BOND FINANCING

 WHEREAS, Lincoln University – of the Commonwealth System of Higher Education (the “University”) desires to enter into a financing arrangement with Pennsylvania Higher Educational Facilities Authority (the “Authority”) pursuant to which the Authority will issue revenue bonds (the “Bonds”), the proceeds of which will be applied to finance a project (the “Project”) consisting of:  (a) the current refunding of the University’s existing loan from the Educational Direct Loan Mortgage Corporation, to which Commerce Capital Access Program Corporation (“CCAPC”) is successor, in the outstanding principal amount of approximately $12.9 million (the “Existing Loan”), the proceeds of which were used in part to finance the acquisition of the University’s facilities located at 3020 Market Street (the “3020 Market St. Facility”); (b) the payment or reimbursement of the costs of construction, acquisition, installation and equipping of an approximately 400 bed residence hall and related facilities (the “Residence Hall”); (c) the funding of a debt service reserve fund for the Bonds; (d) the funding of capitalized interest; and (e) the payment of the costs associated with the issuance of the Bonds; and

WHEREAS, The Authority will issue the Bonds under and pursuant to a Trust Indenture (the “Indenture”) between the Authority and Wachovia Bank, National Association, as trustee (the “Trustee”); and

WHEREAS, It is contemplated that the Authority will loan the proceeds of the Bonds to the University for application toward the costs of the Project pursuant to a Loan and Security Agreement between the Authority and the University (the “Loan Agreement”) pursuant to which the University will be obligated to repay such loan of the proceeds of the Bonds at such times and in such amounts as will be sufficient to enable the Authority to pay the principal and redemption price of and interest on the Bonds as and when due; and

WHEREAS, To secure the Bonds, the Authority will assign to the Trustee all of the right, title and interest of the Authority in and to the Loan Agreement (except for certain rights relating to fees and expenses and indemnification of the Authority), including amounts payable by the University thereunder; and

WHEREAS, Pursuant to the Loan Agreement, the University will pledge and grant to the Authority a security interest in all or a portion of the revenues of the University; and

WHEREAS, It is contemplated that the Bonds will be purchased by Wachovia Securities and SBK Brooks Investment Corp. (the “Underwriters”) pursuant to a Bond Purchase Contract (the “Bond Purchase Contract”) among the Underwriters, the Authority and the University, and it is contemplated that the Bonds will be offered to the public by the Underwriters by means of a Preliminary Official Statement and an Official Statement with respect to the Bonds (together, the “Official Statement”); and

WHEREAS, It is contemplated that the payments of principal and interest on the Bonds will be secured by bond insurance, a letter of credit or other credit facility if it is determined by the University to be financially favorable; and

WHEREAS, If the University determines to purchase a credit facility and if the provider thereof requires a mortgage on the Residence Hall and the 3020 Market St. Facility, the appropriate officers of the University will execute and deliver the mortgage to the Trustee; and

WHEREAS, In order to assist the Underwriters in complying with their obligations under the federal securities laws, it is contemplated that the University will enter into a Continuing Disclosure Agreement (the “Continuing Disclosure Agreement”) with the Trustee; and

WHEREAS, Pending the issuance by the Authority of the Bonds, the University may enter into a bridge loan (the “Bridge Loan”) with one or more lenders, including Wachovia Bank, National Association (the “Bridge Loan Bank”), in order to provide temporary financing for Project costs, in which event the Bridge Loan will be paid with proceeds of the Bonds; and

WHEREAS, It is contemplated that the University will pay the out?of?pocket costs of issuance of the Bonds and the making of the Bridge Loan to the extent such costs are not permitted to be paid from the proceeds of the Bonds; now therefore, be it

RESOLVED, By the Board of Trustees of the University (the “Board”) as follows:

SECTION 1.  For purposes of this Resolution, each of the President and the Vice President of Fiscal Affairs of the University shall constitute an “Authorized Officer.”  Unless specifically authorized herein, all authorizations and directions herein to “Authorized Officers” shall be a joint and not several authorization, and the signature or action authorized shall require the signature or action of both such officers.  In addition, for any signature or action requiring a single officer, the Executive Committee may designate an additional “Authorized Officer” solely for such purpose.

SECTION 2.  The Project as generally outlined above is hereby authorized and approved and the University and its Authorized Officers are hereby authorized to enter into the financing arrangement with the Authority and the other parties as generally set forth above and to perform all obligations and duties thereunder or in respect thereof.

SECTION 3.  The issuance of the Bonds to finance the Project is hereby approved, provided that the aggregate principal amount of the Bonds shall not exceed $41,500,000, the net interest cost of fixed rate Bonds shall not exceed  a blended rate of 6.00% and the final maturity of the Bonds shall not be more than 40 years from the date of issuance thereof.  The Bonds may be issued in one or more series, may consist of taxable bonds and/or tax-exempt bonds, may bear interest at fixed rates and/or variable rates and may be entitled to the benefit of one or more credit facilities and/or liquidity facilities (including without limitation, one or more policies of bond insurance, letters of credit or standby bond purchase agreements (each, a “Credit Facility”)); and the Bonds, the Loan Agreement and the Indenture may contain such other terms and provisions, including provisions for creation of a security interest in all or a portion of the University’s revenues and for redemption of the Bonds prior to maturity, as shall be approved by the Executive Committee of the Board (the “Executive Committee”) or by the President of the University to the extent authority is delegated to him by the Executive Committee, with the advice of counsel, as being the most favorable to the University reasonably obtainable, such approval and the approval of the Board to be conclusively evidenced by the consummation of the issuance and sale of the Bonds.

SECTION 4.  The incurrence of the Bridge Loan to provide temporary financing for costs of the Project is hereby approved, provided that the principal amount of the Bridge Loan shall not exceed $5,000,000 and the final maturity of the Bridge Loan shall be not later than December 31, 2004.  The Bridge Loan and the financing documents related thereto (collectively, the “Bridge Loan Documents”) may contain such other terms and provisions, including provisions for creation of a security interest in favor of the Bridge Loan Bank in all or a portion of the University’s revenues and for prepayment prior to maturity, as shall be approved by the President of the University, with the advice of counsel, as being the most favorable available to the University reasonably obtainable, such approval and the approval of the Board to be conclusively evidenced by the closing of the Bridge Loan.

SECTION 5.  The Authorized Officers are hereby authorized without further approval or direction from the Board, to execute and deliver on behalf of the University, the Loan Agreement, the Bond Purchase Contract, the Continuing Disclosure Agreement and the Bridge Loan Documents, such documents to contain such terms and to be in such form as shall be approved by the officers executing the same on behalf of the University, with the advice of counsel, such approval, and the approval of the Board, to be conclusively evidenced by the execution and delivery of such documents on behalf of the University.  Any Authorized Officer of the University is hereby authorized to execute and deliver, with the advice of counsel and without further approval or direction from the Board, any and all other documents, instruments, agreements or certificates, and to do and perform such other and further acts, as may be necessary or desirable, in the sole and absolute judgment of such officers upon the advice of counsel, in order to effect, implement or consummate the Project and the above?described financing arrangement, on the most favorable terms to the University reasonably obtainable, and the acts of such officer shall be the acts of the University and shall be binding upon the University.  The Secretary or any Assistant Secretary of the Board is hereby authorized to affix and attest the corporate seal of the University to any document or instrument referred to above which requires the same.

SECTION 6.  The University hereby designates Wachovia Securities and SBK Brooks Investment Corp. as Underwriters of the Bonds and designates Wachovia Bank, National Association, as the Trustee for the Bonds.

SECTION 7.  The preparation and distribution to the public of the Official Statement, with appropriate information therein contained concerning the Bonds and the University, are hereby authorized and approved.  Any Authorized Officer is hereby authorized, without further approval or direction from the Board, to execute and deliver the Official Statement on behalf of the University, such document to be in form and substance as shall be approved by the officer executing the same on behalf of the University, with the advice of counsel, such approval and the approval of the Board to be conclusively evidenced by the execution of the Official Statement on behalf of the University.

SECTION 8.  The Authorized Officers and General Counsel of the University are hereby authorized and directed to negotiate with the CCAPC and its representatives and intermediaries the terms and conditions of the prepayment of the Existing Loan, including any prepayment penalty applicable thereto, and to cause the Existing Loan to be prepaid with proceeds of the Bonds (or other funds available for such purpose) on the terms and conditions so determined.  The University hereby authorizes the prepayment on the earliest practicable date on or after the date of issuance of the Bonds, or on such later date as the President of the University may deem most advantageous to the University, of the entire outstanding principal amount of the Existing Loan, and the Authorized Officers of the University are hereby authorized and directed to take all necessary steps to effect such prepayment.

SECTION 9.  The Board hereby authorizes and directs the Executive Committee to determine at the appropriate time whether the purchase of a Credit Facility for the Bonds is financially favorable to the University in light of the conditions proposed by the credit enhancer.  In the event the Executive Committee determines that the purchase of the Credit Facility is financially favorable to the University, the Authorized Officers are hereby authorized and directed to execute and deliver and (where applicable) the Secretary or Assistant Secretary is hereby authorized and directed to affix the corporate seal of the University to any documents necessary or appropriate to obtain such Credit Facility and as such officers shall approve, with the advice of counsel, such approval to be conclusively evidenced by their execution thereof.  The foregoing Authorized Officers are further authorized, upon the advice of counsel, to approve any appropriate changes in the Indenture, the Loan Agreement or the Bond Purchase Contract in connection with the Credit Facility, such approval to be evidenced by their execution of the Loan Agreement and the Bond Purchase Contract. 

SECTION 10.  If the University determines to purchase a Credit Facility and if the provider thereof requires a mortgage on the Residence Hall and/or the 3020 Market St. Facility, the authorized officers of the University are hereby authorized to execute and deliver the mortgage to the Trustee and the Board hereby authorizes the granting of the mortgage lien and security interest in on the Residence Hall and the 3020 Market St. Facility. 

SECTION 11.  The University hereby authorizes the payment of the out?of?pocket costs of issuance of the Bonds or the making of the Bridge Loan to the extent such costs are not permitted to be paid from the proceeds of the Bonds.

SECTION 12.  Any Authorized Officer of the University is hereby authorized and directed to execute and deliver such other documents and instruments, including but not limited to any tax certificates or agreements required to ensure compliance with the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, or any representation letters required to make the Bonds eligible for a book?entry system of registration, and to take or approve the taking of such other action as may be necessary or appropriate in order to effectuate the execution and delivery of the Indenture, the Loan Agreement, the Continuing Disclosure Agreement, the Bond Purchase Contract and the Official Statement, the issuance and sale of the Bonds, the execution and delivery of the Bridge Loan Documents, the prepayment of the Existing Loan, and the financing of the Project.

SECTION 13.  The University hereby resolves and declares its intent under Treasury Regulation § 1.150-2 to use tax-exempt bonds to finance the capital costs of the Project.  Pending issuance of the Bonds, the University may finance costs of the Project with proceeds of the Bridge Loan and/or with other funds which will be reimbursed with the proceeds of the Bonds, provided that (a) the Bonds shall not be used to reimburse any expenditure paid more than 60 days prior to the present date; (b) the Bonds shall not be issued more than 18 months after the later of (i) the date of the first expenditure to be reimbursed with the proceeds of the Bonds, or (ii) the date the Project is placed in service; and (c) in no event may the Bonds be issued more than three years after the date of the first expenditure to be reimbursed with the proceeds of the Bonds; and provided further that the limitations of this paragraph shall not apply to qualified “preliminary expenditures” as permitted by Treasury Regulation § 1.150-2(f).

SECTION 14.  This resolution shall take effect immediately.  All resolutions or parts of resolutions inconsistent herewith are, to the extent so inconsistent, hereby repealed and rescinded and shall henceforth be of no further force and effect.

The Undersigned, Secretary of the Board of Trustees of Lincoln University, hereby certifies that the foregoing is a true and correct copy of the Resolution adopted by the Board at a meeting thereof held on April 17, 2004, which meeting was duly called in accordance with the Bylaws of the University and at which meeting a quorum was present at all times.

Date:________________________   __________________________________
                                                                             Secretary

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