$300,000,000* BROWN UNIVERSITY Taxable Bonds, Series …This Preliminary Offering Memorandum and the information contained herein are subject to completion, amendment or other change

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n.PRELIMINARY OFFERING MEMORANDUM DATED MAY 13, 2020

NEW ISSUE – BOOK-ENTRY ONLY RATINGS: See “RATINGS” herein

$300,000,000*BROWN UNIVERSITY

Taxable Bonds, Series 2020A

_____% Bonds, due September 1, 2030* Issue Price: ___% CUSIP+ ________

_____% Bonds, due September 1, 2050* Issue Price: ___% CUSIP+ ________

Interest payable: March 1 and September 1 Dated: Date of Delivery

The Brown University Taxable Bonds, Series 2020A (the “Bonds”), will be issued pursuant to the terms of an Indenture of Trust, dated as of May 1, 2020 (the “Indenture”), between Brown University in Providence in the State of Rhode Island and Providence Plantations (the “University”) and U.S. Bank National Association, as trustee (the “Trustee”). The proceeds of the Bonds will be used by the University for general corporate purposes and to pay costs of issuance.

The Bonds will be issued in fully registered form in denominations of $1,000 and any integral multiple thereof and, when issued, will be registered under a book-entry only system in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Individual purchases will be made in book-entry form only, in principal amounts of $1,000 and any integral multiple thereof. Purchasers of the Bonds will not receive physical certificates (except under certain circumstances described in the Indenture) representing their ownership interests in the Bonds purchased.

Interest on the Bonds will be payable on March 1 and September 1 of each year, commencing on September 1, 2020.* So long as the Bonds are held by DTC, the principal, Make-Whole Redemption Price or other redemption proceeds of and interest on the Bonds will be payable by wire transfer to DTC, which in turn is required to remit such principal, interest, Make-Whole Redemption Price or other redemption proceeds to the DTC Participants for subsequent disbursement to the Beneficial Owners of the Bonds, as more fully described in “BOOK-ENTRY ONLY SYSTEM AND GLOBAL CLEARANCE PROCEDURES” herein.

The Bonds are subject to optional redemption prior to their stated maturity as described herein. See “THE BONDS – Redemption” herein.

Interest, redemption price and profit, if any, on the sale of the Bonds, are not excludable from gross income for federal or state income tax purposes. See “CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS” herein.

The Bonds constitute unsecured general obligations of the University. The University has other unsecured general obligations outstanding. See APPENDIX A – “CERTAIN INFORMATION RELATING TO BROWN UNIVERSITY – Long-Term Indebtedness” and APPENDIX B – “FINANCIAL STATEMENTS OF BROWN UNIVERSITY” attached hereto. Moreover, the University is not restricted by the Indenture or otherwise from incurring additional indebtedness. Such additional indebtedness, if issued, may be either secured or unsecured and may be entitled to payment prior to payment on the Bonds. See “SECURITY FOR THE BONDS” herein.

This cover page contains certain information for quick reference only. It is not intended to be a summary of this issue. Investors must read the entire Offering Memorandum to obtain information essential to the making of an informed investment decision.

The Bonds are offered by the Underwriters, when, as and if issued by the University and accepted by the Underwriters, subject to the approval of legality by Locke Lord LLP, Providence, Rhode Island, counsel to the University. In addition, certain other legal matters will be passed upon for the Underwriters by their counsel, Hinckley, Allen & Snyder LLP, Boston, Massachusetts. It is expected that the Bonds will be available for delivery through the facilities of DTC in New York, New York on or about _______, 2020.

BofA Securities Goldman Sachs & Co. LLC

_______, 2020

* Preliminary, subject to change.+ CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (“CGS”) is managed on behalf

of the American Bankers Association by S&P Capital IQ. Copyright© 2020 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. The CUSIP® number listed above is being provided solely for the convenience of Bondowners only at the time of issuance of the Bonds, and no representation is made with respect to the correctness thereof. The CUSIP® number is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part. None of the University, the Underwriters or the Trustee has agreed to, nor is there any duty or obligation to, update this Offering Memorandum to reflect any change or correction in the CUSIP® number printed above.

TABLE OF CONTENTS Page

GENERAL INFORMATION ....................................................................................................................................... i INFORMATION CONCERNING OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS

OUTSIDE THE UNITED STATES .............................................................................................................. ii SUMMARY OF THE OFFERING ............................................................................................................................ vi INTRODUCTION ....................................................................................................................................................... 1

Purpose of this Offering Memorandum ......................................................................................................... 1 Purpose of the Bonds and the Plan of Finance .............................................................................................. 1 The University ............................................................................................................................................... 1 The Bonds ..................................................................................................................................................... 1 Security for the Bonds ................................................................................................................................... 2 Additional Bonds; Additional Indebtedness .................................................................................................. 2 Outstanding Indebtedness .............................................................................................................................. 2 Redemption ................................................................................................................................................... 2 Certain Information Related to this Offering Memorandum ......................................................................... 2

PLAN OF FINANCE .................................................................................................................................................. 3 ESTIMATED SOURCES AND USES OF FUNDS ................................................................................................... 3 THE BONDS ............................................................................................................................................................... 3

Description of the Bonds ............................................................................................................................... 3 Book-Entry Only System and Global Clearance Procedures ........................................................................ 4 Redemption ................................................................................................................................................... 5 Partial Redemption of Bonds ........................................................................................................................ 5 Notice of Redemption ................................................................................................................................... 5 Effect of Redemption .................................................................................................................................... 6 Selection of Bonds for Redemption .............................................................................................................. 6

SECURITY FOR THE BONDS .................................................................................................................................. 7 General .......................................................................................................................................................... 7 Certain Funds and Accounts Established by the Indenture ........................................................................... 7

CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS ..................................................................... 7 CERTAIN ERISA AND BENEFIT PLAN CONSIDERATIONS ............................................................................ 12 UNDERWRITING .................................................................................................................................................... 13 CERTAIN RELATIONSHIPS .................................................................................................................................. 14 CONTINUING DISCLOSURE ................................................................................................................................. 14 FINANCIAL ADVISOR ........................................................................................................................................... 14 APPROVAL OF LEGALITY ................................................................................................................................... 15 FINANCIAL STATEMENTS ................................................................................................................................... 15 RATINGS .................................................................................................................................................................. 15 MISCELLANEOUS .................................................................................................................................................. 15 CERTAIN INFORMATION RELATING TO BROWN UNIVERSITY ............................................... APPENDIX A FINANCIAL STATEMENTS OF BROWN UNIVERSITY .................................................................. APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE ...................................................... APPENDIX C PROPOSED FORM OF OPINION OF COUNSEL TO THE UNIVERSITY ........................................ APPENDIX D DTC BOOK-ENTRY ONLY SYSTEM AND GLOBAL CLEARANCE PROCEDURES .................... APPENDIX E

i

GENERAL INFORMATION This Offering Memorandum does not constitute an offer to sell the Bonds in any jurisdiction in which, or to

any person to whom, it is unlawful to make such an offer. No dealer, salesperson or other person has been authorized by BofA Securities, Inc. and Goldman Sachs & Co. LLC (collectively, the “Underwriters”) or the University to give any information or to make any representations, other than those contained herein, in connection with the offering of the Bonds and, if given or made, such information or representations must not be relied upon.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Bonds, or determined that this Offering Memorandum is accurate or complete. Any representation to the contrary is a criminal offense. The Bonds have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and are being issued in reliance on an exemption or on exemptions contained therein. The Bonds are not exempt in every jurisdiction in the United States; some jurisdictions’ securities laws (the “blue sky laws”) may require a filing and a fee to secure the Bonds’ exemption from registration.

The distribution of this Offering Memorandum and the offer or sale of Bonds may be restricted by law in certain jurisdictions. Neither the University nor the Underwriters represent that this Offering Memorandum may be lawfully distributed, or that any Bonds may be lawfully offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the University or the Underwriters that would permit a public offering of any of the Bonds or distribution of this Offering Memorandum in any jurisdiction where action for that purpose is required. To be clear, action may be required to secure exemptions from the blue sky registration requirements either for the primary distributions or any secondary sales that may occur. Accordingly, none of the Bonds may be offered or sold, directly or indirectly, and neither this Offering Memorandum nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations.

All information set forth herein has been obtained from the University and other sources. Estimates and opinions are included and should not be interpreted as statements of fact. Summaries of documents do not purport to be complete statements of their provisions. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Offering Memorandum nor any sale made hereunder will, under any circumstances, create any implication that there has been no change in the affairs of the University since the date hereof.

Certain statements included or incorporated by reference in this Offering Memorandum constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget,” “intend,” “projection” or other similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information in APPENDIX A – “CERTAIN INFORMATION RELATING TO BROWN UNIVERSITY” and APPENDIX B – “FINANCIAL STATEMENTS OF BROWN UNIVERSITY.” A number of important factors, including factors affecting the University’s financial condition and factors that are otherwise unrelated thereto, could cause actual results to differ materially from those stated in such forward-looking statements. THE UNIVERSITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.

The Underwriters have provided the following sentence for inclusion in this Offering Memorandum. The Underwriters have reviewed the information in this Offering Memorandum in accordance with, and as part of, their responsibility to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information.

References to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such websites and the information or links contained therein are not incorporated into, and are not part of, this Offering Memorandum.

ii

INFORMATION CONCERNING OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS OUTSIDE THE UNITED STATES

REFERENCES IN THIS SECTION TO THE “ISSUER” MEAN BROWN UNIVERSITY IN PROVIDENCE IN THE STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS AND REFERENCES TO “BONDS” OR “SECURITIES” MEAN THE BROWN UNIVERSITY TAXABLE BONDS, SERIES 2020A OFFERED HEREBY.

MINIMUM UNIT SALES

THE BONDS WILL TRADE AND SETTLE ON A UNIT BASIS (ONE UNIT EQUALING ONE BOND OF $1,000 PRINCIPAL AMOUNT). FOR ANY SALES MADE OUTSIDE THE UNITED STATES, THE MINIMUM PURCHASE AND TRADING AMOUNT IS 150 UNITS (BEING 150 BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF $150,000).

NOTICE TO PROSPECTIVE INVESTORS IN THE EUROPEAN ECONOMIC AREA

THIS OFFERING MEMORANDUM HAS BEEN PREPARED ON THE BASIS THAT ALL OFFERS OF THE SECURITIES TO ANY PERSON THAT IS LOCATED WITHIN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (“EEA”) WILL BE MADE PURSUANT TO AN EXEMPTION UNDER ARTICLE 1(4) REGULATION (EU) 2017/1129 (THE “PROSPECTUS REGULATION”) FROM THE REQUIREMENT TO PRODUCE A PROSPECTUS FOR OFFERS OF THE SECURITIES. ACCORDINGLY, ANY PERSON MAKING OR INTENDING TO MAKE ANY OFFER TO ANY PERSON LOCATED WITHIN A MEMBER STATE OF THE EEA OF THE SECURITIES SHOULD ONLY DO SO IN CIRCUMSTANCES IN WHICH NO OBLIGATION ARISES FOR THE ISSUER OR ANY OF THE INITIAL PURCHASERS TO PRODUCE A PROSPECTUS OR SUPPLEMENT FOR SUCH AN OFFER. NEITHER THE ISSUER NOR THE INITIAL PURCHASERS HAVE AUTHORIZED, NOR DO THEY AUTHORIZE, THE MAKING OF ANY OFFER OF SECURITIES THROUGH ANY FINANCIAL INTERMEDIARY, OTHER THAN OFFERS MADE BY THE INITIAL PURCHASERS, WHICH CONSTITUTE THE FINAL PLACEMENT OF THE SECURITIES CONTEMPLATED IN THIS OFFERING MEMORANDUM.

THE OFFER OF ANY SECURITIES WHICH IS THE SUBJECT OF THE OFFERING CONTEMPLATED BY THIS OFFERING MEMORANDUM IS NOT BEING MADE AND WILL NOT BE MADE TO THE PUBLIC IN ANY MEMBER STATE OF THE EEA, OTHER THAN: (A) TO ANY LEGAL ENTITY WHICH IS A “QUALIFIED INVESTOR” AS SUCH TERM IS DEFINED IN THE PROSPECTUS REGULATION; (B) TO FEWER THAN 150 NATURAL OR LEGAL PERSONS (OTHER THAN “QUALIFIED INVESTORS” AS SUCH TERM IS DEFINED IN THE PROSPECTUS REGULATION)OR (C) IN ANY OTHER CIRCUMSTANCES FALLING WITHIN ARTICLE 1(4) OF THE PROSPECTUS REGULATION, SUBJECT TO OBTAINING THE PRIOR CONSENT OF THE RELEVANT UNDERWRITER OR THE CORPORATION FOR ANY SUCH OFFER; PROVIDED THAT NO SUCH OFFER OF THE SECURITIES SHALL REQUIRE THE ISSUER OR THE INITIAL PURCHASERS TO PUBLISH A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS REGULATION OR A SUPPLEMENT TO A PROSPECTUS PURSUANT TO ARTICLE 23 OF THE PROSPECTUS REGULATION.

FOR THE PURPOSES OF THIS PROVISION, THE EXPRESSION AN “OFFER OF SECURITIES TO THE PUBLIC” IN RELATION TO THE SECURITIES IN ANY MEMBER STATE OF THE EEA MEANS THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE SECURITIES TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE THE SECURITIES.

EACH SUBSCRIBER FOR OR PURCHASER OF THE BONDS IN THE OFFERING LOCATED WITHIN A MEMBER STATE WILL BE DEEMED TO HAVE REPRESENTED, ACKNOWLEDGED AND AGREED THAT IT IS A “QUALIFIED INVESTOR” AS DEFINED IN THE PROSPECTUS REGULATION. THE ISSUER AND EACH UNDERWRITER AND OTHERS WILL RELY ON THE TRUTH AND ACCURACY OF THE FOREGOING REPRESENTATION, ACKNOWLEDGEMENT AND AGREEMENT.

PROHIBITION OF SALES TO EEA RETAIL INVESTORS – THE BONDS ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD

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OR OTHERWISE MADE AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA. FOR THESE PURPOSES, A RETAIL INVESTOR MEANS A PERSON WHO IS ONE (OR MORE) OF: (I) A RETAIL CLIENT AS DEFINED IN POINT (11) OF ARTICLE 4(1) OF DIRECTIVE 2014/65/EU (AS AMENDED, “MIFID II”); OR (II) A CUSTOMER WITHIN THE MEANING OF DIRECTIVE (EU) 2016/97 (THE “INSURANCE DISTRIBUTION DIRECTIVE”), WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT AS DEFINED IN POINT (10) OF ARTICLE 4(1) OF MIFID II. CONSEQUENTLY NO KEY INFORMATION DOCUMENT REQUIRED BY REGULATION (EU) NO 1286/2014 (THE “PRIIPS REGULATION”) FOR OFFERING OR SELLING THE NOTES OR OTHERWISE MAKING THEM AVAILABLE TO RETAIL INVESTORS IN THE EEA HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE NOTES OR OTHERWISE MAKING THEM AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA MAY BE UNLAWFUL UNDER THE PRIIPS REGULATION.

NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED KINGDOM

THIS OFFERING MEMORANDUM IS FOR DISTRIBUTION ONLY TO, AND IS DIRECTED SOLELY AT, PERSONS WHO (I) ARE OUTSIDE THE UNITED KINGDOM, (II) ARE INVESTMENT PROFESSIONALS, AS SUCH TERM IS DEFINED IN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE “FINANCIAL PROMOTION ORDER”), (III) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE FINANCIAL PROMOTION ORDER, OR (IV) ARE PERSONS TO WHOM AN INVITATION OR INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000) IN CONNECTION WITH THE ISSUE OR SALE OF ANY BONDS MAY OTHERWISE BE LAWFULLY COMMUNICATED OR CAUSED TO BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THIS OFFERING MEMORANDUM IS DIRECTED ONLY AT RELEVANT PERSONS AND MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS OFFERING MEMORANDUM RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. ANY PERSON WHO IS NOT A RELEVANT PERSON SHOULD NOT ACT OR RELY ON THIS OFFERING MEMORANDUM OR ANY OF ITS CONTENTS.

NOTICE TO PROSPECTIVE INVESTORS IN SWITZERLAND

THE BONDS MAY NOT BE PUBLICLY OFFERED, DIRECTLY OR INDIRECTLY, IN SWITZERLAND WITHIN THE MEANING OF THE SWISS FINANCIAL SERVICES ACT (THE “FINSA”), AND NO APPLICATION HAS OR WILL BE MADE TO ADMIT THE BONDS TO TRADING ON ANY TRADING VENUE (EXCHANGE OR MULTILATERAL TRADING FACILITY) IN SWITZERLAND. NEITHER THIS OFFERING MEMORANDUM NOR ANY OTHER OFFERING OR MARKETING MATERIAL RELATING TO THE BONDS (1) CONSTITUTES A PROSPECTUS PURSUANT TO THE FINSA OR (2) HAS BEEN OR WILL BE FILED WITH OR APPROVED BY A SWISS REVIEW BODY PURSUANT TO ARTICLE 52 OF THE FINSA, AND NEITHER THIS OFFERING MEMORANDUM NOR ANY OTHER OFFERING OR MARKETING MATERIAL RELATING TO THE BONDS MAY BE PUBLICLY DISTRIBUTED OR OTHERWISE MADE PUBLICLY AVAILABLE IN SWITZERLAND.

NOTICE TO PROSPECTIVE INVESTORS IN CANADA

THE BONDS MAY BE SOLD ONLY TO PURCHASERS PURCHASING, OR DEEMED TO BE PURCHASING, AS PRINCIPAL THAT ARE ACCREDITED INVESTORS, AS DEFINED IN NATIONAL INSTRUMENT 45-106 PROSPECTUS EXEMPTIONS OR SUBSECTION 73.3(1) OF THE SECURITIES ACT (ONTARIO), AND ARE PERMITTED CLIENTS, AS DEFINED IN NATIONAL INSTRUMENT 31-103 REGISTRATION REQUIREMENTS, EXEMPTIONS AND ONGOING REGISTRANT OBLIGATIONS. ANY RESALE OF THE BONDS MUST BE MADE IN ACCORDANCE WITH AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE PROSPECTUS REQUIREMENTS OF APPLICABLE SECURITIES LAWS.

SECURITIES LEGISLATION IN CERTAIN PROVINCES OR TERRITORIES OF CANADA MAY PROVIDE A PURCHASER WITH REMEDIES FOR RESCISSION OR DAMAGES IF THIS OFFERING

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MEMORANDUM (INCLUDING ANY AMENDMENT THERETO) CONTAINS A MISREPRESENTATION, PROVIDED THAT THE REMEDIES FOR RESCISSION OR DAMAGES ARE EXERCISED BY THE PURCHASER WITHIN THE TIME LIMIT PRESCRIBED BY THE SECURITIES LEGISLATION OF THE PURCHASER’S PROVINCE OR TERRITORY. THE PURCHASER SHOULD REFER TO ANY APPLICABLE PROVISIONS OF THE SECURITIES LEGISLATION OF THE PURCHASER’S PROVINCE OR TERRITORY FOR PARTICULARS OF THESE RIGHTS OR CONSULT WITH A LEGAL ADVISOR.

PURSUANT TO SECTION 3A.3 OF NATIONAL INSTRUMENT 33-105 UNDERWRITING CONFLICTS (“NI 33-105”), THE UNDERWRITERS ARE NOT REQUIRED TO COMPLY WITH THE DISCLOSURE REQUIREMENTS OF NI 33-105 REGARDING UNDERWRITER CONFLICTS OF INTEREST IN CONNECTION WITH THIS OFFERING.

NOTICE TO PROSPECTIVE INVESTORS IN HONG KONG

WARNING. THE CONTENTS OF THIS OFFERING MEMORANDUM HAVE NOT BEEN REVIEWED BY ANY REGULATORY AUTHORITY IN HONG KONG. YOU ARE ADVISED TO EXERCISE CAUTION IN RELATION TO THE OFFER OF THE BONDS. IF YOU ARE IN ANY DOUBT ABOUT ANY OF THE CONTENTS OF THIS DOCUMENT, YOU SHOULD OBTAIN INDEPENDENT PROFESSIONAL ADVICE.

THIS DOCUMENT HAS NOT BEEN, AND WILL NOT BE, REGISTERED AS A PROSPECTUS IN HONG KONG NOR HAS IT BEEN APPROVED BY THE SECURITIES AND FUTURES COMMISSION OF HONG KONG PURSUANT TO THE SECURITIES AND FUTURES ORDINANCE (CHAPTER 571 OF THE LAWS OF HONG KONG) (“SFO”). THE BONDS MAY NOT BE OFFERED OR SOLD IN HONG KONG BY MEANS OF THIS DOCUMENT OR ANY OTHER DOCUMENT, AND THIS DOCUMENT MUST NOT BE ISSUED, CIRCULATED OR DISTRIBUTED IN HONG KONG, OTHER THAN TO `PROFESSIONAL INVESTORS’ AS DEFINED IN THE SFO AND ANY RULES MADE THEREUNDER. IN ADDITION, NO PERSON MAY ISSUE OR HAVE IN ITS POSSESSION FOR THE PURPOSES OF ISSUE, WHETHER IN HONG KONG OR ELSEWHERE, ANY ADVERTISEMENT, INVITATION OR DOCUMENT RELATING TO THE BONDS, WHICH IS DIRECTED AT, OR THE CONTENTS OF WHICH ARE LIKELY TO BE ACCESSED OR READ BY, THE PUBLIC OF HONG KONG (EXCEPT IF PERMITTED TO DO SO UNDER THE SECURITIES LAWS OF HONG KONG) OTHER THAN WITH RESPECT TO BONDS WHICH ARE OR ARE INTENDED TO BE DISPOSED OF ONLY (A) TO PERSONS OUTSIDE HONG KONG, OR (B) TO `PROFESSIONAL INVESTORS’ AS DEFINED IN THE SFO AND ANY RULES MADE THEREUNDER.

NOTICE TO PROSPECTIVE INVESTORS IN JAPAN

THE BONDS HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER ARTICLE 4, PARAGRAPH 1 OF THE FINANCIAL INSTRUMENTS AND EXCHANGE ACT OF JAPAN (ACT NO.25 OF 1948, AS AMENDED THE "FIEA"). IN RELIANCE UPON THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS SINCE THE OFFERING CONSTITUTES THE PRIVATE PLACEMENT TO QUALIFIED INSTITUTIONAL INVESTORS ONLY AS PROVIDED FOR IN "I" OF ARTICLE 2, PARAGRAPH 3, ITEM 2 OF THE FIFEA. A TRANSFEROR OF THE BONDS SHALL NOT TRANSFER OR RESELL THEM EXCEPT WHERE A TRANSFEREE IS A QUALIFIED INSTITUTIONAL INVESTORS AS DEFINED UNDER ARTICLE 10 OF THE CABINET OFFICE ORDINANCE CONCERNING DEFINITIONS PROVIDED IN ARTICLE 2 OF THE FIEA (THE MINISTRY OF FINANCE ORDINANCE NO.14 OF 1993, AS AMENDED).

NOTICE TO PROSPECTIVE INVESTORS IN SOUTH KOREA

THIS OFFERING MEMORANDUM IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE CONSIDERED AS, A PUBLIC OFFERING OF SECURITIES IN SOUTH KOREA FOR THE PURPOSES OF THE FINANCIAL INVESTMENT SERVICES AND CAPITAL MARKET ACT OF KOREA. THE BONDS HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE FINANCIAL SERVICES COMMISSION OF SOUTH KOREA FOR PUBLIC OFFERING IN SOUTH KOREA UNDER THE FINANCIAL INVESTMENT SERVICES AND CAPITAL MARKETS ACT AND ITS SUBORDINATE DECREES AND REGULATIONS (COLLECTIVELY, THE “FSCMA”). THE BONDS MAY NOT BE OFFERED, REMARKETED, SOLD OR

v

DELIVERED, DIRECTLY OR INDIRECTLY, OR OFFERED, REMARKETED OR SOLD TO ANY PERSON FOR RE-OFFERING OR RESALE, DIRECTLY OR INDIRECTLY, IN SOUTH KOREA OR TO ANY RESIDENT OF SOUTH KOREA EXCEPT AS OTHERWISE PERMITTED UNDER THE APPLICABLE LAWS AND REGULATIONS OF SOUTH KOREA, INCLUDING THE FSCMA AND THE FOREIGN EXCHANGE TRANSACTION LAW AND ITS SUBORDINATE DECREES AND REGULATIONS (COLLECTIVELY, THE “FETL”). WITHOUT PREJUDICE TO THE FOREGOING, THE NUMBER OF INVESTORS OFFERED IN SOUTH KOREA OR THE NUMBER OF INVESTORS WHO ARE RESIDENTS IN SOUTH KOREA SHALL BE LESS THAN FIFTY AND FOR A PERIOD OF ONE YEAR FROM THE ISSUE DATE OF THE BONDS, NONE OF THE BONDS MAY BE DIVIDED RESULTING IN AN INCREASED NUMBER OF THE BONDS. FURTHERMORE, THE BONDS MAY NOT BE RESOLD TO SOUTH KOREAN RESIDENTS UNLESS THE PURCHASER OF THE BONDS COMPLIES WITH ALL APPLICABLE REGULATORY REQUIREMENTS (INCLUDING BUT NOT LIMITED TO GOVERNMENT REPORTING REQUIREMENTS UNDER THE FETL) IN CONNECTION WITH THE PURCHASE OF THE BONDS.

NOTICE TO PROSPECTIVE INVESTORS IN TAIWAN

THE BONDS HAVE NOT BEEN AND WILL NOT BE REGISTERED OR FILED WITH, OR APPROVED BY THE FINANCIAL SUPERVISORY COMMISSION OF TAIWAN, THE REPUBLIC OF CHINA ("TAIWAN") AND/OR OTHER REGULATORY AUTHORITY OR AGENCY OF TAIWAN PURSUANT TO RELEVANT SECURITIES LAWS AND REGULATIONS OF TAIWAN AND MAY NOT BE ISSUED, OFFERED, OR SOLD IN TAIWAN THROUGH A PUBLIC OFFERING OR IN CIRCUMSTANCES WHICH CONSTITUTE AN OFFER WITHIN THE MEANING OF THE SECURITIES AND EXCHANGE ACT OF TAIWAN OR RELEVANT LAWS AND REGULATIONS THAT REQUIRES A REGISTRATION, FILING OR APPROVAL OF THE FINANCIAL SUPERVISORY COMMISSION AND/OR OTHER REGULATORY AUTHORITY OR AGENCY OF TAIWAN. NO PERSON OR ENTITY IN TAIWAN HAS BEEN AUTHORISED TO OFFER OR SELL THE BONDS IN TAIWAN.

vi

SUMMARY OF THE OFFERING*

Issuer Brown University in Providence in the State of Rhode Island and Providence Plantations

Securities Offered $___________ _____% Taxable Bonds, Series 2020A due September 1, 2030; price ___%; $___________ _____% Taxable Bonds, Series 2020A due September 1, 2050; price ___%

Interest Accrual Dates Interest will accrue from the Date of Issuance

Interest Payment Dates March 1 and September 1 of each year, commencing September 1, 2020*

Redemption The Bonds are subject to optional redemption at either (i) the Make-Whole Redemption Price prior to the Par Call Date, or (ii) on or after the Par Call Date at a redemption price discussed more fully herein. See “THE BONDS – Redemption.”

Date of Issuance ________, 2020

Authorized Denominations $1,000 and any integral multiple thereof

Form and Depository The Bonds will be delivered solely in registered form under a global book-entry system through the facilities of DTC.

Use of Proceeds The University will use the net proceeds of the Bonds for general corporate purposes and to pay costs of issuance.

Ratings Moody’s: Aa1 S&P: AA+

* Preliminary, subject to change.

OFFERING MEMORANDUM

Relating to

$300,000,000*

BROWN UNIVERSITY TAXABLE BONDS, SERIES 2020A

INTRODUCTION

Purpose of this Offering Memorandum

The purpose of this Offering Memorandum, which includes the cover page, the table of contents and appendices, is to provide certain information concerning the sale and delivery by Brown University in Providence in the State of Rhode Island and Providence Plantations (the “University”) of $300,000,000* aggregate principal amount of its Brown University Taxable Bonds, Series 2020A (the “Bonds”). This Introduction contains only a brief summary of certain terms of the Bonds being offered and a brief description of the Offering Memorandum. All statements contained in this Introduction are qualified in their entirety by reference to the entire Offering Memorandum.

Purpose of the Bonds and the Plan of Finance

The proceeds from the sale of the Bonds are expected to be used by the University for general corporate purposes and to pay costs of issuance. See “ESTIMATED SOURCES AND USES OF FUNDS.”

The University

The University is an educational corporation existing under the laws of the State of Rhode Island and Providence Plantations (the “State”). Important information on the financial condition of the University is set forth in APPENDIX A – “CERTAIN INFORMATION RELATING TO BROWN UNIVERSITY” and APPENDIX B – “FINANCIAL STATEMENTS OF BROWN UNIVERSITY” attached hereto, both of which should be read in their entirety.

The global outbreak of the coronavirus COVID-19 (“COVID-19”) and measures taken by federal, state and local governments in response thereto are impacting individuals and businesses in a manner that to an unknown extent will have negative effects on economic activity across the country and the State, and may adversely affect the financial condition and operations of the University. For a description of certain of the impacts of the COVID-19 pandemic on the University, see APPENDIX A – “CERTAIN INFORMATION RELATING TO BROWN UNIVERSITY – Impact of COVID-19 Pandemic.”

The Bonds

The Bonds are being issued pursuant to an Indenture of Trust, dated as of May 1, 2020 (the “Indenture”), between the University and U.S. Bank National Association, as trustee (the “Trustee”). Pursuant to the Indenture, on each Payment Date, until the principal of and interest on the Bonds shall have been fully paid or provision for such payment shall have been made as provided in the Indenture, the University will pay the Trustee a sum equal to the amount payable on such Payment Date as principal of or interest on the Bonds. See “THE BONDS” herein.


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Security for the Bonds

The Bonds constitute unsecured general obligations of the University. The University has other unsecured general obligations outstanding. See “Outstanding Indebtedness” below. Moreover, the University is not restricted by the Indenture or otherwise from incurring additional indebtedness. Such additional indebtedness, if issued, may be either secured or unsecured and may be entitled to payment prior to payment on the Bonds. See “SECURITY FOR THE BONDS” herein.

Additional Bonds; Additional Indebtedness

The University may, from time to time, without the consent of the Bondholders, issue additional bonds under the Indenture in addition to the Bonds (“Additional Bonds”). Additional Bonds shall be authorized by a Supplemental Indenture. Each Supplemental Indenture authorizing the issuance of Additional Bonds shall specify the following: (i) the authorized principal amount of Additional Bonds to be issued; (ii) the first Interest Payment Date for the Additional Bonds; (iii) directions for the applications of the proceeds of the Additional Bonds; and (iv) such other provisions as the University deems advisable and as are not materially adverse to the Holders of the Outstanding Bonds issued prior to such Additional Bonds.

Additional Bonds so authorized shall be issued from time to time and in such amounts as directed by the University, shall be authenticated by the Trustee and shall be delivered by the Trustee to or upon the order of the University upon receipt of the consideration therefor. All such Additional Bonds shall mature on the maturity date for the Bonds and shall bear interest at the same rate per annum as the Bonds. Additional Bonds shall: (i) be identical in all respects to the Bonds except for their date of issuance and initial Interest Payment Date; (ii) without limiting the foregoing, be subject to redemption at the same times and at the same redemption price as the Bonds, provided that the mandatory sinking fund redemptions for any Additional Bonds shall be structured in a manner that produces a weighted average life for such Additional Bonds that is equal to the remaining weighted average life of the Bonds as of the issuance date of such Additional Bonds; and (iii) following the initial Interest Payment Date for the applicable Additional Bonds, or upon issuance, if such Additional Bonds are issued on an Interest Payment Date, bear the same CUSIP identifier as the Bonds.

Outstanding Indebtedness

The University has other unsecured general obligations outstanding. As of June 30, 2019, the outstanding indebtedness of the University totaled approximately $743.95 million (not including unamortized premium). Upon delivery of the Bonds, the total outstanding principal amount of indebtedness (not including any draws on an existing line of credit) is expected to be approximately $1.015 billion.

For additional information regarding the outstanding indebtedness of the University, see APPENDIX A – “CERTAIN INFORMATION RELATING TO BROWN UNIVERSITY – Long-Term Indebtedness” and APPENDIX B – “FINANCIAL STATEMENTS OF BROWN UNIVERSITY” attached hereto.

Redemption*

The Bonds are subject to optional redemption by the University prior to maturity at the redemption price as described herein. See “THE BONDS – Redemption” herein.

Certain Information Related to this Offering Memorandum

The descriptions herein of the Indenture and other documents relating to the Bonds do not purport to be complete and are qualified in their entirety by reference to such documents, and the description herein of the Bonds is qualified in its entirety by the form thereof and the information with respect thereto included in such documents. See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE” attached hereto for a brief summary of the Indenture, including descriptions of certain duties of the Trustee, rights and remedies of the Trustee and


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the Bondholders upon an Event of Default, and provisions relating to amendments of the Indenture and procedures for defeasance of the Bonds.

All capitalized terms used in this Offering Memorandum and not otherwise defined herein have the same meanings as in the Indenture. See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE” attached hereto for definitions of certain words and terms used but not otherwise defined herein.

The information and expressions of opinion herein speak only as of their date and are subject to change without notice. Neither delivery of this Offering Memorandum nor any sale made hereunder nor any future use of this Offering Memorandum will, under any circumstances, create any implication that there has been no change in the affairs of the University.

PLAN OF FINANCE

The proceeds of the Bonds are expected to be applied to (i) general corporate purposes of the University and (ii) pay the costs of issuance of the Bonds.

ESTIMATED SOURCES AND USES OF FUNDS

The table below sets forth the estimated sources and uses of funds (rounded to the nearest dollar) in connection with the issuance of the Bonds.

Sources of Funds: Total Principal Amount of Bonds ............................................................. $__________ Original Issue Premium ................................................................... __________

Total Sources .............................................................................. $__________ Uses of Funds:

General Corporate Purposes............................................................. $__________ Costs of Issuance* ............................................................................ __________

Total Uses ................................................................................... $__________ * Includes Underwriters’ discount, legal fees, rating agency fees and other issuance expenses.

THE BONDS

Description of the Bonds

The Bonds will be dated as of the date of their original issuance and will bear interest and mature (subject to prior redemption) as shown on the cover page hereof.

Interest on the Bonds will be payable on March 1 and September 1 of each year (each, an “Interest Payment Date”), commencing on September 1, 2020,* and will be calculated on the basis of a three hundred sixty (360) day year consisting of twelve (12) thirty (30) day months.

The principal and redemption price of the Bonds will be payable by check or by wire transfer of immediately available funds in lawful money of the United States of America at the Designated Office of the Trustee.

Interest on the Bonds will be payable from the later of (i) the dated date of the Bonds and (ii) the most recent Interest Payment Date to which interest has been paid or duly provided for. Payment of the interest on each Interest Payment Date will be made to the Person whose name appears on the bond registration books of the Trustee as the Holder thereof as of the close of business on the Record Date for each Interest Payment Date, such interest to be paid by check mailed by first class mail to such Holder at its address as it appears on such registration books, or, upon the


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written request of any Holder of at least $1,000,000 in aggregate principal amount of Bonds, submitted to the Trustee at least one (1) Business Day prior to the Record Date, by wire transfer on the Interest Payment Date in immediately available funds to an account within the United States designated by such Holder. The Record Date is the fifteenth day of the month (whether or not a Business Day) immediately preceding each Interest Payment Date.

Notwithstanding the foregoing, as long as the Securities Depository is the Holder of all or part of the Bonds in Book-Entry Form, said payments of principal, interest, Make-Whole Redemption Price (as defined herein), or other redemption proceeds will be made to the Securities Depository by wire transfer in immediately available funds.

Book-Entry Only System and Global Clearance Procedures

The Bonds will be issued in fully registered form and, when issued, will be held by the Securities Depository through Cede & Co., as its nominee, as securities depository with respect to the Bonds. Individual purchases of interests in the Bonds will be made in book-entry form only, in the principal amount of $1,000 or any multiple integral thereof for sales made within the United States. For sales made outside the United States, the minimum purchase and trading amount for the Bonds is 150 units (i.e., 150 Bonds in an aggregate principal amount of $150,000) as described herein. Individual purchasers will not receive physical delivery of bond certificates. So long as Cede & Co. is the registered owner of the Bonds as nominee of the Securities Depository, references herein to the holders or registered owners of the Bonds will mean Cede & Co. and will not mean the beneficial owners of the Bonds. Beneficial interests in the Bonds may be held through the Securities Depository, Clearstream Banking, S.A. (“Clearstream Banking”) or Euroclear Bank S.A./N.V. (“Euroclear”) as operator of the Euroclear System, directly as a participant or indirectly through organizations that are participants in such system. See APPENDIX E - “DTC BOOK-ENTRY ONLY SYSTEM AND GLOBAL CLEARANCE PROCEDURES.”

As long as the Bonds are held by the Securities Depository or its nominee, interest will be paid to Cede & Co., as nominee of the Securities Depository in immediately available funds on each Interest Payment Date. In the event the University determines that it is in the best interests of the Beneficial Owners (defined herein) that they be able to obtain Bond certificates, the University will so notify the Securities Depository and the Trustee, whereupon the Securities Depository will notify the Participants of the availability through the Securities Depository of Bond certificates. In such event, the Trustee shall issue, transfer and exchange Bond certificates as requested by the Securities Depository in appropriate amounts and in Authorized Denominations.

With respect to Bonds registered in the registry books kept by the Trustee in the name of Cede & Co., as nominee of the Securities Depository, the University and the Trustee shall have no responsibility or obligation to any Participant (which means securities brokers and dealers, banks, trust companies, clearing corporations and various other entities, some of whom or their representatives own the Securities Depository) or to any Beneficial Owner (which means, when used with reference to the Book-Entry System, the Person who is considered the beneficial owner of the Bonds pursuant to the arrangements for book entry determination of ownership applicable to the Securities Depository) with respect to the following: (1) the accuracy of the records of the Securities Depository, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (2) the delivery to any Participant, any Beneficial Owner or any other Person, other than the Securities Depository, of any notice with respect to the Bonds, including any notice of redemption, or (3) the payment to any Participant, any Beneficial Owner or any other Person, other than the Securities Depository, of any amount with respect to the principal, Make-Whole Redemption Price or other redemption proceeds of and interest on the Bonds only to or upon the order of the Securities Depository, and all such payments shall be valid and effective fully to satisfy and discharge the University’s obligations with respect to the principal, Make-Whole Redemption Price or other redemption proceeds of and interest on the Bonds to the extent of the sum or sums so paid. For more information on the Securities Depository, the book-entry only system, Clearstream Banking and Euroclear see APPENDIX E - “DTC BOOK-ENTRY ONLY SYSTEM AND GLOBAL CLEARANCE PROCEDURES.”

Neither the University nor the Underwriters have provided information in this Offering Memorandum with respect to the Securities Depository, Clearstream Banking and Euroclear and neither the University nor the Underwriters certify as to the accuracy or sufficiency of the disclosure policies of or content provided by the Securities Depository, Clearstream Banking and Euroclear and are not responsible for the information provided by the Securities Depository, Clearstream Banking and Euroclear.

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Redemption*

Par Optional Redemption. The Bonds are subject to redemption prior to their stated maturities at the option of the University, in whole or in part and if in part among maturities to be designated by the University, on any date on or after ___________ (the date that is ______ months prior to the maturity date of the Bonds), at a redemption price equal to 100% of the principal amount of the Bonds to be redeemed plus accrued and unpaid interest on the Bonds to be redeemed on the redemption date.

Make-Whole Optional Redemption. The Bonds are subject to redemption prior to their stated maturities at the

option of the University, in whole or in part and if in part among maturities to be designated by the University (subject to the provisions described below under “– Selection of Bonds for Redemption”), on any date prior to __________ at the Make-Whole Redemption Price, as described below.

“Make-Whole Redemption Price” means the greater of (i) 100% of the principal amount of the Bonds to be

redeemed and (ii) the sum of the present value of the remaining scheduled payments of principal and interest to the maturity date of the Bonds to be redeemed, not including any portion of those payments of interest accrued and unpaid as of the date on which the Bonds are to be redeemed, discounted to the date on which such Bonds are to be redeemed on a semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate (as defined below) plus _____ basis points, plus, in each case, accrued and unpaid interest on the Bonds to be redeemed on the redemption date.

The University shall retain an independent accounting firm or financial advisor to determine the Make-Whole

Redemption Price and perform all actions and make all calculations required to determine the Make-Whole Redemption Price. The Trustee and the University may conclusively rely on such accounting firm’s or financial advisor’s calculations in connection with, and determination of, the Make-Whole Redemption Price, and neither the Trustee nor the University will have any liability for their reliance.

“Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of United

States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (excluding inflation indexed securities) (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to the maturity date of the Bonds to be redeemed. However, if the period from the redemption date to such maturity date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

Partial Redemption of Bonds

Upon surrender of any Bond redeemed in part only, the University will execute (but need not prepare) and the Trustee will prepare or cause to be prepared, authenticate and deliver to the Holder thereof, at the expense of the University, a new Bond or Bonds of Authorized Denominations, equal in aggregate principal amount to the unredeemed portion of the Bond surrendered.

Notice of Redemption

Notice of redemption will be sent by the Trustee by first class mail or using Electronic Means not less than twenty (20) days (or, if longer, the minimum number of days necessary to comply with the operational requirements of the Securities Depository then in effect), nor more than sixty (60) days prior to the redemption date, to the respective Holders of any Bonds designated for redemption at their addresses appearing on the registration books of the Trustee. If the Bonds are no longer held by the Securities Depository or its successor or substitute, the Trustee will also give notice of redemption by overnight mail to such securities depositories and/or securities information services as will be designated in a certificate of the University. Each notice of redemption will state the date of such notice, the date of issue of the Bonds, the redemption date, the Make-Whole Redemption Price (or the method for determining the Make-Whole Redemption Price) or other redemption proceeds, the place or places of redemption (including the name and appropriate address or addresses of the Trustee), the maturity, the CUSIP number (if any), the conditions, if any, to * Preliminary, subject to change.

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redemption and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. Each such notice will also state that on such date there will become due and payable on each of such Bond the Make-Whole Redemption Price or other redemption proceeds (as applicable) thereof, or such specified portion of the principal amount thereof in the case of a Bond to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon will cease to accrue, and will require that such Bonds be then surrendered.

Failure by the Trustee to give notice as described above to any one or more of the securities information services or depositories designated by the University, or the insufficiency of any such notice will not affect the sufficiency of the proceedings for redemption. Failure by the Trustee to send notice of redemption to any one or more of the respective Holders of any Bonds designated for redemption will not affect the sufficiency of the proceedings for redemption with respect to the Holders to whom such notice was mailed.

With respect to the optional redemption of some or all of the Bonds, the University may instruct the Trustee to provide conditional notice of redemption, which may be conditioned upon the receipt of moneys or any other event. Additionally, any such optional redemption notice may be rescinded by written notice given to the Trustee by the University no later than five (5) Business Days prior to the date specified for redemption. The Trustee will give notice of such rescission, as soon thereafter as practicable, in the same manner, to the same Persons, as notice of such redemption was given.

Effect of Redemption

Notice of redemption having been duly given as provided in the Indenture and as described above, and moneys for payment of the Make-Whole Redemption Price or other redemption proceeds of the Bonds (or portion thereof) so called for redemption being held by the Trustee, on the date fixed for redemption designated in such notice, the Bonds (or portion thereof) so called for redemption will become due and payable at the Make-Whole Redemption Price or other redemption proceeds specified in such notice, interest on the Bonds so called for redemption will cease to accrue, said Bonds (or portion thereof) will cease to be entitled to any benefit or security under the Indenture, and the Holders of said Bonds will have no rights in respect thereof except to receive payment of said Make-Whole Redemption Price or other redemption proceeds from funds held by the Trustee for such payment.

Selection of Bonds for Redemption

If less than all of the Bonds of a particular maturity are called for prior redemption and such Bonds are registered in book-entry form, the particular Bonds or portions thereof to be redeemed shall be selected on a pro rata pass-through distribution of principal basis in accordance with DTC procedures, provided that, so long as the Bonds are held in book-entry form, the selection for redemption of such Bonds shall be made in accordance with the operational arrangements of DTC then in effect.

If DTC’s operational arrangements do not allow for the redemption of the Bonds on a pro rata pass-through distribution of principal basis, then the Bonds will be selected for redemption in accordance with the customary procedures of DTC. If DTC or its nominee or a successor securities depository is no longer the sole registered owner of the Bonds, if less than all of the Bonds of a maturity are called for redemption, the Trustee will select the Bonds to be redeemed on a pro rata basis.

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SECURITY FOR THE BONDS

General

The Indenture provides that, on or before each Payment Date, the University will pay the Trustee a sum equal to the amount payable on such Payment Date as principal of and interest on the Bonds. In addition, the Indenture provides that each such payment made will at all times be sufficient to pay the total amount of interest and principal (whether at maturity or upon acceleration) becoming due and payable on the Bonds on such Payment Date. If on any Payment Date, the amounts held by the Trustee in the accounts within the Bond Fund are insufficient to make any required payments of principal of (whether at maturity or upon acceleration) and interest on the Bonds as such payments become due, the University is required to pay such deficiency to the Trustee. Upon the receipt thereof, the Trustee will deposit all payments received from the University into certain funds and accounts established pursuant to the Indenture. See “Certain Funds and Accounts Established by the Indenture” below.

The Bonds constitute unsecured general obligations of the University. The Bonds are not secured by a reserve fund, mortgage lien or security interest on or in any funds or other assets of the University, except for funds held from time to time by the Trustee for the benefit of the Holders of the Bonds under the Indenture. Pursuant to the Indenture, and, as described above, the University is not required to deposit with the Trustee amounts necessary to pay the principal of and interest on the Bonds until the Payment Date on which such amounts become due and payable; therefore, the funds held from time to time by the Trustee for the benefit of the Holders of the Bonds under the Indenture are expected to be minimal.

The Indenture does not contain any financial covenants limiting the ability of the University to incur indebtedness, encumber or dispose of its property or merge with any other entity, or any covenants. Further, the University is not required by the Indenture to produce revenues at any specified level or to obtain any insurance with respect to its property or operations.

The University has other unsecured general obligations outstanding. See APPENDIX A – “CERTAIN INFORMATION RELATING TO BROWN UNIVERSITY – Long-Term Indebtedness” and APPENDIX B – “FINANCIAL STATEMENTS OF BROWN UNIVERSITY” attached hereto. Moreover, the University is not restricted by the Indenture or otherwise from incurring additional indebtedness. Such additional indebtedness, if issued, may be either secured or unsecured and may be entitled to payment prior to payment on the Bonds.

Certain Funds and Accounts Established by the Indenture

Indenture Fund. Under the Indenture, the Trustee has established for the sole benefit of the Bondholders, a master fund referred to as the “Indenture Fund,” containing the Bond Fund and the Redemption Fund and each of the funds and accounts contained therein. The University has pledged, assigned and transferred the Indenture Fund and all amounts held therein to the Trustee for the benefit of the Bondholders to secure the full payment of the principal, Make-Whole Redemption Price or other redemption proceeds of and interest on the Bonds in accordance with their terms and the provisions of the Indenture. The Indenture Fund and all amounts on deposit therein constitute collateral security to secure the full payment of the principal, Make-Whole Redemption Price or other redemption proceeds of and interest on the Bonds in accordance with their terms and provisions of the Indenture. Due to the timing of payments by the University to the Trustee, in general there is not expected to be any money in the Indenture Funds except for a brief period of time on the Interest Payment Dates.

For information on other funds and accounts established by the Indenture, see APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE” attached hereto.

CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS

The following discussion summarizes certain U.S. federal income tax considerations relating to the acquisition, ownership, and disposition of the Bonds and it may not contain all of information that may be important to a particular investor. It is based on provisions of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated thereunder, and administrative and judicial interpretations thereof, all in effect or proposed on the date hereof and all of which are subject to change, possibly with retroactive effect. Prospective investors should note that no rulings have been or are expected to be sought from the Internal Revenue Service (“IRS”) with respect to any of

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the U.S. federal income tax consequences discussed below. Accordingly, no assurance can be given that the IRS will agree with the views expressed in this summary, or that a court will not sustain any challenge by the IRS in the event of litigation.

The following relates only to Bonds that are acquired in the initial offering for an amount of cash equal to the initial offering price (i.e., the price at which a substantial amount of such Bonds is first sold to the public) and that are held as “capital assets” within the meaning of Section 1221 of the Code (i.e., generally, property held for investment).

This discussion does not address all U.S. federal income tax consequences applicable to any given investor, nor does it address the U.S. federal income tax considerations applicable to investors who may be subject to special tax treatment (regardless of whether or not such persons constitute U.S. Holders (defined below)), such as banks and other financial institutions, retirement plans, employee stock ownership plans, certain U.S. expatriates, banks, real estate investment trusts, regulated investment companies, insurance companies, tax-exempt organizations, dealers or traders in securities or currencies, partnerships or other pass-through entities for U.S. federal income tax purposes (or investors in such entities), S corporations, estates and trusts, investors who hold their Bonds as part of a hedge, straddle, or an integrated or conversion transaction, investors whose “functional currency” is not the U.S. dollar, or persons subject to the alternative minimum tax. In addition, this discussion does not include any description of the tax laws of any state, local, or non-U.S. jurisdiction that may be applicable to a particular investor and does not consider any aspects of U.S. federal tax law other than income taxation.

As used herein, “U.S. Holder” means a beneficial owner of a Bond that is, for U.S. federal income tax purposes: (i) an individual citizen or resident, as defined in Section 7701(b) of the Code, of the United States, (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any State thereof (including the District of Columbia), (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (as defined in the Code) have the authority to control all substantial decisions of the trust or (B) the trust validly elected to be treated as a domestic trust). As used herein, “Non-U.S. Holder” generally means a beneficial owner of a Bond (other than a partnership) who is not a U.S. Holder.

The U.S. federal income tax treatment of an entity classified as a partnership for U.S. federal income tax purposes that holds the Bonds generally will depend on such partner’s particular circumstances and on the activities of the partnership. Partners in such partnerships should consult their own tax advisors regarding the consequences of acquiring, owning and disposing of the Bonds (including their status as U.S. Holders or Non-U.S. Holders).

U.S. Holders

Interest. Stated interest on the Bonds generally will be taxable to a U.S. Holder as ordinary interest income at the time such amounts are accrued or received, in accordance with the U.S. Holder’s method of accounting for U.S. federal income tax purposes.

“Original issue discount” will arise for U.S. federal income tax purposes in respect of any Bond if its stated redemption price at maturity exceeds its issue price by more than a de minimis amount (as determined for U.S. federal income tax purposes). For any Bonds issued with original issue discount, the amount of original issue discount is equal to the excess of the stated redemption price at maturity of that Bond over its issue price. The stated redemption price at maturity of a Bond is the sum of all scheduled amounts payable on such Bond other than qualified stated interest. U.S. Holders generally will be required to include any original issue discount in income for U.S. federal income tax purposes as it accrues, in accordance with a constant yield method based on a compounding of interest (which may be before the receipt of cash payments attributable to such income). Under this method, U.S. Holders of Bonds issued with original issue discount generally will be required to include in income increasingly greater amounts of original issue discount in successive accrual periods.

“Premium” generally will arise for U.S. federal income tax purposes in respect of any Bond to the extent its issue price exceeds its stated principal amount. A U.S. Holder of a Bond issued at a premium may make an election, applicable to all debt securities purchased at a premium by such U.S. Holder, to amortize such premium, using a constant yield method over the term of such Bond.

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Market Discount. A holder who acquires a Bonds in a secondary market transaction may be subject to U.S. federal income tax rules providing that accrued market discount will be subject to taxation as ordinary income on the sale or other disposition of a “market discount bond.” Dispositions subject to this rule include a redemption or retirement of a Bond. The market discount rules may also limit a holder’s deduction for interest expense for debt that is incurred or continued to purchase or carry Bonds. A market discount bond is defined generally as a debt obligation purchased subsequent to issuance, at a price that is less than the principal amount of the obligation, subject to a de minimis rule. The Code allows a taxpayer to compute the accrual of market discount by using a ratable accrual method or a constant interest rate method. Also, a taxpayer may elect to include the accrued discount in gross income each year while holding the bond, as an alternative to including the total accrued discount in gross income at the time of a disposition, in which case the tax basis of the bond will be increased by the amount of discount included in gross income and the interest expense deduction limitation described above will not apply.

Disposition of the Bonds. Unless a nonrecognition provision of the Code applies, the sale, exchange, redemption, retirement (including pursuant to an offer by the University), reissuance or other disposition of a Bond will be a taxable event for U.S. federal income tax purposes. In such event, a U.S. Holder generally will recognize gain or loss equal to the difference between (i) the amount of cash plus the fair market value of property received (except to the extent attributable to accrued but unpaid interest on the Bond which will be taxed in the manner described above under “Interest”) and (ii) the U.S. Holder’s adjusted tax basis in the Bond at the time of disposition. A U.S. Holder’s adjusted basis in a Bond will generally equal the purchase price paid by the U.S. Holder for the Bond, increased by the amount of any original issue discount previously included in income by such U.S. Holder with respect to such Bond and decreased by any payments previously made on such Bond, other than payments of qualified stated interest, or decreased by any amortized premium. Any such gain or loss generally will be capital gain or loss and will be long term capital gain or loss if such Bond is held by the U.S. Holder for more than one year. Long-term capital gain of non-corporate U.S. Holders is generally subject to tax at preferential rates. The deductibility of capital losses is subject to limitations.

Defeasance or material modification of the terms of any Bond may result in a deemed reissuance thereof, in which event a beneficial owner of the defeased or modified Bonds generally will recognize taxable gain or loss equal to the difference between the amount realized from the sale, exchange or retirement (less any accrued qualified stated interest which will be taxable as such) and the beneficial owner’s adjusted tax basis in the Bond.

Net Investment Income Tax. Section 1411 of the Code generally imposes a 3.8% Medicare contribution tax on the net investment income of certain individuals, trusts, and estates to the extent their income exceeds certain threshold amounts. For these purposes, “net investment income” may include, among other things, interest and gains from the sale or other disposition of the Bonds. Prospective investors are advised to consult their tax advisors regarding the possible implications of this additional tax on their investment in the Bonds.

Information Reporting and Backup Withholding. In general, a U.S. Holder will be subject to backup withholding with respect to interest on the Bonds, and the proceeds of a sale or other disposition of the Bonds (including a redemption or retirement), at the applicable tax rate (currently 24%), unless such holder (a) is an entity that is exempt from backup withholding (including corporations) and, when required, demonstrates this fact, or (b) provides the payor with its taxpayer identification number (“TIN”), certifies that the TIN provided to the payor is correct and that the holder has not been notified by the IRS that such holder is subject to backup withholding due to underreporting of interest or dividends, and otherwise complies with applicable requirements of the backup withholding rules. In addition, such payments to U.S. Holders that are not exempt entities will generally be subject to information reporting requirements. A U.S. Holder who does not provide the payor with its correct TIN may be subject to penalties imposed by the IRS. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.

Non-U.S. Holders

The following discussion applies only to Non-U.S. Holders. This discussion does not address all aspects of U.S. federal income taxation that may be relevant to Non-U.S. Holders in light of their particular circumstances. For example, special rules may apply to a Non-U.S. Holder that is a “controlled foreign corporation” or a “passive foreign investment company,” and, accordingly, Non-U.S. Holders should consult their own tax advisors to determine the effect of U.S. federal, state, local and non-U.S. tax laws, as well as tax treaties, with regard to an investment in the Bonds.

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Interest. Subject to the discussions below under the headings “FATCA Withholding” and “Information Reporting and Backup Withholding,” a Non-U.S. Holder will not be subject to U.S. federal income or withholding taxes in respect of interest paid or accrued on a Bond (including original interest discount income) if the interest qualifies for the “portfolio interest exemption.” This generally will be the case if each of the following applicable requirements are satisfied:

• the interest is not effectively connected with a U.S. trade or business;

• the Non-U.S. Holder is not, and is not treated as, a bank receiving interest on an extension of credit pursuant to a loan agreement entered into in the ordinary course of its trade or business, as described in Section 881(c)(3)(A) of the Code;

• certain certification requirements are met. Under current law, the certification requirement will be satisfied in any of the following circumstances:

• If a Non-U.S. Holder provides to the payor a statement on an applicable IRS Form W-8 (or suitable successor form), together with all appropriate attachments, signed under penalties of perjury, identifying the Non-U.S. Holder by name and address and stating, among other things, that the Non-U.S. Holder is not a United States person.

• If a Bond is held through a securities clearing organization, bank, or another financial institution that holds customers’ securities in the ordinary course of its trade or business, (i) the Non-U.S. Holder provides such a form to such organization or institution, and (ii) such organization or institution, under penalty of perjury, certifies to the payor that it has received such statement from the beneficial owner or another intermediary and furnishes the payor with a copy thereof.

• If a financial institution or other intermediary that holds the Bond on behalf of the Non-U.S. Holder has entered into a withholding agreement with the IRS and submits an IRS Form W-8IMY (or suitable successor form) and certain other required documentation to the payor.

If the requirements of the portfolio interest exemption described above are not satisfied, a 30% withholding tax will apply to the gross amount of interest on the Bonds that is paid to a Non-U.S. Holder, unless either: (a) an applicable income tax treaty reduces or eliminates such tax, and the Non-U.S. Holder claims the benefit of that treaty by providing a properly completed and duly executed IRS Form W-8BEN or Form W-8BEN-E, as applicable (or suitable successor or substitute form) establishing qualification for benefits under the treaty, or (b) the interest is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States and the Non-U.S. Holder provides an appropriate statement to that effect on a properly completed and duly executed IRS Form W-8ECI (or suitable successor form).

If a Non-U.S. Holder is engaged in a trade or business in the United States and its investment in a Bond is effectively connected with the conduct of that trade or business, the Non-U.S. Holder generally will be required to pay U.S. federal income tax on that interest on a net income basis in the same manner as a U.S. Holder and the 30% withholding tax described above will not apply provided the duly executed IRS Form W-8ECI is provided to the Trustee. If a Non-U.S. Holder is eligible for the benefits of an income tax treaty between the U.S. and its country of residence, and the Non-U.S. Holder claims the benefit of the treaty by properly submitting an IRS Form W-8BEN or Form W-8BEN-E, as applicable, any interest income that is effectively connected with a U.S. trade or business will be subject to U.S. federal income tax in the manner specified by the treaty and generally will only be subject to such tax if such income is attributable to a permanent establishment (or a fixed base in the case of an individual) maintained by the Non-U.S. Holder in the United States. In addition, a Non-U.S. Holder that is treated as a foreign corporation for U.S. federal income tax purposes may be subject to a branch profits tax equal to 30% (or such lower rate provided by an applicable income tax treaty) of its earnings and profits for the taxable year, subject to adjustments, that are effectively connected with its conduct of a trade or business in the United States.

Disposition of the Bonds. Subject to the discussions below under the headings “FATCA Withholding” and “Information Reporting and Backup Withholding,” any gain realized by a Non-U.S. Holder upon the sale, exchange, redemption, retirement, reissuance or other disposition of a Bond generally will not be subject to U.S. federal income

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tax, unless (i) such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business within the United States (and, in the case of certain income tax treaties, is attributable to a permanent establishment or “fixed base” within the United States); or (ii) in the case of any gain realized by an individual Non-U.S. Holder, such holder is present in the United States for 183 days or more in the taxable year of such sale, exchange, redemption, retirement, reissuance or other disposition and certain other conditions are met. If the first exception applies, the Non-U.S. Holder will generally be subject to U.S. federal income tax on the net gain derived from the sale, exchange, redemption, retirement at maturity, or other taxable disposition of the Bonds in the same manner as a U.S. Holder unless an applicable income tax treaty provides otherwise. If the second exception applies, the Non-U.S. Holder generally will be subject to U.S. federal income tax at a rate of 30% (except as otherwise provided by an applicable income tax treaty) on the amount by which its U.S.-source capital gains exceed its U.S.-source capital losses. In addition, corporate Non-U.S. Holders may be subject to a 30% (or lower applicable treaty rate) branch profits tax on any such effectively connected earnings and profits attributable to such gain.

U.S. Federal Estate Tax. A Bond that is held by an individual who at the time of death is not a citizen or resident of the United States will not be subject to U.S. federal estate tax as a result of such individual’s death, provided that at the time of such individual’s death, payments of interest with respect to such Bond would not have been effectively connected with the conduct by such individual of a trade or business within the United States.

FATCA Withholding. The Foreign Account Tax Compliance Act (“FATCA”) together with administrative guidance and certain intergovernmental agreements entered into thereunder generally imposes a 30% U.S. withholding tax on certain types of “withholdable payments” (as defined in the Code), paid to (i) a “foreign financial institution” (as specifically defined in the Code) which does not provide sufficient documentation, typically on IRS Form W-8BEN-E, evidencing either (x) an exemption from FATCA, or (y) its compliance (or deemed compliance) with FATCA (which may alternatively be in the form of compliance with an intergovernmental agreement with the United States) in a manner which avoids withholding, or (ii) or to a “non-financial foreign entity” (as specifically defined in the Code) which does not provide sufficient documentation, typically on IRS Form W-8BEN-E, evidencing either (x) an exemption from FATCA, or (y) adequate information regarding certain substantial United States beneficial owners of such entity (if any). The 30% withholding tax under FATCA applies regardless of whether the foreign financial institution or non-financial foreign entity receives payments as a beneficial owner or intermediary and whether the applicable payment otherwise is exempt from U.S. withholding (e.g., as “portfolio interest” or as capital gain upon the sale, exchange, redemption or other disposition of a Bond). Interest paid with respect to the Bonds may be subject to the 30% withholding tax if the holder fails to comply with FATCA. While withholdable payments would have originally included payments of gross proceeds from the sale or other disposition of a Bond on or after January 1, 2019, proposed U.S. Treasury Regulations provide that such payments of gross proceeds (other than amounts treated as interest) do not constitute withholdable payments. Taxpayers may generally rely on these proposed U.S. Treasury Regulations until they are revoked or final regulations are issued. Foreign entities located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Under certain circumstances, a beneficial owner of notes might be eligible for refunds or credits of such taxes. Non-U.S. holders are urged to consult their own tax advisors with respect to these information reporting rules and due diligence requirements and the potential application of FATCA to them.

Information Reporting and Backup Withholding. In general, the amount of any interest paid on the Bonds in each calendar year, and the amount of U.S. federal income tax withheld, if any, with respect to these payments will be reported to the IRS and each Non-U.S. Holder. Non-U.S. Holders who have provided certification as to their non-U.S. status or who have otherwise established an exemption by providing a properly executed IRS Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, or W-8IMY (or acceptable substitute form) will generally not be subject to backup withholding tax on payments of interest if the payor does not have actual knowledge or reason to know that such certification is unreliable or that the conditions of the exemption are in fact not satisfied.

Payment of the proceeds of a disposition of a Bond effected by the U.S. office of a U.S. or foreign broker will be subject to information reporting requirements and backup withholding, unless the Non-U.S. Holder properly certifies under penalties of perjury as to its foreign status (by providing a properly executed IRS Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP. or W-8IMY or acceptable substitute form) and certain other conditions are met or it otherwise establishes an exemption. Information reporting requirements and backup withholding generally will not apply to any payment of the proceeds of the disposition of a Bond effected outside the United States by a foreign office of a broker. However, unless such a broker has documentary evidence in its records that person is a Non-U.S. Holder and certain other conditions are met, or the holder otherwise establish an exemption, information reporting will apply to a payment

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of the proceeds of the disposition of a note effected outside the U.S. by such a broker if the broker is a U.S. person or has certain specified connections with the United States.

Copies of the information returns that are filed with the IRS may also be made available to the tax authorities in the country in which the Non-U.S. Holder resides under an applicable income tax treaty or other information exchange agreement. Backup withholding is not an additional tax, and amounts withheld as backup withholding are allowed as a refund or credit against a holder’s federal income tax liability, provided that the required information as to withholding is furnished to the IRS.

Non-U.S. holders are urged to consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.

State, Local, and Foreign Taxes. Holders may be subject to state, local, or foreign taxes with respect to an investment in the Bonds. In light of the potential impact of state, local, and foreign taxes (including limitations on deductibility of state and local taxes imposed by tax legislation enacted in 2017), prospective investors are urged to consult their tax advisors with respect to the state, local, and foreign tax consequences of an investment in the Bonds.

THE FOREGOING SUMMARY IS INCLUDED HEREIN FOR GENERAL INFORMATION ONLY AND DOES NOT DISCUSS ALL ASPECTS OF U.S. FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A PARTICULAR BENEFICIAL OWNER OF BONDS IN LIGHT OF THE BENEFICIAL OWNER’S PARTICULAR CIRCUMSTANCES AND INCOME TAX SITUATION. PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO ANY TAX CONSEQUENCES TO THEM FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF BONDS, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL, FOREIGN TAX LAWS AS WELL AS OTHER FEDERAL TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN THESE TAX LAWS.

CERTAIN ERISA AND BENEFIT PLAN CONSIDERATIONS

The information under this heading summarizes certain considerations associated with the purchase of the Bonds by employee pension and welfare plans. The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), imposes certain fiduciary obligations and prohibited transaction restrictions on employee benefit plans subject to Title I of ERISA (“ERISA Plans”). Section 4975 of the Code imposes essentially the same prohibited transaction restrictions on certain arrangements set forth in Section 4975(e)(1) which include, among other arrangements, tax-qualified retirement plans described in Section 401(a) and 403(a) of the Code, which are exempt from tax under Section 501(a) of the Code, individual retirement accounts, individual retirement annuities, Archer MSAs, health savings accounts, and Coverdell education savings accounts, as described in Sections 4975(e)(1)(B) through (F) of the Code (collectively, “Tax-Favored Plans,” and together with ERISA Plans, the “Plans”). Certain types of U.S. employee benefit plans, such as governmental plans (as defined in Section 3(32) of ERISA), and church plans (as defined in Section 3(33) of ERISA and Section 4975(g)(3) of the Code) for which no election has been made under Section 410(d) of the Code, as well as non-U.S. employee benefit plans, are exempt from ERISA requirements and Code requirements but may nonetheless be subject to similar provisions of state and federal or foreign laws (“Similar Laws”). The information under this heading addresses the requirements of ERISA and the Code, but it should be understood that Similar Laws may impose comparable requirements.

General Fiduciary Matters. Among other requirements, ERISA requires fiduciaries to exercise prudence when investing ERISA Plan assets, taking into account diversification of the ERISA Plan’s portfolio, liquidity needs and the requirement that ERISA Plan investments be made in accordance with the documents governing such ERISA Plan. Under ERISA, any person who has any discretionary authority or responsibility in the administration of an ERISA Plan or who exercises any discretionary authority or control with respect to the management, or disposition of the assets of an ERISA Plan, or who renders investment advice for a fee or other compensation, direct or indirect, with respect to the assets of an ERISA Plan, or has any authority or responsibility to do so, is generally considered to be a fiduciary of the ERISA Plan, unless a statutory or administrative exemption is available. The term “plan assets” is defined at 26 CFR 2510.3-101.

Prohibited Transaction Issues. Section 406 of ERISA and Section 4975 of the Code (the “Prohibited Transaction Rules”) prohibit a broad range of transactions between plans and “Parties in Interest” under ERISA or “Disqualified Persons” under the Code. The definitions of “Party in Interest” and “Disqualified Person” are expansive.

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While other entities may be encompassed by these definitions, they include: (i) a fiduciary with respect to a Plan (including the owner of a Tax-Favored Plan); (ii) a person or entity providing services to a Plan; and (iii) an employer or employee organization any of whose employees or members are covered by the Plan. Certain Parties in Interest (or Disqualified Persons) that participate in a prohibited transaction may be subject to a penalty (or an excise tax or other liability) imposed pursuant to Section 502(i) of ERISA (or Section 4975 of the Code) unless a statutory or administrative exemption is available and certain prohibited transactions may be subject to rescission.

ERISA and the Code generally prohibit the lending of money or other extension of credit between an ERISA Plan or Tax-Favored Plan and a Party in Interest or Disqualified Person. The acquisition of any of the Bonds by a Party in Interest or Disqualified Person would involve the lending of money or extension of credit. In such a case, however, certain exemptions from the prohibited transaction rules might be available depending on the type and circumstances of the plan fiduciary making the decision to acquire a Bond. In this regard, the U.S. Department of Labor has issued prohibited transaction class exemptions, or “PTCEs.” These class exemptions include, without limitation, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38 respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts and PTCE 96-23 respecting transactions determined by in-house asset managers. In addition, Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code provide limited relief from the Prohibited Transaction Rules for certain transactions, provided, among other things, that neither the issuer of the securities nor any of its affiliates (directly or indirectly) have or exercise any discretionary authority or control or render any investment advice with respect to the assets of any ERISA Plan or Tax-Favored Plan involved in the transaction and provided further that the ERISA Plan or Tax-Favored Plan pays no more than adequate consideration in connection with the transaction. There can be no assurance that all of the conditions of any such exemptions will be satisfied with respect to any purchase, holding or disposition of the Bonds by any investor, and even if the conditions specified in one or more of these exemptions are satisfied, the scope of relief provided by these exemptions might or might not cover all acts which might be construed as prohibited transactions.

Plan Asset Issues. Under the Department of Labor’s regulations governing what constitutes “plan assets”, assets of an entity in which a Plan invests may be treated as plan assets for the purposes of ERISA and the Code only if the plan acquires an “equity interest” by reason of the investment and no other exception is available. If a Plan invests in an entity whose assets thereby are considered plan assets, the manager of the entity would be a plan fiduciary to the extent it exercises any authority or control respecting management or disposition of the entity’s assets or provides investment advice for a fee. Any such manager that is considered a plan fiduciary would be separately required to comply with ERISA’s prohibited transaction provisions. An equity interest is defined for this purpose as an interest in an entity other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features. Although there can be no assurances in this regard, it appears that the Bonds should be treated as debt for these purposes.

Representation and Warranty. By acquiring a Bond, each purchaser of a Bond will be deemed to have represented and warranted that either (i) no portion of the assets used by such purchaser to acquire or hold the Bonds constitutes assets of any ERISA Plan or Tax-Favored Plan or of a plan subject to Similar Laws or (ii) the acquisition and holding of the Bonds will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a similar violation under applicable Similar Laws.

The foregoing discussion is general in nature and is not intended to be all inclusive. Due to the complexity of the “plan asset” rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that Plan fiduciaries and other fiduciaries, and other persons considering purchasing the Bonds, consult with their counsel regarding the potential applicability of ERISA, Section 4975 of the Code and any Similar Laws to the assets intended to be used in the acquisition of such investment and to the particular circumstances of the transaction.

UNDERWRITING

The University has entered into a purchase contract with the Underwriters listed on the cover hereof, for whom BofA Securities, Inc. (“BofA Securities”), is acting as representative, and the Underwriters have agreed to purchase the Bonds from the University at an aggregate discount of $__________ from the public offering prices set forth on the cover page hereof.

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The purchase contract pursuant to which the Bonds are being sold provides that the Underwriters will purchase not less than all of the Bonds. The Underwriters’ obligation to make such purchase is subject to certain terms and conditions set forth in the purchase contract, the approval of certain legal matters by counsel and certain other conditions.

The Underwriters may offer and sell the Bonds to certain dealers and others at prices lower than the initial offering prices. The offering prices of Bonds may be changed from time to time by the Underwriters.

The following language has been provided by the Underwriters. The University takes no responsibility as to the accuracy or completeness thereof.

BofA Securities, one of the Underwriters of the Bonds, has entered into a distribution agreement with its affiliate Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”). As part of this arrangement, BofA Securities may distribute securities to MLPF&S, which may in turn distribute such securities to investors through the financial advisor network of MLPF&S. As part of this arrangement, BofA Securities may compensate MLPF&S as a dealer for their selling efforts with respect to the Bonds.

The Underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. Certain of the Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the University, for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the Underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the University.

CERTAIN RELATIONSHIPS

The Chief Executive Officer of BofA Securities, which is one of the Underwriters of the Bonds, is a member of the Board of Trustees and Board of Fellows of the Brown Corporation. An Independent Director of BofA Securities is a member of the Board of Fellows of the Brown Corporation. The chairman of the Merchant Banking Division of Goldman Sachs & Co. LLC, which is one of the Underwriters of the Bonds, is a member of the Board of Fellows and Secretary of the Brown Corporation.

CONTINUING DISCLOSURE

The University has entered into continuing disclosure undertakings (the “Continuing Disclosure Undertakings”) in connection with tax-exempt revenue bonds issued for the benefit of the University. See APPENDIX B – “FINANCIAL STATEMENTS OF BROWN UNIVERSITY.” Holders and prospective purchasers of the Bonds may obtain copies of the information provided by the University under those Continuing Disclosure Undertakings on the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system (“EMMA”). Each Continuing Disclosure Undertaking terminates when the related tax-exempt bonds are paid or deemed paid in full.

The University covenants in the Indenture that, by no later than January 31 after the end of each fiscal year, unless available on EMMA or any successor thereto or to functions thereof, the University will furnish copies of the audited financial statements to the Trustee and the Bondholders requesting the same. Except for providing such annual audited financial statements, the University has not undertaken either to supplement or update the information included in this Offering Memorandum.

FINANCIAL ADVISOR

The Yuba Group LLC, also known as Yuba Group Advisors (the “Financial Advisor”) has been retained by the University to serve as its financial advisor in connection with the issuance of the Bonds. The Financial Advisor is not obligated to make, and has not undertaken, an independent verification of any of the information contained in this Offering Memorandum and makes no guarantee as to the accuracy, completeness or fairness of such information. The

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Financial Advisor is an independent financial advisory and consulting firm and is not engaged in the underwriting or trading of municipal securities or other negotiable instruments. The Financial Advisor does not receive a fee related to or contingent upon the sale and closing of the Bonds.

APPROVAL OF LEGALITY

Legal matters incident to validity of the Bonds and certain other matters are subject to the approving opinion of Locke Lord LLP, Providence, Rhode Island, counsel to the University. The proposed form of opinion of counsel to the University relating to the validity of the issuance of the Bonds and certain other matters is attached hereto as Appendix D. In addition, certain other legal matters will be passed upon for the Underwriters by their counsel, Hinckley, Allen & Snyder LLP, Boston, Massachusetts.

FINANCIAL STATEMENTS

The audited financial statements of the University for the fiscal year ended June 30, 2019 and comparative statements from June 30, 2018, together with the reports thereon of KPMG LLP, the University’s independent auditor, are attached to this Offering Memorandum as Appendix B. KPMG LLP has not been engaged to perform and has not performed, since the date of its report included in Appendix B, any procedures on the financial statements addressed in that report. KPMG LLP also has not performed any procedures relating to this Offering Memorandum.

RATINGS

Moody’s Investors Service (“Moody’s”) assigned a rating of “Aa1” and S&P Global Ratings (“S&P”) assigned a rating of “AA+” on the Bonds. Any explanation of the significance of such ratings may only be obtained from Moody’s and S&P. Generally, rating agencies base their ratings on information and materials furnished and on investigation, studies, and assumptions by the rating agencies. There is no assurance that the rating mentioned above will remain in effect for any given period of time or that a rating might not be lowered or withdrawn entirely, if in the judgment of the rating agency originally establishing the rating, circumstances so warrant. Any such downward change in or withdrawal of a rating might have an adverse effect on the market price or marketability of the Bonds. A securities rating is not a recommendation to buy, sell or hold securities.

MISCELLANEOUS

All quotations from and summaries and explanations of the Indenture and of other statutes and documents contained herein do not purport to be complete, and reference is made to said documents and statutes for full and complete statements of their provisions. Copies in reasonable quantity of the Indenture may be obtained upon request directed to the Underwriters or the University.

Any statements in this Offering Memorandum involving matters of opinion are intended as such and not as representations of fact. This Offering Memorandum is not to be construed as a contract or agreement between the University and Holders of any of the Bonds.

The execution and delivery of this Offering Memorandum has been duly authorized by the University.

BROWN UNIVERSITY IN PROVIDENCE IN THE STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS

By: Barbara D. Chernow Executive Vice President for Finance and Administration

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APPENDIX A

CERTAIN INFORMATION RELATING TO BROWN UNIVERSITY

APPENDIX A

CERTAIN INFORMATION RELATING TO BROWN UNIVERSITY

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Page History and Location ................................................................................................................................................. A-1 Academic Programs and Library Facilities................................................................................................................ A-1 The Warren Alpert Medical School of Brown University ......................................................................................... A-3 School of Public Health ............................................................................................................................................. A-4 Accreditations and Memberships............................................................................................................................... A-5 Governance and Administration ................................................................................................................................ A-5 Management of the University .................................................................................................................................. A-9 Faculty ..................................................................................................................................................................... A-10 Enrollment ............................................................................................................................................................... A-11 Undergraduate Admission Statistics ........................................................................................................................ A-11 Geographic Distribution of the Class of 2023 ......................................................................................................... A-12 Class of 2024 ........................................................................................................................................................... A-12 Division of Campus Life ......................................................................................................................................... A-12 Student Charges ....................................................................................................................................................... A-13 Undergraduate Financial Aid ................................................................................................................................... A-13 Labor and Employee Relations ................................................................................................................................ A-14 Retirement Plans ...................................................................................................................................................... A-14 Fundraising .............................................................................................................................................................. A-15 Sponsored Research ................................................................................................................................................. A-16 Investment Management .......................................................................................................................................... A-16 Liquidity .................................................................................................................................................................. A-17 Endowment Usage ................................................................................................................................................... A-17 Operating Budget ..................................................................................................................................................... A-18 Financial Contributions to the City of Providence .................................................................................................. A-18 Physical Plant .......................................................................................................................................................... A-19 Insurance.................................................................................................................................................................. A-19 Long-Term Indebtedness ......................................................................................................................................... A-20 Financial Reporting ................................................................................................................................................. A-20 Impact of COVID-19 Pandemic .............................................................................................................................. A-23 Litigation ................................................................................................................................................................. A-24

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BROWN UNIVERSITY

May ____, 2020

Brown University (“Brown University,” “Brown” or the “University”) is pleased to present the following information regarding the University and other pertinent information for inclusion in the Offering Memorandum relating to the Brown University Taxable Bonds, Series 2020A (the “Bonds”). Unless otherwise indicated, the source of information is the University’s records.

History and Location

Brown University is a privately endowed, coeducational, nonprofit, nonsectarian institution of higher education. It was established in 1764 as Rhode Island College with a Charter from the General Assembly of the Colony of Rhode Island, making it the seventh college in America and the third in New England. In 1770, the school moved from Warren, Rhode Island to its present site in Providence, and in 1804, it changed its name to Brown University.

Located in the City of Providence, the capital of Rhode Island, Brown owns approximately 154 acres of land and 224 buildings with its main campus located on College Hill, a residential area overlooking the center of the city. In addition, Brown owns approximately 339 acres of land and six buildings located 17 miles from Providence in Bristol, Rhode Island, which property is used for ongoing ecological studies and recreational purposes. Six of the University’s buildings are individually listed on the National Historic Register, and 28 buildings are located within the City of Providence’s Historic Districts.

Academic Programs and Library Facilities

Brown University is a comprehensive research university combining undergraduate, graduate and professional education with a faculty who are leaders in their disciplines in scholarship and research. Faculty at all levels take part in undergraduate education, graduate education, and scholarship. The opportunity to study with leading scholars who are interested in teaching undergraduates and to participate in their research activities is one factor in attracting the University’s outstanding undergraduate student body. Brown’s strong graduate programs attract students interested in careers in scholarship and teaching. The University’s ability to offer the opportunity to educate some of the nation’s most promising students coupled with a university setting that supports faculty scholarship enables Brown to attract and retain an excellent faculty. Brown has a number of highly-ranked academic departments and programs, including Applied Mathematics, Classics, Computer Science, English, Geological Sciences, History, Philosophy, Literary Arts, Mathematics, Computational Biology, Environmental Sciences, Economics, and Theatre Arts and Performance Studies.

Brown offers the following degree programs for undergraduates: Bachelor of Arts, Bachelor of Science, a combined five-year program of Bachelor of Arts and Bachelor of Science,

APPENDIX A

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and concurrent programs leading to a baccalaureate degree and master’s degree (AM, ScM, and MPH). Additionally, a five-year dual-degree program allows students to obtain either an AB or ScB degree from Brown and a Bachelor of Fine Arts degree from the Rhode Island School of Design. The Bachelor of Arts degree is offered in all disciplines and by all academic departments in the humanities, arts, social sciences, and physical and life sciences. The Bachelor of Science degree requires a science concentration that demonstrates both breadth and depth beyond the requirements for a Bachelor of Arts degree in the same field. The Program in Liberal Medical Education (PLME) offers an eight-year program combining undergraduate and professional medical studies, leading to a baccalaureate degree awarded after four years and to the degree of Doctor of Medicine after eight years.

The Brown University Graduate School has 51 doctoral programs and 28 active master’s programs. The following degrees are conferred: Master of Arts, Master of Arts in Teaching, Master of Fine Arts, Master of Public Affairs, Master of Public Health, Master of Science, Master of Science in Innovation Management & Entrepreneurship, and Doctor of Philosophy. The University also offers four Executive Master’s degrees in Healthcare Leadership, Business Administration (jointly with IE Business School in Spain), Cybersecurity, and Science and Technology Leadership.

A high percentage of Brown undergraduates eventually pursue graduate and professional education. Average annual acceptance rates for Brown undergraduates applying to medical school (87%) and law school (83.2%) are well above national averages (approximately 42% and 71.6%, respectively).

The Brown University Library is central to the University’s teaching and research mission. With a collection that includes approximately seven million volumes, inclusive of over two million eBooks, over 70,000 online journals, over 300 databases, and nearly 15,000 linear feet of manuscripts and archives, the Brown Library is one of the largest academic libraries in New England. Brown faculty and students may also borrow from the collections of other Ivy League libraries, which collectively possess approximately 90 million titles, as well as obtain materials from libraries around the globe through interlibrary loans.

The Brown Library system consists of five campus buildings, as well as the Library Collections Annex, an off-campus high-density storage facility with a shelving capacity of 1.5 million volumes. The John D. Rockefeller, Jr. Library houses the Library’s collections for the humanities, social sciences, and fine arts. It is also home to the Center for Digital Scholarship, a hub of leading edge digital projects, including the Mellon-funded Digital Publications Initiative. The Sciences Library supports research in the STEM fields. The George S. Champlin Health Sciences Library, located in the Warren Alpert Medical School of Brown University (the “Warren Alpert Medical School”), provides digital resources and infrastructure to medical students and faculty and supports research in the STEM fields. Brown’s world renowned special collections of rare books, manuscripts, archives, and ephemera are housed in the John Hay Library and the Library Collection Annex house. A Carnegie library, the exquisitely restored John Hay Library offers extensive exhibition space, promoting engagement with Brown’s unique holdings for students, faculty, and the broader community. The Virginia M. Orwig Music Library consolidates Brown’s extensive music materials and is home to the Walter Neiman ‘46 Archive of Sound Recordings as well as more than 24,000 musical scores. The John Carter Brown Library, an

APPENDIX A

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independently administered and funded center for advanced research in history and the humanities, is located on the Brown campus. This library is home to one of the world’s most outstanding collections of printed books and other materials concerning the European discovery, exploration, and settlement of the New World to 1825 with a collection of 50,000 rare books, maps, and manuscripts encompassing more than two hundred languages and spanning over three centuries of early American history.

The Warren Alpert Medical School of Brown University

Since granting its first Doctor of Medicine degrees in 1975, Brown has become a national leader in medical education and biomedical research. By attracting first-class physicians and researchers to Rhode Island over the past four decades, Brown and its seven affiliated hospitals (which are not owned by Brown) have radically improved the state’s healthcare environment, from healthcare policy to patient care. In January 2007, Brown named its medical school The Warren Alpert Medical School of Brown University in recognition of a $100 million gift from The Warren Alpert Foundation to support medical education at Brown. In 2016, The Warren Alpert Foundation reaffirmed its commitment to the school through a second major gift of $27 million to support the development of the MD/PhD program, translational research, and scholarships.

Brown awards approximately 144 Doctor of Medicine degrees each year. Students are admitted to the school through several pathways, including (i) the standard route, open to all qualified graduates of any college or university; (ii) the Program in Liberal Medical Education (PLME), an eight-year continuum that combines undergraduate study at Brown with professional studies in medicine; (iii) the Early Identification Program, whereby promising sophomores from three Rhode Island colleges (Providence College, Rhode Island College and the University of Rhode Island) and Tougaloo College in Jackson, Mississippi, are offered admission to the Warren Alpert Medical School; (iv) the MD/PhD program, for students who wish to pursue a career in academic medicine and biomedical research; and (v) premedical post baccalaureate programs with Goucher College, Bryn Mawr College, Columbia University, and Johns Hopkins University. This results in a student body of unusual diversity in terms of life experience, age, and ethnic, socioeconomic, and geographic backgrounds.

Brown University’s Division of Biology and Medicine (“DBM”) comprises the Program in Biology (five basic science departments and one hybrid department) and the Warren Alpert Medical School (14 clinical departments). The basic science curriculum is taught at Brown, while the majority of the clinical departments are housed in the seven affiliated hospitals; most clinical teaching is hospital- or community-based.

DBM has seen unprecedented growth in its external research funding in the last five years. Sponsored research funding topped $76.7 million in fiscal year 2019, compared to $36.8 million in fiscal year 2013. Fiscal year 2020 is on track to reach a 118% increase in research dollars since 2013. This growth is instrumental to the success of the Brown Institute for Translational Science (“BITS”). BITS was formed by the Dean of Medicine and Biological Sciences in 2015 and is composed of both basic science and hospital-based researchers who work together on some of the most vexing human health issues, including respiratory disease, the biology of aging, cancer, and neurological diseases. The goal of BITS is to accelerate the translation of scientific discovery into treatments and cures for patients. BITS has used funds raised through philanthropy, which in fiscal

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year 2019 totaled $24 million, to recruit outstanding researchers and as a source of start-up funds for its research labs. Since the start of the BrownTogether Campaign, DBM philanthropic support has surpassed $190 million (see “Fundraising” herein).

Brown continues to diversify and expand revenue streams through innovative programing and partnerships. In the fall of 2017, Brown welcomed the inaugural class of the “Gateways to Medicine, Health Care, and Research” program. In this one-year program, students have the option of pursing a Master of Science in Medical Sciences (ScM) or a Certificate in Medical Science. Based at the Warren Alpert Medical School, these programs are intended for students who are seriously considering a career in medicine or healthcare and want to strengthen their credentials, test themselves on their ability to handle rigorous scientific curriculum, gain first-hand experience in a community healthcare site, and/or decide whether medicine is the right fit for them. The Warren Alpert Medical School plans to continue to expand the master’s offerings in the coming years.

In May 2017, Brown joined six private, non-profit foundations (with more than 500 physician members who are all members of the Warren Alpert Medical School faculty) in signing a formal agreement to create Brown Physicians, Inc. (“BPI”), a nonprofit, 501(c)(3) organization established to enhance the ability of its members to serve the health care needs of the state and the region. In addition to the University, the other members of BPI include Brown Neurology, Brown Medicine, Brown Dermatology, University Surgical Associates, Inc., Brown Urology and Brown Emergency Medicine. Brown has two seats on the board of directors of BPI. BPI is not owned, controlled or consolidated with Brown, rather BPI has an academic affiliation agreement with the University. It is expected that BPI will enhance the ability of its members to serve the community’s health care needs, to optimally educate the next generation of medical professionals, to grow their combined research portfolios, and to contribute to the state’s plans to cultivate a thriving biomedical economy in Providence and the greater region.

Brown does not own a teaching hospital, but rather the Warren Alpert Medical School has established academic and research affiliations with a total of seven hospitals, three each at the two major hospital systems in Rhode Island, Care New England Health System (“CNE”) and Lifespan, as well as the Providence VA Hospital. CNE is home to Brown’s obstetrics and gynecology and neonatology programs (at Women & Infants Hospital), its Family Medicine program (at Kent Hospital), and a portion of its adult psychiatry program (at Butler Hospital). Lifespan’s Rhode Island Hospital serves as the principal teaching hospital for the Warren Alpert Medical School, and two additional teaching hospitals in the Lifespan system, the Miriam Hospital and Bradley Hospital, are affiliated with Brown.

School of Public Health

Brown is home to Rhode Island’s first and only School of Public Health, which was formed by the University in July 2013. Prior to the creation of the School of Public Health, the University’s Program in Public Health was a part of DBM. The School of Public Health hosts 13 active, nationally renowned public health research centers. It also hosts the University’s Public Health concentration and its Statistics concentration for undergraduate students, and offers four master’s degrees and four doctoral degrees. U.S. News & World Report’s 2020 edition of Best Graduate Schools ranks the Brown University School of Public Health 17th out of the 177 eligible

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schools and programs of public health in the United States. This is the School of Public Health’s first year being ranked by U.S. News & World Report since achieving full accreditation as a School of Public Health in 2016.

Accreditations and Memberships

The University is accredited by the New England Commission of Higher Education (“NECHE”). The next re-accreditation review by NECHE, which occurs every ten years, is scheduled for 2028.

The University also has professional accreditation from the following organizations:

• American Chemical Society • Accreditation Board for Engineering and Technology • Council on Education for Public Health • Liaison Committee on Medical Education of the Association of American Medical

Colleges and the American Medical Association The University is a member of the following:

• Association of American Universities • National Association of Independent Colleges and Universities • Association of Governing Boards of Universities and Colleges • Association of American Medical Colleges • Council of Graduate Schools • Association of Research Libraries • Association of Academic Health Sciences Libraries • Online Computerized Library Center • American Council on Education • Consortium on Financing Higher Education • Council of Ivy League Presidents • American Council of Learned Societies • Social Science Research Council • American Academy of Arts & Sciences • Consortium of Social Science Associations • Fulbright Association • American Institute of Indian Studies • The Science Coalition • National Humanities Alliance • Coalition of Urban and Metropolitan Universities

Governance and Administration

The University is governed by the Brown Corporation, which consists of two bodies: (i) a 12-member Board of Fellows, including the President, by virtue of her office, and (ii) a 42-member Board of Trustees. In addition to the Charter, the Brown Corporation operates under its own

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statutes and a series of resolutions that cover such matters as the adoption of the University budget, establishment of departments and programs, investment and accounting policies, land use and development, faculty and senior staff appointments, and benefits. Members of the Board of Fellows (except the University President) are elected for a single term of not more than 11 years and are not eligible for re-election, except in unusual circumstances. Members of the Board of Trustees serve no more than two non-consecutive six-year terms, except in unusual circumstances. Of the 42 trustees, 13 are elected by the alumni pursuant to an agreement dated May 24, 2019, between the Brown Corporation and the Brown Alumni Association. Two trustee slots are reserved for alumni who received their degree from Brown within three years of election. These “new alumni trustees” serve two-year terms and are elected by undergraduate, graduate and medical students in the final year of study, and undergraduate, graduate, and medical alumni one to five years after their date of graduation. The full Brown Corporation meets three times a year, typically in February, May and October.

The Brown Corporation has the following standing committees: Academic Affairs; Budget and Finance; Campus Life; Communications, Alumni and External Affairs; Brown Medical School; Facilities and Campus Planning; Investment; Risk and Audit; Advisory and Executive; Governance and Nominating; Senior Administration; and Trustee Vacancies.

Current members of the Brown Corporation must serve on one (and only one) of the following three committees: Academic Affairs, Budget and Finance, and Campus Life. The President and Chancellor are ex officio members of each of these three committees. The Vice Chancellor, Treasurer, Secretary, and Chair of the Governance and Nominating Committee each serve on two of these three committees.

The following is a list of the members of the Brown Corporation for academic year 2019-2020, the year of their election to the board and the professional field of each member. Members of the Advisory and Executive Committee are marked with an asterisk (*).

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MEMBERS OF THE BROWN CORPORATION, 2019-2020

Board of Fellows Professional Field Elected * Christina H. Paxson President, Brown University 2012 * Sangeeta N. Bhatia Education 2019 *† Richard A. Friedman Finance 2013 * Laura Geller Religion 2010 Jim Yong Kim Public Service 2019 † Brian T. Moynihan Finance 2016 Jonathan M. Nelson Finance 2011 Thomas J. Tisch Finance 2017 Jerome C. Vascellaro Consulting 2016 Peter S. Voss Finance 2010 *† Maria T. Zuber Education 2009 Board of Trustees Professional Field Elected * John C. Atwater Real Estate 2015 Bernadette Aulestia Media 2017 George S. Barrett Business 2014 Preetha Basaviah Medicine 2018 Brian A. Benjamin Real Estate 2015 Amanda T. Boston Education 2019 Orlando Bravo Finance 2019 Kate Burton Arts 2019 A. Richard Caputo Jr. Finance 2019 Guoqing Chen Business 2017 * Brickson E. Diamond Business 2015 Joseph E. Edleman Finance 2019 John B. Ehrenkranz Finance 2016 Genine M. Fidler Non-Profit 2014 Jill Furman Arts 2019 Charles H. Giancarlo Technology 2016 * Alexandra Robert Gordon Law 2014 * Theresia Gouw Finance 2016 Oliver Haarmann Finance 2019 Libby A. Heimark Education 2017 Galen V. Henderson Medicine 2017 * Jeffrey H. Hines Medicine 2015 Mitchell R. Julis Finance 2019 Pablo G. Legorreta Business 2018 Frayda B. Lindemann Philanthropy- Arts 2019 * Samuel M. Mencoff Finance 2016 * Jennifer B. Moses Education 2015 Viet Nguyen Non-Profit 2018 Perri A. Peltz Media 2018 * Pamela Reeves Consulting 2016 * Alison S. Ressler Law 2004 Ralph F. Rosenberg Finance 2014 Barry S. Rosenstein Finance 2015 Pablo J. Salame Finance 2015 Sara Leppo Savage Business 2019 Zachary J. Schreiber Finance 2016 Matthew I. Sirovich Finance 2016 Preston C. Tisdale Law 2015 Donna E. McGraw Weiss Finance 2019 Nancy G. Zimmerman Finance 2019

___________________ * Member of Advisory and Executive Committee. † Richard Friedman is chairman of the Merchant Banking Division of Goldman Sachs, which is serving as co-manager for the Bonds. Brian Moynihan

is the chairman and CEO of Bank of America and Maria Zuber is an Independent Director of Bank of America, which is serving as senior manager for the Bonds.

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The following is a list of the officers of the Brown Corporation and the years of their initial appointment:

Name

Title

Year of Initial Appointment

Christina H. Paxson President 2012 Samuel M. Mencoff Chancellor 2016 Alison S. Ressler Vice Chancellor 2016 Richard A. Friedman Secretary 2017 Theresia Gouw Treasurer 2016

Christina H. Paxson, President, has served as Brown’s 19th President and a professor of economics and public policy since July 1, 2012. Prior to assuming the presidency in July 2012, President Paxson was dean of the Woodrow Wilson School of International and Public Affairs and the Hughes Rogers Professor of Economics and Public Affairs at Princeton University. A nationally-recognized higher education leader, respected economist and public health expert, President Paxson is a member of the Council on Foreign Relations, a board member of the Association of American Universities, and serves as deputy chair on the Federal Reserve Bank of Boston Board of Directors. She is a 1982 honors graduate of Swarthmore College and earned her graduate degrees in economics at Columbia University (M.A., 1985; Ph.D., 1987). Samuel M. Mencoff, Chancellor, was elected Brown’s 21st Chancellor in 2016, after having served on the Board of Fellows since 2009. Previously, he served on the Board of Trustees of the Brown Corporation from 2003 to 2009. Mr. Mencoff is a founding partner and co-CEO of Madison Dearborn Partners, one of the nation’s leading private equity investment firms. Mr. Mencoff serves as a Commissioner of the Smithsonian Institution’s National Portrait Gallery, and is a director of Packaging Corporation of America, World Business Chicago, NorthShore University HealthSystem, and vice chairman of the Board of Trustees of the Art Institute of Chicago. Mr. Mencoff earned a Bachelor of Arts degree with a concentration in Anthropology from Brown in 1978 and an M.B.A. from Harvard Business School in 1981. Alison S. Ressler, Vice Chancellor, was elected Vice Chancellor of the Brown Corporation’s Board of Trustees in 2016 and, prior to that, served as its treasurer since 2008. Ms. Ressler is a partner and member of the Management Committee of Sullivan & Cromwell LLP. She advises boards of directors and special committees of global companies, private equity investors and financial advisers in mergers and acquisitions, corporate governance and capital markets transactions. Based in Los Angeles, Ms. Ressler is the head of Sullivan & Cromwell’s California practice and co-head of the firm’s Global Private Equity Practice. In addition to her service on the Brown Corporation, she currently co-chairs the Dean’s Council of Columbia Law School, is a member of the Board of Trustees of the Harvard-Westlake School, and a member of the Board and Executive Committee for the Los Angeles 2028 Summer Olympics committee. Ms. Ressler received a Bachelor of Arts from Brown magna cum laude and Phi Beta Kappa as a classics concentrator and she earned a J.D. from Columbia University in 1983, where she was a Harlan Fiske Stone Scholar. Richard A. Friedman, Secretary, was elected to the Brown Corporation Board of Fellows in 2013 following a term on the Brown Corporation Board of Trustees. Mr. Friedman is chairman

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of the Merchant Banking Division at Goldman Sachs and sits on its Management Committee. He joined Goldman Sachs in 1981, was made a partner in 1990, and currently chairs Goldman Sachs’ Investment Committee and its Real Estate Investment Committee. In addition to his service on the Brown Corporation, Mr. Friedman serves as co-chairman of the Board of Trustees of The Mount Sinai Hospital System, and the Richard A. and Susan P. Friedman Family Foundation, which provides funding primarily for education, hospitals, health associations, and interests of the Jewish community. Mr. Friedman earned his Bachelor of Arts at Brown in 1979 and his M.B.A. at the University of Chicago in 1981. Theresia Gouw, Treasurer, was first elected to the Brown Corporation as an alumni trustee in 2007, and joined the Board of Fellows in 2012 where she was a member until becoming treasurer in 2016. She has also served on Presidential Advisory Councils and was co-chair of her reunion. Ms. Gouw is co-founder of Aspect Ventures, a leading early stage venture firm with a unique focus on bridging the funding gap between angels and the larger multi-stage venture capital platforms through collaboration and diversity. Prior to establishing Aspect Ventures in 2014, she was a managing general partner at Accel Partners, a global venture capital firm. Ms. Gouw is a director on the following technology boards, ForeScout, Cato Networks, Crew, TheMuse, Deserve, Exabeam, PredictHQ. Ms. Gouw is vice chair of DonorsChoose.org and is a member of the Castilleja School Board. She has served on the Stanford Graduate School of Business Advisory Council and the DAPER Investment Fund. Ms. Gouw earned a Bachelor of Science, magna cum laude, with a concentration in engineering, from Brown in 1990, and an M.B.A. from Stanford Graduate School of Business, where she co-teaches a course on venture capital. Management of the University

The members of the President’s Cabinet for academic year 2019-2020 are as follows:

Name Title Richard Locke Provost Barbara Chernow Executive Vice President for Finance and Administration Amanda Bailey Vice President for Human Resources Andrew G. Campbell Dean of the Graduate School Russell Carey Executive Vice President for Planning and Policy Cass Cliatt Vice President for Communications Shontay Delalue Vice President for Institutional Equity and Diversity Joseph Dowling CEO, Investment Office Jack Elias Dean of Medicine and Biological Sciences, Senior Vice President for Health Affairs Eric Estes Vice President for Campus Life and Student Services Eileen Goldgeier Vice President and General Counsel Sergio Gonzalez Senior Vice President for Advancement Marguerite Joutz Chief of Staff and Assistant to the President Lawrence Larson Dean of the School of Engineering Bess Marcus Dean of the School of Public Health Kevin McLaughlin Dean of the Faculty Jill Pipher Vice President for Research Bill Thirsk Chief Digital Officer and Chief Information Officer Michael White Vice President for Finance and Chief Financial Officer Rashid Zia Dean of the College

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Richard M. Locke, Provost, also serves as Schreiber Family Professor of Political Science and Public and International Affairs. Prior to joining Brown in 2013 as the director of the Watson Institute for International and Public Affairs, he had been a member of the MIT faculty for 25 years, including serving as chair of the Political Science Department and deputy dean in the Sloan School of Management. Provost Locke is an internationally respected scholar and authority on international labor relations and worker rights, comparative political economy, and corporate responsibility. He is a member of the Council on Foreign Relations, the ILO-IFC Better Work Program Advisory Committee, and from 2013-2016, he served as chair of the Apple Academic Advisory Board, a group of independent academics who worked with Apple to improve labor conditions among the company’s suppliers. Dr. Locke earned a Bachelor of Arts at Wesleyan University, a Master of Arts in education at the University of Chicago, and a Ph.D. in political science, with a specialty in political economy, at MIT. Barbara D. Chernow, Executive Vice President for Finance and Administration, joined Brown in March 2015. Ms. Chernow came from Stony Brook University where she was senior vice president for administration since 2012 and worked in various managerial and administrative positions since 1998. She began her career in education administration at the New York City Board of Education and also worked at the New York City School Construction Authority. Ms. Chernow is a 1979 Brown University graduate with a degree in economics. Faculty

As of April 1, 2020, Brown employs more than 785 permanent faculty (consisting of approximately 710 tenured or tenure-track faculty and approximately 75 lecturers and senior lecturers) and 880 paid adjunct, visiting, clinical and research faculty. In addition, there are approximately 2,000 medical faculty employed by the affiliated hospitals or in private medical practice who provide instruction in the Warren Alpert Medical School.

University faculty members have distinguished themselves in many fields. The faculty currently includes two Nobel Laureates, four Pulitzer Prize winners, one winner of the National Medal of Science, four recipients of MacArthur fellowships, three Carnegie Fellows, three dozen members of the American Academy of Arts and Sciences, and a fellow of the Royal Society, as well as members of the National Academy of Sciences, the American Philosophical Society, the National Academy of Engineering, and other distinguished professional associations. Brown faculty members have been awarded prestigious fellowships, including from the Guggenheim Foundation, the National Endowments for the Humanities and for the Arts, the National Science Foundation, the Sloan Foundation, the Simons Foundation, the American Council of Learned Societies, and numerous others. More than 95% of the full-time teaching faculty hold terminal degrees.

The faculty is organized into more than 50 academic departments and divisions (large departments). The University also has less formal associations of faculty, which are arranged for the purpose of creating educational and research programs of an interdisciplinary nature. There are approximately three dozen of these interdisciplinary institutes, centers, and programs, which involve a significant percentage of the faculty. They cover such interdisciplinary areas as Alcohol and Addiction Studies, Brain and Neural Systems, Environmental Studies, International Affairs, the Humanities, Gender and Sexuality Studies, and Population Studies.

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Enrollment

The following table shows the undergraduate, graduate and medical school enrollments and degrees awarded for the current and past four academic years.

Full Time Student Enrollment and Degrees Awarded

Degrees Awarded Academic Year Undergraduate Graduate Medical Program Total Bachelor Advanced

2015-16 6,321 2,204 523 9,048 1,591 9772016-17 6,580 2,255 545 9,380 1,561 9642017-18 6,670 2,495 566 9,731 1,696 1,0452018-19 6,752 2,584 585 9,921 1,697 1,1992019-20 6,834 2,540 597 9,971 * *

* Not available. Undergraduate Admission Statistics

The following table shows Brown’s undergraduate applications, acceptances and matriculations for the five most recent admissions cycles.

Undergraduate Applications, Acceptances and Matriculations

Class of

Applications

Accepted

Matriculated Selectivity

% Accepted Yield

% Matriculated 2019 30,396 2,875 1,615 9.5 56.2 2020 32,390 3,015 1,681 9.3 55.8 2021 32,723 2,799 1,639 8.6 58.6 2022 35,437 2,718 1,656 7.7 60.9 2023 38,674 2,739 1,662 7.1 60.7

Matriculating first-year students typically score in the top four percent of the more than 2.2

million high school seniors who annually take the SAT. More than 62% of entering students are candidates for advanced placement into Brown courses based on CEEB Advanced Placement exam scores. Over 90% of the entering class rank in the top ten percent of their high school classes.

Mean Entrance Exam Scores for Entering Students

Class of 2019 Class of 2020 Class of 2021 Class of 2022 Class of 2023 SAT Verbal 712 722 724 732 730 SAT Math 721 729 731 741 758 SAT II Subject Tests 738 744 746 751 762 ACT Composite 32 32 33 33 33

Matriculating students come from throughout the United States and many foreign

countries. The geographic distribution of students has remained relatively constant in recent years.

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Geographic Distribution of the Class of 2023

Mid-Atlantic States 25% New England States 16 Pacific Coast States 17 International 16 Southern States 14 Central and Midwest States 9 Mountain States 3 Territories <1 100%

Class of 2024

The following table shows Brown’s undergraduate applications, acceptances and matriculations for the Class of 2024 (entering in September 2020). Class of 2024*

Applications Accepted Matriculations % Accepted Early Decision 4,549 800 793 17.6% Regular Decision 32,244 1,798 932 5.6 TOTAL 36,793 2,598 1,725 7.1 ______________

* As of May 1, 2020; does not include future wait list admits. This number may be impacted by the COVID-19 pandemic. See “Impact of COVID-19 Pandemic” herein.

Division of Campus Life

Brown brings to campus intellectually curious and creative students who engage with and develop their intellectual and personal interests outside of the formal classroom and make a meaningful impact in the University community and beyond. The Division of Campus Life and Student Services (the “Division”) consists of 18 departments and centers as well as numerous key resources systems that support undergraduate, graduate, and medical school students and, in some cases, faculty and staff.

The Division establishes and fosters a dynamic residential environment that enables students to pursue their curricular and co-curricular interests to the fullest. The Division includes several centers (Brown Center for Students of Color; Undocumented, First-Generation College, and Low-Income Student Center; Global Brown Center for International Students; the LGBTQ Center; and the Sarah Doyle Center for Women and Gender) that are central to Brown’s intellectual and personal community building efforts outside of the classroom. The Division also includes several departments, including: Student Support Services, which is central to the developmental advising and mentoring efforts of the University; Student Activities, which helps students engage with each other in more than 500 student organizations; Athletics, which supports 38 varsity teams, club sports, intramural, and recreation and fitness resources and opportunities; Office of Military-Affiliated Students, which has expanded its efforts in recent years; and the departments of Health Services, Health Promotion, and Counseling and Psychological Services, which provide a holistic,

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integrated approach to health and wellness. Further, a number of departments such as Student and Employee Accessibility Services and Chaplains and Religious Life support the whole University community.

Overall, the Division advances students’ abilities to thrive as engaged members of the Brown community, develop a wide range of interpersonal and personal life skills, build diverse and inclusive community, and promote meaningful discourse and interactional diversity across differences in histories, backgrounds, experiences and beliefs.

Student Charges

For the upcoming 2020-21 academic year, the annual tuition charge for full-time undergraduate study is $59,254. Depending on the program, master’s degree tuition rates range from $59,254 to $71,312. The Warren Alpert Medical School tuition rate is $64,974. Brown has a single room rate; however, board rates vary based on the particular plan selected. Resident first-year students are required to register for a meal plan. Additionally, there are various student activity and service fees. Total undergraduate student charges for the upcoming academic year, and the preceding four academic years, are shown below:

Total Undergraduate Student Charges

Academic Year Tuition Room, Board & Other Total 2016-2017 $50,224 $14,342 $64,566 2017-2018 52,231 15,208 67,439 2018-2019 54,320 15,906 70,226 2019-2020 57,112 16,624 73,736 2020-2021 59,254 17,238 76,492

Undergraduate Financial Aid

Brown has an extensive need-based undergraduate financial aid program that supports the institution’s need-blind admission policy by enabling first-year, first-time applicants who are U.S. Citizens, Permanent Residents, and undocumented or Deferred Action for Childhood Arrivals (DACA) residents to be admitted to the University regardless of their financial circumstances. Brown admits international, transfer, and Resumed Undergraduate Education (RUE) program students on a need-aware basis. Brown only offers need-based aid—no awards are administered based on athleticism or any type of merit basis. Brown uses two main formulas to determine a student’s eligibility for financial aid – Federal Methodology (“FM”) and Institutional Methodology (“IM”). FM is used to calculate a student’s eligibility for federal aid and most types of state aid. Many private colleges, including Brown, use IM to determine eligibility for institutional grant funds.

Brown meets 100% of a student’s demonstrated financial need with a financial aid “package” made up of campus employment and grant aid (scholarship). Prior to the fall of 2018, loans were part of the financial aid packages, but the “Brown Promise,” a fundraising effort to replace loans with scholarships, was successfully launched in fiscal year 2018, enabling the elimination of loans for all undergraduate students. See “Fundraising” below for further details about the “Brown Promise” initiative. Brown provides need-based grant aid to approximately 41-

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44% of the undergraduate student body each year. Approximately 52% of undergraduate students receive some type of financial aid in the form of scholarships, loans and/or work opportunities. The amount of aid awarded depends entirely on the amount of financial need the student demonstrates. For academic year 2019-20, Brown undergraduates are expected to receive approximately $164.2 million in grant aid, of which $142.8 million is from University resources, $5.8 million is from federal scholarship programs and $15.6 million is from state and other resources. Labor and Employee Relations

Brown is one of Rhode Island’s largest employers, employing approximately 4,400 full and part-time faculty and staff. Two unions represent four bargaining units, including staff in dining services, facilities management, the library and public safety. The Brown University Security Patrolpersons Association, an independent union affiliated with the American Coalition of Public Safety, represents approximately 60 campus police officers and security guards pursuant to a collective bargaining agreement that expires June 30, 2022. United Service and Allied Workers of Rhode Island (USAW-RI) represents (i) approximately 59 library clerical and technical employees pursuant to a collective bargaining agreement that expires September 30, 2020, (ii) approximately 302 facilities management workers pursuant to a collective bargaining agreement that expires October 12, 2021, and (iii) approximately 199 dining service workers pursuant to a collective bargaining agreement that expires November 1, 2021.

Stand Up for Graduate Student Employees/the American Federation of Teachers (SUGSE/AFT) won a representation election in November 2018 and are now the exclusive bargaining representative for approximately 900 graduate assistants at Brown. The University and union negotiating teams began discussions in April 2019 and have reached tentative agreements on several provisions of a proposed collective bargaining agreement; other provisions remain under discussion in ongoing negotiations.

Retirement Plans

The University has retirement plans covering substantially all of its benefits-eligible employees. Eligible employees participate in one of two types of plans: a defined contribution plan (403(b) or 403(b)(7)), or a defined benefit plan, called the Brown University Dining Services and Facilities Management Employees’ Pension Plan (“EPP”). Participation and eligibility requirements in each of the plans vary according to employee group, date of hire and years of service.

The defined contribution plan is offered to faculty, non-union staff, and Library and Public Safety bargaining unit members. Participants have a choice of investing in Fidelity mutual funds and TIAA-CREF variable or traditional (guaranteed) annuities and mutual funds or selected other mutual funds. Upon retirement, participants may elect to receive a monthly annuity payment or may elect lump sum or periodic withdrawals from their account(s). Participants contribute through payroll reductions. Employer contributions to the defined contribution plan on behalf of eligible employees hired prior to March 1, 2001, are fully and immediately vested. Eligible employees hired on or after March 1, 2001 (July 20, 2001 for Public Safety) are subject to a five-year vesting period.

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The EPP covers employees in Dining Services and Facilities Management. As noted above, both groups are represented by USAW-RI. The plan is provided through group annuity contracts with TIAA-CREF. Upon retirement, participants receive monthly payments determined by a formula that includes years of participation in the plan, salary, and age at retirement. Retirement and survivor benefits in the plan are fully vested after five years of service. The plan is supported entirely by University employer contributions. As of June 30, 2019, the projected benefit obligation of the EPP totaled $116.8 million and the fair market value of assets on that date was $82.6 million. See Footnote 8 in the fiscal year 2019 financial statements attached as Appendix B to the Offering Memorandum for further information on the University’s retirement plans.

Fundraising

The Advancement Division serves the mission of the University by raising philanthropic funds in alignment with Brown’s strategic plan and academic priorities, providing critical endowment, facilities, and current-use revenues. On October 23, 2015, the Advancement Division publicly launched BrownTogether, a $3 billion comprehensive campaign in support of President Paxson’s strategic plan.

As of the beginning of April 2020, the University has raised approximately $2.37 billion for the campaign from over 62,000 donors. Of the total dollars raised to date, over $644 million has been raised towards the “Our People” goal, which focuses on strengthening Brown’s community of scholars by funding new endowed professorships, recruiting more faculty from underrepresented groups, increasing undergraduate financial aid, and offering expanded support for graduate and medical students. Over $863 million has been raised towards the “Education & Research” goal in order to empower the collaboration and innovation necessary to address the world’s most pressing questions and lead to educational discovery. Nearly $525 million has been raised towards the “Campus & Community” goal to support new and renovated buildings, instructional and research technology, improved libraries and laboratories, and counseling and wellness programs for students. Finally, nearly $279 million has been raised to support the Brown Annual Fund, which provides the financial flexibility to create immediate opportunities for financial aid, faculty support, and the student experience.

As of the third quarter of fiscal year 2020, the University has raised over $179 million in new gifts and pledges with $129 million in cash. The Brown Annual Fund has raised nearly $27 million in cash from approximately 26,000 donors during fiscal year 2020. Of this amount, $21 million is unrestricted dollars, representing a 7.4% increase as compared to fiscal year 2019. The University also launched the “Brown Promise” initiative during fiscal year 2018 with the goal of eliminating loans from all undergraduate financial aid packages. To date, the University has raised over $82 million for the initiative, with over $22 million raised for the current use portion and $60 million for the endowment component.

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The following table shows the total contribution revenue (in thousands of dollars) for the past five fiscal years:

Fiscal Year Ended June 30 ($ in thousands)

2015 2016 2017 2018 2019 Total contribution revenue $185,023 $216,246 $214,384 $281,768 $291,588 Sponsored Research

For the fiscal year ended June 30, 2019, Brown recognized operating revenue of $200.9 million from the recovery of direct and indirect costs associated with research grants awarded from public and private agencies. Revenues are recognized as the direct and indirect costs that are billed to or received from the sponsor, which may differ in timing from the year in which Brown is awarded a grant. The following table sets forth the total amounts recognized as revenue.

Sources of Sponsored Research ($ in thousands)

Year Ended

June 30

Government

Private

Total Revenues

2015 $133,954 $17,504 $151,458 2016 139,914 21,112 161,026 2017 146,595 25,601 172,196 2018 165,533 24,697 190,230 2019 179,320 21,589 200,909

During the year ended June 30, 2019, Brown received 1,123 sponsored research awards. The largest portion of sponsored research funds comes from federal agencies, particularly the United States Department of Health and Human Services (“DHHS”). The direct awards received from DHHS constitute approximately 47% of total sponsored research revenue.

Brown has a negotiated organized research facilities and administrative (indirect cost) rate of 62.5% for fiscal years 2015-2019. The indirect cost rates for the current and future fiscal years are currently under negotiation.

Investment Management

The Brown University Investment Office, led by Chief Executive Officer for Investments, Joseph L. Dowling III, and Vice President and Chief Investment Officer, Jane Dietze, supports the Investment Committee of the Brown Corporation in its decision-making regarding asset allocation and portfolio strategy and is responsible for manager selection, evaluation and due diligence. The primary management objective is to provide an increasing flow of funds over time, adjusted for inflation, in order to support the University’s annual operating budget.

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The University has established an internal unitized pool of endowment and similar funds to facilitate investment, recognition of income and the sharing of appreciation. Each participating endowment fund owns “shares” in the pool. The market value of a share is determined at the end of each month, and during the succeeding month, new gifts to the endowment buy shares at that price. To satisfy its long-term rate-or-return objectives, the University relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The University targets a diversified asset allocation to achieve its long-term return objectives within prudent risk constraints.

The total endowment return for fiscal year 2019 was 12.4%. Over the past ten years, the University’s average annual compound return was 10.0%. The value of the endowment and other managed funds was $4.2 billion as of June 30, 2019. The unaudited value of the endowment and other managed funds as of March 31, 2020 was $4.1 billion. The COVID-19 pandemic could have an impact on the value of its endowment, but the University cannot predict the magnitude of such impact at this time. See “Impact of COVID-19 Pandemic” herein.

Brown’s portfolio is diversified across a range of strategies in U.S. and international financial markets. As of June 30, 2019, the pooled endowment funds were invested as follows:

Asset Class Percentage Public equity 20% Hedged strategies 37 Private equity 27 Real assets 4 Total Risk Assets 88% Fixed income and Cash 12%

TOTAL 100% Liquidity

The University maintains substantial liquidity to meet its financial obligations. In addition to the liquidity available through the short-term working capital and the long-term investment pool (the endowment and similar funds), Brown has entered into revolving credit agreements with financial institutions to provide additional liquidity for a variety of purposes including stand-by bond purchase agreements for its variable-rate bonds. These agreements are solely for the benefit of the University and the University reserves the right to cancel the agreements or replace the financial institutions at its discretion. Endowment Usage

A long-standing Brown Corporation policy limits the annual spending from endowment to between 4.5% and 5.5% of the average fair value of applicable endowments over the prior twelve quarters, with the objective being to hold the spending rate to no more than a 5% average over time. Earnings in excess of authorized spending are reinvested.

APPENDIX A

A-18

The following table reflects the historical trend of endowment usage for the five most recent fiscal years:

Endowment Usage ($ in thousands)

Year Ended

June 30 Total Endowment

Usage Market Value at Year End

Authorized Usage (% of 3 yr. Average)

2015 $136,878 $3,073,349 5.47% 2016 152,786 2,963,366 5.40 2017 164,085 3,245,531 5.49 2018 149,064 3,603,848 5.07 2019 150,574 3,976,694 4.90

Operating Budget

For fiscal year 2020, the University’s consolidated operating budget totals approximately $1.2 billion. The University has five major operating units that comprise its consolidated operating budget: (i) the Education and General division, with an expense budget of $825 million, supports the core activities of the University, including the undergraduate college and the graduate school; (ii) DBM, with an expense budget of $177 million, which includes the Warren Alpert Medical School; (iii) the School of Public Health, which manages a $58 million budget; (iv) the School of Professional Studies, which manages a $31 million budget; and (v) auxiliary enterprises, which includes operations for housing, dining, and the bookstore, which manages a $116 million budget.

Brown conducts annual budget and multi-year financial planning processes under the direction of the Provost and Executive Vice President for Finance and Administration. The Provost chairs the University Resources Committee, which includes faculty, administrators, students and staff. This Committee reviews and analyzes Brown’s finances and recommends a consolidated operating budget for the upcoming year to the President. While historically the Brown Corporation has approved the consolidated operating budget in February of each year, commencing with the fiscal year 2021 budget process, the Brown Corporation now approves the consolidated operating budget and reviews the projected sources of revenue and expenditures in May. Actual financial results are also reviewed regularly by the Brown Corporation. See “Impacts of COVID-19 Pandemic” below for information regarding the fiscal year 2021 budget.

Vice presidents, deans, directors and department heads are responsible for the expenditures within their operations. Financial reports with budgets, actuals, and encumbrances are available to departments. Financial managers are expected to complete regular projections. Financial Contributions to the City of Providence

In collaboration with the other private colleges and universities in Providence, in 2003 Brown entered into a Memorandum of Understanding with the City of Providence to provide nearly $50 million of voluntary contributions over 20 years to the city, of which Brown’s current annual payment is $1.3 million. In addition, during fiscal year 2020, Brown made transition payments of $1.1 million for properties purchased since 2003 that are converted to educational

APPENDIX A

A-19

purposes. Brown pays $1.9 million in property taxes on property it owns and leases that is not used for educational purposes.

In May 2012, Brown and the City of Providence reached an additional agreement under which Brown increased its total payments to Providence by $31.5 million over 11 years. This agreement preserved Brown’s legal status as a tax-exempt institution and did not alter any of the provisions of the 2003 Memorandum of Understanding signed by Brown and other non-profit colleges in Providence. Under this agreement, Brown provided an additional $3.9 million per year for the first five years beginning in June 2012, followed by $2 million for six years until June 2022. The 2012 agreement with Providence also includes a 20-year lease of 250 on-street parking spaces and the purchase of four city streets surrounded by Brown’s property. In total, Brown pays approximately $64 million annually in voluntary and property tax payments to the City of Providence. Physical Plant

The University owns 236 academic, administrative, athletic, student housing and support buildings. The book value of the University’s physical plant for the last five fiscal years is shown below.

University Plant Book Values ($ in thousands)

June 30 Land, Buildings and

Improvements Accumulated Depreciation

Construction in Progress Total

2015 $1,874,147 $(860,098) $50,056 $1,064,105 2016 1,914,015 (917,141) 67,757 1,064,631 2017 1,980,697 (987,059) 106,105 1,099,743 2018 2,119,494 (1,063,156) 68,390 1,124,728 2019 2,218,816 (1,120,697) 93,013 1,191,132

The book value of the above assets is stated at cost or at fair market value as of the date of

donation or acquisition.

Insurance

The Brown University insurance program incorporates a broad range of coverages designed to insure losses that could materially affect its financial position as well as additional coverages required by law or contract. Insurance companies are utilized to provide catastrophic protection for property and liability exposures. As a member of Pinnacle Consortium of Higher Education, a Vermont-based reciprocal risk retention group, the University has maintained broader coverages, as well as better pricing than might otherwise be available for an individual institution, allowing greater flexibility in the structure of the program. The University has placed increasing emphasis on eliminating conditions and practices which could cause loss, thus permitting higher levels of self-insurance and higher deductibles.

APPENDIX A

A-20

Long-Term Indebtedness

As of June 30, 2019, the University had outstanding indebtedness of $743.9 million (excluding unamortized premium of $43.8 million) evidenced by bonds, mortgages and notes. The debt is comprised of both fixed and variable-rate obligations, and the debt service payments constitute general obligations of the University. The University has interest rate swap agreements in place, effectively to convert a portion of its variable-rate bonds to fixed rates. Footnote 7 in the fiscal year 2019 financial statements attached as Appendix B to the Offering Memorandum provides further details on the outstanding debt and interest rate swaps as of June 30, 2019.

In July 2019, the Rhode Island Health and Educational Building Corporation issued its

Higher Educational Facilities Revenue Refunding Bonds (Brown University Issue – Series 2019 A) (the “Series 2019A Bonds”), for the benefit of the University, in the aggregate principal amount of $54.56 million. The Series 2019A Bonds were issued as tax-exempt bonds, bear interest at a fixed rate of 5% and mature on September 1, 2029. The proceeds of the Series 2019A Bonds were used to refinance $70.795 million outstanding principal amount of the Rhode Island Health and Educational Building Corporation Higher Educational Facilities Revenue Bonds (Brown University Issue – 2009 Series A), which were redeemed on September 1, 2019.

In July 2019, the University also amended its Taxable Commercial Paper program to

increase the maximum amount of taxable notes that could be issued thereunder from $50 million to $125 million and terminate the extendible feature of the notes.

Finally, also in July 2019, the University renewed and reduced its $125 million line of

credit to $50 million. This line of credit expires in July 2020; the University is currently negotiating the renewal of this line with an expected expiration date in May 2021. The University is in discussions regarding obtaining an additional $50 million committed line of credit. The timing and expiration of this line has not yet been determined. Financial Reporting

University resources are reported for accounting purposes in separate classes of net assets based upon the existence or absence of donor-imposed restrictions. The net assets are classified as with or without donor restrictions. All expenses are shown as a decrease in net assets without donor restrictions. As donor-imposed restrictions expire (either through the passage of time or the use of such funds), reclassifications are shown increasing one class of net assets and decreasing another.

The tables that follow are based on the University’s audited financial statements for the fiscal years 2015 through 2019 and should be read in conjunction with the audited financial statements and the footnotes thereto as of June 30, 2019, which are attached as Appendix B to the Offering Memorandum.

KPMG LLP, Brown University’s independent auditor, has not been engaged to perform and has not performed, since the date of its report included as part of Appendix B to the Offering Memorandum, any procedures on the financial statements addressed in that report. KPMG LLP also has not performed any procedures relating to the Offering Memorandum.

APPENDIX A

A-21

__________________ Note: Certain reclassifications were made to the fiscal year 2015-2018 summarized balance sheet information to be in accordance with the 2019 presentation. These reclassifications had no effect on the total net assets as previously reported.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

(thousands of dollars)2019 2018 2017 2016 2015

Total assets 6,209,293 $5,791,966 $5,369,920 $5,000,183 $5,132,202

Total liabilities 1,135,774 1,155,475 1,183,206 1,197,902 1,212,561

Net assets: Without donor restrictions 1,125,901 1,078,110 965,450 891,985 992,318 With donor restrictions 3,947,618 3,558,381 3,221,264 2,910,296 2,927,323

Total net assets $5,073,519 $4,636,491 $4,186,714 $3,802,281 $3,919,641

Total liabilities and net assets $6,209,293 $5,791,966 $5,369,920 $5,000,183 $5,132,202

Summarized Balance Sheet Informationfor the years ended June 30, 2019, 2018, 2017, 2016, and 2015

APPENDIX A

A-22

__________________ Note: Certain reclassifications were made to the fiscal year 2015-2018 summarized statement of activities information to be in accordance with the 2019 presentation. These reclassifications had no effect on the total net assets as previously reported.

APPENDIX A

A-23

Impact of COVID-19 Pandemic

The University is closely monitoring the global spread of the novel coronavirus disease (“COVID-19”) and, to date, has taken (or will take) the following actions:

(i) Beginning March 17, 2020 and continuing through the end of the Spring 2020 semester, all residential facilities have been closed; a small number of students remain on campus due to travel restrictions related to the pandemic.

(ii) On March 30, 2020 (after an extended spring break period) and continuing through the end of the Spring 2020 semester, all classes have been transitioned to online and other forms of remote instruction.

(iii) All on-campus Summer Session 2020 undergraduate courses have been cancelled; the University has moved a number of courses online in an effort to expand the number of available offerings over the summer.

(iv) All Pre-College Programs and Sports Camps (both residential and day camps) scheduled to take place from June through August have been cancelled; efforts to transition a select group of formerly in-person courses to an online format is underway.

The University remains open, but has temporarily suspended most on-campus operations and has transitioned to conducting business remotely whenever possible to comply with the State of Rhode Island’s emergency declaration. To mitigate the operational and financial impact of the loss of revenues from the actions described above, the University has implemented the following expense reduction measures:

• Suspension of all new hiring for the balance of fiscal year 2020 and for all of fiscal year 2021. This hiring freeze extends to all faculty and staff positions (with limited strategic exceptions), and includes seasonal/intermittent hiring and other temporary hiring through vendor partners. Positions deemed essential are being reviewed separately.

• Implementation of a freeze on all faculty and staff salaries at the current levels, no salary increases for fiscal year 2021, and elimination of all merit or performance bonuses for fiscal year 2020.

• Agreement to a 20% reduction in salary by the University President, the University Provost and Investment Office CEO, with a 15% voluntary reduction in salary agreed to by all other members of the senior administration.

• Evaluation of ongoing construction activities to determine which projects may be suspended or postponed based on the mission-critical nature of the project and financing structure.

• Deferral of non-critical purchasing and other discretionary suspending.

• Suspension of all international and domestic travel organized, sponsored or supported by the University (or conducted as part of an appointment or employment at the University).

APPENDIX A

A-24

Although the University is unable to predict the impact the continued spread of the outbreak will have on the University and the generation of revenues, as a result of the actions described above, the University currently estimates that the operating loss for the fiscal year ending June 30, 2020 as a result of COVID-19 will exceed $16 million; however, this estimate does not reflect expense reductions and possible other offsets. Depending on the length of the pandemic, the University expects to incur substantial losses in revenue and increases in costs over the next several months, on the order of at least $50 million, and possibly significantly more, depending on the duration of the pandemic. In addition, while the impact on the University’s endowment cannot be quantified at this time, investment performance will likely be impacted by the downturn in the financial markets.

For Fall 2020, University management is still evaluating multiple scenarios for partial residential semester(s) and/or remote learning. In any event, the University expects to open fully for the fall semester, with the curriculum delivered either in person or virtually and is developing detailed plans for either circumstance. As of April 2020, the number of acceptances for the Fall 2020 freshman class is consistent with previous years, while the requests for deferrals is lower than in prior years. Actual deferral figures will not be known, however, until later in the summer. Currently, the University’s Provost and Executive Vice President for Finance and Administration are leading efforts to develop plans and budgets for the fiscal year 2021. With input from the University Resources Committee and a special Corporation committee focused on the University’s finances, these plans will consider varying scenarios based on the length of the pandemic and potential impact for the University. University updates on the COVID-19 pandemic can be accessed via the following website address: https://covid.brown.edu/university-updates1. Litigation

The University is a defendant in numerous legal actions arising from the normal course and scope of its operations. Although the final outcome of threatened or pending legal actions cannot be determined at this time, University management believes that the potential liability and exposure, if any, would not have a material effect on the University, its assets, its operations or its ability to repay the Bonds.

Relating specifically to COVID-19, on April 30, 2020, a putative class action lawsuit was filed against the University in the United States District Court for the District of Rhode Island (John Doe, et al. v. Brown University (20-CV-00191-WES-LDA). The lead plaintiff in the lawsuit is alleged to be a student who is a Rhode Island resident. The complaint alleges claims for breach of contract, unjust enrichment and conversion due to the transition to remote learning caused by COVID-19 and seeks damages for tuition and/or room or board, plus other costs. The University has engaged outside litigation counsel and is preparing a vigorous defense. At this time, it is too early to determine the potential amount of any damages in the event of an unfavorable outcome in this lawsuit.

1 Reference to the University’s COVID-19 resource website is for informational purposes only and is in the form of a hyperlink solely for the reader’s convenience. This website and the information or links contained therein are not incorporated into, and are not part of, this Appendix A or the Offering Memorandum for any purpose, including for purposes of Rule 15c2-12 promulgated by the SEC.

APPENDIX B

FINANCIAL STATEMENTS OF BROWN UNIVERSITY


BROWN UNIVERSITY

Financial Statements

June 30, 2019 and 2018

(With Independent Auditors’ Report Thereon)

Independent Auditors’ Report

The President and Corporation Brown University:

We have audited the accompanying financial statements of Brown University, which comprise the balance sheets as of June 30, 2019 and 2018, the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the organization’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the organization’sinternal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Brown University as of June 30, 2019 and 2018, and the changes in its net assets and its cash flows for the years then ended in accordance with U.S. generally accepted accounting principles.

KPMG LLP is a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

KPMG LLPOne Financial Plaza, Suite 2300Providence, RI 02903

2

Emphasis of Matter

As discussed in note 1(p) to the financial statements, in 2019, the University adopted Accounting Standards Update (ASU) 2016-14, Presentation of Financial Statements of Not-for-Profit Entities. Our opinion is not modified with respect to this matter.

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BROWN UNIVERSITY Notes to Financial Statements

June 30, 2019 and 2018

(Dollars in thousands)

7 (Continued)

(1) Summary of Significant Accounting Policies (a) Organization

Brown University (the University or Corporation) is a private, not-for-profit, nonsectarian, co-educational institution of higher education with approximately 6,670 undergraduate students and 3,000 graduate and medical students. Established in 1764, Brown University offers educational programs for undergraduates in liberal arts and engineering, professional training for students pursuing a career in medicine, and graduate education and training in the arts and sciences, engineering and medicine.

(b) Basis of Presentation and Tax Status The accompanying financial statements are presented on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (GAAP) and present balances and transactions according to the existence or absence of donor-imposed restrictions.

The John Nicholas Brown Center for the Study of American Civilization; Farview Incorporated, a real estate holding company; KARING, a Rhode Island not-for-profit corporation that holds certain property of the Warren Alpert Medical School; and certain entities established by the University’s investment office that holds certain investment funds, are all separate legal entities that are consolidated in the financial statements. Brown University and these consolidated entities are collectively referred to herein as the University. All significant inter-entity transactions and balances have been eliminated. In 2019, KARING and Farview Incorporated were dissolved and all of the assets and liabilities were assumed by the University.

The University is a not-for-profit organization as described in Section 501(c)(3) of the Internal Revenue Code, as amended, and is generally exempt from income taxes. The University assesses uncertain tax positions and determined that there are no such positions that have a material effect on the financial statements.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted. The Act impacts the University in several ways, including the addition of excise taxes on executive compensation and new rules for calculating unrelated business taxable income. We do not believe it is material to the financial statements.

(c) Classification of Net Assets Net assets, revenues, and gains and losses are classified based on the existence or absence of donor-imposed restrictions into two classes of net assets. Accordingly, net assets of the University are classified and reported as follows:

� Without donor restrictions – Net assets that are not subject to donor-imposed stipulations.

� With donor restrictions – Net assets subject to donor-imposed stipulations that are more specific than broad limits resulting from a not-for-profit’s nature, environment in which it operates and incorporating documents. Some donors impose restrictions that are temporary in nature for example, stipulating that resources be used only after a specific date, for particular programs or services, or to acquire buildings and equipment. Other donors impose restrictions that are


June 30, 2019 and 2018


8 (Continued)

perpetual in nature, for example, donor-restricted endowment funds stipulating that resources be maintained in perpetuity.

Revenues are reported as increases in net assets without donor restrictions unless their use in limited by donor-imposed restrictions. Expenses are reported as decreases in net assets without donor restrictions. Gains and losses on investment are reported as increases or decreases in net assets without donor restrictions unless their use is restricted by explicit donor stipulations or by law. The University is incorporated in and subject to the laws of Rhode Island, which contain the provisions outlined in the Uniform Prudent Management of Institutional Funds Act (UPMIFA). Under UPMIFA, the net assets of a donor-restricted endowment funds may be appropriated for expenditure by the Corporation of the University in accordance with the standard of prudence prescribed by UPMIFA.

(d) Fair Value Measurements Investments, funds held in trust by others, and interest rate swaps are reported at fair value in the University’s financial statements. Fair value represents the price that would be received upon the sale of an asset or paid upon the transfer of a liability in an orderly transaction between market participants as of the measurement date. The University uses a three-tiered hierarchy to categorize those assets and liabilities based on the valuation methodologies employed. The hierarchy is defined as follows:

� Level 1 – Valuation based on quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities;

� Level 2 – Valuations based on inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

� Level 3 – Valuation based on unobservable inputs used in situations in which little or no market data is available.

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. The University utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. Transfers between categories occur when there is an event that changes the inputs used to measure the fair value of an asset or liability. Transfers between fair value categories are recognized at the end of the reporting period.

Investments measured at net asset value as a practical expedient to estimate fair value are not categorized in the fair value hierarchy.

(e) Statements of Activities The statements of activities separately report changes in net assets from operating and nonoperating activities. Operating activities consist principally of revenues and expenses related to ongoing educational and research programs, including endowment return appropriated by the Corporation to support those programs. Nonoperating activities consist of net investment return, an offset for endowment return appropriated for operating activities, changes in fair values of interest rate swaps, change in pension plan and other long-term obligations, contributions for long-term purposes, net assets released from donor restrictions for property placed in service, and other activities not in direct support of annual operations.


June 30, 2019 and 2018


9 (Continued)

Under ASC Topic 606, revenue from contracts with customers is recognized when control of the promised goods or services is transferred in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services (i.e., the transaction price). Revenues are derived from various source, as follows:

� Revenue from student education, residence, and dining services is determined based on published rates and is billed and reflected net of reductions from institutional student aid, which may be funded by endowment funds or other institutional resources. Such revenue is recognized as the services are provided over the academic year, which generally aligns with the University’s fiscal year. Aid in excess of a student’s tuition and fees is reflected as a reduction of residence and dining charges. Disbursements made directly to students for living costs or other purposes are reported as an expense. Payments for student services are generally received prior to the commencement of each academic term and are reported as student deposits to the extent services will be rendered in the following fiscal year.

The composition of student tuition and fee revenue was as follows for the years ended June 30, 2019 and 2018:

2019 2018

Undergraduate $ 394,857 377,994 Graduate and masters programs 168,555 154,249 Other 18,499 18,520

Tuition and fees 581,911 550,763

Less university scholarships (208,960) (197,449)

Net tuition and fees $ 372,951 353,314

Sales and services of auxiliary enterprises revenues are recognized when goods or services are provided to customers. Auxiliary enterprises revenue consisted of the following for the years ended June 30, 2019 and 2018:

2019 2018

Residence, dining and health services $ 82,344 79,225 Bookstore, rental and other auxiliary income 20,368 20,811

Total $ 102,712 100,036


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10 (Continued)

� Contributions, including unconditional promises from donors reported as contributions receivable, are recognized at fair value in the period received and are classified based upon the existence or absence of donor-imposed restrictions. Expirations of donor-imposed restrictions are reported as net assets released from restrictions. Contributions which impose donor restrictions that are met in the same fiscal year they are received are reported as increases in net assets without donor restrictions. Bequest intentions and conditional promises are not recorded in the University’s financial statements.

� Grants and contracts awarded by federal and other sponsors, which generally are considered nonexchange transactions restricted by sponsors for certain purposes, are recognized as revenue when qualifying expenditures are incurred and conditions under the agreements are met. The University has elected the simultaneous release policy available under ASU 2018-08, which allows a not-for-profit organization to recognize a restricted contribution directly in net assets without donor restrictions if the restriction is met in the same period that the revenue is recognized. Total revenue from grants and contracts recognized in net assets without donor restrictions was $200,909 and $190,230 for the years ended June 30, 2019 and 2018, respectively. Payments received from sponsors in advance of conditions being met are reported as deferred revenue, which totaled $23,150 and $19,944 as of June 30, 2019 and 2018, respectively. Conditional awards from federal sponsors outstanding as of June 30, 2019 were $402,345.

� Dividends, interest and realized and unrealized gains (losses) on investments are reported as increases (decreases) in (1) net assets with donor restrictions if the terms of the contributions require them to be added to principal or if the terms of the related contributions impose restrictions on their availability or use; or (2) net assets without donor restrictions in all other cases. Investment return attributable to donor-restricted endowment funds is reported as net assets with donor restrictions to the extent not appropriated and spent.

Expenses are reported as decreases in net assets without donor restrictions.

(f) Cash Equivalents For purposes of the statements of cash flows, cash equivalents, except for those held by investment managers, consist of money market funds and investments with original maturities of three months or less and are carried at cost, which approximates fair value.

(g) Accounts Receivable and Other Assets and Notes Receivable Accounts receivable and other assets include amounts due from students, reimbursements due from sponsors of externally funded research, accrued income on investments, inventory and prepaid expenses. Notes and accounts receivable are presented net of an allowance for uncollectible amounts.

(h) Land, Buildings and Equipment Land, buildings and equipment are stated at cost of acquisition or construction (including capitalized interest) or, to the extent received as a gift, at estimated fair value at the time of receipt, and are presented net of accumulated depreciation. All other expenditures for maintenance and repairs are charged to operating activities as incurred.


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11 (Continued)

Depreciation is calculated using the straight-line method with estimated useful lives of 30-to-40 years for buildings, 20-to-30 years for building improvements, and 3-to-15 years for equipment, depending upon asset class. Depreciation on buildings that support research efforts are componentized and depreciated over useful lives ranging from 15-40 years.

(i) Fund Held in Trust by Others Funds held in trust by others represent funds that are held and administered by outside trustees, including perpetual trusts established by donors of $28,887 and $28,827 at June 30, 2019 and 2018, respectively. The University receives all or a specified portion of the return on the underlying assets of most of the trusts, which is primarily restricted for scholarships. Most of these trust interests are classified in Level 3 in the fair value hierarchy. Other trusteed funds of $33,999 and $65,616 at June 30, 2019 and 2018, respectively, represent debt proceeds to be utilized for construction projects or otherwise required to be held as collateral or in reserve in accordance with debt or interest rate swap agreements. These are classified in Level 1 in the fair value hierarchy because the underlying securities held by the trustee are based on quoted market prices.

(j) Federal Student Loan Advances The University holds certain amounts advanced by the U.S. government under the Federal Perkins Loan Program and the Health Professions Student Loan Program (the Programs). Under federal law, the authority for schools to make new loans under the Programs ended on September 30, 2017, and final distributions to student were permitted through June 30, 2018.

(k) Collections The University’s collections include works of art, historical treasures, and artifacts that are maintained in the University’s libraries and museums. These collections are protected and preserved for education and research purposes. The collections are not recognized as assets in the financial statements of the University.

(l) Derivatives The University uses derivatives for both debt and investment-related purposes. Interest-rate swaps, as described in note 7 (c), are initially used to manage interest-rate risk by fixing the rate on associated variable-rate debt issuances. In addition, certain of the University’s investment strategies utilize various derivative financial instruments for a number of investment purposes, including hedging or altering exposure to certain asset classes and cost-effectively adding exposures to portions of the portfolio. Positions are expected to create gains or losses which, when combined with the applicable portion of the total investment portfolio, provide an expected result. Among the derivative instruments that may be entered from time to time include total return swaps to manage exposures in equity markets, foreign currency forward contracts to manage currency exposures in the portfolio. The University has established policies and procedures to monitor and manage risks related to these instruments. In connection with its investment derivative activities, the University generally maintains master netting agreements and collateral agreements with its counterparties. The agreements provide the University the right, in the event of default by the counterparty, to net a counterparty’s rights and obligations under the agreement and to liquidate and offset collateral against any net amount owed by the counterparty.


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12 (Continued)

(m) Liabilities Associated with Investments The University may, from time to time, incur liabilities associated with its investments portfolio as a result of securities sold short or other transactions. In order to terminate a short position, the University must acquire and deliver to the lender a security identical to the one it borrowed and sold short, and a realized gain or loss is recognized for the difference between the short sale proceeds and the cost of the identical security acquired. Liabilities reported on the balance sheets at June 30, 2019 and 2018 include $21,581 and $54,068, respectively, representing the fair value of identical securities that must be acquired to settle obligations to the lender. The liabilities would be classified as Level 1 in the fair value hierarchy given that they are measured based on quoted market prices. In addition, liabilities associated with investments include the fair value swaps of $2,842 and $6,060 entered into in fiscal 2019 and 2018, respectively.

(n) Other Long-Term Obligations Other long-term obligations consisted of the following for the years ended June 30, 2019 and 2018:

2019 2018

Federal student loan advances $ 20,378 19,875 Split interest obligations 16,432 17,019 Asset retirement obligations 16,107 15,263 Interest-rate swap liabilities 45,259 31,757

Total $ 98,176 83,914

(o) Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

(p) Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-14, Presentation of Financial Statements of Not-for-Profit Entities. The University retrospectively adopted ASU 2016-14 in fiscal year 2019. The standard is intended principally to improve the net asset classification requirements and the information presented in the financial statements and notes about liquidity and financial performance. The primary changes affecting the University include: presentation of two classes of net assets versus the previously required three; recognition of underwater endowment funds as a reduction in net assets with donor restrictions versus unrestricted net assets as previously required; enhanced disclosures for board designated amounts, composition of net assets without donor restrictions, and liquidity; and disclosure of expenses by both their natural and functional classification in a matrix format. As a result of adopting this standard, certain prior year amounts have been reclassified.


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13 (Continued)

Net asset reclassifications as of July 1, 2017 driven by the adoption of ASU 2016-14 in 2018 are as follows:

ASU 2016-14 ClassificationsWithout donor With donor Total net

Net assets classifications restrictions restrictions assets

As previously presented:Unrestricted $ 964,088 — 964,088 Temporarily restricted — 1,708,549 1,708,549 Permanently restricted — 1,514,077 1,514,077

964,088 3,222,626 4,186,714

Reclassifications to implement ASU 2016-14:Underwater endowments 1,362 (1,362) —

Net assets, as reclassified $ 965,450 3,221,264 4,186,714

Net asset reclassifications as of July 1, 2018 driven by the adoption of ASU 2016-14 in 2018 are as follows:

ASU 2016-14 ClassificationsWithout donor With donor Total net

Net assets classifications restrictions restrictions assets

As previously presented:Unrestricted $ 1,077,926 — 1,077,926 Temporarily restricted — 1,934,290 1,934,290 Permanently restricted — 1,624,275 1,624,275

1,077,926 3,558,565 4,636,491

Reclassifications to implement ASU 2016-14:Underwater endowments 184 (184) —

Net assets, as reclassified $ 1,078,110 3,558,381 4,636,491

ASU 2014-09, Revenue from Contracts with Customers, was issued by the FASB in May 2014 and is intended to improve the financial reporting requirements for revenue from contracts with customers. The ASU establishes a five-step model and application guidance for determining the timing and amount of revenue recognition. The related application guidance in the ASU replaces most existing revenue recognition guidance in GAAP. The ASU became effective for the University for the year ended June 30, 2019. The University’s adoption of the ASU did not materially change the timing or amount of revenue recognized by the University. However, the ASU requires that tuition, fees and auxiliary student revenues be presented in the statement of activities at the transaction price, i.e., net of any institutional student aid. Previously, such revenues were presented gross, i.e., at published rates,


June 30, 2019 and 2018


14 (Continued)

followed by a reduction for institutional student aid. Accordingly, the University’s 2018 statement of activities has been revised to conform to the 2019 presentation.

ASU 2018-08, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, was issued by the FASB in June 2018. The new ASU is intended to assist entities in (1) evaluating whether transactions should be accounted for as contributions (nonexchange transactions) within the scope of Topic 958, Not-for-Profit Entities, or as exchange transactions subject to other guidance and (2) determining whether a contribution is conditional. The ASU clarifies that a contribution is conditional if the agreement includes one or more barriers that must be overcome for the recipient to be entitled to the assets transferred and a right of return for the transferred assets or a right of release of the promisor’s obligation to transfer assets. The ASU became effective for the University for the year ended June 30, 2019. The University’s adoption of the ASU on a modified prospective basis did not have a material effect on its financial statements.

(q) Reclassifications Certain 2018 financial information has been reclassified to conform to the 2019 presentation.

(2) Liquidity and Availability Financial assets available for general expenditures within one year of June 30 are as follows:

2019

Financial assets:Cash and cash equivalents $ 208,926 Accounts receivable, net 48,579 Pledge payments available for operations 13,159 Working capital investments 274,148 Fiscal 2020 endowment income appropriated 159,985

Total financial assets available within one year 704,797 Liquidity resources:

Taxable commercial paper 125,000 Bank line of credit 50,000

Total financial assets and liquidity resources available withinone year $ 879,797


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15 (Continued)

The University manages its financial assets to be available as its operating expenditures, liabilities and others obligations come due. In addition, the University invests cash in excess of daily requirement in short-term investments or fixed income securities. To supplement working capital, the University has a line of credit and a commercial paper program. In July 2019, the line of credit agreement was renewed for $50,000. In July 2019, the amount available through the University’s taxable commercial paper programs was amended to $125,000.

Additionally, the University has corporation-designated endowments of $571,146 as of June 30, 2019. Although the University does not intend to spend from its corporation-designated endowment funds, other than amounts appropriated for general expenditure, as part of its annual budget approval and appropriation process, amounts from its corporation-designated endowment funds could be made available if necessary. However, both the corporation-designated funds and donor-restricted endowment funds contain investments with liquidity constraints, of which $2,012,653 can be liquidated on a daily to quarterly basis (refer to note 4 for disclosures about investments).

(3) Contributions Receivable The University’s contributions receivable are recognized net of discounts at rates commensurate with the risks involved and after allowance for uncollectibles are reported at net realizable value, which approximates fair value. Contributions receivable were as follows at June 30:

2019 2018

Contributions expected to be received in:Less than one year $ 64,882 50,066 Between one and five years 142,615 111,168 More than five years 148,532 131,082

Gross contributions receivable 356,029 292,316

Unamortized discount (at rates ranging from 0.7% to4.8%) and allowance for uncollectibles (78,586) (74,682)

Contributions receivable, net $ 277,443 217,634

At June 30, 2019, the University had conditional promises to give of $223,180. These conditional promises to give are not recognized as assets or revenue in the financial statements.


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16 (Continued)

(4) Investments Investment Strategy

In addition to traditional stocks and fixed-income securities, the University may also hold shares or units in institutional funds as well as in alternative investment funds involving hedged, private equity and real asset strategies. Hedged strategies involve funds whose managers have the authority to invest in various asset classes at their discretion, including the ability to invest long and short. Funds with hedged strategies generally hold securities or other financial instruments for which a ready market exists and may include stocks, bonds, put or call options, swaps, currency hedges and other instruments, and are valued accordingly. Private equity funds employ buyout and venture capital strategies and may focus on investments in turn-around situations. Real asset funds generally hold interests in public real estate investment trusts (REITs), commercial properties or commodities, or oil and gas, generally through commingled funds. Private equity and real asset strategies therefore often require the estimation of fair values by fund managers in the absence of readily determinable market values.

Investments also include assets related to donor annuities, pooled income funds, and charitable remainder trusts. Certain of these funds are held in trust by the University for one or more beneficiaries who are generally paid lifetime income, after which the principal is made available to the University in accordance with donor restrictions, if any. The assets are reported at fair value and related liabilities, which are reported as split-interest obligations, represent the present value of estimated future payments to beneficiaries.

Basis of Reporting

Investments are reported at estimated fair value. If an investment is held directly by the University and an active market where quoted prices exists, the market price of an identical security is used to report fair value. Fair values for shares in registered mutual funds are based on published share prices. The University’s interests in alternative investment funds are generally reported at the net asset value (NAV) reported by the fund managers and assessed as reasonable by the University, which is used as a practical expedient to estimate the fair value of the University’s interest therein, unless it is probable that all or a portion of the investment will be sold for an amount different from NAV. At June 30, 2019 and 2018, the University had no plans or intentions to sell investments at amounts different from NAV.

Because of the inherent uncertainties of valuation, these estimated fair values may differ significantly from values that would have been used had a ready market existed, and the differences could be material. Such valuations are determined by fund managers and generally consider variables such as operating results, comparable earnings multiples, projected cash flows, recent sales prices, and other pertinent information, and may reflect discounts for the illiquid nature of certain investments held.


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17 (Continued)

The following tables summarize the University’s investments by strategy type as of June 30, 2019 and 2018:

2019Investments classified in the

fair value hierarchyInvestmentsmeasured

at NAV Level 1 Level 2 Level 3 Total

Investments:Equities:

Domestic $ 120,151 140,655 28,936 106,176 395,918 Global 593,084 84,012 — — 677,096

Fixed income:Domestic 154,091 10,428 33,838 17,571 215,928 Global 34,134 — 48,064 50 82,248

Hedged strategies:General arbitrage 478,939 61 — 732 479,732 Distressed 1,209 — — — 1,209 Global 924,336 171,035 — — 1,095,371

Private equity:Buy-out 615,697 — — 9,788 625,485 Venture 473,081 — — 18,343 491,424

Real assets:Real estate 44,657 3,265 — 40,346 88,268 Commodities, oil and gas — 28,154 16,058 23,980 68,192

Cash and cash equivalents — 147,845 — — 147,845

Total $ 3,439,379 585,455 126,896 216,986 4,368,716


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18 (Continued)

2018Investments classified in the

fair value hierarchyInvestmentsmeasured

at NAV Level 1 Level 2 Level 3 Total

Investments:Equities:

Domestic $ 192,076 76,521 42,679 18,080 329,356 Global 732,526 97,509 — — 830,035

Fixed income:Domestic 58,903 8,553 57,122 14,996 139,574 Global — — 28,748 52 28,800

Hedged strategies:General arbitrage 425,325 9,837 — 850 436,012 Distressed 2,159 — — — 2,159 Global 794,793 92,224 — — 887,017

Private equity:Buy-out 497,620 — — 8,216 505,836 Venture 379,125 — — 12,958 392,083

Real assets:Real estate 25,755 710 — 26,001 52,466 Commodities, oil and gas 70 25,546 — 36,490 62,106

Cash and cash equivalents — 355,670 — — 355,670

Total $ 3,108,352 666,570 128,549 117,643 4,021,114

Registered mutual funds and directly held equity securities are classified in Level 1 of the fair value hierarchy. Investments classified in Level 2 and 3 consist of directly held investments that have valuations based on inputs other than quoted prices.

Certain funds contain “rolling” lock-up provisions. Under such provisions, tranches of the investment are available for redemption once every two to five years, if the University makes a redemption request prior to the next available withdrawal date in accordance with the notification terms of the agreement. Private equity and real assets are held in funds that have initial terms of ten to twelve years with extensions of one to three years, and have an average remaining life of approximately four to seven years.


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19 (Continued)

The following tables present activities for the years ended June 30, 2019 and 2018 for the University’s investments classified in Level 3:

2019Fixed Private Real Hedged

Level 3 roll forward Equities income equity assets strategies Total

Fair value as of June 30, 2018 $ 18,080 15,048 21,174 62,491 850 117,643 Acquisitions 38,618 5,350 1,828 16,541 — 62,337 Dispositions (2,551) (5,585) — (5,906) — (14,042) Net realized and unrealized

gains (losses) 52,029 2,808 5,129 (8,800) (118) 51,048

Fair value at June 30, 2019 $ 106,176 17,621 28,131 64,326 732 216,986

2018Fixed Private Real Hedged

Level 3 roll forward Equities income equity assets strategies Total

Fair value as of June 30, 2017 $ 12,528 17,742 13,385 77,056 1,000 121,711 Acquisitions — 8,400 3,822 — — 12,222 Dispositions (276) (13,872) — (14,505) — (28,653) Net realized and unrealized

gains (losses) 5,828 2,778 3,967 (60) (150) 12,363

Fair value at June 30, 2018 $ 18,080 15,048 21,174 62,491 850 117,643

There were no transfers between Levels 1 and 2 and no transfers between Levels 2 and 3 in 2019 and 2018, respectively.

Total investment return is included in the statements of activities as follows for the years ended June 30:

2019 2018

Operating:Endowment return appropriated $ 153,857 151,641 Included in other income 15,258 12,610

Nonoperating activities:Net investment return 449,179 435,706 Endowment return appropriated (153,857) (151,641)

Total return $ 464,437 448,316

Total investment management and advisory expenses, including internal costs, were $13,131 and $13,276 for the years ended June 30, 2019 and 2018, respectively, and have been netted against the total return.


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20 (Continued)

(a) Liquidity Investment liquidity as of June 30, 2019 and 2018 is aggregated below based on redemption or sale ability:

2019Semi- Subject to

annually to rollingDaily Monthly Quarterly annually lock-ups Illiquid Total

Equities $ 326,063 95,784 319,849 103,789 27,302 200,227 1,073,014 Fixed income 92,330 — 63,803 — 9,743 132,300 298,176 Hedged strategies 102,061 134,373 683,068 178,328 465,266 13,216 1,576,312 Private equity — — — — 17,675 1,099,234 1,116,909 Real assets 47,477 — — — — 108,983 156,460 Cash and cash equivalents 147,845 — — — — — 147,845

Total $ 715,776 230,157 1,066,720 282,117 519,986 1,553,960 4,368,716

2018Semi- Subject to

annually to rollingDaily Monthly Quarterly annually lock-ups Illiquid Total

Equities $ 289,256 198,888 474,124 92,609 36,177 68,337 1,159,391 Fixed income 91,397 — — — 12,971 64,006 168,374 Hedged strategies 43,145 101,899 561,652 183,821 411,403 23,268 1,325,188 Private equity — — — — — 897,919 897,919 Real assets 26,256 — — — — 88,316 114,572 Cash and cash equivalents 355,670 — — — — — 355,670

Total $ 805,724 300,787 1,035,776 276,430 460,551 1,141,846 4,021,114

Investments with daily liquidity generally do not require advance notice prior to withdrawal. Investments with monthly, quarterly, semi-annual, and annual redemption frequency typically require notice periods, ranging from 5 to 180 days, at June 30, 2019 and 2018.

(b) Commitments Private equity and real asset investments are generally made through limited partnerships. Under the terms of these agreements, the University is obligated to remit additional funding periodically as capital or liquidity calls are exercised by the manager. These partnerships have a limited existence, generally ten years, and such agreements may provide for annual extensions for the purpose of disposing portfolio positions and returning capital to investors. However, depending on market conditions, the inability to execute the fund’s strategy, and other factors, a manager may extend the terms of a fund beyond its originally anticipated existence or may wind the fund down prematurely. As a result, the timing and amount of future capital or liquidity calls expected to be exercised in any particular future year is uncertain. The aggregate amount of unfunded commitments associated with private equity and real assets as of June 30, 2019 was $625,164 and $84,216, respectively.


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21 (Continued)

(c) Investment Derivatives The University’s investment-related derivative positions, categorized by primary underlying risk, are as follows as of June 30, 2019 and 2018:

2019Unrealized

Long notional Short notional gain (loss)

Instrument type:Total return swaps $ 139,154 (146,528) 7,993 Futures and options 110,618 (14,828) 3,048 Foreign currency forwards 13,246 — 139

Total $ 263,018 (161,356) 11,180

2018Unrealized

Long notional Short notional gain (loss)

Instrument type:Total return swaps $ 298,590 (45,195) 2,242 Futures and options 7,612 (39,772) (3,547)

Total $ 306,202 (84,967) (1,305)

Contracts in a net asset position are included in investments on the balance sheets, and contracts in a net liability position are included in liabilities associated with investments on the balance sheets and are as follows as of June 30, 2019 and 2018:

2019 2018

Instrument type included in investments:Total return swaps $ 10,835 6,798 Foreign currency forwards 139 — Futures and options 3,781 8,737

Instrument type included in liabilitiesassociated with investments:

Total return swaps $ 2,842 6,038 Futures and options — 124


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22 (Continued)

(5) Endowment The University’s endowment consists of approximately 3,100 individual funds established for a variety of purposes, including both donor-restricted endowment funds and funds designated by the Corporation to function as endowments. Net assets associated with the endowment are classified and reported based upon the existence or absence of donor-imposed restrictions.

Endowment net assets consist of the following at June 30, 2019:

Without donor With donorrestrictions restrictions Total

Donor-restricted endowment funds:Historical gift value $ — 1,591,827 1,591,827 Appreciation — 1,752,139 1,752,139

Corporation-designatedendowment funds 571,146 61,582 632,728

Total endowment net assets $ 571,146 3,405,548 3,976,694

Endowment net assets consist of the following at June 30, 2018:


Donor-restricted endowment funds:Historical gift value $ — 1,496,235 1,496,235 Appreciation — 1,521,737 1,521,737

Corporation-designatedendowment funds 526,150 59,726 585,876

Total endowment net assets $ 526,150 3,077,698 3,603,848

Changes in endowment net assets for the year ended June 30, 2019 are as follows:


Endowment net assets, June 30, 2018 $ 526,150 3,077,698 3,603,848 Investment return, net 68,784 359,355 428,139 Endowment return appropriated (25,048) (128,809) (153,857) Contributions 143 91,625 91,768 Reclassifications and other changes 1,117 5,679 6,796

Endowment net assets, June 30, 2019 $ 571,146 3,405,548 3,976,694


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23 (Continued)

Changes in endowment net assets for the year ended June 30, 2018 are as follows:


Endowment net assets, June 30, 2017 $ 483,590 2,761,941 3,245,531 Investment return, net 68,043 342,894 410,937 Endowment return appropriated (25,283) (126,358) (151,641) Contributions 200 98,303 98,503 Reclassifications and other changes (400) 918 518

Endowment net assets, June 30, 2018 $ 526,150 3,077,698 3,603,848

(a) Interpretation of Relevant Laws In accordance with UPMIFA, the University considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

� The duration and preservation of the fund

� The purposes of the University and the donor-restricted endowment fund

� General economic conditions

� The possible effect of inflation and deflation

� The expected total return from income and the appreciation of investments

� Other resources of the University

� The investment policies of the University

(b) Funds with Deficiencies From time to time, the fair value of assets associated with an individual donor-restricted endowment fund may fall below the fund’s historic dollar value. Deficiencies of this nature are reported in net assets with donor restrictions. As of June 30, 2018, funds with original gift value of $8,088 were underwater by $184. There were no donor-restricted endowment funds underwater at June 30, 2019.

(c) Return Objectives and Risk Parameters The University has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets, including both donor-restricted and designated funds. The long-term investment return objective is formulated to maintain purchasing power after accounting for both inflation and spending. The Corporation has set a long-term return goal at 5.5% above the higher education price index. Actual returns in any given year or period of years may vary from this amount.


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24 (Continued)

(d) Strategies Employed for Achieving Objectives To satisfy its long-term rate-of-return objectives, the University relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The University targets a diversified asset allocation to achieve its long-term return objectives within prudent risk constraints.

(e) Spending Policy and How the Investment Objectives Relate to Spending Policy The University invests its endowment funds and allocates the related return for expenditure in accordance with the total return concept. The endowment utilization is determined in accordance with the policy adopted by the Corporation. This policy fixes the spending range between 4.5% and 5.5% of the average fair value of applicable endowments over the prior twelve quarters, with the objective being to hold the spending rate to no more than a 5% average over time. Applicable endowments include Corporation-designated and donor-restricted endowment funds.

(6) Land, Buildings and Equipment Land, buildings and equipment include the following at June 30:

2019 2018

Land $ 89,215 85,882 Buildings 745,592 729,944 Improvements 1,156,824 1,085,518 Equipment 226,821 215,517 Intangible assets 364 2,633 Construction in progress 93,013 68,390

2,311,829 2,187,884

Accumulated depreciation (1,120,697) (1,063,156)

Land, buildings and equipment, net $ 1,191,132 1,124,728

Outstanding commitments on uncompleted construction contracts total $44,462 at June 30, 2019.


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25 (Continued)

(7) Bonds, Loans and Notes Payable The University has entered into various agreements primarily for the purpose of financing the acquisition, renovation, and improvement of its facilities. The bonds, loans and notes payable outstanding for these purposes are as follows:

Interest Type Final Balance at June 30Name of issue rate(s) of rate maturity 2019 2018

Rhode Island Health and EducationBuilding Corporation (RIHEBC)Facilities Revenue Bonds:

Series 2003B 1.90% Variable 2044 $ 40,165 40,680 Series 2005A 1.85% Variable 2035 85,500 85,500 Series 2009 5.00% Fixed 2040 70,795 70,795 Series 2011 2.50%–5.00% Fixed 2033 41,390 46,160 Series 2012 5.00% Fixed 2023 118,240 118,240 Series 2013 4.00%–5.00% Fixed 2044 127,070 129,925 Series 2015 2.33% Variable 2046 41,560 42,755 Series 2017A 4.00%–5.00% Fixed 2048 141,125 141,125

Brown University Taxable Bonds:Series 2009 4.57% Fixed 2020 — 45,000

Commercial bank term loans:Fiscal year 2016 issuance 2.37% Variable 2019 — 47,800 Fiscal year 2019 issuance 2.65% Variable 2022 75,000 —

Promissory note noninterestbearing N/A 2030 3,100 3,200

Total bonds, loans and notespayable before premium 743,945 771,180

Unamortized premium 43,764 48,481

Total bonds, loansand notes payable $ 787,709 819,661

(a) Tax Exempt Bonds The University’s tax-exempt debt, primarily Facilities Revenue Bonds, is issued through RIHEBC, a state agency serving as a conduit issuer of tax exempt debt. The University is required under certain of its financing agreements with RIHEBC to appropriate funds from operating and other net assets for payment of principal and interest and for maintenance of the related properties. The Revenue Bonds currently outstanding were issued primarily to finance new and ongoing capital projects, student housing, academic, research and administrative buildings, and infrastructure.


June 30, 2019 and 2018


26 (Continued)

In July 2017, the University issued through RIHEBC tax-exempt bonds with a total par value of $141,125 at interest rates range of 4.00% to 5.00%, maturing in 2048. The bonds were sold at a premium of $19,532, resulting in effective yield of 3.25%. The proceeds were used to refinance $84,460 of Series 2007 tax-exempt bonds, with remaining proceeds to be used for capital projects.

(b) Taxable Bonds and Other Debt In July 2018, the University borrowed $75,000 through a commercial bank term loan at a variable rate of one-month LIBOR plus 25 basis points, maturing in 2022. The proceeds were used to repay a maturing $47,800 commercial bank loan, and the remaining proceeds were used to pay down $27,200 of the Series 2009 Taxable Bond. University capital was used to retire the remaining 2009 Taxable Bond. The transaction resulted in a make whole redemption expense of $1,005, which is included in other changes on the 2019 statement of activities.

The University has a $50,000 Taxable Commercial Paper Program that allows for the issuance of Standard Commercial Paper Notes, Series A, and Extendible Commercial Paper Notes, Series B. These unsecured, taxable promissory notes can be issued in various amounts with maturities no greater than 270 days. At June 30, 2019 and 2018, there were no outstanding notes.

In July 2019, the Taxable Commercial Paper Program was amended to increase the maximum amount of taxable promissory notes to $125,000 and to terminate the extendible feature of the notes.

Principal payments of bonds, notes and loans payable as of June 30, 2019 for each of the succeeding five fiscal years ending June 30 and thereafter are as follows:

Fiscal year:2020 $ 11,795 2021 9,775 2022 136,765 2023 70,100 2024 10,165 Thereafter 505,345

Total $ 743,945

At June 30, 2019 and 2018, the University had a $125,000 line of credit, which matured in July 2019 and July 2018, respectively. The line of credit was subsequently reduced to $50,000 and renewed in July 2019. As of June 30, 2019, the full amount of $125,000 was available at a rate of one month LIBOR plus 40 basis points.

The University has two stand-by bond purchase agreements with financial institutions totaling approximately $126,000 in the event that the Series 2003B and Series 2005A bonds cannot be remarketed. The $85,500 agreement matures November 2020 and the $40,614 agreement matures January 2020. There were no amounts outstanding at June 30, 2019 and 2018, under these agreements, nor has either agreement ever been called upon.


June 30, 2019 and 2018


27 (Continued)

The University provided self-liquidity for its taxable commercial paper program at June 30, 2019 and 2018.

During fiscal 2011, the University entered into an agreement with third-party investors to effectively avail itself of certain Federal New Market Tax Credit (NMTC) incentives. By enabling these third parties to capture the NMTC benefits associated with the acquisition and construction of the University’s new medical school facility, the University was able to reduce its all-in cost of the facility. Under the arrangement, the University loaned $58,501 to Providence Richmond Street Investment Fund, LLC (LLC) capitalized by the investors. The LLC in turn provided capital to various community development entities, which then collectively issued $72,249 of loans to KARING, a special-purpose, wholly owned 501(c) (3) not-for-profit entity consolidated by the University. KARING owns the facility and leased it back to the University during the seven-year period required for the NMTC structure to be effective. As part of the unwind of the NMTC transaction, the University bought the sole member interest in the LLC on October 31, 2017. The sole member interest included a $72,249 note receivable from KARING. The transaction resulted in a gain of $13,748, which is reflected in other changes on the statement of activities in fiscal 2018.

(c) Interest Rate Swaps At June 30, 2019 and 2018, the University had two interest-rate swap agreements in place to effectively convert a portion of its variable-rate debt to fixed rates until maturity of the associated bonds. The notional amounts for the JPMorgan swap and the $85,500 Goldman Sachs swap match the par amounts of the bonds and amortize at the same rate as the associated debt.

As of June 30, the following interest-rate swap agreements were outstanding:

June 30, 2019remaining Fair value of liability

Associated Expiration notional Swap fixed at June 30Counterparty debt date value rate 2019 2018

JP Morgan Series 2003B 9/1/2043 $ 40,165 3.732 % $ (14,459) (11,043) Goldman Sachs Series 2005A 5/1/2035 85,500 3.979 (28,459) (19,008) Goldman Sachs None 9/1/2032 13,532 3.891 (2,341) (1,706)

$ (45,259) (31,757)

The variable rate on the two Goldman Sachs swaps is based on the USD-BMA Municipal Swap Index. The variable rate on the JPMorgan swap is based on 67% of one-month LIBOR-BBA. The Goldman Sachs swaps require posting of collateral by either party at thresholds based on their respective credit ratings. Cash collateral must be posted by the University if the aggregate mark-to-market liability payable by the University exceeds $25,000. The JPMorgan swap stipulates that if the University meets a minimum credit rating there are no collateral posting requirements. At June 30, 2019, the collateral posting requirement was $5,800; however, $6,000 was on deposit as collateral to ensure continuing collateral coverage.


June 30, 2019 and 2018


28 (Continued)

Interest rate volatility, remaining outstanding notional value and time to maturity will affect each swap’s fair value at subsequent reporting dates. To the extent the University holds a swap through its expiration date, the swap’s fair value will reach zero. Because the swap fair values are based predominantly on observable inputs corroborated by market data, they are classified in Level 2 in the GAAP fair value hierarchy.

(8) Retirement Benefits The University participates in two contributory retirement plans. The expense to the University, representing its contributions to the accounts of faculty and staff, was $28,775 and $26,288 for the years ended June 30, 2019 and 2018, respectively.

The University also has a non-qualified deferred compensation plan under IRC 457(b) that is offered to a select group of employees. Assets are held by a custodian on behalf of the University and are restricted for payments to participants and beneficiaries. At June 30, 2019, total assets held by the University were $27,453 and included in investments on the balance sheet. A corresponding liability is included in retirement obligations.

The Brown University Food Services and Plant Operations Employees’ Pension Plan is a qualified, noncontributory defined benefit plan which provides pensions for certain full-time weekly paid employees. The policy of the University is to fund pension costs in accordance with the Employee Retirement Income Security Act of 1974, as amended.

Information regarding the defined benefit pension plan for the years ended June 30 is as follows:

2019 2018

Change in projected benefit obligation:Projected benefit obligation at beginning of year $ 99,758 100,398 Service cost 3,965 4,185 Interest cost 4,016 3,741 Benefits paid (2,695) (2,478) Actuarial gain 11,749 (6,088)

Projected benefit obligation at end of year $ 116,793 99,758

The projected benefit obligation was determined using the following assumptions as of June 30:

2019 2018

Discount rate 3.41 % 4.09 %Rate of compensation increase 3.00 3.00


June 30, 2019 and 2018


29 (Continued)

The following is a summary of activity under the plan for the years ended June 30:

2019 2018

Change in plan assets:Fair value of plan assets at beginning of year $ 79,929 74,036 Actual return on plan assets 2,894 5,871 Contributions 2,500 2,500 Benefits paid (2,695) (2,478)

Fair value of plan assets at end of year 82,628 79,929

Projected benefit obligation at end of year (116,793) (99,758)

Funded status included in retirement obligations (34,165) (19,829)

2019 2018

Net periodic pension cost:Service cost $ 3,965 4,185 Interest cost 4,016 3,741 Expected return on assets (5,192) (4,819) Amortization of unrecognized loss and prior service cost 325 958

Net periodic pension cost $ 3,114 4,065

Net periodic pension cost was determined using the following assumptions for the years ended June 30:

2019 2018

Discount rate 4.09 % 3.79 %Rate of compensation increase 3.00 3.00Expected long-term rate of return 6.50 6.50

The expected rate of return on plan assets was derived based upon assumptions of inflation, real returns, anticipated value added by the investment manager and expected asset class allocations.

Net periodic pension cost is reflected in operating activities on the statements of activities. As of June 30, 2019 and 2018, items not yet recognized as components of net periodic pension cost are unrecognized prior service cost of $948 and $873, respectively, and a net unrecognized actuarial loss of $26,209 and $12,562, respectively. These changes affecting the funded status of the plan are included in other changes, net in nonoperating activities in the statements of activities.


June 30, 2019 and 2018


30 (Continued)

The plan assets at June 30, 2019 and 2018 consist of variable annuity investments with various equity and fixed income focuses, which are classified as Level 1 in the GAAP fair value hierarchy.

The investment strategy for the Plan takes into account several factors consistent with the characteristics of an employee pension plan. As such, the strategy recognizes a long-term time horizon where a substantial allocation to equities is appropriate and will help to maximize returns; broad diversification in order to increase return and reduce risk; and investment in institutional retirement annuities that serves to reduce administrative costs.

The actual asset allocation for the pension plan as of June 30, 2019 and 2018, and the weighted average asset targeted allocation are as follows:

ActualTarget 2019 2018

Equity funds 75 % 77 % 77 %Fixed income funds 25 23 23

Total 100 % 100 % 100 %

The University’s estimated contribution for 2020 is $2,500.

Estimated future benefit payments as of June 30, 2019 are as follows:

Fiscal year:2020 $ 3,542 2021 3,746 2022 4,008 2023 4,308 2024 4,606 2025–2029 28,088


June 30, 2019 and 2018


31 (Continued)

(9) Net Assets The University’s net assets as of June 30 are as follows:

2019 2018

Without donor restrictions:Corporation-designated endowment funds $ 571,146 526,150 Investment in plant, net 311,364 264,271 University operations 243,391 287,689

Total without donor restrictions 1,125,901 1,078,110

With donor restrictions:Donor-restricted endowment funds:

Scholarships and student support 1,140,230 1,029,072 Departmental and programatic support 694,021 637,981 Professorships 875,488 761,085 General use 268,566 249,930 Instruction and lecturships 233,643 222,492 Fellowships 193,600 177,138

3,405,548 3,077,698

Contributions receivable 277,443 217,634 Donor restricted for programs 142,525 122,754 Split-interest net assets 54,092 52,007 Investment in plant, net 68,010 88,288

Total with donor restrictions 3,947,618 3,558,381

$ 5,073,519 4,636,491

(10) Functional Classification of Expenses The statements of activities present expenses by natural classification. The University also summarizes its operating expenses by functional classification. Functional categories are reported after allocating, on a square footage basis, expenses for operation and maintenance of plant, interest on indebtedness, and depreciation.


June 30, 2019 and 2018


32 (Continued)

Operating expenses by nature and function are summarized as follows for the fiscal year ended June 30, 2019:

2019Instruction and Academicdepartmental Sponsored and student Auxiliary Institutional

research programs support services support Total 2018

Salaries and wages $ 179,382 52,270 80,093 30,919 59,975 402,639 376,515 Employee benefits 51,213 15,755 22,858 8,527 15,902 114,255 108,990 Graduate student support 7,629 14,999 59,121 — — 81,749 75,640 Purchased services 28,881 33,667 10,862 11,139 14,605 99,154 107,452 Supplies and general 37,615 19,393 68,554 14,118 12,404 152,084 141,806 Utilities 8,650 2,468 6,947 12,102 5,498 35,665 31,153 Interest 7,692 2,366 4,989 8,006 1,385 24,438 27,491 Depreciation 26,268 8,078 17,036 27,338 4,222 82,942 78,176

$ 347,330 148,996 270,460 112,149 113,991 992,926 947,223

Operating expenses by nature and function are summarized as follows for the fiscal year ended June 30, 2018:

2018Instruction and Academicdepartmental Sponsored and student Auxiliary Institutional

research programs support services support Total 2017

Salaries and wages $ 167,846 49,713 74,540 30,647 53,769 376,515 357,895 Employee benefits 48,162 15,143 22,329 8,407 14,949 108,990 104,795 Graduate student support 6,485 13,969 55,186 — — 75,640 68,385 Purchased services 36,783 31,366 14,003 13,142 12,158 107,452 89,835 Supplies and general 39,309 18,752 58,504 18,476 6,765 141,806 131,123 Utilities 7,691 2,203 6,463 10,633 4,163 31,153 26,733 Interest 7,961 2,449 5,163 8,286 3,632 27,491 29,291 Depreciation 24,758 7,615 16,057 25,767 3,979 78,176 73,843

$ 338,995 141,210 252,245 115,358 99,415 947,223 881,900

(11) Commitments and Contingencies All funds expended in conjunction with government grants and contracts are subject to audit by governmental agencies. In the opinion of management, any potential liability resulting from these audits will not have a material effect on the University’s financial position.

The University is a defendant in various legal actions arising in the normal course of its operations. Although the final outcome of such actions cannot currently be determined, the University believes that the ultimate unrecognized liability, if any, will not have a material effect on the University’s financial position.


June 30, 2019 and 2018


33

(12) Related-Party Transactions Members of the Corporation and senior management may, from time to time, be associated either directly or indirectly with companies doing business with the University. The University has a written conflict of interest policy that requires annual reporting by each Corporation member and University senior management. When such relationships exist, measures are taken to mitigate any actual or perceived conflict, including requiring that such transactions be conducted at arms’ length, based on terms that are fair and reasonable to and in the best interest of the University.

Effective July 1, 2017, the University, along with The Neurology Foundation, Inc.; University Emergency Medicine Foundation; University Medicine Foundation; University Surgical Associates, Inc.; Brown Urology, Inc.; and Brown Dermatology, Inc. (collectively the Foundations), joined to create the nonprofit Brown Physicians, Inc. (BPI). BPI is an affiliated clinical practice that will enhance the partnership between the Foundations and the Warren Alpert Medical School. Under the formation and support agreement, the University is obligated to pay BPI $25,000 over a 10-year period. In 2019, the University paid $2,500 to BPI, with the remaining $17,500 included in accounts payable and accrued liabilities at June 30, 2019. In addition, the University authorized a line of credit agreement with BPI, up to $30,000. There was no amount outstanding under the line of credit at June 30, 2019.

(13) Supplemental Disclosure of Cash Flow Information Following is information intended to supplement the statements of cash flows for the years ended June 30:

2019 2018

Cash paid for interest, including recurring swap settlements,net of capitalized interest of $2,981 and $1,682 $ 29,834 29,597

Noncash investing activities:(Decrease) increase in accounts payable for land, buildings

and equipment $ (6,541) 12,441 Decrease in payables for purchases of investments (35,705) (97,826)

(14) Subsequent Events In July 2019, the University issued through RIHEBC tax-exempt bonds with a total par value of $54,560 at an interest rate of 5.0%, maturing in 2030. The bonds were sold at a premium of $16,496, resulting in an effective yield of 1.73%. The proceeds were used to refinance $70,795 of Series 2009 tax-exempt bonds.

The University considers events or transactions that occur after the balance sheet date, but before the financial statements are issued, to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. These financial statements were issued October 28, 2019, and subsequent events have been evaluated through that date.

APPENDIX C

SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE


APPENDIX C

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SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE

The following is a summary of certain provisions of the Indenture that are not described elsewhere in this Offering Memorandum. The Bonds are issued and secured pursuant to the Indenture. References to the Indenture or a fund or account refer to the related document, fund or account with respect to the Bonds, as described in the Offering Memorandum. Unless otherwise specified to the contrary in this Appendix C, all definitions and provisions summarized refer to the Indenture. This summary does not purport to be comprehensive and reference should be made to the Indenture for a full and complete statement of its provisions. Definitions

Unless the context otherwise requires, the following terms have the meanings specified below. “Additional Bonds” has the meaning set forth under the subsection “Additional Bonds” herein. “Authorized Denomination” means $1,000 or any multiple integral thereof. “Authorized Representative” means the University’s President, Executive Vice President for Finance and

Administration, or Vice President for Finance and Chief Financial Officer, or any other Person designated as an Authorized Representative of the University by a Certificate of the University signed by the University’s President, Executive Vice President for Finance and Administration, or Vice President for Finance and Chief Financial Officer and filed with the Trustee.

“Beneficial Owner” means any Person that has or shares the power, directly or indirectly, to make investment

decisions concerning ownership of any of the Bonds (including any Person holding Bonds through nominees, depositories or other intermediaries) established to the reasonable satisfaction of the Trustee or the University.

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

“Bonds” means the Initial Bonds and any Additional Bonds authorized by, and at any time Outstanding

pursuant to, the Indenture.

“Book-Entry Form” or “Book-Entry System” means a form or system, as applicable, under which physical bond certificates in fully registered form are registered only in the name of a Securities Depository or its nominee, as Bondholder, with the physical bond certificates held by and “immobilized” in the custody of the Securities Depository, which form or system is maintained by and the responsibility of others than the University or the Trustee and is the record that identifies and records the transfer of the interests of the owners of book-entry interests in those Bonds.

“Business Day” means any day other than (A) a Saturday or Sunday or legal holiday or a day on which banking institutions in the city or cities in which the Designated Office of the Trustee is located are authorized by law or executive order to close or (B) a day on which the New York Stock Exchange is closed.

“‘Certificate,’ ‘Statement,’ ‘Request’ or ‘Requisition’ of the University” mean, respectively, a written

certificate, statement, request or requisition signed in the name of the University by an Authorized Representative. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. If and to the extent required by the Indenture, each such instrument shall include the statements provided for in the Indenture.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor statute thereto and any regulations promulgated thereunder.

“Default” means any event that is or after notice or lapse of time or both would become an Event of Default. “Designated Office” means the Designated Office of the Trustee, which as of the date of the Indenture is

located at One Federal Street, 3rd Floor, Boston, Massachusetts 02110, Attention: Corporate Trust Department, and

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such other offices as the Trustee, or, if applicable, a successor Trustee, may designate from time to time by written notice to the University and the Holders.

“Electronic Means” means facsimile transmission, email transmission or other similar electronic means of communication providing evidence of transmission.

“EMMA” means the Electronic Municipal Market Access service of the Municipal Securities Rulemaking

Board. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. “ERISA Plans” means employee benefit plans subject to ERISA, including U.S. private pension plans, certain

insurance company accounts, and entities that are deemed to hold “plan assets” with respect to such plans.

“Event of Default” means any of the events specified as such under the heading “Events of Default and Remedies of Bondholders – Events of Default” below.

“Holder” or “Bondholder,” whenever used herein with respect to a Bond, means the Person in whose name such Bond is registered. “Indenture” means the Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture.

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

“Initial Bonds” means the $___________ Brown University Taxable Bonds, Series 2020A, dated their date of delivery.

“Interest Account” means the account by that name in the Bond Fund established pursuant to the Indenture.

“Interest Payment Date” means March 1 and September 1 of each year, commencing September 1, 2020, in the case of the Initial Bonds, and commencing on the date specified in the applicable Supplemental Indenture, in the case of Additional Bonds.

“Investment Securities” means any of the following: (1) direct nonprepayable, noncallable obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of the Treasury of the United States of America); (2) direct nonprepayable, noncallable obligations, the timely payment of the principal of and interest on which are fully guaranteed by the United States of America, including instruments evidencing a direct ownership interest in securities described in this clause such as CATS, TIGRs, and Stripped Treasury Coupons rated or assessed in the highest two Rating Categories by each of S&P and Moody’s and held by a custodian for safekeeping on behalf of holders of such securities; (3) money market funds registered under the Investment Company Act of 1940, the shares in which are registered under the Securities Act of 1933 and that have a rating by S&P in its two highest Rating Categories, including such funds for which the Trustee or its affiliates provide investment advisory or other management services; or (4) any other investment determined by the University.

“Make-Whole Redemption Price” means the greater of (i) 100% of the principal amount of the Bonds to be redeemed and (ii) the sum of the present value of the remaining scheduled payments of principal and interest to the maturity date of the Bonds to be redeemed, not including any portion of those payments of interest accrued and unpaid as of the date on which the Bonds are to be redeemed, discounted to the date on which such Bonds are to be redeemed on a semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate plus _____(__) basis points, plus, in each case, accrued and unpaid interest on the Bonds to be redeemed on the redemption date.

“Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws of the

State of Delaware, and any successor to its securities rating agency business, or, if such corporation shall be dissolved

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or liquidated or shall no longer perform the functions of a securities rating agency, any other nationally recognized securities rating agency designated by the University upon notice to the Trustee.

“Offering Memorandum” means the final offering memorandum dated May __, 2020, relating to the Bonds.

“Opinion of Counsel” means a written opinion of counsel (which may be subject to customary assumptions and exclusions) from legal counsel who is reasonably acceptable to the Trustee. Such counsel may be an employee of, or outside counsel to, the University.

“Outstanding” when used as of any particular time with reference to Bonds, means (subject to the provisions of the Indenture) all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under the Indenture except (1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (2) Bonds with respect to which all liability of the University shall have been discharged in accordance with the Indenture; and (3) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to the Indenture. “Payment Date” means an Interest Payment Date or a Principal Payment Date. “Person” means an individual, corporation, firm, association, partnership, trust, limited liability company or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.

“Principal Account” means the account by that name in the Bond Fund established pursuant to the Indenture.

“Principal Payment Date” means September 1, 2030, and September 1, 2050, the dates of maturity of the Bonds.

“Rating Agency” means Moody’s or S&P.

“Rating Category” means a generic securities rating category, without regard to any refinement or gradation of such rating category by a numerical modifier or otherwise.

“Record Date” means the fifteenth (15th) day (whether or not a Business Day) of the month immediately preceding each Interest Payment Date.

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

“Responsible Officer” means any officer of the Trustee assigned to administer its duties under the Indenture.

“S&P” means S&P Global Ratings, a corporation organized and existing under the laws of the State of New York, and any successor to its securities rating agency business, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, any other nationally recognized securities rating agency designated by the University upon notice to the Trustee.

“Securities Depository” means The Depository Trust Company and its successors and assigns, or any other securities depository selected as set forth in the Indenture, which agrees to follow the procedures required to be followed by such securities depository in connection with the Bonds.

“Special Record Date” means the date established by the Trustee pursuant to the Indenture as the record date for the payment of defaulted interest on the Bonds.

“State” means the State of Rhode Island and Providence Plantations.

“Supplemental Indenture” means any indenture hereafter duly authorized and entered into between the

University and the Trustee, supplementing, modifying or amending the Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized under the Indenture.

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“Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (excluding inflation indexed securities) (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to the maturity date of the Bonds to be redeemed. However, if the period from the redemption date to such maturity date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

“Trustee” means U.S. Bank National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States of America, or its successor or successors, as Trustee under the Indenture.

“Underwriters” means, collectively, BofA Securities, Inc. and Goldman Sachs & Co. LLC.

“Uniform Commercial Code” means the Uniform Commercial Code as in effect in the State from time to time.

“University” means Brown University in Providence in the State of Rhode Island and Providence Plantations,

a nonprofit corporation existing under the laws of the State, or said nonprofit corporation’s successor or successors. Establishment and Pledge of Indenture Fund

Subject only to the provisions of the Indenture permitting or requiring the application thereof for the purposes and on the terms and conditions set forth therein, the Indenture Fund and all amounts held therein are pledged, assigned and transferred by the University to the Trustee for the benefit of the Bondholders to secure the full payment of the principal, Make-Whole Redemption Price or other redemption proceeds of and interest on the Bonds in accordance with their terms and the provisions of the Indenture. The University grants to the Trustee a security interest in and acknowledges and agrees that the Indenture Fund and all amounts on deposit therein shall constitute collateral security to secure the full payment of the principal, Make-Whole Redemption Price or other redemption proceeds of and interest on the Bonds in accordance with their terms and the provisions of the Indenture.

Nothing in the Indenture or in the Bonds, expressed or implied, shall be construed to constitute a security

interest under the Uniform Commercial Code or otherwise in the assets of the University other than in any interest of the University in the Indenture Fund and/or the amounts on deposit therein. No recourse for the payment of the principal, Make-Whole Redemption Price or other redemption proceeds of or interest on any Bond, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the University in the Indenture or in any Supplemental Indenture or in any Bond, or because of the creation of any indebtedness represented thereby, shall be had against any past, present or future employee, agent, or officer of the University or of any successor entity, either directly or through any successor entity, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly understood that all such liability is expressly waived and released as a condition of, and as a consideration for, the execution of the Indenture and the issue of the Bonds. No officer or agent of the University, nor any individual executing the Bonds, shall in any event be subject to any personal liability or accountability by reason of the issuance of the Bonds. (Section 5.01)

Funds and Accounts The Indenture creates an Indenture Fund (and a Bond Fund and a Redemption Fund thereunder). The Indenture also creates an Interest Account and Principal Account under the Bond Fund. All of the funds and accounts are to be held by the Trustee. (Section 5.01)

Application of Proceeds of Bonds. The proceeds from the sale of the Bonds (net of underwriters’ discount and original issue discount, if any) shall be wired by the Underwriters to the University. (Section 3.02)

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Indenture Fund. The Trustee establishes, for the sole benefit of the Bondholders, a master fund referred to in the Indenture as the “Indenture Fund” containing the Bond Fund and the Redemption Fund and each of the accounts contained therein. The Indenture Fund and each of the funds and accounts in the Indenture Fund shall be identified on the books of the Trustee with reference thereto and shall be maintained by the Trustee and held in trust apart from all other moneys and securities held under the Indenture or otherwise, and the Trustee shall have the exclusive and sole right of withdrawal therefrom in accordance with the terms of the Indenture. All amounts deposited with the Trustee pursuant to the Indenture shall be held, disbursed, allocated and applied by the Trustee only as provided in the Indenture. (Section 5.01)

Bond Fund. Upon the receipt thereof, the Trustee shall deposit all payments received from the University

(other than amounts which are to be applied pursuant to the Indenture or income or profit from investments which are to be applied pursuant to the Indenture) in a special fund designated the “Bond Fund” which the Trustee shall establish and maintain and hold in trust and which shall be disbursed and applied only as authorized in the Indenture.

At the times specified below, the Trustee shall allocate within the Bond Fund in the following order of priority

the following amounts to the following accounts or funds, each of which the Trustee shall establish and maintain and hold in trust and each of which shall be disbursed and applied only as authorized in the Indenture: (i) on each Interest Payment Date, the Trustee shall deposit in the “Interest Account” the aggregate amount of interest becoming due and payable on such Interest Payment Date on all Bonds then Outstanding, until the balance in said account is equal to said aggregate amount of interest; and (ii) on each Principal Payment Date, the Trustee shall deposit in the “Principal Account” the aggregate amount of principal becoming due and payable on such Principal Payment Date, until the balance in said account is equal to said aggregate amount of such principal. (Section 5.02)

Interest Account. All amounts in the Interest Account of the Bond Fund shall be used and withdrawn by the

Trustee solely for the purpose of paying interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds redeemed prior to maturity pursuant to the Indenture). (Section 5.03)

Principal Account. All amounts in the Principal Account of the Bond Fund shall be used and withdrawn by

the Trustee solely to pay at maturity the Bonds. (Section 5.04)

Redemption Fund. Upon the receipt thereof, the Trustee shall deposit the following amounts in a special fund designated the “Redemption Fund” that the Trustee shall establish and maintain and hold in trust: (i) all moneys deposited by the University with the Trustee directed to be deposited in the Redemption Fund; and (ii) all interest, profits and other income received from the investment of moneys in the Redemption Fund.

All amounts deposited in the Redemption Fund shall be used and withdrawn by the Trustee solely for the purpose of redeeming Bonds, in the manner and upon the terms and conditions specified in the Indenture, at the next succeeding date of redemption for which notice has been given; provided that, at any time prior to the selection of Bonds for such redemption, the Trustee shall, upon direction of the University, apply such amounts to the purchase of Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued and unpaid interest, which is payable from the Interest Account) as the University may direct, except that the purchase price (exclusive of accrued interest) may not exceed the Make-Whole Redemption Price or other redemption proceeds (exclusive of accrued interest) then applicable to such Bonds; and provided further that in lieu of redemption at such next succeeding date of redemption, or in combination therewith, amounts in such account may be transferred to the Principal Account as set forth in a Request of the University. (Section 5.05)

Payments by the University; Allocation of Funds. On or before 11:00 AM on each Payment Date, until the

principal of and interest on the Bonds shall have been fully paid or provision for such payment shall have been made as provided in the Indenture, the University shall pay to the Trustee a sum equal to the amount payable on such Payment Date as principal of and interest on the Bonds, less the amount, if any, in the Bond Fund and available therefor. Such payments shall be made in federal funds or other funds immediately available at the Designated Office of the Trustee and shall be promptly deposited by the Trustee upon receipt thereof in the Bond Fund. Each payment made pursuant to this paragraph, together with amounts, if any, in the Bond Fund, shall at all times be sufficient to pay the total amount of interest and principal (whether at maturity or upon acceleration) becoming due and payable on the Bonds on such Payment Date. If on any Payment Date the amounts held by the Trustee in the accounts within the Bond Fund are insufficient to make any required payments of principal of (whether at maturity or upon acceleration)

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and interest on the Bonds as such payments become due, the University shall forthwith pay such deficiency to the Trustee.

The obligations of the University to make the payments required by the immediately preceding paragraph

and to perform and observe the other agreements on its part contained in the Indenture shall be a general obligation of the University, absolute and unconditional, irrespective of any defense or any rights of set-off, recoupment or counterclaim it might otherwise have against the Trustee, and during the term of the Indenture, the University shall pay all payments required to be made by the immediately preceding paragraph as prescribed therein and all other payments required under the Indenture, free of any deductions and without abatement, diminution or set-off. Until such time as the principal of and interest on the Bonds shall have been fully paid, or provision for the payment thereof shall have been made as required by the Indenture, the University (i) will not suspend or discontinue any payments provided for in the immediately preceding paragraph; (ii) will perform and observe all of its other covenants contained in the Indenture; and (iii) except as provided in the Indenture, will not terminate the Indenture for any cause, including, without limitation, the occurrence of any act or circumstances that may constitute failure of consideration, destruction of or damage to all or a portion of the projects financed or refinanced with the proceeds of the Bonds, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either of these, or any failure of the Trustee to perform and observe any covenant, whether express or implied, or any duty, liability or obligation arising out of or connected with the Indenture, except to the extent permitted by the Indenture. (Section 5.06)

Investment of Moneys in Funds and Accounts Held By Trustee

Moneys held in the Indenture Fund shall be invested by the Trustee, upon written direction of the University

(upon which the Trustee may rely conclusively), solely in Investment Securities. Investment Securities shall be purchased at such prices as the University may direct. All Investment Securities shall be acquired subject to the limitations as to maturities set forth in the Indenture and such additional limitations or requirements consistent with the foregoing as may be established by Request of the University. No Request of the University shall impose any duty on the Trustee inconsistent with its responsibilities under the Indenture. In the absence of directions from the University, the Trustee shall invest moneys held in the Bond Fund in Investment Securities specified in clause (3) of the definition of “Investment Securities” and moneys held in the Redemption Fund in accordance with the Indenture.

Moneys in such funds and accounts shall be invested in Investment Securities maturing not later than the date

on which it is estimated that such moneys will be required for the purposes specified in the Indenture. All interest, profits and other income received from the investment of moneys in the Redemption Fund shall

be deposited when received in the Redemption Fund. All interest, profits and other income received from the investment of moneys in the Bond Fund shall be deposited when received in the Bond Fund.

Investment Securities acquired as an investment of moneys in any fund or account established under the

Indenture shall be credited to such fund or account. Registrable Investment Securities held by the Trustee shall be registered in the name of the Trustee. In making any valuations of investments under the Indenture, the Trustee may utilize and rely on computerized securities pricing services that are available to it, including those available through its regular accounting system.

The Trustee may commingle any of the funds or accounts established pursuant to the Indenture into a separate

fund or funds for investment purposes only, provided that all funds or accounts held by the Trustee under the Indenture shall be accounted for separately as required by the Indenture. The Trustee or its affiliates may act as sponsor, depository, advisor, principal or agent in the making or disposing of any investment. The Trustee is authorized, in making or disposing of any investment permitted by the Indenture, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or dealing as principal for its own account. The Trustee may sell at the best price reasonably obtainable by it, or present for redemption, any Investment Securities so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Investment Security is credited, and, subject to the provisions of the Indenture, the Trustee shall not be liable or responsible for any depreciation or loss resulting from any investment made in accordance the Indenture. The Trustee shall not be

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responsible for any tax, fee or other charge in connection with any investment, reinvestment or the liquidation thereof. (Section 5.07)

Validity of Bonds

The recital contained in the Bonds that the same are issued pursuant to the Indenture shall be conclusive evidence of their validity and of compliance with the provisions of the Indenture in their issuance. (Section 3.03) Additional Bonds

The University may, from time to time, without the consent of the Bondholders issue additional bonds under the Indenture in addition to the Bonds (“Additional Bonds”). Additional Bonds shall be authorized by a Supplemental Indenture. Each Supplemental Indenture authorizing the issuance of Additional Bonds shall specify the following: (i) the authorized principal amount of Additional Bonds to be issued; (ii) the first Interest Payment Date for the Additional Bonds; (iii) directions for the applications of the proceeds of the Additional Bonds; and (iv) such other provisions as the University deems advisable and as are not materially adverse to the Holders of the Outstanding Bonds issued prior to such Additional Bonds.

The Additional Bonds so authorized shall be issued from time to time and in such amounts as directed by the University, shall be authenticated by the Trustee and shall be delivered by the Trustee to or upon the order of the University upon receipt of the consideration therefor. All such Additional Bonds shall mature on the maturity date for the Initial Bonds and shall bear interest at the same rate per annum as the Initial Bonds. Additional Bonds shall:

(i) be identical in all respects to the Initial Bonds except for their date of issuance and initial Interest Payment Date;

(ii) without limiting the foregoing, be subject to redemption at the same times and at the same redemption price as the Initial Bonds, provided that the mandatory sinking fund redemptions for any Additional Bonds shall be structured in a manner that produces a weighted average life for such Additional Bonds that is equal to the remaining weighted average life of the Initial Bonds as of the issuance date of such Additional Bonds; and

(iii) following the initial Interest Payment Date for the applicable Additional Bonds, or upon issuance, if such Additional Bonds are issued on an Interest Payment Date, bear the same CUSIP identifier as the Initial Bonds. (Section 3.04) Particular Covenants

Punctual Payment. The University shall punctually pay the principal, Make-Whole Redemption Price or other redemption proceeds and interest that becomes due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of the Indenture, according to the true intent and meaning thereof. When and as paid in full, all Bonds shall be delivered to the Trustee and shall forthwith be cancelled by the Trustee and delivered to, or upon the order of, the University. (Section 6.01)

Compliance with Indenture. The University covenants not to issue, or permit to be issued, any Bonds in any

manner other than in accordance with the provisions of the Indenture, and shall not suffer or permit any Default (within its power to prevent) to occur under the Indenture, but shall faithfully observe and perform all the covenants, conditions and requirements of the Indenture. (Section 6.02)

Power to Issue Bonds and Make Pledge and Assignment. The University is duly authorized to issue the

Bonds and to enter into the Indenture and to pledge and assign the funds and accounts purported to be pledged and assigned under the Indenture in the manner and to the extent provided in the Indenture. The Bonds are and will be legal, valid and binding obligations of the University in accordance with their terms, and the University and the Trustee shall at all times, to the extent permitted by law, defend, preserve and protect said pledge and assignment of funds and accounts and all the rights of the Bondholders under the Indenture against all claims and demands of all Persons whomsoever, subject to the limitations set forth in the Indenture relating to the Trustee. (Section 6.03)

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Accounting Records and Financial Statements. With respect to each fund or account established and maintained by the Trustee pursuant to the Indenture, the Trustee shall at all times keep, or cause to be kept, proper books of record and account prepared in accordance with corporate trust accounting standards, in which complete and accurate entries shall be made of all transactions relating to the receipt, investment, disbursement, allocation and application of payments received from the University and the proceeds of the Bonds. Such books of record and account shall be available for inspection by the University and any Bondholder, or his or her agent or representative duly authorized in writing, at reasonable hours and under reasonable circumstances.

The Trustee shall file with the University, within thirty (30) days after the end of each month, a complete

financial statement (which need not be audited and may be its regular account statements) covering receipts, disbursements, allocation and application of any moneys (including proceeds of Bonds) in any of the funds and accounts established pursuant to the Indenture for such month; provided that the Trustee shall not be obligated to deliver an accounting for any fund or account that has a balance of $0.00 and has not had any activity since the last reporting. (Section 6.04)

Deemed Representations of the Bondholders

By acquiring the Bonds, each Holder will be deemed to represent that either (i) it is not acquiring Bonds with assets of an ERISA Plan or other plan subject to the prohibited transaction restrictions of ERISA, the Code, or similar law, or (ii) the acquisition and holding of the Bonds will not give rise to a nonexempt prohibited transaction. (Section 6.06)

Events of Default and Remedies of Bondholders

Events of Default. The following events shall be “Events of Default”: (a) default in the due and punctual payment of the principal, Make-Whole Redemption Price or other redemption proceeds of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by acceleration or otherwise; (b) default in the due and punctual payment of any interest on any Bond when and as such interest shall become due and payable; (c) default by the University in the performance or observance of any of the other covenants, agreements or conditions on its part contained in the Indenture or in the Bonds (other than a covenant, agreement or condition a default in performance or observance of which is elsewhere under this subheading “Events of Default” specifically dealt with), if such default shall have continued for a period of sixty (60) days after written notice thereof, specifying such default and requiring the same to be remedied and stating that such notice is a “Notice of Default” under the Indenture, shall have been given to the University by the Trustee, or to the University and the Trustee by the Holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding; (d) the commencement by the University of a voluntary case under the federal bankruptcy laws, or if the University shall become insolvent or unable to pay its debts as they become due, or shall make an assignment for the benefit of creditors, or shall apply for, consent to or acquiesce in the appointment of, or taking possession by, a trustee, receiver, custodian or similar official or agent for itself or any substantial part of its property; (e) the appointment of a trustee, receiver, custodian or similar official or agent for the University or for any substantial part of its property and such trustee or receiver shall not be discharged within sixty (60) days; or (f) an order or decree for relief in an involuntary case under the federal bankruptcy laws shall be entered against the University, or a petition seeking reorganization, readjustment, arrangement, composition, or other similar relief as to it under the federal bankruptcy laws or any similar law for the relief of debtors shall be brought against it and shall be consented to by it or shall remain undismissed for sixty (60) days. (Section 7.01)

Acceleration of Maturity. If an Event of Default shall occur, then, and in each and every such case during

the continuance of such Event of Default, the Trustee may, and upon the request of the Holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, the Trustee shall, upon notice in writing to the University, declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration by the Trustee the same shall become and shall be immediately due and payable, anything in the Indenture or in the Bonds contained to the contrary notwithstanding.

Any such declaration, however, is subject to the condition that if, at any time after such declaration and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, there shall be deposited with the Trustee a sum sufficient to pay all the principal, Make-Whole Redemption Price or other redemption proceeds

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of, and overdue interest on the Bonds payment of which is overdue, with interest on such overdue principal at the rate borne by the Bonds, and the reasonable charges and expenses of the Trustee, and any and all other Defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Trustee shall, on behalf of the Holders of all of the Bonds, by written notice to the University, rescind and annul such declaration and its consequences and waive such Default; but no such rescission and annulment shall extend to or shall affect any subsequent Default, or shall impair or exhaust any right or power consequent thereon. (Section 7.02)

Rights as a Secured Party. The Trustee, as appropriate, may exercise all of the rights and remedies of a

secured party under the Uniform Commercial Code with respect to securities in the Indenture Fund, including without limitation the Bond Fund and the Redemption Fund, including the right to sell or redeem such securities and the right to retain the securities in satisfaction of the obligation of the University under the Indenture. Notice sent by registered or certified mail, postage prepaid, or delivered during business hours, to the University at least seven (7) days before an event under Uniform Commercial Code Sections 9-610 and 9-611, or any successor provision of law shall constitute reasonable notification of such event. (Section 7.03)

Application of Moneys Collected by the Trustee. If an Event of Default shall occur and be continuing, all

moneys then held or thereafter received by the Trustee under any of the provisions of the Indenture (subject to the Indenture) shall be applied by the Trustee as follows and in the following order:

(a) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of

the Holders of the Bonds and payment of reasonable fees and expenses of the Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under the Indenture; and

(b) To the payment of the principal, Make-Whole Redemption Price or other redemption proceeds of and interest on the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully paid) subject to the provisions of the Indenture, as follows:

(1) Unless the principal of all of the Bonds shall have become or have been declared due and

payable, First: To the payment to the Persons entitled thereto of all installments of interest then due in the

order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments due on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Persons entitled thereto, without any discrimination or preference; and

Second: To the payment to the Persons entitled thereto of the unpaid principal, Make-Whole

Redemption Price or other redemption proceeds of any Bonds which shall have become due, whether at maturity or by call for redemption, in order of their due dates, with interest on the overdue principal at the rate borne by the Bonds, and, if the amount available shall not be sufficient to pay in full all the Bonds due on any date, together with such interest, then to the payment thereof ratably, according to the amounts of principal, Make-Whole Redemption Price or other redemption proceeds due on such date to the Persons entitled thereto, without any discrimination or preference.

(2) If the principal of all of the Bonds shall have become or have been declared due and payable,

to the payment of the principal and interest then due and unpaid upon the Bonds, with interest on the overdue principal at the rate borne by the Bonds, and, if the amount available shall not be sufficient to pay in full the whole amount so due and unpaid, then to the payment thereof ratably, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, according to the amounts due respectively for principal and interest, to the Persons entitled thereto without any discrimination or preference. (Section 7.04)

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Trustee to Represent Bondholders. The Trustee is irrevocably appointed (and the successive respective Holders of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Holders of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Holders under the provisions of the Bonds, the Indenture and applicable provisions of any law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Bondholders, the Trustee in its discretion may, and upon the written request of the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Holders by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained in the Indenture, or in aid of the execution of any power granted in the Indenture, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee, or in such Holders under the Bonds, the Indenture or any applicable law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the amounts pledged under the Indenture, pending such proceedings. If more than one such request is received by the Trustee from the Holders, the Trustee shall follow the written request executed by the Holders of the greatest percentage (which percentage shall be, in any case, not less than a majority in aggregate principal amount) of the Bonds then Outstanding. All rights of action under the Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Holders of such Bonds, subject to the provisions of the Indenture. (Section 7.05)

Bondholders’ Direction of Proceedings. The Holders of a majority in aggregate principal amount of the

Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnifying the Trustee to its satisfaction therefor, to direct the time, method and place of conducting all remedial proceedings taken by the Trustee under the Indenture, provided that such direction shall not be otherwise than in accordance with law and the provisions of the Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction. (Section 7.06)

Limitation on Bondholders’ Right to Sue. No Holder of any Bond shall have the right to institute any suit,

action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under the Indenture or any applicable law with respect to such Bond, unless (1) such Holder shall have given to the Trustee written notice of the occurrence of an Event of Default; (2) the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers granted in the Indenture or to institute such suit, action or proceeding in its own name; (3) such Holder or said Holders shall have tendered to the Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request; and (4) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

Such notification, request, tender of indemnity and refusal or omission are declared, in every case, to be

conditions precedent to the exercise by any Holder of Bonds of any remedy under the Indenture or under law; it being understood and intended that no one or more Holders of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of the Indenture or the rights of any other Holders of Bonds, or to enforce any right under the Indenture or applicable law with respect to the Bonds, except in the manner provided in the Indenture, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner provided in the Indenture and for the benefit and protection of all Holders of the Outstanding Bonds, subject to the provisions of the Indenture. (Section 7.07)

Absolute Obligation of the University. Notwithstanding any other provision of the Indenture, or in the Bonds,

nothing shall affect or impair the obligation of the University, which is absolute and unconditional, to pay the principal, Make-Whole Redemption Price or other redemption proceeds of or interest on the Bonds to the respective Holders of the Bonds at their date of maturity, or upon call for redemption, as provided in the Indenture, or, subject to provisions under the subheading “Limitations on Bondholders’ Right to Sue” above, affect or impair the right of such Holders to enforce such payment by virtue of the contract embodied in the Bonds. (Section 7.08)

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Termination of Proceedings. In case any proceedings taken by the Trustee or any one or more Bondholders on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Bondholders, then in every such case the University, the Trustee and the Bondholders, subject to any determination in such proceedings, shall be restored to their former positions and rights under the Indenture, severally and respectively, and all rights, remedies, powers and duties of the University, the Trustee and the Bondholders shall continue as though no such proceedings had been taken. (Section 7.09)

Remedies Not Exclusive. No remedy conferred in the Indenture upon or reserved to the Trustee or to the

Holders of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given under the Indenture or now or hereafter existing at law or in equity or otherwise. (Section 7.10)

Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of the Bonds to exercise

any right or power arising upon the occurrence of any Default shall impair any such right or power or shall be construed to be a waiver of any such Default or an acquiescence therein; and every power and remedy given by the Indenture to the Trustee or to the Holders of the Bonds may be exercised from time to time and as often as may be deemed expedient. (Section 7.11)

Waiver of Past Defaults. The Trustee may, and upon request of the Holders of not less than a majority in

aggregate principal amount of the Outstanding Bonds shall, on behalf of the Holders of all the Bonds waive any past Default under the Indenture and its consequences, except a Default: (a) In the payment of the principal, Make-Whole Redemption Price or other redemption proceeds of or interest on any Bond, or (b) in respect of a covenant or other provision of the Indenture which, pursuant to the Indenture, cannot be modified or amended without the consent of the Holder of each Outstanding Bond affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of the Indenture, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. (Section 7.12)

Undertaking for Costs. Subject to the provisions relating to compensation and indemnification of the Trustee,

the parties to the Indenture agree, and each Holder of any Bond by such Person’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under the Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this paragraph shall not apply to any suit instituted by the Trustee or to any suit instituted by any Bondholder or group of Bondholders holding in the aggregate more than a majority in aggregate principal amount of the Outstanding Bonds. (Section 7.13)

Notice of Default. Upon a Responsible Officer’s actual knowledge of the existence of any Default under the

Indenture, the Trustee shall notify the University in writing as soon as practicable, but in any event within five (5) Business Days.

Upon a Responsible Officer’s actual knowledge of the existence of any Default under the Indenture, the

Trustee shall transmit by mail to all Bondholders, as their names and addresses appear in the bond register, notice of such Default under the Indenture within ninety (90) days, unless such Default shall have been cured or waived; provided, however, that, except in the case of a Default in the payment of the principal, Make-Whole Redemption Price or other redemption proceeds of or interest on any Bond, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Bondholders; and provided, further, that in the case of any Default of the character specified in subparagraph (c) under “Events of Default” above, no such notice to Bondholders shall be given until at least thirty (30) days after the occurrence thereof. (Section 7.14)

Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation,

bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the University or any other obligor upon the Bonds or the property of the University or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Bonds shall then be due and payable as therein

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expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the University for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise: (i) to file and prove a claim for the whole amount of principal (or Make-Whole Redemption Price or other redemption proceeds, as applicable) and interest owing and unpaid in respect of the Bonds and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel including expenses and fees of outside counsel and allocated costs of internal legal counsel) and of the Bondholders allowed in such judicial proceeding; and (ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any receiver, assignee, trustee, liquidator or sequestrator (or other similar official) in any such judicial proceeding is, by the Indenture, authorized by each Bondholder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Bondholders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel including expenses and fees of outside counsel and allocated costs of internal legal counsel, and any other amounts due the Trustee under the Indenture.

Nothing contained in the Indenture shall be deemed to authorize the Trustee to authorize or consent to or

accept or adopt on behalf of any Bondholder any plan of reorganization, arrangement, adjustment or composition affecting the Bonds or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Bondholder in any such proceeding. (Section 7.15) The Trustee

Duties, Immunities and Liabilities of Trustee. The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in the Indenture, and, except to the extent required by law, no implied covenants or obligations shall be read into the Indenture against the Trustee. The Trustee shall, during the existence of any Event of Default (which has not been cured or waived), exercise such of the rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

The University may remove the Trustee at any time and appoint a successor that is eligible in accordance

with the Indenture unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or if at any time the Trustee shall cease to be eligible in accordance with the Indenture, or shall become incapable of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the Trustee, and thereupon shall appoint a successor Trustee by an instrument in writing.

The Trustee may at any time resign by giving written notice of such resignation to the University and by

giving the Bondholders notice of such resignation by mail at the addresses shown on the registration books maintained by the Trustee. Upon receiving such notice of resignation, the University shall promptly appoint a successor Trustee by an instrument in writing. The Trustee shall not be relieved of its duties until such successor Trustee has accepted appointment.

Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective

upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within thirty (30) days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Bondholder (on behalf of itself and all other Bondholders) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under the Indenture shall signify its acceptance of such appointment by executing and delivering to the University and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee in the Indenture; but, nevertheless at the

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request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under the Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions set forth in the Indenture. Upon request of the successor Trustee, the University shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this paragraph, the University shall mail or cause to be mailed (at the expense of the University) a notice of the succession of such Trustee to the trusts under the Indenture to the Bondholders at the addresses shown on the registration books maintained by the Trustee. If the University fails to mail such notice within fifteen (15) days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the University.

Any successor Trustee shall be a trust company or bank having trust powers in the State, having a combined

capital and surplus of (or if such trust company or bank is a member of a bank holding system, its bank holding company shall have a combined capital and surplus of) at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or State authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this paragraph the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this paragraph, the Trustee shall resign immediately in the manner and with the effect specified in the Indenture. (Section 8.01)

Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of the Indenture shall be retained in its possession and shall be subject upon reasonable prior written notice to the inspection of the University and any Bondholder, and their agents and representatives duly authorized in writing, at reasonable hours and under reasonable conditions. (Section 8.05) Modification or Amendment of the Indenture

Amendments Permitted. The Indenture and the rights and obligations of the University and of the Holders of the Bonds and of the Trustee may be modified or amended from time to time and at any time by an indenture or indentures supplemental to the Indenture, which the University and the Trustee may enter into when the written consent of the Holders of a majority in aggregate principal amount of the Bonds then Outstanding shall have been filed with the Trustee. No such modification or amendment shall (1) extend the fixed maturity of any Bond, or reduce the amount of principal thereof, or reduce the rate of interest thereon, or extend the time of payment of interest thereon, or reduce any redemption price or premium payable upon the redemption thereof, without the consent of the Holder of each Bond so affected, or (2) other than as inherent in the issuance of Additional Bonds pursuant to a Supplemental Indenture, reduce the aforesaid percentage of Bonds the consent of the Holders of which is required to effect any such modification or amendment, or permit the creation of any lien on the Indenture Fund or the amounts pledged under the Indenture prior to or on a parity with the lien created by the Indenture, or deprive the Holders of the Bonds of the lien created by the Indenture on the Indenture Fund and such amounts (except as expressly provided in the Indenture), without the consent of the Holders of all Bonds then Outstanding. It shall not be necessary for the consent of the Bondholders to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the University and the Trustee of any Supplemental Indenture pursuant to this paragraph, the Trustee shall mail a notice, setting forth in general terms the substance of such Supplemental Indenture, to the Bondholders at the addresses shown on the registration books maintained by the Trustee. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture.

The Indenture and the rights and obligations of the University, of the Trustee and of the Holders of the Bonds

may also be modified or amended from time to time and at any time by an indenture or indentures supplemental to the Indenture, which the University and the Trustee may enter into without the necessity of obtaining the consent of any Bondholders, but only to the extent permitted by law and only for any one or more of the following purposes: (i) to provide for the issuance of Additional Bonds pursuant to the Indenture; (ii) to add to the covenants and agreements of

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the University contained in the Indenture other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power reserved in the Indenture to or conferred upon the University, provided that such covenant, agreement, pledge, assignment or surrender shall not materially adversely affect the interests of the Holders of the Bonds; (iii) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision, contained in the Indenture, or in regard to matters or questions arising under the Indenture, as the University or the Trustee may deem necessary or desirable and not inconsistent with the Indenture, and which shall not materially adversely affect the interests of the Holders of the Bonds; (iv) to modify, amend or supplement the Indenture or any Supplemental Indenture in such manner as to permit the qualification thereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which shall not materially adversely affect the interests of the Holders of the Bonds; (v) to provide for the procedures required to permit any Bondholder, at its option, to utilize an uncertificated system of registration of its Bond or to facilitate the registration of the Bonds in the name of a nominee of the Securities Depository in accordance with the Indenture; (vi) to authorize different denominations of the Bonds and to make correlative amendments and modifications to the Indenture of a technical nature relating to such different denominations, such as specifying the applicable exchangeability or redemption provisions thereof; or (vii) to make any changes required by a Rating Agency in order to obtain or maintain a rating for the Bonds; or (viii) to modify, amend or supplement any other provision of the Indenture in a manner that shall not materially adversely affect the interests of the Holders of the Bonds.

The Trustee may in its discretion, but shall not be obligated to, enter into any such Supplemental Indenture

authorized by either of the two preceding paragraphs which materially adversely affects the Trustee’s own rights, duties or immunities under the Indenture or otherwise. (Section 9.01)

Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to the

Indenture, the Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under the Indenture of the University, the Trustee and all Holders of Bonds Outstanding shall thereafter be determined, exercised and enforced under the Indenture subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of the Indenture for any and all purposes. (Section 9.02)

Amendment of Particular Bonds. The provisions of the Indenture shall not prevent any Bondholder from accepting any amendment as to the particular Bonds held by such Bondholder, provided that due notation thereof is made on such Bonds. (Section 9.04)

Defeasance

Discharge of Indenture. The Bonds may be paid or discharged by the University or the Trustee on behalf of the University in any of the following ways: (a) by paying or causing to be paid the principal, Make-Whole Redemption Price or other redemption proceeds of and interest on all Bonds Outstanding, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, moneys or securities in the necessary amount (as provided in the Indenture) to pay when due or redeem all Bonds then Outstanding; or (c) by delivering to the Trustee, for cancellation by it, all Bonds then Outstanding.

If the University shall also pay or cause to be paid all other sums payable under the Indenture by the

University, then and in that case at the election of the University (evidenced by a Certificate of the University filed with the Trustee signifying the intention of the University to discharge all such indebtedness and the Indenture and upon receipt by the Trustee of an Opinion of Counsel to the effect that the obligations under the Indenture and the Bonds have been discharged), and notwithstanding that any Bonds shall not have been surrendered for payment, the Indenture and the pledge of the Indenture Fund and all amounts held therein made under the Indenture and all covenants, agreements and other obligations of the University under the Indenture (except as otherwise provided in the Indenture) shall cease, terminate, become void and be completely discharged and satisfied and the Bonds shall be deemed paid. In such event, upon Request of the University, the Trustee shall cause an accounting for such period or periods as may be requested by the University to be prepared and filed with the University and shall execute and deliver to the University all such instruments as may be necessary to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver to the University all moneys or securities or other property held by

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it pursuant to the Indenture which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption. (Section 10.01)

Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money

or securities in the necessary amount (as provided in the Indenture) to pay or redeem any Outstanding Bond (whether upon or prior to its maturity or the redemption date of such Bond), provided that, if such Bond is to be redeemed prior to maturity, notice of such redemption shall have been given as provided in the Indenture, or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the University in respect of such Bond shall cease, terminate and be completely discharged, and the Bonds shall be deemed paid, except only that thereafter the Holder thereof shall be entitled to payment of the principal, Make-Whole Redemption Price or other redemption proceeds of and interest on such Bond by the University, and the University shall remain liable for such payments, but only out of such money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions under the heading, “Payment of Bonds After Discharge of Indenture” below.

The University may at any time surrender to the Trustee for cancellation by it any Bonds previously issued

and delivered, which the University may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired. (Section 10.02)

Payment of Bonds After Discharge of Indenture. Notwithstanding any provisions of the Indenture, any

moneys held by the Trustee in trust for the payment of the principal, Make-Whole Redemption Price or other redemption proceeds of, or interest on, any Bonds and remaining unclaimed for three years (or, if shorter, one day before such moneys would escheat to the State under then applicable Rhode Island law) after such principal, Make-Whole Redemption Price or other redemption proceeds or interest, as the case may be, has become due and payable (whether at maturity or upon call for redemption), shall be repaid to the University free from the trusts created by the Indenture upon receipt of an indemnification agreement acceptable to the University and the Trustee indemnifying the University and the Trustee with respect to claims of Holders of Bonds which have not yet been paid, and all liability of the Trustee and the University with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the University as aforesaid, the Trustee may (at the cost of the University) first mail to the Holders of Bonds which have not yet been paid, at the addresses shown on the registration books maintained by the Trustee, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the University of the moneys held for the payment thereof. (Section 10.04)

Limitation of Rights to Parties and Bondholders

Nothing in the Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any Person other than the University, the Trustee and the Holders of the Bonds any legal or equitable right, remedy or claim under or in respect of the Indenture or any covenant, condition or provision therein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the University, the Trustee and the Holders of the Bonds. (Section 11.02)

Evidence of Rights of Bondholders

Any request, consent or other instrument required or permitted by the Indenture to be signed and executed

by Bondholders may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bondholders in Person or by an agent or agents duly appointed in writing.

The fact and date of the execution by any Person of any such request, consent or other instrument or writing

may be proved by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the Person signing such request, consent or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer.

The ownership of Bonds shall be proved by the registration books for the Bonds held by the Trustee.

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Any request, consent, or other instrument or writing of the Holder of any Bond shall bind every future Holder of the same Bond and the Holder of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the University in accordance therewith or reliance thereon. (Section 11.07)

Waiver of Personal Liability

No member, officer, agent or employee of the University shall be individually or personally liable for the payment of the principal, Make-Whole Redemption Price or other redemption proceeds of or interest on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof or the performance of any duty under the Indenture; but nothing contained in the Indenture shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or by the Indenture. (Section 11.11)

Governing Law; Venue

The Indenture shall be construed in accordance with and governed by the Constitution and the laws of the State applicable to contracts made and performed in the State. The Indenture shall be enforceable in the State, and any action arising under the Indenture shall (unless waived by the University) be filed and maintained in the State. (Section 11.13) CUSIP Numbers

Neither the Trustee nor the University shall be liable for any defect or inaccuracy in the CUSIP number that appears on any Bond or in any redemption notice. (Section 11.15)

APPENDIX D

PROPOSED FORM OF OPINION OF COUNSEL TO THE UNIVERSITY


One Financial PlazaSuite 2800

Westminster StreetProvidence, RI 02903

Telephone: 401-274-9200Fax: 401-276-6611www.lockelord.com

APPENDIX D

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PROPOSED FORM OF OPINION OF COUNSEL TO THE UNIVERSITY

[Closing Date] BofA Securities, Inc., as Representative of the Underwriters 555 California Street San Francisco, California 94104 Brown University in Providence in the State of Rhode Island and Providence Plantations University Hall 1 Prospect Street Providence, Rhode Island 02912 U.S. Bank National Association, as Trustee One Federal Street, 3rd Floor Boston, Massachusetts 02110 As bond counsel to Brown University in Providence in the State of Rhode Island and Providence Plantations (the “University”), we are furnishing this opinion in connection with the issuance by the University of $___________ Brown University Taxable Bonds, Series 2020A (the “Bonds”). All references in this opinion to defined terms shall mean the terms as defined in the Indenture of Trust dated as of May 1, 2020 (the “Indenture”) between the University and U.S. Bank National Association, as trustee (the “Trustee”).

We have reviewed and relied upon the provisions of an executed copy of each of the following documents:

1. Bonds.

2. Indenture.

BofA Securities, Inc. Brown University in Providence in the State of Rhode Island and Providence Plantations U.S. Bank National Association [Closing Date] Page 2

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3. Purchase Contract dated __________, 2020 (together with the Bonds and the Indenture, the “Bond Documents”) between the University and BofA Securities, Inc., as representative of the underwriters of the Bonds (the “Representative”).

4. Charter of the University, as amended, as certified by the Secretary of State of the State of Rhode Island and Providence Plantations (the “State”) on May 1, 2020 (the “Charter”) and the Statutes of the Corporation of Brown University in Providence in the State of Rhode Island and Providence Plantations (the “Brown Corporation”) (the “Statutes”).

5. Certificate of Good Standing of the University issued by the Secretary of State of the State on April 30, 2020.

6. Certificate of the Senior Associate Secretary of the Brown Corporation as to due authorization, incumbency and other matters including, the Charter, the Statutes and resolutions of the members of the Brown Corporation duly adopted on April 3, 2020.

We have also examined such public records and other documents and materials, including, among others, minutes of the meetings of the Brown Corporation and of its Advisory and Executive Committee, Committee on Budget and Finance, Committee on Facilities and Campus Planning and Investment Committee from their respective meetings in May and October of 2019, as well as the Advisory and Executive Committee’s meeting in February of 2020, and a determination letter from the Internal Revenue Service that the University is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986 (or a predecessor provision) (the “Code”), and made such investigation and such examination of law as we have deemed necessary under the circumstances in connection with this opinion, including review of certain documents and other records of the University. We have also relied on certificates of public officials and, as to factual matters material to our opinion, upon representations contained in the Bond Documents and in certificates and other due inquiries of appropriate officers and other representatives of the University.

We have assumed the genuineness of all signatures (other than those of the University), the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies. For purposes of this opinion, we have assumed that the Bond Documents constitute valid and binding obligations of the parties thereto other than the University.

The opinions herein are limited to matters of law solely on applicable provisions of the following laws as currently in effect: (a) the federal laws of the United States of America; and (b) the laws of the State; provided, however, that the opinions expressed herein are based upon a review of those laws, statutes and regulations that, in our experience, are generally recognized as applicable to the transactions contemplated in the Bond Documents, and in any event, the laws


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described in clauses (a) and (b) above shall not include (and we express no opinion as to): (i) local or state laws governing licenses, permits or approvals necessary for the conduct of the University’s business; (ii) the Employee Retirement Income Security Act of 1974, as amended; (iii) any federal or state securities, antitrust, environmental, unfair competition or usury laws; (iv) except for the opinion in paragraph 4 below, any tax laws or any rules or regulations with respect thereto; or (v) any laws, regulations, executive orders or government programs designed to combat terrorism, money laundering or racketeering; and we express no opinions as to any other laws, statutes, rules or regulations not specifically identified above that are otherwise excluded in this opinion letter. We express no opinion with respect to:

A. the effect of any provision of any Bond Document that increases the rate of interest upon any default or imposes a late fee to the extent either is determined to be a penalty;

B. the enforceability of any provision of any Bond Document providing for collection of interest on overdue interest;

C. the effect of any provision of any Bond Document waiving any legal right to the extent that such waiver would violate public policy;

D. the effect of any provision of any Bond Document that purports to grant rights of set-off or similar rights (i) other than in accordance with applicable law; (ii) to the extent the Trustee or any other person is authorized to set off against funds on deposit in the University’s accounts that were accepted by the Trustee or such other person with the intent to apply such funds to a preexisting claim rather than to hold the funds subject to withdrawals in the ordinary course; or (iii) to the extent that the funds on deposit in said accounts are in any manner special accounts, which by the express terms on which they are created, are made subject to the rights of a third party;

E. any person’s title or rights to title to any assets;

F. the enforceability of any provision of the Bond Documents purporting to establish evidentiary standards;

G. the effect of any provision of any Bond Document to the extent that it provides for recourse or exercise of any remedial rights in the absence of notice and a hearing;

H. the grant of powers of attorney which is against public policy;


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I. any exculpation or indemnification provisions contained in any Bond Document, insofar as the Trustee or the Representative are disabled from enforcement by matters internal to themselves, or to the extent that the exculpation or indemnification provisions therein are contrary to public policy;

J. the enforceability of any provision of the Bond Documents relating to the appointment of a receiver;

K. the enforceability of any provision providing for the exclusive choice of venue or any submission to the exclusive jurisdiction of any court or courts; and

L. the collection of any quantum of legal fees upon or subsequent to a default.

Our opinions below are subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors and to general principles of equity.

When used in this opinion, the phrase “to our knowledge” or an equivalent phrase limits the statements it qualifies to the actual knowledge of the lawyers in this firm responsible for preparing this opinion after such inquiry as they deemed appropriate.

Based on the foregoing and subject to the additional qualifications set forth below, we are of the opinion that:

1. The University is a nonprofit corporation validly existing under the laws of the State with full corporate power to execute and deliver the Bond Documents and to perform its obligations thereunder.

2. The University has duly authorized, executed and delivered the Bond Documents, and the Bond Documents constitute its valid and binding obligations enforceable against the University in accordance with their respective terms.

3. The execution and delivery by the University of the Bond Documents do not, and the performance by the University of its obligations thereunder will not, (i) violate Rhode Island or federal law, (ii) violate any court order, judgment or decree applicable to it and known to us, (iii) result in a breach of or constitute a default under or result in the creation of a lien or a right of acceleration or other advance payment, or a right of termination exercisable by the other party under, any agreement or instrument to which it is a party and known to us, or (iv) violate its charter or bylaws.


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4. The University is an organization described in Section 501(c)(3) of the Code, and as such has been determined by the Internal Revenue Service to be exempt from federal income taxation under Section 501(a) of the Code or a predecessor provision, with the exception of taxation of any income deemed to be unrelated business taxable income and any amounts deemed taxable by virtue of Section 511 of the Code.

5. No consent, approval, license or exemption by, order or authorization of, or filing, recording or registration with, any governmental authority is required to be obtained or made by the University in connection with the University’s performance of its payment obligations pursuant to the Bond Documents other than those that have been obtained or made, except that we express no opinion as to zoning or environmental matters, or as to application for or approvals of building, operating and other permits and approvals required for operation of the projects to be financed by the Bonds or as may be required under federal or state securities or blue sky laws.

In addition to the forgoing opinions, we inform you that, to our knowledge, without having made independent investigation, no action, suit or proceeding to which the University is a party is pending or is overtly threatened in writing against the University that challenges the validity or enforceability of or seeks to enjoin the performance of the Bond Documents or the validity of the Bonds.

This opinion speaks only as of its date, and we undertake no obligation to update it for any subsequent events or legal developments. This opinion is being furnished only to you for use solely in connection with the transaction described above and may not be relied on without our prior written consent for any other purpose or by anyone else.

LOCKE LORD LLP


APPENDIX E

DTC BOOK-ENTRY ONLY SYSTEM AND GLOBAL CLEARANCE PROCEDURES


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The information set out below is subject to any change in or reinterpretation of the rules, regulations and procedures of DTC, Euroclear Bank S.A./N.V. as operator of the Euroclear System (“Euroclear”) or Clearstream Banking, S.A. (“Clearstream Banking”) (DTC, Euroclear and Clearstream Banking together, the “Clearing Systems”) currently in effect. The information in this section concerning the Clearing Systems has been obtained from sources that the University believes to be reliable, but none of the University, the Trustee or the Underwriters take any responsibility for the accuracy, completeness or adequacy of the information in this section. Investors wishing to use the facilities of any of the Clearing Systems are advised to confirm the continued applicability of the rules, regulations and procedures of the relevant Clearing System. The University will not have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Bonds held through the facilities of any Clearing System or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

Clearing Systems DTC Book-Entry Only System

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

DTC 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, as amended. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). The DTC rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will

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

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the

name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the 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 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds

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are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to

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

Redemption notices will be sent to DTC. If less than all of the Bonds are being redeemed, DTC’s practice is

to determine by lot the amount of the interest of each Direct Participant in the Bonds to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds

unless authorized by a Direct Participant in accordance with DTC’s Money Market Instrument Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the University 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 the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal, redemption and interest payments on the Bonds will be made to Cede & Co., or such other nominee

as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the University or the Trustee, on a payment 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 Participants and not of DTC, its nominee, the Trustee or the University, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption proceeds and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the University, 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 the Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving

reasonable notice to the University or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered.

The University may decide to discontinue use of the system of book-entry-only transfers through DTC (or a

successor securities depository). In that event, Bond certificates for the applicable Bonds will be printed and delivered to DTC.

THE TRUSTEE, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE BONDS, WILL

SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS OF SUCH BONDS ONLY TO DTC. ANY FAILURE OF DTC TO ADVISE ANY PARTICIPANT, OR OF ANY PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY SUCH NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OR SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.

Since DTC may only act on behalf of Direct Participants, who in turn act on behalf of Indirect Participants,

any Beneficial Owner desiring to pledge Bonds to persons or entities that do not participate in DTC, or otherwise take actions with respect to such Bonds, will be required to withdraw the Bonds from DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from

sources that the University believes to be reliable, but the University takes no responsibility for the accuracy thereof.

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Euroclear and Clearstream Banking

Euroclear and Clearstream Banking have advised the University as follows: Euroclear and Clearstream Banking each hold securities for their customers and facilitate the clearance and

settlement of securities transactions by electronic book-entry transfer between their respective account holders. Euroclear and Clearstream Banking provide various services including safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Euroclear and Clearstream Banking also deal with domestic securities markets in several countries through established depositary and custodial relationships. Euroclear and Clearstream Banking have established an electronic bridge between their two systems across which their respective participants may settle trades with each other.

Euroclear and Clearstream Banking customers are worldwide financial institutions, including underwriters,

securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to Euroclear and Clearstream Banking is available to other institutions that clear through or maintain a custodial relationship with an account holder of either system, either directly or indirectly.

Clearing and Settlement Procedures

The Bonds sold in offshore transactions will be initially issued to investors through the book-entry facilities of DTC, or Clearstream Banking and Euroclear in Europe if the investors are participants in those systems, or indirectly through organizations that are participants in the systems. For any of such Bonds, the record holder will be DTC’s nominee. Clearstream Banking and Euroclear will hold omnibus positions on behalf of their participants through customers’ securities accounts in Clearstream Banking’s and Euroclear’s names on the books of their respective depositories.

The depositories, in turn, will hold positions in customers’ securities accounts in the depositories’ names on

the books of DTC. Because of time zone differences, the securities account of a Clearstream Banking or Euroclear participant as a result of a transaction with a participant, other than a depository holding on behalf of Clearstream Banking or Euroclear, will be credited during the securities settlement processing day, which must be a business day for Clearstream Banking or Euroclear, as the case may be, immediately following the DTC settlement date. These credits or any transactions in the securities settled during the processing will be reported to the relevant Euroclear participant or Clearstream Banking participant on that business day. Cash received in Clearstream Banking or Euroclear as a result of sales of securities by or through a Clearstream Banking participant or Euroclear participant to a DTC Participant, other than the depository for Clearstream Banking or Euroclear, will be received with value on the DTC settlement date but will be available in the relevant Clearstream Banking or Euroclear cash account only as of the business day following settlement in DTC.

Transfers between participants will occur in accordance with DTC rules. Transfers between Clearstream

Banking participants or Euroclear participants will occur in accordance with their respective rules and operating procedures. Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream Banking participants or Euroclear participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant European international clearing system by the relevant depositories; however, cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in the system in accordance with its rules and procedures and within its established deadlines in European time. The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its depository to take action to effect final settlement on its behalf by delivering or receiving securities in DTC, and making or receiving payment in accordance with normal procedures for same day funds settlement applicable to DTC. Clearstream Banking participants or Euroclear participants may not deliver instructions directly to the depositories.

The University will not impose any fees in respect of holding the Bonds; however, holders of book-entry

interests in the Bonds may incur fees normally payable in respect of the maintenance and operation of accounts in the Clearing Systems.

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Initial Settlement

Interests in the Bonds will be in uncertified book-entry form. Purchasers electing to hold book-entry interests in the Bonds through Euroclear and Clearstream Banking accounts will follow the settlement procedures applicable to conventional Eurobonds. Book-entry interests in the Bonds will be credited to Euroclear and Clearstream Banking participants’ securities clearance accounts on the business day following the date of delivery of the Bonds against payment (value as on the date of delivery of the Bonds). DTC participants acting on behalf of purchasers electing to hold book-entry interests in the Bonds through DTC will follow the delivery practices applicable to securities eligible for DTC’s Same Day Funds Settlement system. DTC participants’ securities accounts will be credited with book-entry interests in the Bonds following confirmation of receipt of payment to the University on the date of delivery of the Bonds.

Secondary Market Trading

Secondary market trades in the Bonds will be settled by transfer of title to book-entry interests in the Clearing Systems. Title to such book-entry interests will pass by registration of the transfer within the records of Euroclear, Clearstream Banking or DTC, as the case may be, in accordance with their respective procedures. Book-entry interests in the Bonds may be transferred within Euroclear and within Clearstream Banking and between Euroclear and Clearstream Banking in accordance with procedures established for these purposes by Euroclear and Clearstream Banking. Book-entry interests in the Bonds may be transferred within DTC in accordance with procedures established for this purpose by DTC. Transfer of book-entry interests in the Bonds between Euroclear or Clearstream Banking and DTC may be effected in accordance with procedures established for this purpose by Euroclear, Clearstream Banking and DTC.

Special Timing Considerations.

You should be aware that investors will only be able to make and receive deliveries, payments and other communications involving the Bonds through Euroclear or Clearstream on days when those systems are open for business. In addition, because of time-zone differences, there may be complications with completing transactions involving Euroclear and/or Clearstream on the same business day as in the United States. U.S. investors who wish to transfer their interests in the Bonds, or to receive or make a payment or delivery of Bonds, on a particular day, may find that the transactions will not be performed until the next business day in Brussels if Euroclear is used, or Luxembourg if Clearstream is used.

Clearing Information.

We expect that the Bonds will be accepted for clearance through the facilities of Euroclear and Clearstream. The international securities identification numbers, common codes and CUSIP numbers for the Bonds are set out on the cover page. General None of Euroclear, Clearstream Banking or DTC is under any obligation to perform or continue to perform the procedures referred to above, and such procedures may be discontinued at any time.

Neither the University nor any of their agents will have any responsibility for the performance by Euroclear, Clearstream Banking or DTC or their respective direct or indirect participants or account holders of their respective obligations under the rules and procedures governing their operations or the arrangements referred to above.

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