residence hall rooms and classrooms have high-speed Internet connections for access to the
University’s library catalog on the World Wide Web and the full range of Internet learning resources. Two
nearby libraries augment the University’s collection: the University of California, Irvine library provides
access to an additional 1.5 million volumes and the Heritage Park (Irvine) branch of the Orange County
Library.

The Project

         The proceeds of the Bonds, together with other funds of the University, will be used to finance and
reimburse the costs of the Project, which is an approximately $24 million campus-wide construction and
renovation program to include (1) construction of the approximately 45,000 square foot Education, Business
and Technology building, consisting of (A) offices supporting the School of Business and the School of Adult
Studies, open office space for faculty and staff members and providing all student services (e.g., registration,
financial aid, etc.) in a “one-stop shop” environment; (B) class rooms; (C) one or more lecture halls; (D)
computer labs; (E) administrative office space and board room; and (F) one or more multi-purpose meeting
rooms with small kitchen facilities; (2) renovation of existing dormitories to add approximately 150 beds of

                                                      C-4
capacity; and (3) addition of new track, soccer and other athletic field surfaces and other improvements to
athletic facilities.


                                               OPERATIONS

Academic Programs

        The University presently is organized into five colleges or schools: the School of Arts and Sciences,
the School of Education, the School of Theology and Christ College, the School of Business and the School of
Adult Studies, which offer an aggregate of 19 single subject and broad field major and an aggregate of 23
minor areas of study.

        The School of Arts and Sciences offers undergraduate and graduate programs for students in Business
Administration, undergraduate programs in Pre-Law, Pre-Social Work, Sport Management and the Pre-
Medical Professions (Pre-Occupational Therapy, Pre-Physical Therapy and Pre-Medicine).

         The School of Education offers undergraduate programs in Early Childhood, Elementary and
Secondary Education and graduate programs leading to Master of Education (M.Ed.) and Master of Arts in
Education degrees. The School of Education also offers State of California Preliminary and Clear Credentials
in teaching and school administration as well as Lutheran Teaching Certification and Crosscultural Language
and Academic Development “CLAD” Certification.

         The School of Theology offers undergraduate and graduate programs in theology, as well as Pre-
Seminary and Director of Christian Education Certifications for students interested in professional church
work as their chosen field. Christ College (Church Professions Certification Program) is the school of the
University that directs Concordia’s professional church career programs and guides students interested in
careers in the Synod toward Director of Christian Education, Pre-Seminary and Lutheran Teaching Ministry
Certification.

        The School of Business offers undergraduate programs in Business Administration and Information
Technology. The School of Business also offers a graduate program leading to an Entrepreneurial MBA
degree.

         The School of Adult Studies offers an adult degree completion program that allows working
professionals to complete their Bachelor’s Degree.

History of Student Enrollment

         The following table sets forth the University’s fall semester enrollment by class for each of the last
five years:

                                                                   Enrollment by Class
                                                                     Fall Semesters

                                         2001           2002           2003           2004            2005
Undergraduate                            1,013           1,099         1,222          1,266           1,377
Graduate                                   311             394           409            435             424
Adult Studies                               22              85            80             94             118
Total                                    1,346           1,578         1,711          1,795           1,919




                                                     C-5
Enrollment Profile

       The following table sets forth for undergraduate students the University’s applications for admission,
number of applications accepted, matriculation rate and number of new freshmen for the last five years.

                         Applications                                                    New
            Year        for Admissions       Acceptances       Matriculations          Freshmen

            2001            1,285                810                 63%                     275
            2002            1,204                795                 66%                     256
            2003            1,319                866                 66%                     270
            2004            1,303                830                 64%                     270
            2005            1,350                862                 64%                     300

Average Entrance Exam Scores

        The following table sets forth the mean SAT test scores for the last five years for first-time freshmen
at the University and for the nation, and also includes the average high school GPA for first-time freshmen at
the University.

                                First-Time Freshman SAT and Average GPA
                                                                           Avg. GPA
     Fall          University Mean           National Mean                 Concordia

     2001               1000                      1019                       3.4
     2002               1040                      1026                       3.5
     2003               1070                      1023                       3.6
     2004               1020                      1025                       3.5
     2005               1050                      Not Available              3.5

Demographics of Student Population

        The following summarizes the origin of students:

                           Fall 2005 Geographic Origin – UG (degree/non-degree)

                                                 Head Count                        Percent
                   California                       1,037                           76%
                   International                       75                            5%
                   Colorado                            31                            2%
                   Other Out-of-State                 234                           17%
                      Total                         1,377                          100%

Tuition and Fees

        The University meets the costs of its educational programs primarily through tuition, fees, gifts and
grants. The following table sets forth the base tuition, fees and room and board charges for a full-time student
of the University for the past six academic years.




                                                       C-6
                           Academic
                             Year                 Tuition and Fees            Room and Board

                            2000-01                      $15,700                     $5,600
                            2001-02                       16,480                      5,810
                            2002-03                       17,300                      6,110
                            2003-04                       17,990                      6,430
                            2004-05                       18,800                      6,670
                            2005-06                       19,930                      6,850

Faculty

          The following table sets forth the University’s faculty and full-time faculty with advanced degrees for
the last five years.

                                          Faculty Profile--Fall, 2000-2004

                                                   Faculty                     Doctorate Degrees
             Fall                          Full-time      Part-time          Number       Percent(1)

             2001                               62                  63          36             58%
             2002                               72                  70          41             57%
             2003                               73                  94          43             59%
             2004                               76                 109          44             58%
             2005                               84                 146          52             62%
             ____________________
             (1)
                    Percent of full-time faculty only.

Employees

        As of June 30, 2005, the University employed 191 full-time and eight part-time personnel (excluding
part-time faculty).

         The management of the University considers its relationship with its employees to be excellent.
Management has worked to strengthen that relationship by instituting various programs addressing the
interaction of employees and management. Management has established mechanisms for addressing employee
grievances and involving employees in the management process.

        Pay increases for employees of the University have averaged 2.5% per year over the last five years.
The University provides a variety of benefits to its employees, including health insurance, dental insurance,
long-term disability insurance, life insurance, pension plan, tuition reimbursement, and customary vacation,
holidays and sick days.

        None of the University’s employees are represented by a union. Management is not aware of any
organizing activity or of any work disruption involving its employees.

Accreditations

        The University is accredited by the Accrediting Commission for Senior Colleges and Universities of
the Western Association of Schools and Colleges.




                                                           C-7
Competition

        There are a number of private four-year colleges and universities in the Irvine area with which the
University competes for first-time freshmen. The following table sets forth certain information for the 2005-
2006 academic year for the local educational institutions that the University considers to be its primary
competition.

                                     Distance from            Current Tuition             Estimated
Name of School                        University                 Charge                   Enrollment

Azusa Pacific University                35 miles                  $20,000                       --
Biola University                        20 miles                   20,930                     5,370
Concordia University                       --                      19,930                     1,800
Point Loma University                   75 miles                   19,040                       --
Vanguard University                     10 miles                   18,430                     2,300
Westmont University                    150 miles                   27,000                     1,328

Risk Management and Insurance

          Under the Loan Agreement, the University is required to maintain the University facilities and
campus in a reasonably safe and sound operating condition, making from time to time all reasonably
needed material repairs, and to maintain reasonable amounts of insurance coverage with respect to the
facilities and campus and to pay all costs of maintenance, repair and insurance. The University participates
in a broad risk management program provided by the Synod through its Concordia University Systems office.

                                       RESULTS OF OPERATIONS

Financial Records

        The University maintains its financial records on the basis of a fiscal year ending June 30 and follows
the accrual basis of accounting. Set forth in Appendix D to this Official Statement are the audited financial
statements of the University for the fiscal year ended 2005.

Summary Statement of Revenues and Expenses

        The table below presents a summary of historical statements of revenues and expenses of the
University for the last two fiscal years. The information has been derived from the audited financial
statements of the University, and with respect to the fiscal year ended June 30, 2005, should be read in
conjunction with the audited financial statements of the University, including the notes thereto, contained in
Appendix D of this Official Statement.




                                                     C-8
                                 SUMMARY OF REVENUES AND EXPENSES

                                                                       Fiscal Year Ended June 30
                                                                        2004                 2005
   Support, Revenues and Gains:
        Support                                                      $ 2,031,812             $ 2,864,828
        Revenues:
              Net Tuition and Fees                                    16,307,184              18,171,354
              Income on Cash and Equivalents                              26,454                  52,443
              Income on Long-Term Investments                            487,832                 280,030
              Auxiliary Enterprises                                    6,688,205               7,036,285
              Other                                                        4,573                  83,614
         Change in Value of Split-Interest Agreements                  (113,985)                 (13,170)
         Other Changes in Interest in Net Assets of Concordia
             University Foundation                                       636,855                 618,657
         Change in Value of Funds Held by Third-Party
         Trustee                                                          29,948                  21,082
         Gain (Loss) on Property Disposals                               (23,511)                      0
         Net Gains (Losses) on Investments                                47,146                  31,607
        Unrealized Gain on Interest Rate Swap Agreements               2,083,950               (403,561)
             Total Support, Revenues and Gains                        28,206,463              28,743,169
   Expenses:
        Educational & General Academic Programs
              Academic Programs                                        6,928,524               8,215,623
              Support Programs                                        12,310,003              12,088,680
         Fund-Raising                                                    866,145               1,206,973
         Auxiliary Enterprises                                         6,577,239               6,928,119
              Total Expenses                                          26,681,911              28,439,395
   Change in Net Assets                                                1,524,552                 303,774
   Net Assets - Beginning of Year                                     28,519,370
   Net Assets - End of Year                                          $30,043,922

Outstanding Debt
         After the issuance of the Bonds, the University’s long-term indebtedness will be (1) the Bonds, (2)
$26,560,000 outstanding principal amount of the University’s Series 2001 Bonds and (3) $67,388 as a
capitalized lease. See Notes 13 and 14 of the Notes to Financial Statements in Appendix D for a description of
certain terms of the Series 2001 Bonds and the capital lease.

        The University has not guaranteed any outstanding indebtedness of any other corporation or entity.

Pension Liabilities
         The University participates in the worker benefit plans of the Synod. Almost all full-time employees
are covered by these retirement and survivor programs. The University contributes a fixed percentage of each
participant’s salary to the plans. Retirement and Survivor program expenses for the years ended June 30, 2004
and 2005, totaled $576,636 and $533,936, respectively.

                                                  *    * *

                                                      C-9
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           APPENDIX D

INDEPENDENT ACCOUNTANTS’ REPORT

AND AUDITED FINANCIAL STATEMENTS




              D-1
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