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132755433v2 <br /> <br /> 3 <br /> <br />amounts and at specified times sufficient to pay in full when due the principal of, premium, <br />if any, and interest on the Notes. In addition, the Loan Agreement contains provisions <br />relating to the maintenance and operation of the Project, indemnification, insurance, and <br />other agreements and covenants which are required or permitted by the Act and which the <br />City and the Borrower deem necessary or desirable for their financing of the Project. A <br />draft of the Loan Agreement has been submitted to the City Council. <br />(d) Pursuant to a Pledge Agreement (the “Pledge Agreement”) to be entered <br />into between the City and the Lender, the City has pledged and granted a security interest <br />in all of its rights, title, and interest in the Loan Agreement to the Lender (except for certain <br />rights of indemnification and to reimbursement for certain costs and expenses). A draft of <br />the Pledge Agreement has been submitted to the City Council. <br />(e) Payments due under the Loan Agreement and Notes shall also be secured <br />pursuant to a Security Agreement (the “Security Agreement”) given by the Borrower to the <br />Lender by granting a security interest in the property described therein. A draft of the <br />Security Agreement has been submitted to the City Council. <br />(f) As additional security, the Borrower will grant to the Lender a Mortgage, <br />Security Agreement, Assignment of Leases and Rents, and Fixture Financing Statement <br />(the “Mortgage”),granting a first mortgage lien on the Borrower’s facility. A draft of the <br />Mortgage has been submitted to the City Council. <br />(g) The Notes will be a special, limited obligation of the City. The Notes shall <br />not be payable from or charged upon any funds other than the revenues pledged to the <br />payment thereof, nor shall the City be subject to any liability thereon. No holder of the <br />Notes shall ever have the right to compel any exercise of the taxing power of the City to <br />pay the Notes or the interest thereon, nor to enforce payment thereof against any property <br />of the City. The Notes shall not constitute a debt of the City within the meaning of any <br />constitutional or statutory limitation. <br />(h) On the basis of information available to the City it appears, and the City <br />hereby finds, that the Project constitutes properties, real and personal, used or useful in <br />connection with an educational facility within the meaning of the Act; that the Project <br />furthers the purposes stated in the Act; that the availability of the financing under the Act <br />and the willingness of the City to furnish such financing will be a substantial inducement <br />to the Borrower to undertake the Project, and that the effect of the Project, if undertaken, <br />will be to assist in the prevention of the emergence of blighted and marginal land, to help <br />prevent chronic unemployment, to help the surrounding area retain and eventually improve <br />the tax base, to provide the range of service and employment opportunities required by the <br />population, to help prevent the movement of talented and educated persons out of the state <br />and to areas within the State where their services may not be as effectively used, and to <br />promote more intensive development and use of land within the City and surrounding <br />communities, and to provide available adequate educational services to residents of the <br />State at a reasonable cost.