The Series 2019 Bonds Shall Constitute Limited

This is a Preliminary Official Statement and the information contained herein is subject to change, amendment and completion without notice. These securities may not be sold, nor may an offer to buy be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. delivery throughthefacilitiesofDTC onorabout August [__],2019. by its counsel, Saul Ewing Arnstein & Lehr LLP, Philadelphia, Pennsylvania. It is expected that the Series 2019 Bonds in definitive form will be available for Mullin, Maxwell & Lupin, PC, Lansdale, Pennsylvania; for the School by its counsel, Ballard Spahr LLP, Philadelphia, Pennsylvania; and for Rubin, Hamburg, the counsel, Underwriter,its by the Authority for upon passed be will matters legal Certain Counsel. LLP,Bond Spahr Pennsylvania, Ballard Philadelphia, Appendices hereto,toobtaininformationessentialmakinganinformed investmentdecision. SUBDIVISION THEREOF. THE AUTHORITY HASNO TAXING POWER. MONTGOMERY OR THE COMMONWEALTH OF PENNSYLVANIA OROF ANY POLITICAL GENERAL OBLIGATION OF THE AUTHORITY OR AN OBLIGATION OF THE COUNTY OF THE SERIES2019BONDS,NORSHALL 2019 BONDSBEORDEEMED THE SERIES A OR OF ANY POLITICAL SUBDIVISION THEREOFPLEDGED FOR IS THE PAYMENT OF OF THE COUNTY OF MONTGOMERY OROF THE COMMONWEALTH OF PENNSYLVANIA THE GENERAL CREDIT OF THE AUTHORITY NOR THE CREDIT OR THE TAXINGPOWER PAYMENTS TOBY BE MADE THE SCHOOL UNDER THE LOAN AGREEMENT. NEITHER AUTHORITY AND ARE PAYABLE SOLELY FROM THE TRUST ESTATE FROM AND Owners oftheSeries2019Bonds.See“THESERIESBONDS–Book-Entry-OnlySystem”herein. as nominee of DTC, references herein to the Bondholders, Owners or registered Owners shall mean Cede & Co., as aforesaid and shall not mean the Beneficial thereof. Purchasers will not receive certificates representing their interest in the Series 2019 Bonds purchased. So long as Cede & Co. is the registered Owner, 2019 Bonds. Purchases of beneficial interests in the Series 2019 Bonds will be made in book-entry form, in denominations of $5,000 or any integral multiple Series the for depository securities as act will Company,York,TrustDTC New Depository York New The (“DTC”). for nominee and Owner registered as of theSeries2019Bonds.” SOURCES OFPAYMENT FOR THE SERIES2019BONDS”herein. “SECURITY AND See School. the of obligation general a is payments loan make to Loan Agreement the under School’sobligation The Loan Agreement. under theLoan Agreement (the“Loan Agreement”) describedhereinbetweenthe Authority andHaverfordSchool(the“School”). the Authority,of assignee Trustee,as the to payments and Indenture the Trusteeunder the by held funds certain by secured and from payable be will Bonds York Mellon Trust Company, N.A., Philadelphia, Pennsylvania, as trustee, paying agent and bond registrar (in such capacities, the “Trustee”). The Series 2019 Development a under “Authority”) (the TrustAuthority of as dated Indenture the between “Indenture”), (the 2019 1, August and New Authority of Bank The Dated: DateofDelivery 2019 Bondsisexemptfrom Pennsylvaniapersonalincometaxandcorporatenettax.See“TAX MATTERS” herein. Pennsylvania as presently enactedandconstrued,theSeries2019Bondsare exemptfrom personalproperty taxesinPennsylvania,andinterest ontheSeries preference item for purposes ofindividual federal alternative minimum tax. Bond Counselisalsoofthe opinion that, under the laws oftheCommonwealth purposes of federal income tax, assuming continuing compliance with the requirements of federal tax laws. Interest on the Series 2019 Bonds is not a specific NEW ISSUE–BOOK-ENTRY ONLY *Preliminary, subjecttochange. Dated: August [__], 2019 The Series 2019 Bonds are offered when, as and if issued by the Authority and received by the Underwriter, subject to the approving legal opinion of opinion legal approving the to Underwriter,subject the by received and the Authority by issued if and as when, offered are Bonds 2019 Series The the including Statement, Official entire this read must Investors issue. this of summary a only.is reference It for information contains page cover This THE SERIES 2019BONDSSHALL CONSTITUTELIMITEDOBLIGATIONS OF THE Co., & Cede of name the in registered be will issued, when and, coupons, without bonds registered fully as only issued be will Bonds 2019 Series The The Series 2019 Bonds are subject to redemption prior to maturity, as set forth in this Official Statement. See “THE SERIES 2019 BONDS – Redemption the to pursuant the Authority by received be to payments from and Indenture the under held funds the from solely payable are Bonds 2019 Series The Industrial County Montgomery the by issued be will Bonds”) 2019 “Series (the Project) School Haverford (The 2019 Series Bonds, Revenue The In theopinionofBallardLLP, Spahr Philadelphia, Pennsylvania, BondCounsel,interest ontheSeries2019Bondsisexcludable from grossincome for REVENUE BONDS,SERIES2019(THEHAVERFORD SCHOOL PROJECT) MONTGOMERY COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY PRELIMINARY OFFICIAL STATEMENT DATED AUGUST 15,2019 $31,000,000* Due: March 1,asshownontheinsidefront cover (See “RATINGS” herein) Ratings: S&P:“A”

MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS AND CUSIP NUMBERS

$31,000,000 MONTGOMERY COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY REVENUE BONDS, SERIES 2019 (THE HAVERFORD SCHOOL PROJECT)

Maturity Date Principal Interest (March 1) Amount Rate Yield CUSIP No.†

$ ____% Term Bond due March 1, 20[ ], priced at _____% to yield ____%, CUSIP ___†

Preliminary, subject to change. † “CUSIP” is a registered trademark of the American Bankers Association. CUSIP numbers are provided by CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Global Market Intelligence. The CUSIP numbers listed above are being provided solely for the convenience of holders of the Series 2019 Bonds only at the time of issuance of the Series 2019 Bonds. None of the Authority, the School or the Underwriter or their respective agents or counsel takes responsibility for the accuracy of such CUSIP numbers or at any time in the future.

IN CONNECTION WITH THIS OFFERING THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2019 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE ORDER AND PLACEMENT OF MATERIALS IN THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, ARE NOT TO BE DEEMED TO BE A DETERMINATION OF RELEVANCE, MATERIALITY, OR IMPORTANCE, AND THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, MUST BE CONSIDERED IN ITS ENTIRETY. THE OFFERING OF THE SERIES 2019 BONDS IS MADE ONLY BY MEANS OF THIS ENTIRE OFFICIAL STATEMENT. ______

The information set forth herein has been obtained from the Montgomery County Industrial Development Authority (the “Authority”) and The Haverford School (the “School”), and other sources which are believed to be reliable, but the information provided by sources other than the Authority is not guaranteed as to accuracy or completeness by the Authority. The information and expressions of opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in any of the information set forth herein since the date hereof.

The Authority has not prepared or assisted in the preparation of this Official Statement except for the statements under the captions “THE AUTHORITY” and “LITIGATION – The Authority.” The Authority has reviewed only the information contained herein under such captions and approved only such information for use within the Official Statement.

The Underwriter has provided the following sentence for inclusion in the Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities law as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

No dealer, broker, salesperson or other person has been authorized by the Authority, the Underwriter or the School to give any information or to make any representations with respect to the Series 2019 Bonds, other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of any offer to buy any of the Series 2019 Bonds in any jurisdiction in which it is unlawful to make such an offer, solicitation, or sale.

The Series 2019 Bonds are not, and will not be, registered under the Securities Act of 1933, as amended, or under any state securities laws, and the Indenture has not been and will not be qualified under the Trust Indenture Act of 1939, as amended, because of available exemptions therefrom. Neither the Securities and Exchange Commission nor any federal, state, municipal, or other governmental agency will pass upon the accuracy, completeness, or adequacy of the Official Statement.

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

If and when included in this Official Statement, the words “expects,” “forecasts,” “projects,” “intends,” “anticipates,” “estimates,” “assumes,” and analogous expressions are intended to identify forward-looking statements and such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those that have been projected. Such risks and uncertainties which could affect the amount of revenue collected by the School include, among others, changes in economic conditions and various other events, conditions and circumstances, many of which are beyond the control of the School. Such forward-looking

statements speak only as of the date of this Official Statement. The School disclaims any obligation or undertaking to release publicly any updated or revisions to any forward-looking statement contained herein to reflect any changes in the School’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

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 final official statement for purposes of, and as that term is defined in, SEC Rule 15c2-12.

TABLE OF CONTENTS

Page

INTRODUCTION ...... 1 Purpose of the Official Statement ...... 1 The Authority ...... 1 The School ...... 1 The 2019 Project ...... 2 Security and Sources of Payment for the Series 2019 Bonds ...... 2 The Series 2010 Bonds ...... 2 Bondholders’ Risks ...... 2 Definitions and Summaries of Documents ...... 3

THE AUTHORITY ...... 3

THE 2019 PROJECT ...... 4 General ...... 4 Plan of Refunding ...... 4 Plan of Finance ...... 4 Estimated Sources and Uses of Funds ...... 4

THE SERIES 2019 BONDS ...... 5 General ...... 5 Book-Entry-Only System ...... 6 Redemption of the Series 2019 Bonds ...... 8

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2019 BONDS ...... 10 Limited Obligations ...... 10 The Indenture ...... 10 The Loan Agreement ...... 10 Series 2019 Bonds are Unsecured Obligations of the School ...... 10 No Recourse Against Members of the Authority ...... 11

DEBT SERVICE REQUIREMENTS ...... 12

BONDHOLDERS’ RISKS ...... 12 General ...... 12 Uncertainty of School Revenues and Expenses ...... 13 Competition ...... 13 Fluctuations in Market Value of Investments ...... 13 Potential for Additional Legislation or Regulation ...... 13 Qualified 501(c)(3) Status of School ...... 14 Covenant to Maintain Tax-Exempt Status of the Series 2019 Bonds ...... 14 Property Tax Assessments ...... 15 Enforceability of Remedies ...... 15 Potential Effects of Bankruptcy ...... 15 No Pledge of School Revenues ...... 16 Additional Indebtedness ...... 16 Secondary Market for the Series 2019 Bonds ...... 16

Suitability of Investment ...... 16 Other Risk Factors Relating to the Finances and Operations of the School ...... 17

TAX MATTERS ...... 17 Federal Tax Exemption ...... 17 State Tax Exemption ...... 18

LEGAL MATTERS ...... 18

INDEPENDENT ACCOUNTANTS ...... 18

RATINGS ...... 18

UNDERWRITING ...... 19

RELATIONSHIPS AMONG PARTIES ...... 19

FINANCIAL ADVISOR ...... 19

LITIGATION ...... 20 The Authority ...... 20 The School ...... 20

CONTINUING DISCLOSURE UNDERTAKING ...... 20

MISCELLANEOUS ...... 21

APPENDIX A – CERTAIN INFORMATION CONCERNING THE HAVERFORD SCHOOL ...... A-1

APPENDIX B – FINANCIAL STATEMENTS OF THE HAVERFORD SCHOOL FOR THE FISCAL YEAR ENDED JUNE 30, 2018 ...... B-1

APPENDIX C – SUMMARY OF LEGAL DOCUMENTS ...... C-1

APPENDIX D – PROPOSED FORM OF OPINION OF BOND COUNSEL ...... D-1

APPENDIX E – PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT ...... E-1

Official Statement

$31,000,000 MONTGOMERY COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY Revenue Bonds, Series 2019 (The Haverford School Project)

INTRODUCTION

Purpose of the Official Statement

The purpose of this Official Statement is to provide certain information in connection with the offering of the Montgomery County Industrial Development Authority Revenue Bonds, Series 2019 (The Haverford School Project) (the “Series 2019 Bonds”) in the aggregate principal amount of $31,000,000*. The Series 2019 Bonds will be issued pursuant to a Trust Indenture dated as of August 1, 2019 (the “Indenture”) between the Montgomery County Industrial Development Authority (the “Authority”) and The Bank of New York Mellon Trust Company, N.A., as trustee, paying agent and bond registrar (in such capacities, the “Trustee”). The proceeds of the Series 2019 Bonds, together with other available funds, will be used to pay the costs of the 2019 Project described below to be undertaken on behalf of The Haverford School (the “School”). See APPENDIX C for the definition of capitalized terms used herein and not otherwise defined.

The Authority

The Authority is a public instrumentality of the Commonwealth of Pennsylvania (the “Commonwealth”) and a body corporate and politic organized and existing under the Pennsylvania Economic Development Financing Law, Act of August 23, 1967, P.L. 251, as amended (the “Act”). The Authority was created by a resolution adopted by the Board of County Commissioners of the County of Montgomery, Pennsylvania (the “County”). The Authority was incorporated on April 25, 1969 and pursuant to Articles of Amendment approved by the Secretary of the Commonwealth has a term of existence until August 2, 2056, which is beyond the final maturity date of the Series 2019 Bonds. The Authority is governed by a board of seven members. The Series 2019 Bonds are being issued under the Act pursuant to a resolution of the Authority adopted on July 24, 2019 (the “Resolution”). For additional information concerning the Authority, see “THE AUTHORITY” herein.

The School

The School is a Pennsylvania not for profit corporation organized under the laws of the Commonwealth and is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”). The School was established in 1884 and operates as an independent nonsectarian college preparatory day school for boys grades pre-kindergarten through twelve, located in Lower Merion Township, Montgomery County, Pennsylvania, and Haverford Township, Delaware County, Pennsylvania. The School had an enrollment of 962 students for the 2018-2019 school year and projects an enrollment of approximately 960 students for the 2019-2020 school year. For a further description of the School, see Appendix A - “INFORMATION CONCERNING THE HAVERFORD SCHOOL” attached hereto. APPENDIX B contains financial statements of the School for the fiscal year ended June 30, 2018.

 Preliminary, subject to change.

The 2019 Project

The Series 2019 Bonds are being issued by the Authority to finance a project (the “2019 Project”) consisting of the following: (i) the current refunding of the Authority’s Revenue Refunding Bonds, Series of 2010 (The Haverford School Project) (the “Series 2010 Bonds”) currently held by PNC Bank, National Association; (ii) the payment of (or reimbursement to the School for) a portion of the costs of construction of a new middle school building or other capital expenditures on the School’s campus; and (iii) the payment of certain costs of issuing the Series 2019 Bonds. For additional information concerning the 2019 Project, see “PLAN OF FINANCING” herein.

The proceeds of the Series 2019 Bonds will be loaned to the School for the purposes described above pursuant to a Loan Agreement dated as of August 1, 2019 (the “Loan Agreement”), between the Authority and the School. Under the Loan Agreement, the School will be obligated to make loan payments to the Trustee, as assignee of the Authority, in amounts and at times sufficient, among other things, to pay the principal, redemption price of, and interest on, the Series 2019 Bonds when due.

Security and Sources of Payment for the Series 2019 Bonds

Under the Loan Agreement, the School is obligated to make payments which are sufficient, in the aggregate, to pay when due the principal or redemption price of, and interest on the Series 2019 Bonds. The School’s obligation to make such payments is an unsecured, general obligation of the School. Pursuant to the Indenture, the Authority will assign to the Trustee, for the benefit and security of the Owners of the Series 2019 Bonds, substantially all of the rights of the Authority in the Loan Agreement (other than the Reserved Rights, as defined in the Indenture), including its right to receive loan payments payable by the School under the Loan Agreement.

The Series 2019 Bonds are limited obligations of the Authority and are payable solely from the payments to be made by the School under the Loan Agreement and certain funds held by the Trustee under the Indenture, and not from any other fund or source of the Authority, and are pledged under the Indenture and the Loan Agreement as described therein. Neither the general credit of the Authority nor the credit or the taxing power of the County or of the Commonwealth or of any political subdivision thereof is pledged for the payment of the Series 2019 Bonds, nor shall the Series 2019 Bonds be or be deemed a general obligation of the Authority or an obligation of the County or the Commonwealth or of any political subdivision thereof. The Authority has no taxing power. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2019 BONDS” herein.

The Series 2010 Bonds

The proceeds of the Series 2010 Bonds were used to currently refund tax-exempt bonds issued by the Authority to finance or refinance the cost of the construction, renovation, furnishing and equipping of various educational facilities on the School’s campus. Simultaneous with the refunding of the Series 2010 Bonds, the School will be using funds other than the proceeds of the Series 2019 Bonds to terminate two existing interest rate swaps associated with the Series 2010 Bonds. Upon the current refunding of the Series 2010 Bonds with the proceeds of the Series 2019 Bonds, the only revenue bonds issued for the purpose of financing or refinancing projects on behalf of the School will be the Series 2019 Bonds.

Bondholders’ Risks

There are risks involved in the purchase of the Series 2019 Bonds. See “BONDHOLDERS’ RISKS” herein.

Definitions and Summaries of Documents

Definitions of certain words and terms used in this Official Statement and summaries of the Indenture and the Loan Agreement are included in APPENDIX C. Such definitions and summaries do not purport to be comprehensive or definitive. All references herein to such documents are qualified in their entirety by reference to the definitive forms of such documents, copies of which may be viewed at the office of the Trustee in Philadelphia, Pennsylvania, and will be provided to any prospective purchaser requesting the same upon payment by such prospective purchaser of the cost of complying with such request.

THE AUTHORITY

The Authority is a public instrumentality and a body corporate and politic, organized under the Act by a resolution adopted by the Board of County Commissioners of the County. The Authority was incorporated on April 25, 1969 and pursuant to Articles of Amendment approved by the Secretary of the Commonwealth has a term of existence until August 2, 2056, which is beyond the final maturity date of the Series 2019 Bonds. The Authority was organized for the purpose of, among other things, financing educational facilities.

The Series 2019 Bonds are authorized and issued by the Authority pursuant to the provisions of the Act. A Resolution authorizing the issuance of the Series 2019 Bonds has been adopted by the Board of the Authority. The issuance of the Series 2019 Bonds has been approved by the County Commissioners of Montgomery County, Pennsylvania and the County Council of Delaware County, Pennsylvania after a public hearing held upon reasonable notice, and by the Pennsylvania Department of Community and Economic Development.

Members of the Authority. The governing body of the Authority is a board consisting of seven members appointed by the Board of County Commissioners of the County. Members of the Authority are appointed for staggered terms and may be reappointed to an unlimited number of successive terms. The current members of the Board of the Authority are:

Member Office Eric Pritchard, Esq. Chair Adam Silverman, Esq. Vice Chair Elizabeth Moy Secretary Richard J. DePiano, Jr., Esq. Treasurer Jay M. Lankford Member Jason E. Salus Member Bud Tyler Member

The address of the Authority is 1430 DeKalb Street, Norristown, PA 19401.

Financings of the Authority. The Authority has participated in the past and intends to participate from time to time in the future in additional financing transactions for other projects permitted under the Act, and in connection therewith may issue bonds or notes which will be limited obligations of the Authority, to be solely payable from and secured by revenues derived from such projects. The Authority may also from time to time enter into refinancing transactions for obligations previously issued. Any future bonds or notes of the Authority will be secured by instruments separate and apart from the Indenture securing the Series 2019 Bonds.

THE SERIES 2019 BONDS, INCLUDING INTEREST AND PREMIUM, IF ANY, THEREON, SHALL CONSTITUTE LIMITED OBLIGATIONS OF THE AUTHORITY AND ARE PAYABLE SOLELY FROM THE TRUST ESTATE AND FROM PAYMENTS TO BE MADE BY THE SCHOOL UNDER THE LOAN AGREEMENT. NEITHER THE GENERAL CREDIT OF THE AUTHORITY NOR THE CREDIT OR THE TAXING POWER OF THE COUNTY OF MONTGOMERY OR OF THE COMMONWEALTH OF PENNSYLVANIA OR OF ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED FOR THE PAYMENT OF THE SERIES 2019 BONDS, NOR SHALL THE SERIES 2019 BONDS BE OR BE DEEMED A GENERAL OBLIGATION OF THE AUTHORITY OR AN OBLIGATION OF THE COUNTY OF MONTGOMERY OR THE COMMONWEALTH OF PENNSYLVANIA OR OF ANY POLITICAL SUBDIVISION THEREOF. THE AUTHORITY HAS NO TAXING POWER. THE 2019 PROJECT General The Series 2019 Bonds are being issued by the Authority to fund the 2019 Project.

Plan of Refunding All of the outstanding Series 2010 Bonds will be currently refunded from the proceeds derived from the sale of the Series 2019 Bonds, which will be applied on the date of issuance of the Series 2019 Bonds to redeem the Series 2010 Bonds.

Plan of Finance A portion of the proceeds derived from the sale of the Series 2019 Bonds will be used to finance the payment of (or reimbursement to the School for) a portion of the costs of the construction of a new middle school building or other capital expenditures on the School’s campus. The remaining costs of the new middle school will be paid with pledges or other available funds of the School.

Estimated Sources and Uses of Funds

The following sets forth the estimated sources and uses of funds in connection with the financing of the 2019 Project:

Sources of Funds:

Principal Amount of the Series 2019 Bonds ...... $ [Plus/Less] Net Original Issue [Premium/Discount] ......

Total Sources of Funds ...... $

Uses of Funds:

Refunding of Series 2010 Bonds ...... $ Deposit to Project Fund Costs of Issuance1 ...... Total Uses of Funds ...... $

1 Includes Underwriter’s discount, legal fees, Authority fees, rating agency fees, Trustee and paying agent fees, financial advisory fees, accountant fees and other miscellaneous expenses related to the issuance of the Series 2019 Bonds.

THE SERIES 2019 BONDS

General

The Series 2019 Bonds will be dated and will bear interest from the dates and at the rates set forth on the inside cover page hereof payable on March 1 and September 1 (each an “Interest Payment Date”) of each year, commencing March 1, 2020. The Series 2019 Bonds shall be subject to redemption prior to maturity as stated below. Interest shall be payable on each Interest Payment Date to the registered owner of Series 2019 Bonds as appears on the registration maintained by the Trustee on each Regular Record Date, which is the close of business on the 15th day of the calendar month (whether or not a Business Day) immediately preceding each Interest Payment Date. Interest accruing on the Series 2019 Bonds shall be calculated on the basis of a 360-day year of twelve 30-day months.

The Series 2019 Bonds are issuable only as fully registered bonds in denominations of $5,000 and any integral multiple thereof. The Authority has established a book-entry-only system of registration for the Series 2019 Bonds (the “Book-Entry System”). Except as otherwise provided in the Indenture, The Depository Trust Company, New York, New York, or its successor as securities depository (the “Securities Depository” or “DTC”) (or its nominee) will be the registered owner of the Series 2019 Bonds. By acceptance of a confirmation of purchase, delivery or transfer, each Beneficial Owner (defined herein) of an interest in the Series 2019 Bonds will be deemed to have consented to the Book- Entry System. The Securities Depository (or its nominee), as registered owner of the Series 2019 Bonds, will be the registered owner or holder of the Series 2019 Bonds for all purposes of the Indenture. See “Book-Entry-Only System” below.

So long as the Series 2019 Bonds are held in the Book-Entry System, the principal, premium, if any, and interest on the Series 2019 Bonds will be paid through the facilities of the Securities Depository. If the Book-Entry System is discontinued, interest on the Series 2019 Bonds will be payable by check mailed to the Owner of record; provided that upon the written request of an Owner of record of at least $1,000,000 aggregate principal amount of Series 2019 Bonds received by the Trustee at least one Business Day prior to the corresponding Regular Record Date, interest payable on such Series 2019 Bonds will be paid by wire transfer, in immediately available funds, to a bank account within the continental United States or by deposit into a bank account maintained with the Trustee, in either case, to the bank account number of such owner specified and entered by The Bank of New York Mellon Trust Company, N.A., as Bond Registrar (the “Bond Registrar”) on the Bond Register.

Any interest on any Series 2019 Bond which is payable, but is not punctually paid or provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the owner of such Series 2019 Bond on the relevant Regular Record Date by virtue of having been such owner, and such Defaulted Interest shall be paid to the Person in whose name the Series 2019 Bond is registered at the close of business on a Special Record Date to be fixed by the Trustee, such date to be no more than 15 nor fewer than 10 days prior to the date of proposed payment. The Trustee shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to the Bond Registrar and to each Bondholder at his address as it appears in the Bond Register, not fewer than 10 days prior to such Special Record Date.

If the Book-Entry System is discontinued and the Series 2019 Bonds are issued in certificated form, the Series 2019 Bonds may be transferred or exchanged for an equal total amount of Series 2019 Bonds of other authorized denominations upon surrender of such Series 2019 Bonds to the Trustee, in Philadelphia, Pennsylvania, duly endorsed for transfer or accompanied by an assignment executed by the Owner or the Owner’s duly authorized attorney and with a guaranty of signature satisfactory to the Trustee. Except as provided in the Indenture, the Bond Registrar will not be required to register the

transfer or exchange of (i) any Series 2019 Bond during the period of fifteen (15) days immediately preceding the date on which a notice of redemption of Series 2019 Bonds is mailed; or (ii) any Series 2019 Bond selected for redemption in whole or in part. Registration of transfers and exchanges shall be made without charge to the Owners, except that the Bond Registrar may require the Owner requesting registration of transfer or exchange to pay any required tax or governmental charge.

Book-Entry-Only System

The Series 2019 Bonds will be available initially only in book-entry form. Purchasers of the Series 2019 Bonds will not receive certificates representing their interest in the Series 2019 Bonds.

The following information concerning DTC and DTC’s book-entry only system has been obtained from DTC. The Authority, the Underwriter, the School and the Trustee make no representation as to the accuracy of such information.

DTC will act as securities depository for the Series 2019 Bonds. The Series 2019 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 Series 2019 Bond certificate will be issued for each maturity of the Series 2019 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S., equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of bond certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies.

DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of Series 2019 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2019 Bonds on DTC’s records. The ownership interest of each actual purchaser of each Series 2019 Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of

ownership interests in the Series 2019 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2019 Bonds, except in the event that use of the Book-Entry System for the Series 2019 Bonds is discontinued.

To facilitate subsequent transfers, all Series 2019 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 Series 2019 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2019 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Series 2019 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices shall be sent to DTC. If less than all of the Series 2019 Bonds are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2019 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Series 2019 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments of principal of and interest on the Series 2019 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest on the Series 2019 Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Series 2019 Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Series 2019 Bond certificates are required to be printed and delivered.

The Authority may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Series 2019 Bond certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s Book-Entry System has been obtained from sources that the Authority and the School believe to be reliable, but neither the Authority nor the School takes no responsibility for the accuracy thereof.

Redemption of the Series 2019 Bonds

Optional Redemption. The Series 2019 Bonds maturing on or after March 1, 20[__], are subject to redemption at the option of the Authority, upon the direction of the School, in whole or in part at any time on or after [______, 20__], at a redemption price of 100% of the principal amount of the Series 2019 Bonds to be redeemed, plus interest accrued to the redemption date.

Extraordinary Optional Redemption. The Series 2019 Bonds are subject to extraordinary optional redemption in whole or in part at the option of the Authority, upon the written direction of the School, on any date prior to maturity, at a redemption price of 100% of the principal amount of the Series 2019 Bonds to be redeemed, plus interest accrued to the redemption date, in the event of condemnation, damage or destruction of any material properties of the School, out of proceeds of insurance, condemnation awards and the proceeds of conveyances in lieu of condemnations deposited with or held by the Trustee for such purpose.

The Authority shall direct the Trustee to call the Series 2019 Bonds for optional redemption or extraordinary optional redemption only when it shall have been notified by the School to do so. Notice of any optional redemption or extraordinary optional redemption to the Trustee shall specify the principal amount of Series 2019 Bonds to be redeemed and the redemption date. The Authority will give the notice to the Trustee at least 15 days prior to the day on which the Trustee is required to give notice of such optional redemption or extraordinary optional redemption to the Bondholders. The Trustee may conclusively rely upon and shall be protected in acting in accordance with the direction of the Authority without investigation or inquiry into the validity or accuracy of such notice.

Notice of Redemption. The notice of the call for redemption of Series 2019 Bonds shall identify (i) the complete official name of the issue, (ii) the Series 2019 Bonds or portions thereof to be redeemed by designation, letters, CUSIP numbers, numbers or other distinguishing marks, interest rate, maturity date and principal amount, (iii) the redemption price to be paid, (iv) the date fixed for redemption, (v) the place or places, by name and address, where the amounts due upon redemption are payable and (vi) the name and telephone number of the person to whom inquiries regarding the redemption may be directed; provided, however, that the failure to identify a CUSIP number for said Series 2019 Bonds in the redemption notice, or the inclusion of an incorrect CUSIP number, shall not affect the validity of such redemption notice. The notice shall be given by the Trustee on behalf of the Authority at the expense of the School by mailing a copy of the redemption notice by first class mail, postage prepaid, at least 30 days, but no more than 60 days, prior to the date fixed for redemption, to the owner of each Series 2019 Bond subject to redemption in whole or in part at the owner’s address shown on the Bond Register on the Business Day preceding that mailing. Failure to receive notice as provided herein, or any defect in that notice, as to any Series 2019 Bond shall not affect the validity of the proceedings for the redemption of any other Series 2019 Bond.

If at the time of mailing of notice of any optional redemption or extraordinary optional redemption, the Authority shall not have deposited with the Trustee moneys sufficient to redeem all the Series 2019 Bonds called for redemption, such notice may state that it is conditional in that it is subject to the deposit of the sufficient moneys with the Trustee not later than the opening of business on the redemption date, and such notice shall be of no effect unless such moneys are so deposited.

Partial Redemption. Any Series 2019 Bond which is to be redeemed only in part shall be surrendered at a place stated for the surrender of Series 2019 Bonds called for redemption in the notice given with respect thereto (with due endorsement by, or a written instrument of transfer in form satisfactory to the Trustee duly executed by, the owner thereof or his attorney duly authorized in writing) and the Authority shall execute and the Trustee shall authenticate and deliver to the owner of such Series 2019 Bond without service charge, a new Series 2019 Bond or Series 2019 Bonds, of any authorized denomination as requested by such owner in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Series 2019 Bond so surrendered.

Selection of Series 2019 Bonds Called for Redemption. If less than all the Series 2019 Bonds are called for optional redemption or extraordinary optional redemption, the particular Series 2019 Bonds or portions thereof to be redeemed shall be selected from the maturities designated by the School, or if not so designated, by any method determined by the Trustee to be fair and reasonable. If less than all Series 2019 Bonds of a single maturity are to be redeemed, the selection of Series 2019 Bonds within such maturity, or portions thereof in authorized denominations, to be redeemed shall be made by lot by the Trustee in any manner which the Trustee may determine. The Trustee shall treat any Series 2019 Bond of a denomination greater than the minimum authorized denomination as representing that number of separate Series 2019 Bonds each of that minimum authorized denomination as can be obtained by dividing the actual principal amount of such Series 2019 Bond by that minimum authorized denomination; provided that no Series 2019 Bond shall be redeemed in part if it results in the unredeemed portion of the Series 2019 Bond being in a principal amount other than an authorized denomination.

Effect of Redemption. If (a) unconditional notice of redemption has been duly given or duly waived by the Holders of all Series 2019 Bonds called for redemption or (b) conditional notice of redemption has been so given or waived and the redemption moneys have been duly deposited with the Trustee, then in either such case the Series 2019 Bonds called for redemption shall be payable on the redemption date at the applicable redemption price. Payment of the redemption price together with accrued interest shall be made by the Trustee, out of Revenues (as defined herein) or other funds deposited for that purpose, to the holders of the Series 2019 Bonds called for redemption upon surrender of such Series 2019 Bonds and upon payment in full of the redemption price, interest shall cease to accrue on such Series 2019 Bonds.

Mandatory Purchase in Lieu of Redemption. Each Holder or Beneficial Owner, by purchase and acceptance of any Series 2019 Bond, irrevocably grants to the School the option to purchase such Series 2019 Bond at any time such Series 2019 Bond is subject to optional redemption as described in the Indenture and in this Official Statement. Such Series 2019 Bond is to be purchased at a purchase price equal to the then applicable Redemption Price of such Series 2019 Bond. If the School determines to purchase any Series 2019 Bond in lieu of allowing it to be redeemed, it will so notify the Trustee, in writing, prior to the Trustee canceling such Series 2019 Bond and on the date fixed for purchase of any Series 2019 Bond in lieu of redemption as described herein, the School will pay the purchase price of such Series 2019 Bond, plus accrued interest, to the Trustee in immediately available funds, and the Trustee shall pay the same to the Holders or the Series 2019 Bonds being purchased against delivery thereof. No purchase of any Series 2019 Bond in lieu of redemption as described herein shall operate to extinguish the indebtedness of the School evidenced by such Series 2019 Bond. No Holder or Beneficial Owner may elect to retain a Series 2019 Bond subject to mandatory purchase in lieu of redemption.

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2019 BONDS

Limited Obligations

THE SERIES 2019 BONDS SHALL CONSTITUTE LIMITED OBLIGATIONS OF THE AUTHORITY AND ARE PAYABLE SOLELY FROM THE TRUST ESTATE AND FROM PAYMENTS TO BE MADE BY THE SCHOOL UNDER THE LOAN AGREEMENT. NEITHER THE GENERAL CREDIT OF THE AUTHORITY NOR THE CREDIT OR THE TAXING POWER OF THE COUNTY OF MONTGOMERY OR OF THE COMMONWEALTH OF PENNSYLVANIA OR OF ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED FOR THE PAYMENT OF THE SERIES 2019 BONDS, NOR SHALL THE SERIES 2019 BONDS BE OR BE DEEMED A GENERAL OBLIGATION OF THE AUTHORITY OR AN OBLIGATION OF THE COUNTY OF MONTGOMERY OR THE COMMONWEALTH OF PENNSYLVANIA OR OF ANY POLITICAL SUBDIVISION THEREOF. THE AUTHORITY HAS NO TAXING POWER.

The Indenture

In order to secure the payment of the principal of and redemption premium, if any, and interest on the Series 2019 Bonds, the Authority is assigning to the Trustee, under the Indenture, all its right, title and interest in (but not the obligations) of the Authority under and pursuant to the terms of the Loan Agreement, all loan payments and all other payments, revenues and receipts receivable by the Authority under the Loan Agreement (other than the Reserved Rights); and all of the right, title and interest of the Authority in and to all Funds and Accounts established under the Indenture and all moneys and investments now or hereafter held in the Indenture and all present and future Revenues. “Revenues” means (a) all amounts payable to the Trustee with respect to the principal or redemption price of, or interest on, the Series 2019 Bonds (i) upon deposit in the Bond Fund from the proceeds of the Series 2019 Bonds or of obligations issued by the Authority to refund the Series 2019 Bonds or (ii) by the School under the Loan Agreement; (b) any proceeds of Series 2019 Bonds originally deposited with the Trustee for the payment of interest accrued on the Series 2019 Bonds or otherwise; and (c) investment income with respect to any moneys held by the Trustee in the Bond Fund, the Project Fund and the Costs of Issuance Fund. No additional series of bonds may be issued under the Indenture. See APPENDIX C hereto for a description of the Indenture.

The Loan Agreement

Under the Loan Agreement, the School is required to make loan payments to the Trustee in amounts sufficient to pay when due the principal or redemption price of, and interest on the Series 2019 Bonds and to redeem Series 2019 Bonds then outstanding if the School exercises its right to redeem Series 2019 Bonds under any provision of the Indenture or if any Series 2019 Bonds are required to be redeemed under any provision of the Indenture, and to make certain other payments. The Loan Agreement provides that the School shall pay without abatement, diminution or deduction (whether for taxes, loss of use, in whole or in part, of the Project Facilities or otherwise) all such amounts regardless of any cause or circumstance whatsoever, which may now exist or may, hereafter arise, including, without limitation, any defense, set-off, recoupment or counterclaim which the School may have or assert against the Authority, the Trustee, any Bondholder or any other Person. See APPENDIX C hereto for a description of the Loan Agreement.

Series 2019 Bonds are Unsecured Obligations of the School

The School’s obligation under the Loan Agreement to make loan payments is a general obligation of the School and is not secured by any pledge of or mortgage or other lien on revenues

or assets of the School. See “BONDHOLDERS’ RISKS – No Pledge of School Revenues” herein. The Loan Agreement does not limit or restrict the ability of the School to incur additional long-term or short- term debt in the future.

No Recourse Against Members of the Authority

No recourse shall be had for any claim based on the Indenture or the Series 2019 Bonds, including but not limited to the payment of the principal or redemption price of, or interest on, the Series 2019 Bonds, against any member, officer, agent or employee, past, present or future, of the Authority or of any successor body, as such, either directly or through the Authority or any such successor body, under any constitutional provision, statute or rule of law or by the enforcement of any assessment or penalty or by any legal or equitable proceeding or otherwise. The obligations and liabilities of the Authority arising under the Indenture shall be payable solely from the Revenues.

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DEBT SERVICE REQUIREMENTS

The following table sets forth, for each fiscal year of the School ending June 30, the amounts required to be made available in such year by the School for payment of the principal of and interest on the Series 2019 Bonds.

Year Total Debt Ending Principal of the Interest on the Service on the June 30 Bonds Bonds Bonds 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049

BONDHOLDERS’ RISKS

General

The Series 2019 Bonds are limited obligations of the Authority payable solely from amounts payable by the School under the Loan Agreement and from other funds available to the Trustee under the Indenture. Future revenues and expenses of the School are subject to change, and no representation or assurance can be given to the effect that the School will be able to generate sufficient revenues to meet its obligations, including its obligations to make payments under the Loan Agreement. Various factors could adversely affect the School’s ability to pay the obligations under the Loan Agreement. The future

financial condition of the School could be adversely affected by, among other things, economic conditions in the areas from which the School traditionally draws students, legislation, regulatory actions, increased competition from other educational institutions, changes in the demand for college preparatory educational services, demographic changes and litigation. Some of such risk factors are described below.

The paragraphs below discuss certain Bondholders’ risks but are not intended to be a complete enumeration of all of the risks associated with the Series 2019 Bonds and the School. Neither the Underwriter nor the Authority has made any independent investigation of the extent to which any of these risk factors may have an adverse impact on the revenues of the School. In order to identify risk factors and make informed investment decisions, potential investors should be thoroughly familiar with the entire Official Statement (including each Appendix hereto) in order to make a judgment as to whether the Series 2019 Bonds are an appropriate investment.

Uncertainty of School Revenues and Expenses

There are a number of factors affecting not-for-project private college preparatory schools, such as the School, that could have an adverse effect on the School’s financial position and its ability to make the payments required under the Loan Agreement. Without intending to limit the generality of the foregoing, these factors include: competition from other independent schools that offer comparable services and programs; an economic downturn in the area served by the School; shortfalls in sources of School revenue other than tuition and fees, such as fundraising campaigns and other general donor contributions or grants; investment losses in endowment and other funds; increasing costs of compliance with governmental regulations, including accommodations for handicapped or special needs students, and costs of compliance with the changes in such regulations; future changes in standards for certification and accreditation by government agencies and by certain nongovernmental agencies; future legislation, regulatory, and judicial or administrative determinations affecting not-for-profit educational institutions and their exemptions from various taxes; and future economic and other conditions which are unpredictable.

Competition

Competition for students in the Philadelphia metropolitan area by independent schools that are similar to the School is strong. If the School is unable to maintain its competitive position, its ability to earn revenues and to pay operating expenses, including debt service on the Series 2019 Bonds, may be impaired.

Fluctuations in Market Value of Investments

Earnings on investments have historically provided the School an important source of cash flow and capital appreciation to support its programs and services, to finance capital expenditure investments and to build cash reserves. Historically, the market value of the investments has fluctuated and, in some instances, the fluctuations have been quite significant. No assurances can be given that the market value of the investments of the School will grow or even remain at current levels. There is risk that such market value will decline.

Potential for Additional Legislation or Regulation

In recent years, the activities of non-profit tax-exempt corporations have been subjected to increasing scrutiny by federal, state and local legislative and administrative agencies (including the United States Congress, the Internal Revenue Service (the “IRS”), the Pennsylvania General Assembly and local taxing authorities). Various proposals either have been considered previously or are presently

being considered at the federal, state and local level which would restrict the definition of tax-exempt or non-profit status, impose new restrictions of the activities of tax-exempt, non-profit corporations, and/or tax or otherwise burden the activities of such corporations (including proposals to broaden or strengthen federal and local tax law provisions respecting unrelated business income of non-profit corporations). There can be no assurance that future changes in the laws, rules, regulations, interpretations and policies relating to the definition, activities and/or taxation of tax-exempt corporations will not have material adverse effects on the future operations of the School.

Qualified 501(c)(3) Status of School

In rendering its opinion as to the tax-exempt status of interest on the Series 2019 Bonds for federal income tax purposes, Bond Counsel will rely upon representations of the School with respect to the qualification of the School as a charitable organization described in Section 501(c)(3) of the Code. The failure of the School to be organized and to remain qualified as a so-called “501(c)(3) organization,” and to conduct its activities (and, in particular, its activities with respect to the facilities financed or refinanced with the proceeds of the Series 2019 Bonds) in a manner that is substantially related to its charitable purpose could also result in the interest on the Series 2019 Bonds issued for the benefit of the School being included in the gross income of the owners thereof for federal income tax purposes, in some cases retroactive to the date of their original issuance.

Loss of tax-exempt status by the School could result in loss of tax exemption of interest on the Series 2019 Bonds and of other tax-exempt debt issued for the benefit of the School, and defaults in covenants regarding the Series 2019 Bonds would likely be triggered. Such an event would have materially adverse consequences on the financial condition of the School. Management of the School is not aware of any transactions or activities currently ongoing that are likely to result in the revocation of the tax-exempt status of the School.

The maintenance by the School of its status as an organization described in Section 501(c)(3) of the Code is contingent upon compliance with general rules promulgated in the Code and related regulations regarding the organization and operation of tax-exempt entities, including their operation for charitable and educational purposes and their avoidance of transactions that may cause their assets to inure to the benefit of private individuals. The IRS has announced that it intends to closely scrutinize transactions between not-for-profit corporations and for-profit entities. Although certain specific activities have been the subject of interpretations by the IRS in the form of private letter rulings, many activities have not been addressed in any official opinion, interpretation or policy of the IRS.

Covenant to Maintain Tax-Exempt Status of the Series 2019 Bonds

The tax-exempt status of the Series 2019 Bonds is based on the continued compliance by the Authority and the School with certain covenants contained in the Indenture, the Loan Agreement, and certain other documents executed by the Authority and the School. These covenants are aimed at satisfying applicable requirements of the Code and relate generally to use of the proceeds of the Series 2019 Bonds, maintenance of the status of the School as an organization meeting the requirements of Section 501(c)(3) of the Code, arbitrage limitations, rebate of certain excess investment earnings to the federal government and restrictions on the amount of issuance costs financed with the proceeds of the Series 2019 Bonds. Failure to comply with such covenants could cause interest on the Series 2019 Bonds to become subject to federal income taxation retroactive to the date of issuance of the Series 2019 Bonds.

Property Tax Assessments

A number of local taxing authorities in Pennsylvania, including the County and certain local townships and school districts, have sought to subject the facilities of nonprofit entities to local real estate taxes, primarily by challenging their status as “purely public charities” as described in the Pennsylvania Constitution, notwithstanding the fact that the facilities of a Pennsylvania nonprofit have been viewed as exempt from such taxes. In response to the uncertainty resulting from divergent court decisions, the Pennsylvania legislature enacted The Institutions of Purely Public Charity Act on November 26, 1997 which, among other things, sets forth specific criteria to be met by an entity in order for such entity to be deemed an “institution of purely public charity.” The criteria are highly fact-specific and are to be used by the courts as guidance; therefore, there are no assurances that the School’s facilities will meet such criteria now or in the future.

Enforceability of Remedies

Bondholders of the Series 2019 Bonds are unsecured creditors of the School. The remedies available to such Bondholders upon an event of default under the Indenture and Loan Agreement are in many respects dependent upon judicial action which may be subject to discretion or delay. Under current Pennsylvania law, involuntary petitions for relief under Title 11 of the United States Code, as amended (the “Bankruptcy Code”) are not permitted. In addition, under existing law and judicial decisions, including specifically the Bankruptcy Code, the remedies (including, without limitation, specific performance) specified in the Indenture and Loan Agreement may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the original delivery of the Series 2019 Bonds will be qualified as to enforceability of the various legal instruments (including the Indenture and Loan Agreement) by a number of limitations, including those imposed by the bankruptcy, reorganization, insolvency or other similar laws affecting creditors’ rights and by the application of equitable principles.

Potential Effects of Bankruptcy

Under existing law, if the School were to file a petition for relief under the Bankruptcy Code, the filing would operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against the School and its property. If the bankruptcy court so ordered, the School’s property, including its revenues, could be used for the benefit of the School despite the claims of its creditors (including the Trustee).

In a bankruptcy proceeding, the School could file a plan for the adjustment of its debts which modifies the rights of creditors generally or the rights of any class of creditors, secured or unsecured. The plan, if and when confirmed by the court, would bind all creditors who had notice or knowledge of the plan and discharge all claims against the debtor provided for in the plan. No plan may be confirmed unless, among other conditions, the plan is in the best interest of creditors, is feasible and has been accepted by each class of claims impaired thereunder.

Each class of claims has accepted the plan if at least two-thirds in dollar amount and more than one-half in number of the allowed claims of the class that are voted with respect to the plan are cast in its favor. Even if the plan is not so accepted, it may be confirmed if the court finds that the plan is fair and equitable with respect to each class of non-accepting creditors impaired thereunder and does not discriminate unfairly.

In case of financial difficulties, the School may also commence state court receivership proceedings. Involuntary filings under the Bankruptcy Code are not permitted under current Pennsylvania law.

There can be no assurance that Bondholders or Beneficial Owners will receive all or any amount as payment with respect to the Series 2019 Bonds under any plan or court order resulting from the bankruptcy, receivership or other similar court action.

No Pledge of School Revenues

The School’s obligations under the Loan Agreement will be unsecured, general obligations of the School and the School has not pledged any lien on or security interest in the revenues or assets of the School to the Bondholders of the Series 2019 Bonds. Further, the Series 2019 Bonds are not secured by a mortgage on any real property of the School.

Additional Indebtedness

The Loan Agreement does not limit or restrict the ability of the School to incur additional long- term or short-term debt in the future. The occurrence of an Event of Default with respect to the Series 2019 Bonds could result in an event of default with respect to other indebtedness of the School, and, correspondingly, the occurrence of an event of default with respect to any of such other indebtedness could result in an Event of Default with respect to the Series 2019 Bonds. Accordingly, moneys available upon the exercise of remedies by the Trustee and/or by other lenders would likely be available to the Trustee for payment of amounts due with respect to the Series 2019 Bonds only on a pari passu basis with other lenders. Upon the issuance of the Series 2019 Bonds and the refunding of the Series 2010 Bonds, the School will have no outstanding indebtedness other than the Series 2019 Bonds.

Secondary Market for the Series 2019 Bonds

No assurance can be given that a secondary market will develop for the purchase and sale of the Series 2019 Bonds or, if a secondary market exists, that such Series 2019 Bonds can be sold for any particular price. The Underwriter is not obligated to engage in secondary market trading or to repurchase any of the Series 2019 Bonds at the request of the owners thereof.

Prices of the Series 2019 Bonds as traded in the secondary market are subject to adjustment upward and downward in response to changes in the credit markets and other prevailing circumstances. No guarantee exists as to the future market value of the Series 2019 Bonds. Such market value could be substantially different from the original purchase price.

Suitability of Investment

The interest rate borne by the Series 2019 Bonds is intended to compensate the investor for assuming the risk of investing in the Series 2019 Bonds. Furthermore, the tax-exempt feature of the Series 2019 Bonds is currently more valuable to high tax bracket investors than to investors that are in low tax brackets. As such, the value of the interest compensation to any particular investor will vary with individual tax rates and circumstances. Each prospective investor should carefully examine this Official Statement and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Series 2019 Bonds are an appropriate investment for such investor.

Other Risk Factors Relating to the Finances and Operations of the School

In the future, the following factors, among others, may adversely affect the operations of the School to an extent that cannot be determined at this time.

1. Changes in the demand for college preparatory education in general or for programs offered by the School in particular.

2. Cost and availability of energy.

3. Future interest rates, which could prevent borrowing for needed capital expenditures.

4. An increase in the costs of health care benefits, retirement plan, or other benefit packages offered by the School to its employees and retirees. See APPENDIX A – “Pension Program and Other Post-Retirement Benefits” for a discussion of the costs of the School’s pension plans.

5. A significant decrease in the value of the School’s investments caused by market or other factors. See APPENDIX A – “Management’s Analysis of Recent Financial Performance” for a discussion of the School’s investments.

6. Unknown litigation, regulatory actions or other similar claims regarding the School or any of its affiliates. See APPENDIX A – “Litigation”

7. A reduction in charitable pledges and other fundraising support of the School. See APPENDIX A – “Annual Giving,” “Capital Campaign,” and “Management’s Analysis of Recent Financial Performance” for a description of fundraising activities at the School.

8. Employee strikes and other adverse labor actions that could result in a substantial reduction in revenues or increases in costs.

9. Increased costs and decreased availability of liability or property or other form of insurance.

10. The occurrence of natural disasters, including floods and hurricanes, which might damage the facilities of the School, interrupt service to the facilities or otherwise impair the operation and ability of the facilities to produce revenue.

11. Reduced availability of qualified faculty to teach the programs offered by the School.

12. An inability to retain students, resulting in enrollment losses and reduced revenues.

13. A downgrade in the School’s bond rating to a level which prevents the School from being able to borrow at affordable rates in the future.

TAX MATTERS

Federal Tax Exemption

In the opinion of Ballard Spahr LLP, Bond Counsel, interest on the Series 2019 Bonds is excludable from gross income for purposes of federal income tax under existing laws as enacted and construed on the date of initial delivery of the Series 2019 Bonds, assuming the accuracy of the certifications of the Authority and the School and continuing compliance by the Authority and the School

with the requirements of the Code. Interest on the Series 2019 Bonds is not a specific preference item for purposes of individual federal alternative minimum tax. Bond Counsel expresses no opinion regarding other federal tax consequences relating to ownership or disposition of, or the accrual or receipt of interest on, the Series 2019 Bonds.

Original Issue Discount. Certain of the Series 2019 Bonds may be offered at a discount (“original issue discount”) equal generally to the difference between the public offering price and the principal amount. For federal income tax purposes, original issue discount on a Series 2019 Bond accrues periodically over the term of such Series 2019 Bond as interest with the same tax exemption and alternative minimum tax status as stated interest. The accrual of original issue discount increases the bondholder’s tax basis in the Series 2019 Bond for determining taxable gain or loss upon sale or redemption prior to maturity. Bondholders should consult their tax advisers for an explanation of the accrual rules.

Original Issue Premium. Certain of the Series 2019 Bonds may be offered at a premium (“original issue premium”) over their principal amount. For federal income tax purposes, original issue premium is amortizable periodically over the term of a Series 2019 Bond through reductions in the bondholder’s tax basis for the Series 2019 Bond for determining taxable gain or loss upon sale or redemption prior to maturity. Amortization of premium does not create a deductible expense or loss. Bondholders should consult their tax advisers for an explanation of the amortization rules.

State Tax Exemption

Bond Counsel is also of the opinion that, under the laws of the Commonwealth of Pennsylvania as presently enacted and construed, the Series 2019 Bonds are exempt from personal property taxes in Pennsylvania, and interest on the Series 2019 Bonds is exempt from Pennsylvania personal income tax and corporate net income tax.

The proposed form of opinion of Bond Counsel is included as APPENDIX D to this Official Statement. LEGAL MATTERS

Legal matters incident to the authorization, issuance, and sale of the Series 2019 Bonds will be passed upon by Ballard Spahr LLP, Philadelphia, Pennsylvania, Bond Counsel. The proposed form of Bond Counsel’s opinion with respect to the Series 2019 Bonds is included in APPENDIX D hereto. Certain legal matters will be passed upon for the Authority by its counsel, Hamburg, Rubin, Mullin, Maxwell & Lupin, PC, Lansdale, Pennsylvania; for the School by its counsel, Ballard Spahr LLP, Philadelphia, Pennsylvania; and for the Underwriter by its counsel, Saul Ewing Arnstein & Lehr LLP, Philadelphia, Pennsylvania.

INDEPENDENT ACCOUNTANTS

The financial statements of the School as of June 30, 2018, included in APPENDIX B to this Official Statement, have been audited by Baker Tilly Virchow Krause, LLP, Philadelphia, Pennsylvania, independent accountants, as stated in their report appearing herein.

RATINGS

S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P”) has assigned the Series 2019 Bonds a long-term municipal bond rating of “A”. Any explanation of the significance of any ratings may only be obtained from the rating agency furnishing the same.

The School has furnished to the rating agencies certain information and material concerning the Series 2019 Bonds and itself. Generally, rating agencies base their ratings on this information and materials and on investigations, studies and assumptions made by the rating agencies themselves. There is no assurance that the ratings initially assigned to any of the Series 2019 Bonds will be maintained for any given period of time or that such ratings may not be revised downward or withdrawn entirely by a rating agency if, in its judgment, circumstances so warrant. Any downward change in or the withdrawal of any such rating might have an adverse effect on the market price or marketability of the Series 2019 Bonds to which it applies.

UNDERWRITING

Pursuant to the provisions of a bond purchase agreement among the Authority, the School and PNC Capital Markets LLC (the “Underwriter”), the Underwriter has agreed, subject to certain conditions, to purchase the Series 2019 Bonds from the Authority at a purchase price of $______(reflecting the par amount, less an Underwriter’s discount of $______, [plus/less] [net] an original issue [premium/discount] of $______). The Underwriter will be obligated to purchase all of the Series 2019 Bonds if any are purchased. The public offering prices may be changed, from time to time, by the Underwriter. The Series 2019 Bonds may be offered and sold to certain dealers (including the Underwriter and other dealers depositing the Series 2019 Bonds into investment trusts) at prices lower than such public offering prices.

The bond purchase agreement for the Series 2019 Bonds requires the School to indemnify the Authority and the Underwriter against certain liabilities relating to the Official Statement.

The Underwriter may offer and sell the Series 2019 Bonds to certain dealers (including dealer banks and dealers depositing Series 2019 Bonds into investment trusts) and others at prices lower than the public offering prices. Such initial public offering prices may be changed from time to time by the Underwriter.

The Underwriter may offer to sell to its affiliate, PNC Investments, LLC (“PNCI”), securities in PNC Capital Markets LLC’s inventory for resale to PNCI’s customers, including securities such as those to be offered by the Authority. The Underwriter may share with PNCI a portion of the fee or commission paid to PNC Capital Markets LLC if any Bonds are sold to customers of PNCI.

RELATIONSHIPS AMONG PARTIES

Ballard Spahr LLP is serving as Bond Counsel and as counsel to the School in connection with the issuance of the Series 2019 Bonds. Saul Ewing Arnstein & Lehr LLP is serving as counsel to the Underwriter in connection with the issuance of the Series 2019 Bonds. Each firm has previously represented, and is currently representing, PNC Capital Markets LLC and/or its affiliates on various matters unrelated to the Series 2019 Bonds. PNC Bank, National Association may, from time to time, have banking or other credit relationships with the Authority and/or the School. PNC Capital Markets LLC is acting as an Underwriter of the Series 2019 Bonds. PNC Capital Markets LLC and PNC Bank, National Association are both wholly owned subsidiaries of The PNC Financial Services Group, Inc.

FINANCIAL ADVISOR

The School has retained Callowhill Capital Advisors LLC, Philadelphia, Pennsylvania (“Callowhill”) as financial advisor in connection with the structuring and offering of the Series 2019 Bonds. Callowhill is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information

contained in this Official Statement. Callowhill is an independent advisory firm and does not engage in the business of underwriting, trading or distributing municipal securities or other public securities.

LITIGATION

The Authority

There is no litigation of any nature pending or, to the Authority’s knowledge, threatened against the Authority at the date of this Official Statement to restrain or enjoin the issuance, sale, execution or delivery of the Series 2019 Bonds, or in any way contesting or affecting the validity of the Series 2019 Bonds or any proceedings of the Authority taken with respect to the issuance or sale thereof, or the pledge or application of any moneys or the security provided for the payment of the Series 2019 Bonds or the existence or powers of the Authority.

The School

In the ordinary course of business, the School is from time to time subject to various legal actions. At the current time, the School is not aware of any litigation pending or threatened against the School, wherein an unfavorable decision would adversely affect the ability of the School to meet its obligations under the Series 2019 Bonds and the documents pursuant to which they will be issued or which may result in any material adverse effect on the School’s operations or financial position.

CONTINUING DISCLOSURE UNDERTAKING

In connection with the issuance of the Series 2019 Bonds, the School will execute a Continuing Disclosure Agreement (the “Continuing Disclosure Agreement”) pursuant to which the School will covenant, in compliance with the provisions of Rule 15c2-12 (the “Rule”) promulgated by the Securities and Exchange Commission (the “SEC”), to provide the following annual financial information and operating data (collectively, the “Annual Report”) by January 15 following the end of each fiscal year of the School and notices of certain specified events required by the Rule:

(i) a copy of its audited annual financial statements prepared in accordance with generally accepted accounting principles; and

(ii) to the extent not included in the financial statements delivered pursuant to (i) above, an update of the information set forth in the following subsections of “APPENDIX A — CERTAIN INFORMATION CONCERNING THE HAVERFORD SCHOOL” to this Official Statement: (i) both of the tables under the caption “Applications, Acceptances and Enrollments,” (ii) the first table under the caption “Tuition Rates,” (iii) the table under the caption “Annual Giving,” (iv) the table under the caption “Endowment and Similar Funds”, (v) the table under the caption “Historical Endowment Returns”, (vi) the table under the caption “Endowment Spending”, and (vii) the table under the caption “Costs and Financial Aid.”

Such information will be filed with the MSRB through its Electronic Municipal Market Access system (https://emma.msrb.org). The form of the Continuing Disclosure Agreement is attached hereto as APPENDIX E.

The School entered into a continuing disclosure agreement similar to the Continuing Disclosure Agreement for the Series 2019 Bonds in connection with the issuance of certain tax-exempt bonds in

2007. During the past five years, the School did not file certain financial information and operating data, nor notices thereof, as required under such continuing disclosure agreement. It is expected that the School will adopt policies for its post-closing continuing disclosure obligations under the Continuing Disclosure Agreement.

The Continuing Disclosure Agreement will terminate upon payment or provision for payment in full of the Series 2019 Bonds.

MISCELLANEOUS

This Official Statement has been duly approved by the School, and solely as to and for purposes of distribution, by the Authority. The Authority and the School have authorized its distribution in connection with the offering of the Series 2019 Bonds. This Official Statement is not to be construed as a contract or agreement between the Authority or the School and the purchasers or holders of any Series 2019 Bonds.

All of the summaries of the provisions of the Act, the Indenture, the Loan Agreement, the Continuing Disclosure Agreement and the Series 2019 Bonds set forth herein are only brief outlines of certain provisions thereof and are made subject to all of the detailed provisions thereof, to which reference is hereby made for further information, and do not purport to be complete statements of any or all such provisions of such document.

The Series 2019 Bonds have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary is a criminal offense.

Information concerning the School has been provided by the School. All estimates, projections, and assumptions herein have been made on the best information available and are believed to be reliable, but no representations whatsoever are made that such estimates, projections, or assumptions are correct or will be realized. So far as any statements herein involve matters of opinion, whether or not expressly so stated, they are intended merely as such and not as representations of fact. The Authority and the School have authorized the execution and distribution of this Official Statement. The Authority has not assisted in the preparation of this Official Statement, except for the statements under the sections captioned “INTRODUCTION – The Authority,” “THE AUTHORITY” and “LITIGATION – The Authority” herein and, except for those sections, the Authority is not responsible for any statements made in this Official Statement. Except for the authorization, execution, and delivery of documents required to effect the issuance of the Series 2019 Bonds, the Authority assumes no responsibility for the disclosures set forth in this Official Statement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

MONTGOMERY COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

By: Name: Eric Pritchard Title: Chairman

Approved:

THE HAVERFORD SCHOOL

By: Name: George B. Lemmon, Jr. Title: Treasurer

APPENDIX A

CERTAIN INFORMATION CONCERNING THE HAVERFORD SCHOOL

[ THIS PAGE INTENTIONALLY LEFT BLANK ] APPENDIX A

THE HAVERFORD SCHOOL

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements included or incorporated by reference in this APPENDIX A constitute projections or estimates of future events, generally known as forward-looking statements. These statements are generally identifiable by the terminology used such as "plan," "expect," "estimate," "budget" or other similar words. The achievement of certain results or other expectations in these forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. The School will not issue any updates or revisions to any forward-looking statements if or when changes in its expectations, or events, conditions or circumstances on which these statements are based occur.

History and Philosophy of the School

The Haverford School (the “School” or “Haverford”) is an independent nonsectarian college preparatory day school for boys. Established in 1884, the School began as the Haverford College Grammar School; in 1903, it adopted its present name and moved to its current location in the “Main Line” suburban Philadelphia community of Haverford, Pennsylvania. As of June 30, 2019, the School enrolled 962 students for the 2018-2019 school year from Junior Kindergarten through Grade 12, and is served by 121 faculty members.

Haverford is a nationally recognized leader in the education of young men. The School’s goal is to provide a superior liberal arts education which emphasizes scholarship, aspires to the highest standards of character and conduct and enables each student to develop his individual potential. The curriculum is challenging, and with close individual guidance, prepares boys for a variety of leading colleges. The School is located six miles west of Philadelphia in the Main Line community of Haverford. Nearby bus and rail services provide access to the historic, cultural and recreational resources of Philadelphia.

Accreditation and Memberships

The School is dually accredited by the Middle States Association of Colleges and Schools and the Pennsylvania Association of Independent Schools. The School will start planning this upcoming school year (2019-2020) for accreditation renewal and the accreditation team is due at the School in school year 2020-2021. It is a member of the National Association of Independent Schools and the International Boys School Coalition.

Board of Trustees

The School’s Board of Trustees (the “Board”) is composed of not less than 15 and not more than 30 members. Automatically included on the Board are the Head of the School, the President of the Parents Association, and the President of the Alumni Association. Alumni must constitute at least one- third of the Board at any given time. Trustees currently serve an initial three-year term that may be followed by up to one additional three-year term. Most of the Trustee volunteers bring valuable experience as business executives and professionals and from service in other civic leadership positions.

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The Board meets regularly at such time and place, as the Board shall designate, but not less than four times per year. Standing committees of the Board include the Executive, Audit, Development, Facilities, Faculty and Staff, Finance, Investment, and Trusteeship. The current members of the Board and their affiliations and occupations follow:

Board Member Affiliation Occupation William C. Yoh, Board Chair Alumnus Chairman of Yoh Services LLC Parent of Alumni Co-owner, Day & Zimmerman Current Parent Maurice D. Glavin, Vice Chair Alumnus Founder, TotalScope Parent of Alumni Current Parent

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Board Member Affiliation Occupation Sharon S. Merhige, Secretary Parent of Alumni Attorney George B. Lemmon Jr., Treasurer Alumnus President, Brynavon Group Parent of Alumni Jennifer Paradis Behle Current Parent CEO, Chappell Culpepper Oray B. Boston Jr. Parent of Alumnus VP of Sales, J&J Consumer Amy C. Briddell Current Parent --- Caroline R. De Marco Current Parent VP, Regional Accounts, GlaxoSmithKline Randall T. Drain Alumnus Founder, Managing Partner, Commercial Mortgage Strategies Thaddeus J. Fortin Alumnus CEO, Haas Group, Retired Parent of Alumnus William C. Hambleton Educator Headmaster, Lacordaire Academy William T. Harrington Current Parent Managing Partner, Osage Partners John F. Hollway Parent of Alumnus Assoc Dean/Exec Dir, Penn Law Jason W. Ingle Educator Exec Dir, Greener Partners Barbara Klock Current Parent Founder, Dr. Klock Talks Jeffrey F. Lee Alumnus Managing Partner, Apium Capital Joshua R. Levine Alumnus Founder/CEO, Cornerstone Family John J. Lynch Parent of Alumni Pres & CEO, Main Line Health Christopher J. Maguire Parent of Alumni Pres, 1251 Capitol Group Current Parent Wade L. McDevitt Current Parent CEO/Founder, McDevitt Company H. Laddie Montague Alumnus Pres, Berger & Montague Jonathan R. Morgan Alumnus Managing Partner/Pres, Morgan Properties John A. Nagl Educator Headmaster, The Haverford School Alicia C. Payne Current Parent --- Jennifer N. Pechet Parent of Alumni --- Ravindra Reddy Alumnus Partner, Citi Structure LLC Peter A. Rohr Parent of Alumni Sr. VP, Merrill Lynch G. Bart Smith Alumnus Head, Advisor Sales & Trading Current Parent Susquehanna International Fitz Daniel T. Tepper Alumnus VP. Operations, Rally Rd G. Nash Waterman Alumnus Managing Dir., Morgan Stanley Roland Yang Alumnus Assoc., Box Cloud Computing A-2

The conflict of interest policy of the School and its Board requires that if an occasion arises when a member of the Board has a financial interest in a contract or transaction upon which action is to be taken or withheld by the Board or a committee thereof: (a) any material facts as to such financial interest shall be disclosed by such Trustee to the members of the Board or committee, (b) the Trustee having such financial interest on any matter shall not vote or use any personal influence in regard to the matter (except that he or she may state a position on the matter and respond to questions about it); however, such Trustee may be counted in determining the quorum for the meeting at which the matter is voted upon, and (c) no contract or transaction in which a Trustee has a financial interest shall be knowingly entered into by the School unless it has been authorized in good faith by the Board pursuant to the provisions of the Pennsylvania Nonprofit Corporation Law of 1988, as amended.

Administration

The Headmaster is the principal officer of the School. The Headmaster is appointed by the Board and is responsible for managing the academic and business affairs of the School and carrying out the policies established by the Board. He meets regularly with the Board and its committees as well as with other committees within the School. He also is actively involved with all members of the School’s community, including the surrounding neighborhoods for purposes of fundraising, public relations and representation of the School’s general interests. Short descriptions for key administrative staff of the School, follow:

JOHN A. NAGL, D.PHL, HEADMASTER, came to Haverford in July of 2013 from the U.S. Naval Academy, where he served as the inaugural Minerva Research Professor. He is a retired Army officer who earned Bronze Stars in both Operation Desert Storm and Operation Iraqi Freedom. He taught at West Point and Georgetown University as well as Annapolis and was the second President of the Center for a New American Security in Washington, D.C., Nagl is the author of Learning to Eat Soup with a Knife (University of Chicago, 2005) and Knife Fights (Penguin, 2014). A distinguished graduate of West Point, he earned his Master’s and Doctoral degrees from Oxford University as a Rhodes Scholar.

PATRICK ANDRÉN, HEAD OF UPPER SCHOOL, came to Haverford in July of 2018. Mr. Andren has held leadership positions in several independent schools. Most recently, he was the Head of Upper School at St. Mark’s School of Texas. He received his A.B in History and Russian and East European Studies from Lafayette College and his M.A. in Modern European Studies from Columbia University.

JAMES J. GREYTOK, HEAD OF MIDDLE SCHOOL, joined the Middle School faculty in the fall of 1988, and taught Physical Science there for three years before moving to the Upper School where he taught Math, Biology, Chemistry, Physics, Animal Behavior and Physiology. He became Dean of the Upper School in 1996 after four years of working as a Form Dean. He is a 1983 graduate of Haverford. He received his B.S. in Biology from Syracuse University in 1987.

PAMELA D. GREENBLATT, Ed.D, HEAD OF LOWER SCHOOL, came to Haverford in July of 2014, first as the Director of the Enrichment and Learning Center until July 2018 when she took over the Lower School division headship. Prior to arriving at Haverford, Dr. Greenblatt was the Director of Curriculum and Instruction at AIM Academy in Conshohocken. Dr. Greenblatt holds a Doctorate of Educational and Organizational Leadership from the University of Pennsylvania. She received a Master’s in Speech and Language Pathology from The George Washington University in 2004 and a double

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Bachelor of Arts in Speech and Hearing Science and Psychology from The George Washington University in 2002

REBECCA D. DAVIS, DEAN OF FACULTY, joined Haverford’s staff in 2001 as Head of the English Department and has served as Director of the Big Timber Arts Roundup since 2002. She was appointed Dean of the Faculty in 2006. Prior to coming to Haverford, Mrs. Davis taught English at Virginia Episcopal School in Lynchburg, Virginia, at Greens Farms Academy in Westport, Connecticut, and at Kent School in Kent, Connecticut. She earned her Bachelor’s Degree at Goucher College, a Master’s in Education at Johns Hopkins University, and a Masters in English at Middlebury College.

DAVID S. GOLD, CPA, CHIEF FINANCIAL OFFICER, came to Haverford in 2002 from Federation Day Care Services, where he was Chief Operating Officer and Chief Financial Officer. He has more than 34 years business experience including Chief Financial Officer of the Philadelphia Education Fund; Finance Director of Paths/Prism: The Philadelphia Partnership for Education; Controller of The Foundation For Architecture, and Audit Senior in the Closely Held Division of Arthur Andersen & Co. He has also held diverse consulting positions. He is a graduate of The Pennsylvania State University.

JEFF DAY, DIRECTOR OF DEVELOPMENT, came to The Haverford School in 2014 from Shady Side Academy in Fox Chapel, PA. With more than 28 years of experience in the independent school arena, including The Episcopal Academy, The Pennington School, The American School in England, and The Bullis School, Jeff Day brings expertise in campaign fundraising, donor cultivation, financial stewardship, and alumni and parent relations to his role as director of development at The Haverford School. He is a graduate of Bates College.

JESSICA WELSH, DIRECTOR OF MARKETING AND COMMUNICATIONS, came to The Haverford School in August 2016. Previously, she was Director of Marketing and Communications at The Baldwin School. She began her career at a marketing public relations agency in Atlanta, where she specialized in crisis communications and strategic communications planning. She has held several consulting roles for clients in the healthcare, nonprofit, education, and real estate industries. She earned a bachelor’s degree in Business Administration from the State University of New York at Geneseo and is a member of Project HOME’s Rising Leaders committee.

BRIAN McBRIDE, ASSOCIATE HEAD FOR EXTERNAL AFFAIRS AND ENROLLMENT MANAGEMENT, has been associated with Haverford School for over 30 years as a student, teacher, coach, and administrator. For the past 10 years, he has been an administrator for advancement-related endeavors and has been leading the School’s enrollment management efforts for the past three years. He is a graduate of the University of Pennsylvania’s Wharton School and has a master’s degree in education from Loyola University.

MARK THORBURN, ASSISTANT HEADMASTER, has served The Haverford School community for the past 24 years as Dean of Student and Community Affairs, Assistant Headmaster, and Acting Headmaster. He has been working in student support services for the last 27 years. Mr. Thorburn has experience in a number of school settings varying from very progressive to traditional in philosophy and approach. He is a graduate of Bates College, Lewistown, Maine (B.S.) and The University of Maine (M.Ed.).

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MICHAEL MURPHY, DIRECTOR OF ATHLETICS, taught at The Episcopal Academy and was a Form Dean as well as Director of Summer Programs, before coming to Haverford as Associate Athletic Director and Head Football Coach in 2005. As head of the football program he has led Haverford to the second most wins of any coach and 5 Inter-Ac championships. He graduated from East Stroudsburg University (B.S. ‘93, M.Ed. ‘96).

Academic Program

The Haverford School is dedicated to providing its students with an education of the highest quality. Even in a community environment with strong private and public schools, Haverford’s commitment to academic quality is emphatic and distinguishing. The visiting committee report of Haverford’s most recent Middle States accreditation, noted: “While the expression itself is now a catch phrase that appears in the literature of virtually every school, academic excellence is a concept that has meaning and is clearly identifiable at Haverford. In a world of relativism, Haverford stands for the verities in the liberal arts”.

Haverford’s academic program revolves around the following principles:

 Traditional academic emphasis, subject to prudent and thoughtful change. Basic skills are the cornerstone of Haverford’s program – reading, writing, math and critical thinking, taught in depth and with care. Traditional subjects such as Latin are highly valued in the School’s program, but the School has recently embraced such innovative courses as molecular biology and the Tao of Physics.

 An aversion to “tracking.” Haverford’s experience has taught it that boys develop in unpredictable ways, that they will constantly surprise the faculty by their ability to exceed the expectations set for them. Accordingly, the School has no upper and lower “tracks,” wherein students are sorted according to what relative abilities are attributed to them. To the contrary, the School makes sure that only students who have academic promise and a constructive attitude are admitted; the School asks a lot of them, works closely with them, and finds that they meet with success.

 A close relationship between teacher and student. The Middle States report noted: “Many of the [visiting] committee had never been in a school where relationships between students and their teachers are as strong as they are here”.

 A commitment to educating boys. Haverford is a national leader in studying and articulating the needs of boys as learners and as developing persons.

 A commitment to the arts and technology. The School places a strong emphasis on the development of the creative energies of its students, with outstanding programs in music, fine arts and drama. Haverford is also committed to providing its students with excellent, appropriate preparation in a world in which computers play a major role.

The Lower School

The Lower School, Junior Kindergarten through Grade 5, provides the foundation of an excellent education. Teachers work to create the best possible climate for learning in an elementary school setting.

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In the early childhood years, Junior Kindergarten through Grade 2, the emphasis is on explicitly taught strategies which allow mastery of numeracy, literacy and problem-solving skills, in an atmosphere that promotes a love of learning, and an attitude of excitement about school activities. Special attention in the Junior Kindergarten and Kindergarten is placed on language development, processing, reading and writing. Lots of hands-on activities and concrete learning experiences maintain a high interest level in reading, writing, math, science, social studies, physical education and the arts.

In the elementary years, Grade 3 through 5, the emphasis changes slightly to produce independence, with a view to developing the intellectual discipline, reflection, and persistence that will make the students life-long learners. At this point, the students are reading to learn rather than learning to read, and employing their math skills in problem solving and understanding of abstract concepts. In science and social studies, the curriculum becomes broader and students study various topics and themes in greater depth. In music, students learn how to sing and play instruments, in art they are introduced to many media and develop a strong understanding of form, color, tone and composition. In physical education, they continue to work on the skills necessary for participation in a variety of team and individual sports.

The Middle School

The Middle School, Grades 6 through 8, is a preparation for Upper School, college, and life, committed to educating qualified young men of all different backgrounds. The Middle School curriculum is based on liberal arts, which gives students the best tools with which to live and contribute to their world.

A middle school education is designed to provide basic and intermediate schooling in english, social studies, math, science, and for seventh and eighth grade students, Latin. Education in the Middle School is enhanced by music, art and drama and provides choices to participate in student government and student publications, and electives that offer a wide variety of extracurricular activities.

Athletics is an important part of a middle school student’s life. Physical education is provided several times per week, as well as three trimesters of after-school sports or a physical fitness program in place of one season of sports. Participation in these activities is mandatory.

The Upper School

In the Upper School, Grades 9 through 12, the academic environment is one of high expectations and demands set in a traditional curriculum centered in the disciplines of the liberal arts. The program emphasizes the cultivation of a spirit of open inquiry, the training and knowledge to think logically, the desire to read for knowledge and pleasure, the ability to speak and to write with clarity and fluency, and the acquisition of information and skills necessary to adapt to the changes of the coming century.

The average class size of 16-18 students enables the teachers to have discussions, provide attention to each students’ needs, encourage stimulating class discussions, and work with students in a variety of ways and methods. Homework assignments challenge each student to read critically and independently, to work analytically on problems and research, and to improve their writing in a variety of ways and in a range of forums.

Teachers, in addition to their normal teaching load of 60 students, serve as advisors to 8-10 students. The role of the advisor is to be the liaison between a student’s parents and his teachers,

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administrators, deans and coaches. The advisor role is crucial to the daily life of each student. Advisors meet each day with their advisees in homerooms and once per week in a special advisor period.

Faculty serve as coaches and club sponsors. These activities place extra demands on the teacher’s time. There are fifteen different interscholastic sports that culminate in a varsity level. Clubs and activities range from student government to artistic, theatrical, and literary groups to specialized groups related to academic areas and special interests.

The Upper School offers a college preparatory curriculum based on the liberal arts. In addition, a variety of elective courses - primarily for seniors - is offered in each of those disciplines. Honors courses are offered in each discipline, including math, science, English, history, foreign language, art and music. The School previously offered so-called “AP” courses in many subjects specifically designed to culminate in the taking of the applicable Advanced Placement examination offered by The College Board. Effective for the 2007-2008 school year, however, the School discontinued this practice in favor of the development of advanced level (or “most demanding”) courses in various subjects not constrained by the typical AP curriculum. This practice is widely supported by college admissions offices consulted by the School.

Students must meet the following minimum requirements for graduation, but most students exceed the requirements in preparation for admission to some of the most competitive colleges in the country:

Subject Course Units Subject Course Units English ...... 4 Mathematics ...... 3 History ...... 3 (4 recommended) Science ...... 3 Foreign Language ...... 2 (3 recommended) Fine Arts ...... 1 Interscholastic Sports……………………………. 2 Health and Phys. Ed.……………………………...1

Faculty and Staff

The Faculty is made up of 108 full-time and 3 part-time members, 60 of whom are male and 51 of whom are female. All faculty hold baccalaureate degrees and 73 hold one or more advanced degrees. Faculty turnover has averaged approximately 4-5% per year. The following table gives the number and category of employment of the persons employed by the School as of March 2019.

Full-Time Part-Time Faculty 108 3 Senior Administration 10 0 Administration and Staff 64 11 Totals 182 14

Facility and dining services are provided at the School through contracts with third-party service providers.

Benefits offered to faculty and staff include health and disability (short and long term) coverage, a defined contribution retirement plan, and tuition assistance.

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The School provides a competitive benefits package to its employees that are fully compliant with ERISA, the Affordable Care Act, and all other regulations governing employee benefits.

Medical Benefits. All administrative faculty, teaching faculty, and staff members who regularly work thirty (30) hours per week are eligible to participate in the School’s Medical Benefits plans. The School offers an HMO and a High Deductible Health Plan and pays 100% of the cost of the individual HMO monthly premium. Dental and Vision insurance is also offered to employees at affordable group rates.

Life Insurance. The School provides life insurance equal to the employee’s base salary of each full-time (30+ hours) employee. The School pays the full cost of the premium. Employees are able to purchase additional life insurance at group rates through a highly rated life insurance company.

Disability Insurance. The School provides short and long-term disability to full-time employees. The School is self-insured for short-term disability. A highly rated life insurance company is the carrier for the School’s long-term disability plan.

None of the School’s employees are represented under a collective bargaining agreement. The School’s administration believes that relations with employees are generally very good.

The School’s Employee Handbook & Benefits Manual contains a conflicts of interest statement which provides that employees are prohibited from engaging in any activity that is likely to compromise the School’s ability to provide services to students in accordance with the School’s educational mission. Employees and contractors having financial authority to obligate the School in purchases or other contracts are required to disclose to the CFO any prior or existing business or personal relationship the employee or contractor had or has with any person or entity with whom the employee or contractor will negotiate or contract for, or from whom he or she will purchase or otherwise secure, goods or services on behalf of the School.

Pension Program and Other Post-Retirement Benefits

The School sponsors a defined contribution retirement plan covering all employees who are employed at least 1,000 hours or more. Benefits are funded through the Teacher’s Insurance and Annuity Association (TIAA) and its related College Retirement Equities Fund (CREF). The School contributes 10% of each participating employee’s compensation; employees must defer at least 5% of their compensation during the year to become eligible for an employer contribution.

All employees are required to participate in this plan after one year of service. Total School contributions to this plan during the fiscal years ended June 30, 2018 and June 30, 2017 were $1,390,364 and $1,319,613, respectively. Employees own their contracts with TIAA/CREF and are vested on a 5- year grading schedule upon entering into the plan. There are no accruals and no unfunded liabilities to the School for the pension plans of faculty or staff members.

The School provides post-retirement health insurance coverage for 12 former employees under a previously maintained health benefit plan. Coverage is provided through participation in a managed care health insurance program for which the School funds all premiums. For the fiscal year ended June 30, 2018, the accrued liability of the School for these benefits was $280,379. For a further discussion of this obligation, see Note 12 to the audited financial statements of the School included in Appendix B to this Official Statement.

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Applications, Acceptances and Enrollments

Over the past five academic years, the School has enrolled between 960 and 980 students. For the fall of 2019, the School is projecting enrollment anywhere from 960 to 965. The table below provides a further breakdown of School enrollment over the past five academic years:

Grade 2015-16 2016-17 2017-18 2018-19 2019-20* Pre-K 18 15 20 21 17 K 42 33 32 32 36 1 47 45 35 33 36 2 49 50 46 33 32 3 50 46 54 46 33 4 55 55 49 55 48 5 57 60 65 58 65 Lower 318 304 301 278 267

6 73 70 72 73 69 7 77 73 79 78 79 8 85 89 86 90 87 Middle 235 232 237 241 235

9 106 116 118 114 117 10 106 107 114 112 116 11 111 104 106 114 107 12 103 108 102 103 114 Upper 426 435 440 443 454

Total 979 971 978 962 956

______*Numbers are as of August 8, 2019. The School anticipates meeting its enrollment target of 960 by the start of the school year.

The softness/decline in enrollment has mostly come in the Lower School while the Middle and Upper Schools are at all-time highs for enrollment totals. The Lower School trend is not specific to Haverford, but to the overall independent school industry. Most Independent Schools in the Philadelphia Area (and country) have experienced a decline in the lower grades. Haverford has new leadership in the Lower School as of the 2018-2019 school year and has seen an increase in applications for the 2019-2020 school year.

For the 2018-2019 school year, the School yielded a 96% student retention rate.

The School’s students predominantly come from the Philadelphia area. For the 2018-2019 school year, the School had 5 international students, 2 students from New Jersey, and the remainder came from Pennsylvania. The school represents students from over 90 zip codes in Pennsylvania. The table on the following page indicates the School’s application, admissions and enrollments over the past five academic years for each of the Pre-K & Kindergarten (K), Grade 6 and Grade 9, the primary entry grades of the School, and for the School as a whole:

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2015-16 2016-17 2017-18 2018-19 2019-20* Pre-K & K: Applications 68 51 56 62 83 Acceptances 47 40 46 44 46 Acceptance Rate 69% 78% 82% 71% 55% New Enrollment 36 31 36 37 33 Yield 77% 78% 79% 84% 72% Total Grade Enrollment 59 48 52 53 53 Grade Six: Applications 41 34 42 24 41 Acceptances 27 22 19 15 21 Acceptance Rate 66% 65% 45% 63% 51% New Enrollment 19 17 15 11 14 Yield 71% 78% 79% 74% 67% Total Grade Enrollment 73 70 72 73 69 Grade Nine: Applications 121 120 136 106 118 Acceptances 64 64 67 62 63 Acceptance Rate 53% 53% 49% 58% 53% New Enrollment 32 36 36 40 34 Yield 50% 57% 54% 65% 54% Total Grade Enrollment 106 116 117 114 117 Total School: Applications 358 312 372 330 408 Acceptances 197 187 203 190 209 Acceptance Rate 55% 60% 55% 58% 51% New Enrollment 128 129 142 146 143 Yield 65% 69% 70% 77% 69% Total School Enrollment 979 971 978 962 960 *2019 projected/estimated

Applications for admission to the School over the 10-year period from 2008-09 through 2018-19 period have decreased by 7%, while the acceptance percentage decreased slightly to 58%. Traditionally, admissions to independent schools is likened to a “funnel” where a school receives a large number of inquiries that are screened for bona-fide applicants. Those appearing qualified are encouraged to submit an application. There are a limited number of acceptances granted based on openings by grade. The “yield” from applications represents the percentage of accepted applicants who enroll at the School.

Tuition Rates

The following table shows tuition rates for students attending the School for the last five academic years.

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2015-16 2016-17 2017-18 2018-19 2019-20 Pre- Kindergarten $21,500 $22,300 $22,700 $23,000 $24,000 Kindergarten 25,750 25,900 26,000 26,500 27,000 Lower School (Grades 1 through 3) 28,750 29,000 29,500 30,000 30,800 Lower School (Grades 4 through 5) 29,900 30,100 30,700 31,300 32,000 Middle School (Grades 6 through 8) 33,900 34,200 34,500 35,200 36,000 Upper School (Grades 9 through 12) 36,800 37,500 38,000 38,800 39,500

Set forth below are comparative tuition rates for similar independent schools in the vicinity of the School, including: The Episcopal Academy and The Shipley School, coeducational day-schools which the School considers among its significant competitors for student enrollments; and The Agnes Irwin School and The Baldwin School, which are comparable single-sex independent schools for girls:

2019-20 Total Grades School Entry Grades Tuition Rate Enrollment Served The Haverford School Kindergarten $27,000 960 PK-12th Grade 6 36,000 Grade 9 39,500

The Episcopal Academy Kindergarten $24,900 1,200 PK-12th Grade 6 33,155 Grade 9 36,650

The Shipley School Kindergarten $26,985 Grade 6 36,155 850 PK-12th Grade 9 39,655

The Agnes Irwin School Kindergarten $22,650 Grade 6 35,000 606 PK-12th Grade 9 39,250 The Baldwin School Kindergarten $23,800 584 PK-12th Grade 6 34,900 Grade 9 38,800 College Entrance

School graduates typically attend competitive four-year colleges and universities. The table below sets forth representative college or university attendance for the graduating classes of 2015-2019:

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University of Pennsylvania (41) Towson University (3) Pennsylvania State University - Abington Pennsylvania State University (22) University of Miami (3) Pennsylvania State University - Altoona Wake Forest University (15) University of St Andrews (3) Pennsylvania State University - Franklin & Marshall College (13) Washington University (3) Brandywine University of Richmond (13) Wesleyan University (3) Philadelphia University University of Virginia (13) West Chester University (3) Providence College Dickinson College (12) Bates College (2) Quinnipiac University Lehigh University (12) Brandeis University (2) Rensselaer Polytechnic Institute Villanova University (12) Case Western Reserve University (2) Roger Williams University Bucknell University (11) Colby College (2) Rollins College Temple University (9) College of the Holy Cross (2) Rutgers University Boston College (8) Fordham University (2) Salisbury University Drexel University (8) Furman University (2) San Diego State University George Washington University (8) Georgia Institute of Technology (2) Savannah College of Art and Design University of Michigan (8) Montgomery County Community College Sewanee: The University of the South Harvard College (7) (2) St. Charles Borromeo Seminary New York University (7) Norwich University (2) Susquehanna University University of Colorado at Boulder (7) Oberlin College (2) Swarthmore College University of Notre Dame (7) Saint Joseph’s University (2) United States Air Force Academy Gettysburg College (6) Union College (2) Preparatory School Johns Hopkins University (6) University of California, Los Angeles (2) United States Military Academy Princeton University (6) University of Maryland (2) United States Naval Academy Prep Stanford University (6) University of North Carolina (2) School University of Southern California (6) Williams College (2) University of Delaware Vanderbilt University (6) Austin Community College University of Denver Yale University (6) Berklee College of Music University of Hartford Amherst College (5) Boston University University of North Carolina at Colgate University (5) Cabrini University Wilmington Dartmouth College (5) Campbell University University of Pittsburgh Duke University (5) Chapman University University of Rhode Island Emory University (5) Clarkson University University of South Carolina Georgetown University (5) College of Charleston University of Texas Hobart College (5) College of William & Mary University of the Sciences Lafayette College (5) Connecticut College University of Utah Loyola University Maryland (5) Denison University University of Waterloo Northeastern University (5) Eckerd College University of Wisconsin Syracuse University (5) Elizabethtown College Vassar College Texas Christian University (5) Elon University Washington and Lee University Tulane University (5) Hamilton College Wilkes University United States Naval Academy (5) Haverford College Brown University (4) High Point University Cornell University (4) Holy Family University Fairfield University (4) Howard University Ithaca College (4) Indiana University La Salle University (4) Indiana University-Purdue University Southern Methodist University (4) Indianapolis Trinity College (4) Macalester College Tufts University (4) Massachusetts Institute of Technology University of Chicago (4) McGill University Ursinus College (4) Michigan State University Bowdoin College (3) Morehouse College Carnegie Mellon University (3) Northwestern University Clemson University (3) Occidental College Columbia University (3) Davidson College (3) Hampton University (3) Miami University, Oxford (3) Monmouth University (3) Muhlenberg College (3) Skidmore College (3)

Scholastic Aptitude Test. The College Board Scholastic Assessment Test (SAT) is taken by college-bound students as part of the college admissions process. The scores reflect general aptitude in

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both the verbal and mathematical areas. The following table reflects the average verbal, math and combined scores of senior class students over the past four academic years:

2015-2016 2016-2017 2017-2018 2018-2019 Verbal 677* 669 657 656 Math 676* 661 674 685 Total Combined 1,353* 1,330 1,331 1,341 National Mean 1060* 1060 1068 TBA

______*old SAT converted to New SAT Scale

National Merit Scholarship Program. The National Merit Scholarship Program awards academic scholarships for college students on the basis of high achievement on the Preliminary Scholastic Aptitude Test/National Merit Scholarship Qualifying Exam administered by The College Board. The table below indicates the number of School students recognized over the last four academic years:

2015-2016 2016-2017 2017-2018 2018-2019 Award Winners 1 1 1 TBA Finalists 4 6 7 7 Semi-Finalists 5 6 7 9 Commended 14 9 9 11 % of Class Recognized 15% 15% 15% 20%

The School previously offered so-called Advanced Placement (“AP”) courses in many subjects specifically designed to culminate in the taking of the applicable AP examination offered by the College Board. Effective for the 2007-2008 school year, however, the School discontinued this practice in favor of the development of advanced level (or “most demanding”) courses in various subjects not constrained by the typical AP curriculum

Annual Giving

The School annually solicits unrestricted gifts from the alumni, current and former parents, grandparents, faculty and Trustees (The Haverford Fund). Additionally, it receives scholarship funding through the Pennsylvania Educational Improvement Tax Credit (EITC). Each year the School also receives endowment gifts and other restricted and unrestricted gifts. The size of these gifts varies considerably from year to year. The following table indicates the amount of Annual Giving (Haverford Fund + EITC) the School received for each of the most five recent fiscal years of the School:

Fiscal Year Ended June 30,

2015 2016 2017 2018 *2019 $2,788,025 $2,602,307 $2,616,589 $3,032,381 $3,325,280

*Unaudited

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Capital Campaign

The School currently has underway a capital campaign that began in July 2014 to address facilities needs for the Middle School and expand endowment. Silent/leadership phase began in 2014 with encouraging early momentum and significant donor cultivation and outreach underway. Gifts and pledges to date exceed $44 million. In the spring of 2019, the School publicly announced the campaign, with an expected campaign goal of $50 million or more.

A portion of funds raised from the campaign will be used for the construction of a new middle school, which is currently underway. The project totals approximately $18 million and construction commenced in May 2019 with a 15-month construction timeline. Approximately $10 million of campaign funds will be used for the construction of the middle school, with approximately $3 million to be funded by the Series 2019 Bonds, and remaining funds to come from the School.

Endowment and Similar Funds

The following table sets forth the market value of the School’s total endowment and similar fund assets (restricted and unrestricted) for each of the five most recent fiscal years.

Fiscal Year Ended June 30,

2015 2016 2017 2018 *2019 $68,448,481 $67,547,651 $71,516,670 $76,923,595 $83,417,000

*Unaudited

Investment Guidelines

Spending Policy. The School maintains a spending policy allowing the use of investment income derived from its endowment funds to fund current operations. The current School spending policy permits spending from the endowment and similar funds for current operations of not more than 4.5% of the average endowment and similar funds for the most recent 12 fiscal quarters. For the most recent fiscal year ended June 30, 2019, the contribution to current operations from the endowment and similar funds was $3,152,486*.

Future Growth. The School anticipates increasing the size of its endowment although there can be no assurance that it will be successful in such effort. Any increase will be, in large part, dependent on the School’s ability to collect contributions through the above-described capital campaign and other fundraising efforts. Failure to collect such amounts could have an adverse effect on amounts available to pay for future operations of the School.

Investment Goal. The overall, long-term investment objective of the School’s endowment is to achieve an annualized total return through appreciation and income, net of investment management expenses, greater than the rate of inflation plus any spending and administrative expenses, thus protecting the purchasing power of the assets. The assets are to be managed in a manner that will meet the Primary Benchmark, while at the same time attempting to limit portfolio volatility to a reasonable level. The

 Unaudited

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School’s Primary Benchmark is: 6.0% Total Return ≥ 4.5% Spending Policy + 1.4% Inflation + 0.1% Administrative Fees.

A secondary objective is to achieve a total return in excess of the Broad Market Benchmark. The Broad Market Benchmark is comprised of broad market asset class indices using a well-established 60/40 split between equity (60% MSCI ACWI) and fixed income (40% Barclay’s US Aggregate).

Strategy. The School’s endowment is divided into an externally-managed portfolio, with investment discretion generally provided to third-party managers, and an internally-managed portfolio, with investment discretion generally remaining with the Committee. The externally-managed portfolio consists primarily of investments into illiquid funds. Managers of those funds may invest into other managers or directly into marketable securities. The Committee intends for externally-managed funds to build and maintain portfolios that are broadly diversified across asset classes, investment types, geographies and risk levels.

The externally-managed portfolio currently consists of an investment in Verger Fund II LLC, a diversified investment portfolio managed by Verger Capital Management. Verger Capital Management manages over $1.5 billion including the endowment portfolio for Wake Forest University.

The internally-managed portfolio consists primarily of investments into liquid funds, marketable securities and cash. The Committee intends for internally-managed portfolios to represent a diversity of asset classes, geographies and risk levels.

The Committee expects the long-term performance of the consolidated Fund to meet or exceed the Primary Benchmark as well as the Broad Market Benchmark.

Asset Allocation. The Fund’s asset allocation is set with the following ranges and target percentages:

Range Current Target External Portfolio 25-75% of the Fund 50% Internal Portfolio 25-75% of the Fund 50%

The asset allocation of the internal portfolio has the following ranges and target percentages:

Range Current Target Equity 35-85% of the Internal Portfolio 60% Fixed Income 15-65% of the Internal Portfolio 40%

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Historical Endowment Returns

The following table indicates the annual return on the School’s endowment, for each of the past five fiscal years.

Fiscal Year Investment Return

*2019 4.48%

2018 4.11%

2017 9.20%

2016 (4.3%)

2015 (1.5%)

______*Unaudited

Endowment Spending

Over the last five fiscal years, spending from the School’s endowment to supplement operating revenues, as a percentage of the 36-month trailing market value of endowment determined annually by the Board, is presented in the table below.

Fiscal Year Spending Rate Spending Amount

*2019 3.8% $3,152,486

2018 3.9% $3,024,617

2017 3.9% $2,772,312

2016 3.5% $2,390,162

2015 3.2% $2,199,765

______*Unaudited

Costs and Financial Aid

For 2018-2019, Haverford awarded $8,140,300 in tuition assistance, divided in two categories:

 Tuition Remission. Tuition remission is given to Haverford faculty and staff children in accordance with written policies. In the 2018-19 school year, the remission policy was a 50% benefit for full time employees regardless of “need”. For the 2018-19 school year, 48 students received $1,006,300 in tuition remission.

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 Need-Based Aid. Need-based aid is provided to students according to the need analysis procedures of the School and the student service office in Princeton, New Jersey. For the 2018-19 school year, 348 students received $7,134,000 in need-based aid.

The following table indicates the levels of tuition remission and need-based aid provided to students, and certain related information, in each of the last three fiscal years of the School, as well as the current fiscal year:

Fiscal Year Ended June 30, 2015 2016 2017 2018 *2019 Total Tuition Remission $1,099,445 $1,032,700 $1,086,300 $1,030,500 $1,006,300 Number of Students 56 53 53 52 48 Percent of Student Body 5.6% 5.4% 5.5% 5.3% 4.9% Total Need-Based Aid $5,081,379 $5,411,874 $6,094,050 $6,759,150 $7,134,000 Number of Students 249 297 315 339 348 Percent of Student Body 25% 30.3% 32.4% 34.7% 36.1% Total Enrollment 993 979 971 978 962 ______*Unaudited

Outstanding Indebtedness

Upon the issuance of the Series 2019 Bonds as described under “THE 2019 PROJECT” in the front portion of this Official Statement, the School’s long-term indebtedness will consist only of its obligations with respect to the Series 2019 Bonds. The expected debt service requirements for the Series 2019 Bonds are set forth under “DEBT SERVICE REQUIREMENTS” in the front portion of this Official Statement. The School’s existing interest rate swap arrangements will be terminated simultaneously with the issuance of the Series 2019 Bonds from School funds other than the proceeds of the Series 2019 Bonds.

Facilities and Location

The School is located in the Townships of Lower Merion (Montgomery County) and Haverford (Delaware County) in the Main Line community of Haverford, approximately six miles west of Philadelphia. The local commuter railway line (SEPTA) stops in Haverford within a short walk of the Haverford campus, and is a convenient mode of transportation for students commuting from Philadelphia and other points along the Main Line. Lancaster Avenue borders the northern boundary of the School and is a major east/west thoroughfare. Interstate 476, located four miles west of the School, affords easy access from the north and south.

The physical facilities consist of the following principal buildings:

Facility Date of Construction Gross Square Feet

Business Office 1935 700

Café 1935 1000

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Centennial Hall 1984 25,550 Performing Arts and Classrooms New Middle School Opening 2020 30,630

Dining Hall 1954 11,000

Facilities Garage 2000 2,500

Fieldhouse/Gym/Pool 2000 82,500

Lower School 2005 68,880

Palmer House/Advancement 1930 5,000

Wilson Hall/Upper School 2008 112,000 (Classrooms /Library/Offices) Total Square Footage 339,760

In addition to the above major buildings, the School owns 6 homes. All of these are located on School-owned property and are used to house faculty and staff of the School.

The School campus consists of 28 contiguous acres of land, nine buildings, five playing fields and four tennis courts. One of the School’s buildings, Centennial Hall, houses a 650-seat theater with a 30-foot deep stage. The Serveringhaus Library has a computerized card catalog system networked to other local sources. The Athletic Facility/Gymnasium was completed in 2000 and houses squash courts, an indoor pool and wrestling facility. A new 112,000 square-foot Upper School/ Administration building was opened in the fall of 2008 which included a historical renovation of Wilson Hall (circa 1902).

Strategic Plan

The Haverford School is committed to continuing to improve and evolve so that students will be prepared to lead and serve the community and world for years to come. In support of that effort, every five years the School engages in a strategic planning process to ensure that the School is meeting the needs of today’s boys -- and that the School is strongly positioned to educate and inspire future generations. The 2015 effort led to a formal commitment to help every Haverford student be a man of character who is a good citizen of Philadelphia and our nation. This year’s effort will set the course of the School for 2020 and beyond. Haverford is in the middle of an 18-month strategic planning effort, which has benefitted from the input of alums, parents, students, faculty, and staff, and has reached a critical phase. Three working groups are combing through data and ideas generated throughout the process to determine what strategic priorities should be implemented over the next five years. The 21st Century Teaching and Learning team is in place to adapt both on what and how the School teaches. A Character, Culture, and Community team will work to ensure that programs are developing the men needed to lead the nation through the challenges they face now and into the future. And to guarantee that The Haverford School continues to prepare boys for life for another century to come, there is a Financial Sustainability working group that has enormous implications for the long-term health of the School.

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Summary Financial Information

The following tables sets forth (i) the summaries of the statement of financial position of the School, and (ii) the statement of activities and changes in net assets of the School, in each case as of the end of each of the fiscal years ended June 30, 2015 through June 30, 2018. This information is derived from the audited financial statements of the School for such fiscal years. The tables also include unaudited information for the fiscal year ended June 30, 2019. The summary information set forth below should be read in conjunction with the audited financial statements of the School for the fiscal year ended June 30, 2018, including the notes thereto, included as Appendix B to this Official Statement.

Summary Statement of Financial Position

Fiscal Years Ended June 30, Unaudited 2015 2016 2017 2018 2019 Assets Cash and cash equivalents $8,393,312 $9,685,308 $8,464,840 $10,142,713 $11,638,096 Cash - restricted - - - - - Accounts Receivable, less allowance for doubtful accounts 8,172 41,630 16,624 25,270 20,831 Contributions receivable, net 3,884,740 5,904,019 5,234,632 4,453,726 6,231,587 Investments, at fair value 68,488,879 67,589,205 71,516,670 76,923,595 83,420,561 Split-interest agreements 73,393 73,393 62,903 64,304 97,567 Beneficial interest in perpetual trusts, at fair value 521,840 488,575 517,921 537,204 548,010 Prepaid and other assets 439,629 432,263 459,473 535,444 622,943 Property, furniture and equipment, net 73,901,346 73,421,932 71,411,348 69,865,303 70,766,262 Total Assets $155,711,311 $157,636,325 $157,684,411 $162,547,559 $173,345,857 Liabilities and Net Assets Liabilities Accounts payable and accrued expenses $2,111,269 $2,311,786 $1,953,777 $2,384,513 $3,170,967 Advance tuition 6,198,298 5,991,960 4,897,524 4,938,837 4,996,299 Accrued postretirement benefit cost 225,505 184,852 297,003 280,379 258,844 Interest rate swap agreements 2,874,725 4,344,835 2,875,701 2,034,956 2,895,385 Revenue refunding bonds, net 33,516,591 32,817,522 26,952,734 26,956,612 26,960,490 Total Liabilities 44,926,388 45,650,955 36,976,739 36,595,297 38,281,985 Net Assets Unrestricted 87,224,646 86,647,464 92,860,746 97,248,070 104,442,681 Temporarily restricted 3,805,112 2,129,103 3,232,677 3,182,411 2,880,659 Permanently restricted 19,755,165 23,208,803 24,614,249 25,521,781 27,740,532 Total Net Assets 110,784,923 111,985,370 120,707,672 125,952,262 135,063,872 Total Liabilities and Net Assets $155,711,311 $157,636,325 $157,684,411 $162,547,559 $173,345,857

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Summary Statement of Unrestricted Activities and Changes in Unrestricted Net Assets

Fiscal Years Ended June 30, Unaudited 2015 2016 2017 2018 2019 Unrestricted Revenue, Gains and Other Support Tuition and fees $32,507,215 $32,613,201 $33,006,264 $33,706,051 33,925,069 Less: Scholarships and financial aid (5,153,654) (5,213,774) (5,870,628) (6,517,258) (6,857,018) Net tuition and fees 27,353,561 27,399,427 27,135,636 27,188,793 27,068,051 Day camp 197,024 212,098 222,525 213,647 213,105 Contributions 5,128,508 3,936,055 2,686,596 4,487,835 5,917,965 Auxiliary income 1,698,314 1,930,477 1,972,164 1,997,610 1,973,483 All other 398,501 362,814 353,976 495,222 565,309 Net tuition, fee and other revenue 34,775,908 33,840,871 32,370,897 34,383,107 35,737,913 Endowment and other investment return designated for operations 2,199,765 2,390,162 2,772,312 3,024,617 3,152,486 Net assets released from restrictions 2,392,127 1,854,210 1,741,293 1,840,834 3,018,702

Total Unrestricted Revenues, Gains and Other Support 39,367,800 38,085,243 36,884,502 39,248,558 41,909,101

Expenses Program services

Instructional 23,360,069 24,004,356 24,550,022 25,078,546 24,750,356 Auxiliary programs 1,342,994 1,280,056 1,326,307 1,325,366 1,295,534

Total program services 24,703,063 25,284,412 25,876,329 26,403,912 26,045,890 Supporting services Management and general 3,977,512 3,959,096 4,096,445 3,892,851 3,993,700 Fundraising 3,106,282 3,389,367 3,392,350 3,510,591 3,578,278 Total supporting services 7,083,794 7,348,463 7,488,795 7,403,442 7,571,978 Total expenses 31,786,857 32,632,875 33,365,124 33,807,354 33,617,868

Changes in net assets before gains (losses) and Other Expenses 7,580,943 5,452,368 3,519,378 5,441,204 8,291,233 Gains (Losses) and Other Expenses Net loss on disposal of assets - - - (617,205) - Net gain on interest rate swap agreements (436,350) (1,470,110) 1,469,134 840,745 (860,429)

Endowment and other investment return less spending rate (2,894,439) (4,559,440) 1,224,770 (1,277,420) (236,193) Change in unrestricted net assets 4,250,154 (577,182) 6,213,282 4,387,324 7,194,611 Unrestricted net assets- beginning 82,974,492 87,224,646 86,647,464 92,860,746 97,248,070 Unrestricted net assets- ending $87,224,646 $86,647,464 $92,860,746 $97,248,070 $104,442,681 ______

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Management’s Analysis of Recent Financial Performance

Net tuition revenue of the School decreased $120,742 or 0.4%, to $27,068,051 for the year ended June 30, 2019 (“FY2019”) as compared to the previous fiscal year (“FY2018”). The slight decrease is due to the reduction in the Lower School enrollment offset by tuition rate increases. The School anticipates maintaining enrollment in the 950-960 size range for the optimal usage of its facilities.

In July 2014, the School embarked on a capital campaign and has raised in excess of $44 million in gifts and pledges as described under “Capital Campaign” above. Unrestricted endowment and other investment income for FY2019 was $412,288, The endowment return for FY2019 is estimated to be 4.48% The endowment fund is managed to maximize total return rather than income, as a consequence of which endowment fund assets have increased from $63,838,563 at June 30, 2014 to $83,417,000 at June 30, 2019 (estimated).

Total expenses for FY2019 were $33,617,868, a decrease of $189,486 over FY2018. The decrease can be attributed mostly to lower personnel and benefit costs. Staffing costs were reduced in relation to the smaller enrollment. In all, expenses related to compensation accounted in FY2019 for over 62% of operating costs for the School.

A three-year balanced budget model includes modest increases in tuition and stable enrollment of 950-960 students, with reasonable increases in expenses. The operating budgets are projected to cover 100% of depreciation and interest expense on outstanding debt. The three-year budget assumes endowment growth of 6% annually. The current capital campaign is expected to continue to increase the endowment, with increased endowment fund income available to provide support for the School’s operations.

Budgeted operating revenues for the fiscal year ending June 30, 2020 (“FY2020”) are $34,140,164. The largest budgeted source of revenue for FY2020 is net student tuition (gross tuition less financial aid), which is $25,391,423 or 75% of total revenue, based upon an assumed enrollment of 960 students (compared to 960 for fiscal year 2019). Operating expenses for FY2020 are budgeted at $33,272,806, with salary and benefit costs of approximately $20,285,044 or 61% of total expenses. The budget projects covering all of the cost of depreciation, estimated at $3,661,000. Insurance

The School has adopted a comprehensive risk management program, which includes comprehensive insurance coverage for property and liability, and believes that the risks associated with the operation of the School are adequately covered by insurance. The School’s insurance coverage includes general liability, auto liability, workers compensation, umbrella, fine arts and directors (trustees) and officers’ coverage of $26 million. In addition to these policies, the School also participates in a Group Excess Umbrella Program underwritten by Fireman’s Fund Insurance Company. This shared umbrella policy provides a $50,000,000 limit of liability, and is shared with 19 other private schools in the Philadelphia area. The School carries $105 million property damage coverage for building and contents.

 Unaudited

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Litigation

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APPENDIX B

FINANCIAL STATEMENTS OF THE HAVERFORD SCHOOL FOR THE FISCAL YEAR ENDED JUNE 30, 2018

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The Haverford School

Financial Statements and Supplementary Information

June 30, 2018 The Haverford School Table of Contents June 30, 2018

Page

Independent Auditors' Report 1

Financial Statements

Statement of Financial Position 3

Statement of Activities and Changes in Net Assets 4

Statement of Cash Flows 5

Notes to Financial Statements 6

Supplementary Information

Schedule I - Detailed Schedule of Expenses 32 Independent Auditors' Report

Board of Trustees The Haverford School

Report on the Financial Statements

We have audited the accompanying financial statements of The Haverford School, which comprise the statement of financial position as of June 30, 2018, and the related statements of activities and changes in net assets and cash flows for the year 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 accounting principles generally accepted in the United States of America; 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 audit. We conducted our audit 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 auditor's 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 entity'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 entity's internal 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.

1 Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Haverford School as of June 30, 2018, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Summarized Comparative Information

We have previously audited The Haverford School's June 30, 2017 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated September 14, 2017. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2017 is consistent, in all material respects, with the audited financial statements from which it has been derived.

Report on Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. Schedule I - Detailed Schedule of Expenses is presented for the purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from, and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Philadelphia, Pennsylvania September 26, 2018

2 The Haverford School Statement of Financial Position June 30, 2018

2018 2017

Assets

Cash and cash equivalents $ 10,142,713 $ 8,464,840 Accounts receivable, net 25,270 16,624 Contributions receivable, net 4,453,726 5,234,632 Prepaid and other assets 535,444 459,473 Investments, at fair value 76,923,595 71,516,670 Split-interest agreements 64,304 62,903 Beneficial interests in perpetual trusts, at fair value 537,204 517,921 Property and equipment at cost, net 69,865,303 71,411,348

Total assets $ 162,547,559 $ 157,684,411

Liabilities and Net Assets

Liabilities Accounts payable and accrued expenses $ 2,384,513 $ 1,953,777 Advance tuition 4,938,837 4,897,524 Accrued postretirement benefit cost 280,379 297,003 Interest rate swap agreements 2,034,956 2,875,701 Revenue refunding bonds, net 26,956,612 26,952,734

Total liabilities 36,595,297 36,976,739

Net Assets Unrestricted 97,248,070 92,860,746 Temporarily restricted 3,182,411 3,232,677 Permanently restricted 25,521,781 24,614,249

Total net assets 125,952,262 120,707,672

Total liabilities and net assets $ 162,547,559 $ 157,684,411

See notes to financial statements 3 The Haverford School Statement of Activities and Changes in Net Assets Year Ended June 30, 2018

Temporarily Permanently Unrestricted Restricted Restricted 2018 Total 2017 Total (Summarized) Revenues, Gains and Other Support Tuition and fees $ 33,706,051 $ - $ - $ 33,706,051 $ 33,006,264 Less: Scholarships and financial aid (6,517,258) - - (6,517,258) (5,870,628)

Tuition and fees, net 27,188,793 - - 27,188,793 27,135,636

Day camp 213,647 - - 213,647 222,525 Contributions 4,487,835 745,949 888,249 6,122,033 4,792,293 Endowment and other investment return designated for operations 3,024,617 - - 3,024,617 2,772,312 Other investment income 15,772 - - 15,772 10,244 Auxiliary revenue 1,997,610 - - 1,997,610 1,972,164 All other 479,450 - - 479,450 343,732 Net assets released from restrictions 1,840,834 (1,840,834) - - -

Total revenues, gains and other support 39,248,558 (1,094,885) 888,249 39,041,922 37,248,906

Expenses Program services: Instructional 25,078,546 - - 25,078,546 24,550,022 Auxiliary programs 1,325,366 - - 1,325,366 1,326,307

Total program services 26,403,912 - - 26,403,912 25,876,329

Supporting services: Management and general 3,892,851 - - 3,892,851 4,096,445 Fund raising 3,510,591 - - 3,510,591 3,392,350

Total support services 7,403,442 - - 7,403,442 7,488,795

Total expenses 33,807,354 - - 33,807,354 33,365,124

Changes in net assets before gains (losses) and other expenses 5,441,204 (1,094,885) 888,249 5,234,568 3,883,782

Gains (Losses) and Other Expenses Net loss on disposal of assets (617,205) - - (617,205) - Net gain on interest rate swap agreements 840,745 - - 840,745 1,469,134 Endowment and other investment return less spending rate (1,277,420) 1,044,619 - (232,801) 3,340,040 Net gain on beneficial interests in perpetual trusts - - 19,283 19,283 29,346

Total (losses) gains and other expenses (1,053,880) 1,044,619 19,283 10,022 4,838,520

Changes in net assets 4,387,324 (50,266) 907,532 5,244,590 8,722,302

Net Assets, Beginning 92,860,746 3,232,677 24,614,249 120,707,672 111,985,370

Net Assets, Ending $ 97,248,070 $ 3,182,411 $ 25,521,781 $ 125,952,262 $ 120,707,672

See notes to financial statements 4 The Haverford School Statement of Cash Flows Year Ended June 30, 2018

2018 2017

Cash Flows from Operating Activities Changes in net assets $ 5,244,590 $ 8,722,302 Adjustments to reconcile change in net assets to net cash provided by operating activities: Net gain on investments (2,154,713) (5,127,233) Net gain on beneficial interests in perpetual trusts (19,283) (29,346) Net gain on interest rate swap agreements (840,745) (1,469,134) Net loss on disposal of assets 617,205 - Depreciation 3,444,068 3,446,410 Amortization of deferred financing costs 3,878 60,212 Bad debt expense 2,900 2,009 Accrued postretirement benefit cost (16,624) 112,151 Contributions restricted for long-term investments (888,249) (1,376,100) (Increase) decrease in assets: Accounts receivable (11,546) 22,997 Contributions receivable, net 780,906 669,387 Prepaid and other assets (75,971) (27,210) Split-interest agreements (1,401) 10,490 Increase (decrease) in liabilities: Accounts payable and accrued expenses 430,736 (358,009) Advance tuition 41,313 (1,094,436)

Net cash provided by operating activities 6,557,064 3,564,490

Cash Flows from Investing Activities Purchases of property and equipment (2,515,228) (1,435,826) Proceeds from sales and redemptions of investments 58,371,054 5,532,365 Purchases of investments (61,623,266) (4,332,597)

Net cash used in investing activities (5,767,440) (236,058)

Cash Flows from Financing Activities Proceeds from contributions restricted for long-term investment 888,249 1,376,100 Principal payments of bonds - (5,925,000)

Net cash provided by (used in) financing activities 888,249 (4,548,900)

Net increase (decrease) in cash and cash equivalents 1,677,873 (1,220,468)

Cash and Cash Equivalents, Beginning 8,464,840 9,685,308

Cash and Cash Equivalents, Ending $ 10,142,713 $ 8,464,840

See notes to financial statements 5 The Haverford School Notes to Financial Statements June 30, 2018

1. Summary of Significant Accounting Policies

The Haverford School ("School") is an independent college-preparatory day school for boys in grades pre-kindergarten through twelve. The School is located in Lower Merion Township in the Commonwealth of Pennsylvania.

The significant accounting policies followed are described below:

Basis of Presentation

The financial statements of the School have been prepared on the accrual basis of accounting.

These financial statements present financial information showing the financial position, the activities, and the cash flows of the School reflecting the presence or absence of donor- imposed restrictions. Accordingly, the amounts of net assets are classified according to the nature of restrictions, as follows:

Permanently Restricted Net Assets - Net assets which are subject to donor-imposed restrictions that are maintained permanently by the School. Generally, the donors of these assets permit the School to use all or part of the income earned on related investments for general or specific purposes. The donors of certain permanently restricted net assets allow for the School to utilize the corpus of the gift if sufficient investment income does not exist to fulfill the purpose of the gift. Temporarily Restricted Net Assets - Net assets which are subject to donor-imposed restrictions that will be met when expenditures are made for the designated purposes or with passage of time. The expiration of temporary restrictions on net assets is reported in the statement of activities and changes in net assets as net assets released from restrictions. Temporarily restricted contributions and temporarily restricted endowment income whose restrictions are not met in the same period as received or earned are reported as increases in temporarily restricted net assets. Unrestricted Net Assets - Net assets that are not subject to donor-imposed stipulations.

Allocation of Certain Expenses

The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities and changes in net assets. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

Cash Equivalents

Cash and cash equivalents represent highly liquid investments with an original maturity date not exceeding 90 days. Cash equivalents which are donor restricted to a specific purpose or Board designated to function as endowment funds are excluded from cash equivalents in the statement of financial position and in the statement of cash flows.

Contributions Receivable

Contributions receivable (pledges) are initially recorded at their estimated fair value and consist of unconditional promises to give to the School.

6 The Haverford School Notes to Financial Statements June 30, 2018

Contributions due in less than one year are recognized as contributions receivable and contribution revenue at the time a donor makes a promise to give. The contribution is recorded at the gross amount of the pledge and may represent an increase in permanently restricted, temporarily restricted, or unrestricted net assets, depending on the pledge agreement. Temporarily restricted contributions, whose restrictions are met in the same reporting period as such pledges are made, are recognized and reported as unrestricted support. Pledges expected to be received after one year are recorded at fair value based upon the present value of the pledge using a discount rate. If a gift is temporarily or permanently restricted by a donor, appropriate net assets are increased.

Investments

Marketable securities are reported at fair value as determined by quoted market values. Mutual funds are reported at net asset value ("NAV"), which approximates fair value. Mutual fund NAVs are determined primarily by quoted market values of the underlying investments of the mutual fund. Investments in non-public investment partnerships and non-regulated investment companies are valued by the general partner or management of the partnership or investment company and are reported at estimated fair value. The fair value of certain of the investments of these partnerships, which may include private placements and other securities for which values are not readily available, are determined in good faith by the investment adviser or general partner or certain investees. The estimated fair values may differ significantly from the values that would have been used had a ready market existed for these investments, and these differences could be material.

Property and Equipment

Land, buildings and equipment are stated at cost when purchased, and gifts of plant assets are reflected at fair value when received. Land, buildings, equipment and furniture are stated at cost less accumulated depreciation which is computed on a straight-line basis over the respective estimated useful lives as follows:

Years

Building and improvements 10-50 Equipment 5-10 Furniture 5-10

Expenditures for improvements that increase the estimated useful lives of the assets are capitalized. Expenditures for repairs and maintenance are charged to operations as incurred. Upon sale or retirement, the cost of the asset and the related accumulated depreciation are removed from the accounts, any gain or loss is included in the statement of activities and changes in net assets. Management's policy is to capitalize property and equipment acquisitions having a cost exceeding $1,000.

Deferred Financing Costs

Costs incurred in connection with issuance of revenue refunding bonds are deferred and amortized to interest expense over the life of the underlying indebtedness using the interest method.

At June 30, 2018 and 2017, accumulated amortization of deferred financing costs is $33,612 and $29,734, respectively. See Note 7.

7 The Haverford School Notes to Financial Statements June 30, 2018

Impairment of Long-Lived Assets

Management reviews the carrying values of long-lived and identifiable intangible assets for possible impairment whenever events or changes in circumstances indicates that the carrying amount of the assets may not be recoverable based on undiscounted estimated future operating cash flows. If an impairment is deemed to have occurred, the carrying value of the applicable asset is written down to estimated fair value, with the excess charged off as a realized loss in the statement of activities and changes in net assets. No impairments were identified as of June 30, 2018 and 2017.

Student Deposits and Advance Tuition Payments

Tuition and fees are recognized as revenue when they are earned. Amounts received in advance of when they are earned are recorded as advance tuition in the statement of financial position. Registration fees are due prior to the commencement of each school year. The School provides discounts as an incentive for advance tuition payments.

Income Taxes

The School is a non-profit educational organization which has been determined by the Internal Revenue Service to be exempt from federal income taxes under section 501(c)(3) of the Internal Revenue Code ("IRC"). The School is subject to federal income taxes on any net unrelated business taxable income, as defined by the IRC.

The School has evaluated its tax positions as of June 30, 2018. A tax position is recognized as a benefit only if it is "more-likely-than-not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that has a likelihood of being realized on examination of more than 50%. For tax positions not meeting the "more-likely-than-not" test, no tax benefit is recorded. Under the "more-likely-than-not" threshold guidelines, Management believes no significant uncertain tax positions exist, either individually or in the aggregate, that would give rise to the recognition of an income tax liability. As of June 30, 2018, in the opinion of Management, the School has no material unrecognized income tax liabilities or accrued interest and penalties.

The School's federal Return of Organization Exempt from Income Tax (Form 990) for the years ended June 30, 2017, 2016, and 2015 are subject to examination by the Internal Revenue Service, generally for three years after the date the return was filed.

Donated Materials and Services

The School recognizes donated materials at the fair value at the date of the gift. Donated services are recognized only when the services (1) create or enhance non-financial assets or (2) require specialized skills, are provided by individuals possessing those skills, and would typically be purchased if not provided by donation and are to be recorded as both revenue and expense.

A significant portion of the School's functions are conducted by unpaid officers, board members, and volunteers. The value of this contributed time is not reflected in the accompanying financial statements since the volunteers' time does not meet the criteria necessary for recognition.

8 The Haverford School Notes to Financial Statements June 30, 2018

Derivative Financial Instruments

In managing its exposure to interest rate risk, the School utilizes interest rate swap agreements. An interest rate swap is a contractual exchange of interest payments between two parties. A typical interest rate swap involves the payment of a fixed rate of interest on a notional principal amount by one party in exchange for receipt of a floating interest rate times the same notional principal amount from a counterparty. As market interest rates fluctuate, the difference between the fixed and variable interest rates results in net interest either paid or received by the School over the life of the agreement. Counterparties to the School's interest swap agreements are major financial institutions. Pursuant to the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 815, Derivatives and Hedging, the School recognizes the interest rate swap agreement at fair value and records changes in fair value as a component of gains (losses) and other expenses in its statement of activities and changes in net assets.

Financial Instruments The carrying value of cash and cash equivalents approximates fair value based on the short- term maturity of these financial instruments.

Advertising Advertising is expensed as incurred and is not considered material to the accompanying financial statements.

Endowment and Other Investment Return Less Spending Rate Endowment return less spending rate represents transactions affecting net assets associated with net investment income including net gains or losses on investments, reduced by the spending rate as approved by the Board of Trustees.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statement of financial position and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Risks and Uncertainties

The School's future results of operations involve a number of risks and uncertainties. Factors that could affect the School's future operating results and cause actual results to vary materially from expectations include, but are not limited to, dependence on key personnel, enrollment/tuition, reliance on public support and the performance of its long-term investments.

9 The Haverford School Notes to Financial Statements June 30, 2018

Recently Issued Accounting Standards not yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which amends its guidance related to revenue recognition. ASU 2014-09 requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. ASU 2014-09 is effective for the School’s 2019 fiscal year. ASU 2014-09 can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The School is currently assessing the effect that Topic 606 will have on its financial statements.

In February 2016, FASB issued ASU No. 2016-02, Leases. ASU 2016-02 was issued to increase transparency and comparability among entities. Lessees will need to recognize nearly all lease transactions (other than leases that meet the definition of a short-term lease) on the statement of financial position as a lease liability and a right-of-use asset (as defined). Lessor accounting under the new guidance will be similar to the current model. For public business entities, including not-for-profit organizations that have issued, or are a conduit bond obligor for, securities that are traded, listed or quoted on an exchange or an over-the-counter market. ASU 2016-02 is effective for the School’s 2020 fiscal year. Early application is permitted for all entities. Upon adoption, lessees and lessors will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply. The School is assessing the impact this standard will have on its financial statements.

In August 2016, FASB issued ASU No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities. The new guidance is intended to improve and simplify the current net asset classification requirements and information presented in financial statements and notes that is useful in assessing a not-for-profit's liquidity, financial performance and cash flows. ASU 2016-14 is effective for the School’s 2019 fiscal year. ASU 2016-14 is to be applied retroactively with transition provisions. The School is assessing the impact this standard will have on its financial statements. In June 2018, the FASB issued ASU 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. The new guidance is intended to clarify and improve accounting guidance for contributions received and contributions made. The amendments in this ASU should assist entities in (1) evaluating whether transactions should be accounted for as contributions (nonreciprocal transactions) or as exchange (reciprocal) transactions subject to other guidance and (2) determining whether a contribution is conditional. For not-for-profit entities that have conduit debt, ASU 2018-08 is effective for the School’s 2019 fiscal year. The School is assessing the impact that ASU 2018-08 will have on its results of operations, financial position and cash flows.

10 The Haverford School Notes to Financial Statements June 30, 2018

Subsequent Events The School evaluated subsequent events for recognition or disclosure through September 26, 2018 the date the financial statements were issued.

Comparative Information The financial statements include certain prior-year summarized comparative information in total but not by net asset category. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the School's financial statements for the year ended June 30, 2017 from which the summarized financial information was derived. Reclassification of Prior Year Amounts

Certain amounts from the prior year have been reclassified to conform to the current year presentation and did not affect changes in net assets or total net assets.

2. Investments

Investments are stated at fair value and are composed of the following at June 30:

2018 2017

Diversified mutual funds: Money market securities $ 376,227 $ 3,297,450 Marketable debt, domestic total return 5,721,444 2,383,751 Marketable debt, domestic short-term 3,819,690 - Marketable debt, domestic intermediate-term 5,583,292 2,524,970 Marketable debt, domestic long-term - 2,783,361 Marketable equity, domestic large value - 7,511,166 Marketable equity, domestic large cap 8,962,203 2,700,734 Marketable equity, domestic mid cap - 2,087,275 Marketable equity, domestic small cap - 7,010,043 Marketable equity, international 12,615,102 14,318,295 Commodity index fund, exchange traded fund - 2,957,880 Alternative investments: Pine River Fund Ltd. 434,982 3,228,217 Salient MLP Total Return Fund, L.P. - 4,198,909 MKP Opportunity Offshore Ltd. - 3,477,920 Kepos Alpha Fund Ltd. - 2,850,645 Conatus Capital Overseas Ltd. - 4,045,818 Forester Diversified, Ltd. 985,524 3,509,600 AG Capital Recovery VI Holdings, L.P. 2,500 35,145 International Opportunistic Fixed Income Fund - 2,595,491 Verger Fund II LLC 38,422,631 -

$ 76,923,595 $ 71,516,670

11 The Haverford School Notes to Financial Statements June 30, 2018

Investments are subject to the following restrictions at June 30:

2018 2017

The Haverford School endowment and similar funds: Permanently restricted gift requiring investment in perpetuity $ 24,984,577 $ 24,096,328 Unexpended gains on permanently restricted net assets 2,613,039 2,707,792 Unrestricted funds designated by the Board and functioning as endowment 49,325,979 44,712,550

Endowment and investments functioning as endowment $ 76,923,595 $ 71,516,670

Investment expenses were $453,524 and $346,817 for the years ended June 30, 2018 and 2017, respectively. The average annual yield (exclusive of net investment gains and losses) on investments was 0.99% and 1.48%, and the annual total return based on fair value and net of investment expenses was 4.54% and 9.2% for the years ended June 30, 2018 and 2017, respectively. Refer to Note 15 for additional disclosures related to investments.

3. Beneficial Interests in Perpetual Trusts

The School is an income beneficiary of the Leonard Hastings Schoff Charitable Trust and the William P. Carty Trust. The trust indentures provide that a portion of the income earned by the trusts are to benefit the School in perpetuity. Trust distributions are included in all other income. Income received by the School from these trusts was $23,360 and $21,360 during the years ended June 30, 2018 and 2017, respectively.

The increase/(decrease) in the fair value of the School's beneficial interests in perpetual trusts was $19,283 and $29,346 for the years ended June 30, 2018 and 2017, respectively. Assets held in the trusts consist of cash and marketable securities recorded at fair value. The changes in value are recorded as gain (loss) on beneficial interests in perpetual trusts in the accompanying statement of activities and changes in net assets.

12 The Haverford School Notes to Financial Statements June 30, 2018

4. Contributions Receivable

Contributions receivable are as follows at June 30:

2018 2017

In less than one year $ 1,504,497 $ 1,459,896 In one to five years 2,701,686 3,526,820 Over five years 599,705 599,705

4,805,888 5,586,421

Less: Discount to net present value (126,807) (80,227) Less: Allowance for uncollectible contributions (225,355) (271,562)

Net contribution receivable $ 4,453,726 $ 5,234,632

Contributions receivable due in more than one year are recorded at the present value of estimated future cash flows using discount rates from 1% to 2.5%.

Management reviews contributions receivable on a periodic basis and records an allowance for contributions which have not been received within the time period promised or expected to be received, or otherwise uncollectible based on available information.

Restrictions applicable to contributions receivable at June 30 are as follows:

2018 2017

Unrestricted $ 1,095,609 $ 1,328,694 Temporarily restricted 874,009 904,742 Permanently restricted 2,484,108 3,001,196

Contributions receivable, net $ 4,453,726 $ 5,234,632

13 The Haverford School Notes to Financial Statements June 30, 2018

5. Financial Instruments and Credit Risk Concentration

The School's principal financial instruments subject to credit risk are its cash in depository institutions, cash equivalents, investments, receivables and interest rate swap agreements. The School maintains its depository accounts at major regional financial institutions. At June 30, 2018, $10.1 million was held at one depository institution. Balances held at depository institutions are generally in excess of the Federal Deposit Insurance Corporation limits. The degree and concentration of credit risk varies by type of investment. Receivables result primarily from student tuition and fees, and unconditional promises to give, which are receivable from individuals, most of whom reside in the local geographic area of the School. At June 30, 2018, approximately 36% of contributions receivable were attributable to three individuals. At June 30, 2017, approximately 38% of contributions receivable were attributable to two individuals.

6. Property and Equipment, Net

The following is a summary of property and equipment as of June 30:

2018 2017

Land $ 521,496 $ 521,496 Buildings and improvements 101,662,508 100,357,069 Furniture and equipment 13,571,565 13,351,598 Construction in progress 1,176,803 1,093,397

116,932,372 115,323,560

Accumulated depreciation and amortization (deduction) (47,067,069) (43,912,212)

Property and equipment, net $ 69,865,303 $ 71,411,348

Construction in progress at June 30, 2018 represents amount incurred for the Middle School and campus master plan updating along with renovations to the turf field.

14 The Haverford School Notes to Financial Statements June 30, 2018

7. Revenue Refunding Bonds Debt consists of the following at June 30:

2018 2017

Montgomery County Industrial Development Authority Revenue Refunding Bonds, Series of 2010, maturing annually from March 1, 2020 at $260,000 and increasing annually to $2,600,000 on March 1, 2037 with variable interest. The bond holder has the option, with at least eighty-five (85) days written prior notice, to declare the entire outstanding principal balance of the bond Series of 2010 and all accrued and unpaid interest, due and payable during specific dates (each a "Bond Put Date"). The period commencing on the ninetieth (90th) day before and terminating on the ninetieth (90th) day following each of the following dates represent Bond Put Dates: December 28, 2020, December 28, 2025, December 28, 2030 and December 28, 2035. The Series 2010 Bonds bear interest at the Tax Exempt Rate, as defined in the Bond Purchase and Loan Agreement, and averaged 1.98% during the period ended June 30, 2018. Interest is payable quarterly on March 1, June 1, September 1, and December 1, commencing March 1, 2011. The proceeds were used to refund the Revenue Refunding Bonds - Series of 2008. The Series 2010 Bonds are subject to certain debt covenants which require the School to: maintain specified liquidity, meet or exceed a specified minimum student enrollment, and place limitations on short-term indebtedness and total debt service. $ 27,000,000 $ 27,000,000

Less: deferred financing costs (43,388) (47,266)

Total bonds payable, net $ 26,956,612 $ 26,952,734

Principal payments required to service the Series 2010 Revenue Refunding Bonds are as follows over the succeeding years ending June 30:

2019 $ - 2020 260,000 2021 560,000 2022 590,000 2023 615,000 Thereafter 24,975,000

$ 27,000,000

Interest expense for the years ended June 30, 2018 and 2017 was $867,984 and $981,499, respectively.

15 The Haverford School Notes to Financial Statements June 30, 2018

8. Derivative Financial Instruments

The School is a party to two derivative financial instruments that are commonly referred to as interest rate swap agreements at June 30, 2018.

Interest rate swap agreement No. 1 was originated on April 7, 2010, and requires the School to make 3.297% fixed interest rate payments and receive variable interest rate payments from its counter party based on 67% of the one month London Interbank Offered Rate ("LIBOR"), which was 1.39% at June 30, 2018. The effect of this swap agreement was to increase interest expense by approximately $275,000 and $282,000 for the years ended June 30, 2018 and 2017, respectively. The agreement is scheduled to terminate on March 15, 2037 via a cash settlement of the fair value of this derivative financial instrument. The School has the right to terminate this agreement prior to March 15, 2037 via cash settlement of the fair value of the derivative as calculated by the counter party to the agreement. The outstanding notional amount at June 30, 2018 and 2017 was $10,000,000.

The estimated fair value of this swap agreement was $(1,952,983) and $(2,605,101) at June 30, 2018 and 2017, respectively.

Interest rate swap agreement No. 2 was originated on May 19, 2011, and requires the School to make 2.258% fixed rate payments and receive variable interest rate payments from its counterparty based on 67% of the one month LIBOR, which was 1.39% at June 30, 2018. The effect of this swap agreement was to (decrease)/increase interest expense by approximately ($72,000) and $124,000 for the years ended June 30, 2018 and 2017, respectively. The agreement is scheduled to terminate on December 28, 2020 via a cash settlement of the fair value of this derivative financial instrument. The School has the right to terminate the agreement prior to December 28, 2020 via a cash settlement of the fair value of the derivative as calculated by the counter party to the agreement. The outstanding notional amount at June 30, 2018 and 2017 was $7,000,000.

The estimated fair value of this swap agreement was $(81,973) and $(270,600) at June 30, 2018 and 2017, respectively.

Under the terms of the Amended and Restated Intercreditor Agreement dated June 1, 2008, the counter parties to each of the interest rate swap agreements has been granted a first lien and security interest in the School's unrestricted gross revenues on a parity basis with the bond holders described in Note 7. Swap agreement termination payments are subordinated to the security interests of holders of outstanding refunding bond Series.

16 The Haverford School Notes to Financial Statements June 30, 2018

9. Fair Value of Financial Instruments

The School measures its investments at fair value on a recurring basis in accordance with accounting principles generally accepted in the United States of America. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The framework that the authoritative guidance established for measuring fair value includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs used in determining valuations into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1 - Fair value is based on unadjusted quoted prices in active markets that are accessible to the School for identical assets or liabilities. These generally provide the most reliable evidence and are used to measure fair value whenever available.

Level 2 - Fair value is based on significant inputs, other than Level 1 inputs, that are observable either directly or indirectly for substantially the same term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets, quoted market prices in markets that are not active for identical or similar assets, and other observable inputs.

Level 3 - Fair value is based on significant unobservable inputs. Examples of valuation methodologies that would result in Level 3 classification include option pricing models, discounted cash flows, and other similar techniques.

The level of a financial asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

17 The Haverford School Notes to Financial Statements June 30, 2018

The following tables present the financial instruments measured at fair value as of June 30, 2018 and 2017 by caption on the statement of financial position by the valuation hierarchy defined above:

2018 Level 1 Level 2 Level 3 Total

Reported at Fair Value: Investments: Diversified mutual funds: Money market funds $ 376,227 $ - $ - $ 376,227 Marketable debt, domestic total return 5,721,444 - - 5,721,444 Marketable debt, domestic short-term 3,819,690 - - 3,819,690 Marketable debt, domestic intermediate term 5,583,292 - - 5,583,292 Marketable equity, domestic large cap 8,962,203 - - 8,962,203 Marketable equity, international 7,243,642 5,371,460 - 12,615,102 Commodity index fund, exchange traded fund - - - -

Total investments by valuation hierarchy $ 31,706,498 $ 5,371,460 $ - 37,077,958

Alternative investments, reported at net asset value 39,845,637

Total investments $ 76,923,595

Split-interest agreements $ - $ - $ 64,304 $ 64,304

Beneficial interests in perpetual trusts $ - $ - $ 537,204 $ 537,204

Financial liabilities, Derivative financial instruments, Interest rate swaps $ - $ (2,034,956) $ - $ (2,034,956)

18 The Haverford School Notes to Financial Statements June 30, 2018

The fair value measurements used for assets (liabilities) measured at fair value on a recurring basis, by level within the fair value hierarchy are as follows at June 30:

2017 Level 1 Level 2 Level 3 Total

Reported at Fair Value: Investments: Diversified mutual funds: Money market funds $ 3,297,450 $ - $ - $ 3,297,450 Marketable debt, domestic total return 2,383,751 - - 2,383,751 Marketable debt, domestic intermediate term 2,524,970 - - 2,524,970 Marketable debt, domestic long-term 2,783,361 - - 2,783,361 Marketable equity, domestic large value 7,511,166 - - 7,511,166 Marketable equity, domestic large cap 2,700,734 - - 2,700,734 Marketable equity, mid cap 2,087,275 - - 2,087,275 Marketable equity, small cap 7,010,043 - - 7,010,043 Marketable equity, international 6,819,452 7,498,843 - 14,318,295 Commodity index fund, exchange traded fund 2,957,880 - - 2,957,880

Total investments by valuation hierarchy $ 40,076,082 $ 7,498,843 $ - 47,574,925

Alternative investments, reported at net asset value 23,941,745

Total investments $ 71,516,670

Split-interest agreements $ - $ - $ 62,903 $ 62,903

Beneficial interests in perpetual trusts $ - $ - $ 517,921 $ 517,921

Financial liabilities, Derivative financial instruments, Interest rate swaps $ - $ (2,875,701) $ - $ (2,875,701)

19 The Haverford School Notes to Financial Statements June 30, 2018

Activity recognized during the year ended June 30, 2018 for financial assets reported within Level 3 in the fair value hierarchy is as follows:

Beneficial Interest in Split-Interest Perpetual Level 3 Agreement Trusts Total

Balance at July 1, 2017 $ 62,903 $ 517,921 $ 580,824

Net investment income 1,401 42,643 44,044 Distributions - (23,360) (23,360)

Balance at June 30, 2018 $ 64,304 $ 537,204 $ 601,508

Activity recognized during the year ended June 30, 2017 for financial assets reported within Level 3 in the fair value hierarchy is as follows:

Beneficial Interests in Split-Interest Perpetual Level 3 Agreement Trusts Total

Balance at July 1, 2016 $ 73,393 $ 488,575 $ 561,968

Net investment loss (10,490) 50,706 40,216 Distributions - (21,360) (21,360)

Balance at June 30, 2017 $ 62,903 $ 517,921 $ 580,824

The net realized and unrealized gains and losses for the years ended June 30, 2018 and 2017 are included in endowment return in the accompanying statement of activities and changes in net assets.

The alternative investment classification includes the following:

Pine River Fund, Ltd., is a private mutual investment fund established under the laws of the Cayman Islands, is a part of a master-feeder structure and generally will not trade assets directly. Rather, the Fund invests substantially all of its assets in the Pine River Master Fund Ltd. The Fund's objective is to provide superior, risk-adjusted returns while adding a valuable element of diversification to a shareholder's overall portfolio through implementing a multi strategy focus on global opportunities throughout Asia, Europe, and North America that is expressed through capital structure arbitrage, structured credit, convertible bond arbitrage, fixed income relative value, equity relative value, and event-driven strategies. The fair value of the investment has been determined by the Fund manager, which is determined based on the Fund's proportionate interest in the NAV of the Master Fund. As of June 30, 2018 and 2017, the fair value of the School's investment was $434,982 and $3,228,217, respectively. All capital has been called. A shareholder may redeem shares upon the receipt by the Fund of 45 days prior written notice.

20 The Haverford School Notes to Financial Statements June 30, 2018

Salient MLP Total Return, L.P. (the "Fund") provides exposure to a diversified portfolio of higher quality publicly traded midstream energy Master Limited Partnerships ("MLPs") and other midstream companies. The Fund will invest directly in the units of MLPs and energy midstream companies. The fair value of the investment has been determined by the Fund manager. As of June 30, 2018 and 2017, the fair value of the School's investment was $-0- and $4,198,909, respectively. All capital has been called. The fund maintains weekly redemptions, with written notification required 5 business days in advance.

MKP Opportunity Offshore, Ltd., established under the laws of the Cayman Islands, is an exempted company whereby the fund invests substantially all of its assets in MKP Opportunity Master Fund, Ltd. (the "Master Fund"). The Master Fund is a discretionary global macro fund that uses a top-down fundamental approach to identify and exploit the imbalances in global economies and asset classes to produce high risk adjusted returns over the long term. The fair value of the investment has been determined by the Fund manager, which is determined based on the Company's proportionate interest in net assets of the Master Fund. As of June 30, 2018 and 2017, the fair value of the School's investment was $-0- and $3,477,920, respectively. All capital has been called. A shareholder may redeem shares upon the receipt by the Fund of 60 days prior written notice.

Kepos Alpha Fund, Ltd., established under the laws of the Cayman Islands, is a feeder fund in a "master feeder" structure whereby the fund invests a portion of its capital in Kepos Alpha Master Fund L.P. (the "Master Fund"). The Master Fund's investment objective is to provide investors with an attractive total return on invested capital over an entire three to five year market cycle while maintaining a low correlation with global equity markets. The fair value of the investment has been determined by the Fund manager, which is determined based on the share in the net assets of the Master Fund. As of June 30, 2018 and 2017, the fair value of the School's investment was $-0- and $2,850,645, respectively. All capital has been called. A shareholder may redeem shares upon the receipt by the Fund of 65 days prior written notice, in addition to and not without limiting a holder's rights to affect a Standard Quarterly Redemption.

Conatus Capital Overseas Ltd., established under the laws of the Cayman Islands, is a feeder fund in a "master feeder" structure whereby the fund invests substantially all of its assets in Conatus Capital Master Fund, L.P. (the "Master Fund"). The Master Fund will generally invest long and short in publicly traded equities in all sectors of the global economy, both in the United States and internationally. The fair value of the investment has been determined by the Fund manager, which is determined based on the estimated fair values of the Fund's proportionate share of the net assets of each investee fund. As of June 30, 2018 and 2017, the fair value of the School's investment was $-0- and $4,045,818, respectively. All capital has been called. A shareholder may redeem shares upon the receipt by the Fund of 65 days prior written notice, as of the last business day of the fiscal quarter ending on or immediately after the end of the 36th month following the date the shareholder initially purchased their shares.

21 The Haverford School Notes to Financial Statements June 30, 2018

Forester Diversified, Ltd., established under the laws of the Cayman Islands, is a fund which invests in a diversified group of long/short equity and absolute return funds. The Fund invests indirectly in securities of global issuers, and therefore many of the underlying investments owned by the Fund are exposed to foreign currency fluctuations. The fair value of the investment has been determined by the Fund manager, which generally represents the Fund's proportionate share of the net assets of the investee funds. As of June 30, 2018 and 2017, the School's investment was $985,524 and $3,509,600, respectively. All capital has been called. Class B2 shares are subject to a three-year lock-up such that shares may not be redeemed until the first quarter-end that falls on or after the three-year anniversary of the purchase of such shares, with at least 95 days' notice required for redemptions.

AG Capital Recovery Holdings VI, L.P., a Delaware limited partnership established to acquire securities of financially distressed issuers. The Fund invests indirectly in securities of global issuers, and therefore many of the underlying investments owned by the Fund are exposed to foreign currency fluctuations. The General Partner separates the Partnership's investment portfolio into the following categories: cash equivalent instruments, equity securities, fixed income securities, derivative financial instruments, and investments in limited partnerships and private placements in non-public companies. As of June 30, 2018 and 2017, the fair value of the School's investment was $2,500 and $35,145, respectively. All capital has been called. The Partnership is without redemption rights and is currently in late stage liquidation as the term expired, with extensions, on March 14, 2009.

The International Opportunistic Fixed Income Fund is a portfolio fund of the Brandywine Investment Trust. The Trust was organized by Brandywine Global Investment Management, LLC, a Delaware corporation. The Fund was organized with the objective of achieving interest income and long-term capital appreciation by investing in non-U.S. debt. The Fund invests indirectly in securities of global issuers, and therefore many of the underlying investments owned by the Fund are exposed to foreign currency fluctuations. The fair value of the investment has been determined by the Fund manager, which generally represents the Fund's proportionate share of the net assets of the investee funds. As of June 30, 2018 and 2017, the School's investment was $-0- and $2,595,491, respectively. All capital has been called. A shareholder may request redemption of all or a portion of its investment with at least 3 days prior written notice.

Verger Fund II LLC, a Delaware limited liability company (the "Delaware Fund") was formed on April 28, 2014. Verger Offshore Fund Ltd. (the "Offshore Fund") was incorporated as an exempted limited liability company under the provisions of the Companies Law (as amended) of the Cayman Islands on June 13, 2014. The Delaware Fund, the Offshore Fund and any other Feeder Funds will collectively be referred to as the "Fund". The investment objective of the Fund is to preserve capital, optimize long-term returns, and to allow for consistent annual payouts to support their investors’ operating budgets. The Fund will invest in many different asset classes, including investing in public and private equites (on a global basis), fixed income, real estate, commodities and other natural resources and hedged strategies. The fair value of the investment has been determined by the Fund manager, which generally represents the Fund's proportionate share of the net assets of the investee funds. As of June 30, 2018 and 2017, the School's investment was $38,422,631 and $-0-, respectively. All capital has been called.

22 The Haverford School Notes to Financial Statements June 30, 2018

The following valuation techniques were used to measure fair value of assets and liabilities on a recurring basis as of June 30, 2018:

Money market, equity, fixed income, and commodity index securities - The fair values of money market, equity, fixed income, and commodity index securities is based on quoted market prices for the identical security.

Alternative investments - The School measures the fair value for these investments based on NAV as a practical expedient, without further adjustment, unless it is probable that the investment will be sold at a significantly different value. If not determined as of the School's measurement date, NAV is adjusted to reflect any significant events that would materially affect the security's value. Certain attributes that impact the security's fair value may not be reflected in NAV, including, but not limited to, the investor's ability to redeem the investment at the measurement date and unfunded purchase commitments. If the School sold all or a portion of its alternative investments, it is reasonably possible that the transaction value could differ significantly from the estimated fair value at the measurement date, because of the nature of the investments, changes in market conditions and the overall economic environment. In accordance with ASC Subtopic 820-10, investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

Split-interest agreements - Fair value of the split-interest agreements is based on the School's interest in the fair value of underlying assets less the net present value of any estimated cash outflows under the terms of the agreements. The fair value approximates the present value of estimated future cash flows to be received under the terms of such agreements.

Beneficial interests in perpetual trusts - The fair values of the School's beneficial interests in charitable trusts is determined based on reference to quoted market prices and other relevant information generated by market transactions for identical or similar marketable securities and other financial instruments which are held by the perpetual trusts for the benefit of the School. These amounts are considered Level 3 because they are under the exclusive control of the third party trustees.

Derivative financial instruments - The fair values of the interest rate swap agreements Nos. 1 and 2 are based on the net present value of expected future cash flows of the difference between the fixed interest rate of each interest rate swap agreement and 67% of one month LIBOR. The one month LIBOR rate is available in public markets or can be derived from information available in publicly quoted markets. Therefore, the School has categorized the interest rate swap agreements as Level 2.

10. Retirement Plans

The School sponsors a retirement plan which qualifies as a tax deferred annuity as defined in IRC Section 403(b) covering substantially all employees. The School contributes 10% of each participating employee's compensation, employees must defer at least 5% of their compensation during the year to become eligible for an employer contribution. The School's policy is to fund retirement plan contributions accrued; total expense related to this plan for the years ended June 30, 2018 and 2017 is $1,390,364 and $1,319,613, respectively. Plan contributions for employees hired before June 30, 2002 are immediately vested; employer contributions for employees hired after June 30, 2002 vest at the rate of 20% per year for the first five years then are fully vested thereafter.

23 The Haverford School Notes to Financial Statements June 30, 2018

11. Self-Insurance

The School entered into a participation agreement on November 1, 2016, with the trustees of the Philadelphia Area Independent School Business Officer Association ("PAISBOA") Health Benefit Trust ("Trust"). The Trust is used to hold required contributions, fund any self-funded benefits, pay premiums for any fully-insured benefits, and pay any and all other plan expenses. The School will be billed for contributions on a monthly basis approximately fifteen (15) days before the beginning of each month. The participants, including the School, are not liable for any obligations to the Trust other than their required contributions. The School agrees to remain a participating member for a term of three (3) years, beginning November 1, 2016 and ending October 31, 2019. The School may terminate its participation in the plan and Trust by providing written notice no later than April 30, 2019.

12. Postretirement Benefits

The School has an unfunded defined benefit postretirement health care plan covering a specific group of retired employees. The plan is non-contributory and will not have any additional participants.

The School uses June 30 of the current fiscal year as the measurement date for its plan. The following tables provide further information about the School's postretirement benefit plan:

Obligations and funded status are as follows at June 30:

2018 2017

Change in benefit obligation: Benefit obligation at beginning of year $ 297,003 $ 365,970 Interest cost 8,495 7,655 Actuarial (gain) loss 15,528 (35,706) Benefits paid (40,647) (40,916)

Benefit obligation at end of year 280,379 297,003

Change in plan assets: Fair value of plan assets at beginning of year - - Employer contribution 40,647 40,916 Benefits paid (40,647) (40,916)

Fair value of plan assets at end of year - -

Funded status, deficit $ 280,379 $ 297,003

Postretirement benefit cost is comprised of the following for the years ended June 30:

2018 2017

Interest on accumulated postretirement benefit obligation $ 8,495 $ 7,655 Amortization of unrecognized loss 22,665 23,345 Amortization of prior service cost (12,192) (15,258)

Postretirement benefit cost $ 18,968 $ 15,742

24 The Haverford School Notes to Financial Statements June 30, 2018

The plan's status was as follows at June 30:

2018 2017

Accumulated postretirement benefit obligation to eligible retirees $ 280,379 $ 297,003 Unrecognized net actuarial loss (146,180) (153,317) Unrecognized prior service cost 3,800 15,992

Accrued postretirement cost $ 137,999 $ 159,678

A reconciliation of accrued postretirement cost is as follows at June 30:

2018 2017

Accrued postretirement cost, beginning of year $ 159,678 $ 184,852 Postretirement benefit expense for the year 18,968 15,742 Benefits paid to participants for the year (40,647) (40,916)

Accrued postretirement cost, end of year $ 137,999 $ 159,678

The healthcare cost trend assumption changed to 6.5% at June 30, 2018 from 6.0% at June 30, 2017, for obligation measurement purposes, declining to an assumed ultimate rate of 4.5% in 2025-2026 and beyond for Medicare eligible participants. The average life expectancy of the covered former employee group is approximately 10 years or less. The health care costs trend rate assumption is not anticipated to have a significant effect on the liability recorded.

The discount rate used in determining the accumulated postretirement benefit obligation to eligible retirees was 3.55% and 2.85% for the years ended June 30, 2018 and 2017, respectively.

Benefit payments (which reflect expected future service as appropriate) are expected to be paid as follows:

Years ending June 30: 2019 $40,802 2020 38,544 2021 35,959 2022 33,117 2023 30,090 2024-2028 104,046

25 The Haverford School Notes to Financial Statements June 30, 2018

13. Restricted Net Assets

Temporarily restricted net assets include contributions restricted by time, unexpended gains on permanently restricted net assets, designated gifts, and equity in split-interest arrangements are restricted to the following purposes at June 30:

2018 2017

Resources solely restricted by time: Unexpended gains on permanently restricted net assets $ 2,613,039 $ 2,707,792 Donor stipulated gifts: Parents' Association 191,676 180,000 Math Initiative 37,173 43,917 Headmaster "Term" Endowment-Scholarships 148,258 114,317 Headmaster "Term" Endowment-Faculty 57,284 59,784 Headmaster "Term" Endowment-Program 36,335 30,835 Innovation Fund 11,232 11,232 Mural Arts Program 32,300 59,800 Maquire Independent Scholars Program 50,000 25,000 Other 5,114 -

Total $ 3,182,411 $ 3,232,677

Permanently restricted net assets are restricted for the following purposes at June 30:

2018 2017

Investment in perpetuity, the income from which is expendable to support: Scholarships and tuition assistance $ 9,398,884 $ 8,680,042 Faculty compensation 5,507,585 5,201,211 Instructional programs 5,364,219 5,546,246 Other activities of the School 4,713,889 4,668,829

Subtotal 24,984,577 24,096,328

Beneficial interest in trusts for general endowment: William P. Carty Trust 414,191 398,455 Leonard Hastings Schoff Charitable Trust 123,013 119,466

Subtotal 537,204 517,921

Total $ 25,521,781 $ 24,614,249

26 The Haverford School Notes to Financial Statements June 30, 2018

14. Net Assets Released from Restrictions Net assets were released from donor restrictions by incurring expenses satisfying the restricted purposes, by occurrence of other events specified by donors or by utilization of unexpended gains as follows during the years ended June 30:

2018 2017

Time restrictions satisfied $ 1,149,867 $ 1,055,182 Pooled income fund - 54,721 Middle School Project 316,343 - Upper School Project - 327,871 Math Initiative 6,744 3,767 Parents' Association designations 180,000 193,500 Headmaster "Term" Endowment-Scholarships 102,880 64,140 Headmaster "Term" Endowment-Faculty 2,500 10,500 Headmaster "Term" Endowment-Program - 5,795 Instructional projects / Scholarships 82,500 25,817

Total $ 1,840,834 $ 1,741,293

15. Endowment and Similar Funds The School's endowments consist of various individual funds established for a variety of purposes. Its endowments include both a donor-restricted endowment fund and funds designated by the Board of Trustees to function as an endowment. As required by FASB ASC Topic 958, Not-for-Profit Entities, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. Interpretation of Relevant Law The School's Board of Trustees has interpreted the relevant state law as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the School classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the School in a manner consistent with the standard of prudence prescribed by the relevant state law. Unless specifically defined, a donor-restricted endowment fund that is required by donor stipulation to accumulate or appropriate endowment funds, the School considers the following factors: 1) The duration and preservation of the fund 2) The purposes of the School and the donor-restricted endowment fund 3) General economic conditions 4) The possible effects of inflation and deflation 5) The expected total return from income and appreciation of investments 6) Other resources of the School 7) The investment policies of the School 27 The Haverford School Notes to Financial Statements June 30, 2018

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

Temporarily Permanently Unrestricted Restricted Restricted Total

Endowment and similar assets, beginning of year $ 44,712,550 $ 2,707,792 $ 24,096,328 $ 71,516,670

Investment return: Investment income 1,040,073 - - 1,040,073 Less: investment expenses (435,180) - - (435,180) Net appreciation (realized and unrealized gains, net) 1,130,278 1,044,619 - 2,174,897

Total investment return 1,735,171 1,044,619 - 2,779,790

Contributions 1,728,391 10,495 888,249 2,627,135

Net assets released from restrictions 1,149,867 (1,149,867) - -

Endowment and similar assets, end of year $ 49,325,979 $ 2,613,039 $ 24,984,577 $ 76,923,595

Changes in endowment and similar assets for the year ended June 30, 2017 are as follows:

Temporarily Permanently Unrestricted Restricted Restricted Total

Endowment and similar assets, beginning of year $ 43,166,827 $ 1,660,596 $ 22,720,228 $ 67,547,651

Investment return: Investment income 1,317,075 - - 1,317,075 Less: investment expenses (338,998) - - (338,998) Net appreciation (realized and unrealized gains, net 2,998,662 2,115,266 - 5,113,928

Total investment return 3,976,739 2,115,266 - 6,092,005

Contributions, net of withdrawals (3,499,086) - 1,376,100 (2,122,986)

Net assets released from restrictions 1,068,070 (1,068,070) - -

Endowment and similar assets, end of year $ 44,712,550 $ 2,707,792 $ 24,096,328 $ 71,516,670

28 The Haverford School Notes to Financial Statements June 30, 2018

Return Objectives and Risk Parameters

The School has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowments while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the School must hold in perpetuity or for a donor-specified period(s) as well as board-designated funds. Under this policy, as approved by the Board of Trustees, the endowment assets are invested in a manner that is intended to achieve a long-term total return on the endowment assets that exceeds the spending rate of the endowment and inflation, so as to preserve for perpetuity the real, inflation adjusted, purchasing power of the assets. The School expects its endowment funds, over time, to provide an average rate of return of approximately 6% annually. Actual returns in any given year may vary from this amount.

Strategies Employed for Achieving Objectives

The School 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 School targets a diversified asset allocation that places a greater emphasis on equity and fixed income investments to achieve its long-term return objectives within prudent risk constraints.

Endowment Spending Policy and How the Investment Objectives Relate to the Spending Policy

The School has a spending policy of appropriating for distribution each year a percentage of its endowment and similar fund's average fair value on the three calendar year end dates proceeding each fiscal year. The spending policy expressed as a percentage of the average fair value of endowment and similar funds (spending rate) was 4.5% for the years ended June 30, 2018 and 2017. If the spending rate amount exceeds the actual earnings of the Endowment Funds in a given year, the amount needed to fund such excess will first be allocated from accumulated excess earnings of endowment and similar funds from prior years, and, conversely, any undistributed income after the allocation of the spending rate distribution is added back to the temporarily restricted accumulated excess earnings balance. In establishing this policy, the School considered the long-term expected return on its endowment and similar funds. Accordingly, over the long term, the School expects the current spending policy to allow its endowments to grow. This is consistent with the School's objective to maintain the purchasing power of endowment assets held in perpetuity (or for a specified term) as well as to provide additional real growth through new gifts and investment returns.

16. Related Organization

The Haverford School Parents' Association is a related organization composed primarily of students' parents. The Association promotes the School and provides designated funds to the School. The Association also hosts and independently provides for social and other events which benefit the School community.

Gifts from the Haverford School Parents' Association to the School are recorded as temporarily restricted contributions in the year received, and are reported as net assets released from restrictions in the year the gifts are expended.

29 The Haverford School Notes to Financial Statements June 30, 2018

Condensed unaudited cash basis financial information of The Haverford School Parents' Association as of and for the year ended June 30, 2017 is as follows:

Assets arising from cash transactions, Cash $ 253

Net Asset, Unrestricted net asset $ 253

Activities: Revenues: Fund raising events - contributions $ 326,801 Cost of fund events and activities 149,842

Net income from events 176,959

Interest income 123

Total 177,082

Expenditures: General and administration 16,238 Gift to School 180,000

Total 196,238

(Decrease) increase in net assets $ (19,156)

The Haverford School Parents' Association ceased to exist as a separate entity during the year ended June 30, 2018 and continued to serve the Haverford School boys by providing gifts utilizing the School’s fundraising infrastructure to raise funds. During the school year ended June 30, 2018 the net funds raised totaled $191,676. In the prior year ending June 30, 2017 the gift to the School was $180,000.

17. Supplemental Disclosure of Cash Flow Information

Interest paid during the years ended June 30, 2018 and 2017 was $862,455 and $1,046,446, respectively.

The School received library books and instructional materials from the Commonwealth of Pennsylvania with a fair value of $136,292 and $137,264 for the years ended June 30, 2018 and 2017, respectively. The fair value is reflected as contributions and instructional expense in the accompanying statement of activities and changes in net assets.

30 The Haverford School Notes to Financial Statements June 30, 2018

18. Commitments

The School has entered into a construction contract with an unrelated party for approximately $1,200,000 to renovate and improve the facilities’ existing synthetic turf field and synthetic track. The cost to complete the project was approximately $1,000,000 as of June 30, 2018 and will be funded from the School’s cash resources.

In addition, the School has entered into contracts with unrelated parties for approximately $1,460,000 for project management and architectural services related to the upcoming Middle School construction project. The costs will be funded by the School’s cash resources.

31 The Haverford School Schedule I - Detailed Schedule of Expenses Year Ended June 30, 2018

2018 2017 Operations Auxiliary Management and Instructional Programs and General Fundraising Maintenance Total Total

Salaries and wages $ 12,185,799 $ - $ 1,785,553 $ 1,565,266 $ - $ 15,536,618 $ 14,881,934 Payroll taxes and benefits 5,120,772 - 557,325 479,354 - 6,157,451 5,911,499 Instructional expenses 896,102 - - - - 896,102 985,042 Student services 654,737 - - - - 654,737 660,716 Library 105,717 - - - - 105,717 100,612 Music 64,340 - - - - 64,340 46,589 Athletics 512,368 - - - - 512,368 535,722 Food service - 1,188,660 - - - 1,188,660 1,194,687 Conservatory - 122,881 - - - 122,881 119,519 Centennial Hall - 13,825 - - - 13,825 12,101 Administrative expenses - - 567,807 - - 567,807 646,867 Admissions - - 122,412 - - 122,412 189,473 Development expenses - - - 426,002 - 426,002 510,999 Fundraising expenses, Parents' Association 143,639 143,639 - Communications - - - 121,000 - 121,000 121,861 Utilities - - - - 457,022 457,022 465,699 Contract services - - - - 1,633,274 1,633,274 1,633,570 Maintenance and repairs - - - - 526,449 526,449 478,756 Insurance - - - - 241,120 241,120 381,357 Interest - - - - 867,984 867,984 981,499 Depreciation and amortization - - - - 3,447,946 3,447,946 3,506,622 Allocation of operations and maintenance 5,538,711 - 859,754 775,330 (7,173,795) - -

Total expenses, 2018 $ 25,078,546 $ 1,325,366 $ 3,892,851 $ 3,510,591 $ - $ 33,807,354 $ -

Total expenses, 2017 $ 24,550,022 $ 1,326,307 $ 4,096,445 $ 3,392,350 $ - $ - $ 33,365,124

APPENDIX C

DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF TRUST INDENTURE AND LOAN AGREEMENT

[ THIS PAGE INTENTIONALLY LEFT BLANK ] DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF TRUST INDENTURE AND LOAN AGREEMENT

The following is a brief summary of certain definitions and provisions of the Indenture and the Loan Agreement. This summary should not be regarded as a full statement of the documents or of the portions summarized. Reference is made to the Loan Agreement and the Indenture, copies of which are on file at the corporate trust office of the Trustee in Philadelphia, Pennsylvania, for a complete statement of the provisions thereof.

DEFINITIONS OF CERTAIN TERMS

The following are definitions of certain terms used in the summaries of the Indenture and the Loan Agreement and not otherwise defined in this Official Statement.

“Administrative Expenses” means all expenses of the Authority which are properly chargeable as administrative expenses under generally accepted accounting principles, including, without limitation, (a) fees and expenses of the Trustee, including annual fees and the fees, costs and expenses of its Counsel; and (b) fees and expenses of the Authority reasonably necessary and fairly attributable directly or indirectly to the Bonds, the Project, this Loan Agreement, the Indenture and the administration of all thereof, including, without limiting the generality of the foregoing, fees and expenses of the Authority’s employees, consultants, counsel and other professional advisors.

“Bond Counsel” means an attorney-at-law or a firm of attorneys of nationally recognized standing in matters pertaining to the exclusion from gross income for federal income tax purposes of interest on bonds issued by states and their political subdivisions, duly admitted to the practice of law before the highest court of any state of the United States of America, and, except as otherwise provided in the Indenture, selected by the School and not unsatisfactory to the Trustee or the Authority.

“Bond Fund” means the trust fund so designated which is established pursuant to the Indenture.

“Bondholder” or “Holder” or “Holder of Bonds” or “Owner” or “Owner of Bonds” or “registered owner” of Bonds means the registered owner of any Bond.

“Business Day” means any day other than (i) a Saturday, Sunday or legal holiday, or (ii) a day on which banking institutions in Philadelphia, Pennsylvania, New York, New York or in the city in which the Designated Office of the Trustee is located, are authorized or required by law or executive order to close, or (iii) a day on which the New York Stock Exchange or the Securities Depository is closed.

“Certified Public Accountant” means an independent accounting firm which is appointed by the School for the purpose of examining and reporting on or passing on questions relating to its financial statements, and has all certifications necessary for the performance of such services.

C-1

“Code” means the Internal Revenue Code of 1986, as amended from time to time. References to the Code and Sections of the Code include relevant applicable regulations and proposed regulations thereunder and under the Internal Revenue Code of 1954, as amended, and any successor provisions to those Sections, regulations or proposed regulations and, in addition, include all revenue rulings, announcements, notices, procedures and judicial determinations under the foregoing applicable to the Bonds.

“Costs of Issuance Fund” means the trust fund so designated which is established pursuant to the Indenture.

“Counsel” means an attorney-at-law or law firm (which may be internal or external counsel for the School or counsel for the Authority) not unsatisfactory to the Trustee and the Authority.

“Designated Office” means: (1) in the case of the Trustee, the office, designated as provided in the Indenture, from which payments of principal, premium (if any) and interest are made and where Bonds may be surrendered for payment upon acceleration or at maturity; and (2) in the case of the Trustee or the Bond Registrar, the office, designated as provided in the Indenture, where Bonds may be delivered for transfer or exchange.

“Government Obligations” means any of the following securities, if and to the extent the same are non-callable and not subject to redemption other than at the option of the owners, at the time legal for investment of funds held under the Indenture: direct obligations of, or obligations the full and timely payment of the principal of and interest on which is unconditionally guaranteed by, 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 and including a receipt, certificate or any other evidence of an ownership interest in an aforementioned obligation, or in specified portions thereof (which may consist of specified portions of interest thereon).

“Moody’s” means, as long as the Bonds are rated by Moody’s, Moody’s Investors Service, Inc., a Delaware corporation, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency designated in writing by the School.

“Outstanding” in connection with the Bonds, means, as of the time in question, all Bonds authenticated and delivered under the Indenture, except:

(i) Bonds cancelled upon surrender, exchange or transfer, or cancelled because of payment or redemption at or prior to that time;

(ii) Bonds paid pursuant to the Indenture;

(iii) Bonds, or the portion thereof, which are deemed to have been paid and discharged or caused to have been paid and discharged pursuant to the Indenture; and

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(iv) Bonds in substitution for which other Bonds have been authenticated under the Indenture.

In determining whether the owners of a requisite aggregate principal amount of Bonds Outstanding have concurred in any request, demand, authorization, direction, notice, consent or waiver under the provisions of the Indenture, Bonds which are held by or on behalf of the School (unless all of the Outstanding Bonds are then owned by the School) shall be disregarded for the purpose of any such determination, except that in determining whether the Trustee shall be protected in relying upon any such approval or consent of an owner, only Bonds that a Responsible Officer of the Trustee actually knows to be owned by or on behalf of the School shall be disregarded.

“Permitted Investments” means any of the following securities, if and to the extent the same are at the time legal for investment of the funds held under the Indenture:

(i) Government Obligations.

(ii) Bonds, debentures, notes, participation certificates or other evidences of indebtedness issued, or the principal of and interest on which are unconditionally guaranteed, by the Federal National Mortgage Association, the Bank for Cooperatives, or the Federal Intermediate Credit Bank, the Federal Home Loan Bank System, the Federal Land Banks, the Government National Mortgage Association or any other agency or instrumentality of or corporation wholly owned by the United States of America when such obligations are backed by the full faith and credit of the United States.

(iii) Obligations of any state of the United States or any political subdivision thereof, which is rated at the time of purchase “Aaa/AAA” by Moody’s or general obligations of any state of the United States with a rating at the time of purchase of at least “A2/A” or higher by Moody’s.

(iv) “Pre-refunded Municipal Obligations” which means any obligations of any state of the United States or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in such irrevocable instructions; and which are rated at the time of purchase, based on an irrevocable escrow account or fund (the “escrow”), in the highest rating category of Moody’s or any successors thereto; or which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (i) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a firm of nationally recognized independent public accountants or other experts in escrow fund cash flow verification, to pay principal of and interest and redemption premium, if any, on the obligations described in this paragraph on the maturity date or dates or redemption date or dates specified in the irrevocable instructions referred to above, as appropriate.

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(v) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: Senior debt obligations rated at the time of purchase “Aaa” by Moody’s issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC); obligations of the Resolution Funding Corporation (REFCORP); senior debt obligations of the Federal Home Loan Bank System.

(vi) Commercial paper which is rated at the time of purchase in the single highest classification, “P-1” by Moody’s and which matures not more than 270 calendar days after the date of purchase.

(vii) Shares or interests in money market mutual funds, including without limitation, any mutual fund for which the Trustee or an affiliate of the Trustee serves as investment manager, administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (i) the Trustee or an affiliate of the Trustee receives fees from such funds for services rendered, (ii) the Trustee charges and collects fees for services rendered pursuant to the Indenture, which fees are separate from the fees received from such funds, and (iii) services performed for such funds and pursuant to the Indenture may at times duplicate those provided to such funds by the Trustee or its affiliates, and which are rated in the highest rating category by Moody’s or S&P, at the time of investment.

(viii) Guaranteed investment contracts, repurchase agreements and/or investment agreements.

(ix) U.S. dollar denominated time and demand deposit accounts, federal funds, trust funds, trust accounts, certificates of deposit and banker's acceptances with domestic commercial banks, including the Trustee and any of its affiliates which have a rating on their short term certificates of deposit on the date of purchase of "A-1" or "A-1+" by S&P or "P-1" by Moody's and maturing no more than 360 days after the date of purchase (ratings on holding companies are not considered as the rating of the bank).

(x) trust funds, trust accounts, certificates of deposit, time deposit agreements, demand deposits or other comparable banking arrangements, whether negotiable or nonnegotiable, issued by any bank, trust company or national banking association (including the Trustee and any of its affiliates), provided that such investments must be (i) fully insured by the Federal Deposit Insurance Corporation, or (ii) secured, to the extent not insured by the Federal Deposit Insurance Corporation, as required by applicable law or (iii) issued by an institution whose unsecured, long term senior debt obligations are, at the time of such issuance, rated by S&P and Moody's in either of their respective two highest rating categories (disregarding qualifications of such categories by symbols as "+" or "-").

“Person” means an individual, a corporation, a partnership, an association, a limited liability company, a joint stock company, a joint venture, a trust, any unincorporated organization, a governmental unit or agency, a political subdivision or instrumentality thereof, a municipality or a municipal authority, or any other group or organization of individuals.

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“Project Costs” means costs of the Project permitted under the Act, including, but not limited to, the following:

(a) Costs incurred in acquisition, construction, renovation, installation, equipment or improvement of the 2019 Capital Improvements and the other portions of the Project, including costs incurred in respect of the 2019 Capital Improvements and the other portions of the Project for preliminary planning and studies; architectural, engineering, accounting, consulting, legal and other professional fees and expenses; labor, services and materials;

(b) Fees, charges and expenses incurred in connection with the authorization, sale, issuance and delivery of the Bonds, including without limitation bond discount, printing expense, title insurance, recording fees and the initial fees and expenses of the Trustee and the Authority;

(c) Payment of interest on the Bonds and fees of the Trustee accruing during the period when the 2019 Capital Improvements are under construction;

(d) Any other costs, expenses, fees and charges properly chargeable to the cost of acquisition, construction, installation, equipment or improvement of the Project; and

(e) Costs and expenses involved in repaying any Person that provided interim financing to the School in order to pay any of the costs described in clauses (a) through (d) above in connection with the Project.

“Project Facilities” means those facilities of the School financed or refinanced by the Bonds, including the 2019 Capital Improvements.

“Project Fund” means the fund so designated which is established pursuant to the Indenture.

“Ratings Service” means Moody’s, if Moody’s has issued a rating of the Bonds at the request of the School, and S&P, if S&P has issued a rating of the Bonds at the request of the School.

“Regulatory Body” means any federal, state or local government, department, agency, authority or instrumentality (other than the Authority acting in its capacity as lender pursuant to the Loan Agreement) and any other public or private body, including accrediting organizations, having regulatory jurisdiction and authority over the School, the Project or the operations of the School.

“Reserved Rights” means (a) all of the Authority’s rights to receive Administrative Expenses and to indemnification under the Indenture and the Loan Agreement and amounts required to be deposited and rebated to the federal government; (b) the right of the Authority to receive notices and to make any determination and to grant any approval, direction or consent to anything in the Indenture and the Loan Agreement expressly requiring the determination, consent, direction or approval of the Authority; (c) any and all rights, remedies and limitations of liability of the Authority set forth in the Indenture, the Loan Agreement or the Bonds regarding (1) the negotiability, registration and transfer of the Bonds, (2) the loss or destruction of the Bonds, (3) the limited liability of the Authority as provided in the Act, the Indenture, the Loan

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Agreement and the Bonds, (4) the maintenance of insurance by the School, (5) no liability of the Authority to third parties, and (6) no warranties of suitability or merchantability by the Authority; (d) all rights of the Authority in connection with any amendment to or modification of the Indenture, the Loan Agreement or the Bonds; and (e) the right of the Authority to enforce remedies (within any limitations provided for in the Indenture or the Loan Agreement) with respect to the Administrative Expenses or indemnification of the Authority.

“Responsible Officer” means, when used with respect to the Trustee, any vice president, assistant vice president, senior associate or other officer of the Trustee within the Designated Office having direct responsibility for the administration of the Indenture.

“Revenues” means (a) all amounts payable to the Trustee with respect to the principal or redemption price of, or interest on, the Bonds (i) upon deposit in the Bond Fund from the proceeds of the Bonds or of obligations issued by the Authority to refund the Bonds or (ii) by the School under the Loan Agreement; (b) any proceeds of Bonds originally deposited with the Trustee for the payment of interest accrued on the Bonds or otherwise; and (c) investment income with respect to any moneys held by the Trustee in the Bond Fund, the Project Fund and the Costs of Issuance Fund.

“School Board” means the then legally constituted governing body vested with the power of management of the School, or duly authorized committee thereof.

“School Representative” means the Chair, Vice Chair or Treasurer of the School Board or the Headmaster or Chief Financial Officer of the School.

“S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, its successors and assigns, and, if such rating agency shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized securities rating agency designated by the School.

“Securities Depository” means initially The Depository Trust Company (“DTC”), New York, New York, and its successors and assigns, or a successor clearing agency designated under the Indenture and its successors and assigns.

“Trust Estate” has the meaning given to such term under the heading “THE INDENTURE – Pledge of Revenues”.

“2019 Capital Improvements” means the facilities financed with proceeds of the Bonds.

THE LOAN AGREEMENT

General

The Loan Agreement provides for the financing by the Authority of the Project and a loan of the proceeds of the Bonds from the Authority to the School. The proceeds of the Bonds are to be paid over to the Trustee for application in accordance with the terms of the Indenture.

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In the Loan Agreement, the School approves the terms and conditions of the Indenture and the Bonds, and the terms and conditions under which the Bonds are issued, sold and delivered.

Payments by the School

Loan Payments. In consideration of and in repayment of the loan from the Authority, the School will make, as loan payments, payments that correspond, as to amounts and due dates, to the principal of, and interest on, the Bonds.

No Set-off. The obligation of the School to make the payments required by the Loan Agreement is absolute and unconditional and a general obligation of the School; the full faith and credit of the School are pledged to the payment of all sums due under the Loan Agreement. The School will pay without abatement, diminution or deduction (whether for taxes, loss of use, in whole or in part, of the Project Facilities or otherwise) all such amounts regardless of any cause or circumstance whatsoever, present or future, including, without limitation, any defense, set-off, recoupment or counterclaim which the School may have or assert against the Authority, the Trustee, any Bondholder or any other Person. Except to the extent described in this paragraph, nothing contained in the Loan Agreement shall be construed to prevent or restrict the School from asserting any rights it may have under the Loan Agreement, or under any provision of law, against the Authority or the Trustee or any other Person in a separate proceeding.

Other Payments by School. The School will pay the following additional amounts, when due:

(a) any costs of issuance in respect of the Bonds in excess of the amount of such costs which may be paid from proceeds of the Bonds pursuant to the Code; and

(b) at any time upon requisition therefor, all other Administrative Expenses and any other expenses of the Authority incurred at the request or with the consent of the School in connection with the Project.

In addition, the School shall pay directly to the Trustee, on behalf of the Authority, when due, the Trustee fees, expenses and disbursements as provided in the Indenture. The foregoing sums will be paid directly to the parties entitled thereto.

Assignment of Loan Agreement to Trustee

The Authority assigns to the Trustee the Loan Agreement, all amounts payable under the Loan Agreement (other than the Authority’s right to be reimbursed for Administrative Expenses and its right to indemnification by the School), to be held and applied pursuant to the provisions of the Indenture. The School: (a) consents to such assignment; (b) agrees to pay directly to the Trustee all amounts payable under the Loan Agreement (except any Administrative Expenses of the Authority and any indemnification payments to the Authority); and (c) agrees that the Trustee may exercise all rights granted to the Authority under the Loan Agreement.

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School Covenants

Corporate Existence. The School covenants that, except as provided under the provisions of the Loan Agreement described under the subheading “– Merger of Consolidation” below, it will preserve and maintain its existence as a not-for-profit corporation under the laws of the Commonwealth, and preserve and maintain its authority to operate its facilities in the Commonwealth.

Merger or Consolidation. The School covenants that during the term of the Loan Agreement it will not consolidate with, transfer all or substantially all of its assets to, or merge into any other Person, unless the following conditions are met: (a) the successor or transferee expressly assumes in writing the full and faithful performance of the School’s duties and obligations under the Loan Agreement to the same extent as if such successor corporation had been the original party under the Loan Agreement; (b) immediately after such consolidation, merger or transfer, the Authority and the Trustee receive a certificate of a School Representative to the effect that the School or such successor or transferee shall not be in default in the performance or observance of any duties, obligations or covenants of the Loan Agreement; and (c) the Authority and the Trustee receive an opinion or opinions of Bond Counsel to the effect that the merger, transfer or consolidation will not adversely affect the validity of any Bonds or adversely affect the exclusion from gross income of interest on the Bonds for purposes of federal income taxation.

Inspection of Facilities. The School will permit the Trustee and the Authority and any duly authorized agent of the Trustee and the Authority at all reasonable times and at such reasonable intervals so as not to interfere with the operation of the School to enter upon, examine and inspect the Project Facilities.

Preservation of Tax-Exempt Status. The School agrees for the benefit of the Authority, the Trustee and the Holders of the Bonds, that throughout the term of the Loan Agreement:

(a) Notwithstanding any provision in the Loan Agreement or Indenture to the contrary, it will not take any action or permit any action to be taken on its behalf or cause or permit any circumstance within its control to arise or continue (including, without limitation, any action or circumstance which would result in the revocation or modification of its status as an organization described in Section 501(c)(3) of the Code), if such action or circumstance would adversely affect the validity of the Bonds or cause the interest on the Bonds to be included in the gross income of the Holders thereof for purposes of federal income taxation.

(b) Neither it nor any Person related to it within the meaning of Section 147(a)(2) of the Code, pursuant to an arrangement, formal or informal, shall purchase bonds of the Authority in an amount related to the total amount payable under and secured by the Loan Agreement.

(c) It shall not carry on or permit to be carried on in the Project Facilities or any other property now or hereafter owned by the School (or with the School revenues, the proceeds of Bonds, or the proceeds of any loan refinanced with the proceeds of Bonds), any trade or

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business the conduct of which would cause the interest on the Bonds to be included in the gross income of the Holders thereof for purposes of federal income taxation.

(d) It will cooperate with the Authority in the preparation and filing of any information, report or other document with respect to the Bonds which may at any time be required, in the judgment of the Authority, to be filed with the Internal Revenue Service pursuant to Section 149(e) of the Code and any regulations thereunder.

(e) The School agrees to comply with the provisions of the Tax Certificate; provided however, that the School shall not be required to comply with the provisions of the Tax Certificate if it causes to be delivered to the Authority and the Trustee an opinion of Bond Counsel that such noncompliance will not adversely affect the exclusion from gross income of the interest on any Bonds for purposes of federal income taxation.

(f) No more than five percent of the net proceeds of the Bonds (less Bond proceeds used to finance costs of issuance) will be used to finance or refinance costs of facilities included in the Project Facilities used or to be used (i) in unrelated trades or businesses (within the meaning of Section 513(a) of the Code) of an organization described in Section 501(c)(3) of the Code, or (ii) in the trade or business of a Person other than an organization described in Section 501(c)(3) of the Code or a governmental entity. The School will not use the Project Facilities, or permit the Project Facilities to be used, in whole or in part, by any Person (including, without limitation, any lessee) in a manner which would result in a violation of this clause (f).

Compliance with Laws. Except as otherwise provided in the Loan Agreement, the School shall, throughout the term of the Loan Agreement and at no expense to the Authority, promptly comply in all material respects or cause compliance in all material respects with all laws, ordinances, orders, rules, regulations and requirements of any Regulatory Body which may be applicable to the Project Facilities or to the repair and alteration of the Loan Agreement, or to the use or manner of use of the Project Facilities.

Taxes, Charges and Assessments. The School covenants and agrees, subject to the provisions of the Loan Agreement, to pay or cause to be paid (before the same shall become delinquent):

(a) all taxes and charges on account of the use, occupancy or operation of the Project Facilities, or the income therefrom, including, but not limited to, all sales, use, occupation, real and personal property taxes, all permit and inspection fees, occupation and license fees and all water, gas, electric light, power or other utility charges assessed or charged on or against the Project Facilities or on account of the School’s use or occupancy of the Loan Agreement or the activities conducted thereon or therein; and

(b) all taxes, assessments and impositions, general and special, ordinary and extraordinary, of every name and kind, which shall be taxed, levied, imposed or assessed during the term of the Loan Agreement upon all or any part of the Project Facilities, or the interest of the Authority and of the School or either of them in and to the Project, or upon the Authority’s

C-9 and the School’s interest, or the interest of either of them, in the Loan Agreement or the loan payments payable under the Loan Agreement.

Bonds Not to Become Arbitrage Bonds. As provided in the Indenture, the Trustee will invest moneys held by the Trustee in the funds and accounts established under the Indenture as directed by a School Representative. The Authority and the School covenant with each other and with the Holders of the Bonds that, notwithstanding any provision of the Loan Agreement or any other instrument to the contrary, they will neither make or instruct the Trustee to make any investment or other use of the proceeds of the Bonds, nor take or omit to take any other action which would cause the Bonds to be arbitrage bonds under Section 148(a) of the Code, and that they will comply with the requirements of the Code throughout the term of the Bonds.

The provisions described in the preceding paragraph may be modified or may be deleted from the Loan Agreement, upon receipt by the Trustee and the Authority of an opinion of Bond Counsel that such modification or deletion will not adversely affect the exclusion from gross income of interest on any Bonds for purposes of federal income taxation.

Insurance. The School agrees for the benefit of the Authority, the Trustee and the Holders of the Bonds, that throughout the term of the Loan Agreement:

(a) It will maintain, with a financially sound and reputable insurer, insurance or provide a funded plan of self-insurance with respect to its facilities, insuring against such casualties and contingencies, of such types (including public liability insurance) and in such amounts as are customary in the case of corporations engaged in the same or a similar activity and similarly situated.

(b) All policies of insurance required as described under the preceding paragraph shall be for the benefit of the School. The School shall have the right to receive payments due and to receipt for claims under all policies of insurance specified herein.

Events of Default

Each of the following shall constitute an Event of Default under the Loan Agreement:

(a) if the School fails to make any payment required to pay principal of and interest on the Bonds under the Loan Agreement when the same shall become due and payable thereunder; or

(b) if the School fails to make any other payment or deposit required under the Loan Agreement within 30 days of the due date thereof; or

(c) if the School fails to perform any of its other covenants, conditions or provisions under the Loan Agreement and such failure continues for 60 days after the Authority or the Trustee gives the School written notice thereof; provided, however, that if such performance requires work to be done, actions to be taken, or conditions to be remedied, which by their nature cannot reasonably be done, taken or remedied, as the case may be, within such 60-day period, no Event of Default shall be deemed to have occurred or to exist if, and so long

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as, the School shall commence such performance within such 60-day period and shall diligently and continuously prosecute the same to completion; or

(d) if the School admits in writing its inability to pay its debts generally as they become due, or proposes or makes an assignment for the benefit of creditors or a composition agreement with all or a material part of its creditors, or a trustee, receiver, executor, conservator, liquidator, sequestrator or other judicial representative, similar or dissimilar, is appointed for the School or any of its assets or revenues, or there is commenced any proceeding in liquidation, bankruptcy, reorganization, arrangements of debts, debtor rehabilitation, creditor adjustment or insolvency, local, state or federal, by or against the School and if such is not vacated, dismissed or stayed on appeal within 60 days; or

(e) if for any reason any of the Bonds shall be declared due and payable by acceleration in accordance with the terms of the Indenture; or

(f) the School shall default in the payment of any indebtedness (other than amounts due under the Loan Agreement) with a principal amount in excess of $1,000,000, and any period of grace with respect thereto shall have expired.

Remedies

If acceleration of the principal amount of the Bonds has been declared pursuant to the Indenture, the Trustee shall declare all loan payments to be immediately due and payable, whereupon the same shall become immediately due and payable. In addition, if an Event of Default under the Loan Agreement has occurred and is continuing, the Authority (or the Trustee as its assignee) may, at its option, in addition to its other rights and remedies as may be provided in the Loan Agreement or may exist at the time at law or in equity, exercise any one or more of the following remedies:

(a) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Authority, and require the School to carry out any agreements with or for the benefit of the Bondholders and to perform its duties under the Act or the Loan Agreement; or

(b) by action or suit in equity require the School to account as if it were the trustee of an express trust for the Authority; or

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

(d) upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and the Bondholders, to have appointed a receiver or receivers of the Trust Estate, with such powers as the court making such appointment shall confer; or

(e) upon notice to the School, accelerate the due dates of all sums due or to become due under the Loan Agreement.

In order to entitle the Authority (or the Trustee as its assignee) to exercise any remedy reserved to it in Loan Agreement concerning Events of Default and remedies, it shall not be

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necessary to give any notice, other than such notice as may be therein expressly required. Such rights and remedies as are given the Authority thereunder shall also extend to the Trustee. For so long as any Bonds remain Outstanding under the Indenture, and except with respect to the School’s obligations in respect of the Authority’s rights to notices, payments of fees and expenses and indemnification rights and the School’s obligations to comply with the Act, the Trustee, as the assignee of the Authority, shall have the sole right to exercise rights and remedies against the School upon the occurrence of any Event of Default under the Loan Agreement, and the exercise by the Trustee of such rights and remedies shall be subject to all applicable provisions of the Indenture, the Loan Agreement and the Act. To the extent necessary or appropriate and requested by the Trustee, the Authority shall cooperate with the Trustee in connection with the exercise by the Trustee of such rights and remedies against the School.

Amendments

The School and the Authority, from time to time, may enter into any amendments and supplements to the Loan Agreement without the consent of Bondholders, but with prior notice to the Trustee, for the following purposes:

(a) to cure any ambiguity, inconsistency, defect or omission in the Loan Agreement or in any amendment to the Loan Agreement;

(b) to modify, eliminate or add to the provisions of the Loan Agreement to such extent as shall be necessary to obtain, maintain or improve a rating of the Bonds by any Ratings Service;

(d) to make such additions, deletions or modifications as may be necessary in the case of any Bonds to assure compliance with Section 148(f) of the Code relating to the required rebate of certain investment earnings to the United States government or otherwise as may be necessary to assure exemption from federal income taxation of interest on the Bonds; or

(e) in connection with any other change in the Loan Agreement if, in the judgment of the Trustee in reliance on an opinion of Counsel (which may be Bond Counsel), the proposed change does not materially adversely affect the rights of the Holders of any Bonds.

Except for amendments, changes or modifications described in clauses (a) through (e) above, neither the Authority nor the Trustee shall consent to any amendment, change or modification of the Loan Agreement or waive any obligation or duty of the School under the Loan Agreement without the written consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Bonds affected thereby; provided, however, that no such waiver, amendment, change or modification shall permit termination or cancellation of the Loan Agreement or any reduction of the Loan Payments payable under the Loan Agreement or change the date when such payments are due without the consent of the Holders of all the Bonds then Outstanding who are adversely affected thereby.

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THE INDENTURE

Pledge of Revenues

Pursuant to the Indenture (i) all right, title and interest (but not the obligations) of the Authority in, under and pursuant to the Loan Agreement, all loan payments and all other payments, revenues and receipts receivable by the Authority thereunder (except for certain rights related to indemnification and the payment of certain fees and expenses), and (ii) all of the right, title and interest of the Authority in and to all Funds and Accounts established under the Indenture and all moneys and investments now or hereafter held therein and all present and future Revenues, are assigned and pledged to the Trustee to secure the payment of the principal of and interest on the Bonds and are collectively referred to as the “Trust Estate”.

Funds

Bond Fund. A Bond Fund will be established and maintained with the Trustee under the Indenture. The amounts with respect to the payment of principal or redemption price of and interest on the Bonds derived under the Loan Agreement and certain other amounts specified in the Indenture will be deposited in the Bond Fund. While the Bonds are Outstanding, moneys in the Bond Fund will be used solely for the payment of the principal or redemption price of and interest on the Bonds as they mature or become due upon redemption, acceleration or otherwise.

Costs of Issuance Fund. A Costs of Issuance Fund will be established and maintained with the Trustee for the payment of costs of issuance. There shall be deposited into the Costs of Issuance Fund moneys as indicated in Indenture. Such moneys shall be expended to pay costs of issuance with respect to the Bonds in accordance with a closing statement signed by an Authority Representative and a School Representative and delivered to the Trustee upon the issuance of the Bonds or otherwise in accordance with the written direction of a School Representative. Each such written order shall be accompanied by invoices or other appropriate documentation supporting the payments or reimbursements requested. The Trustee is authorized and directed under the Indenture to wire money from or issue its checks on the Costs of Issuance Fund for each payment in accordance with such written directions. Upon the earlier of six months after the date of issuance of the Bonds or receipt by the Trustee of a certificate signed by the School stating that all reasonable expenses incurred in connection with the issuance of the Bonds have been paid, any moneys remaining in the Costs of Issuance Fund shall be transferred into the Bond Fund and applied to pay the interest on the first or next succeeding Interest Payment Date.

Project Fund. A Project Fund will be established and maintained with the Trustee for the payment of Project Costs. Pending disbursement of moneys from the Project Fund pursuant to the Loan Agreement, the moneys and investments to the credit of the Project Fund shall be held as security for the Outstanding Bonds.

Payment of all Project Costs payable out of the Project Fund shall be evidenced by the delivery by the School and the Authority to the Trustee of a Certificate of the School to that effect. As soon as practicable after the receipt by the Trustee of such Certificate, any balance remaining in the Project Fund shall be deposited or applied in accordance with the written direction of the authorized representative of the School pursuant to the Loan Agreement. In

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addition, such balance shall not be invested by the School at a yield in excess of the yield on the Bonds, unless there shall have been delivered to the Trustee and the Authority an opinion of Bond Counsel to the effect that such investment will not cause the interest on the Bonds to be included in the gross income of the Holders for federal income tax purposes.

Investments

At the written direction of a School Representative, the Trustee shall invest moneys held in the Costs of Issuance Fund and the Project Fund in Permitted Investments and shall invest moneys in the Bond Fund in Permitted Investments maturing on or before the date or dates when the payments in respect of principal of or interest on the Bonds for which such moneys are held are to become due. Any such investments shall be held by or under the control of the Trustee and shall be deemed at all times a part of the respective Fund. The interest and income received upon, and any profit or loss resulting from, the investment of moneys in each such Fund shall be credited to or charged to such Fund.

Tax Covenants

The Authority covenants for the benefit of the Holders from time to time of the Bonds that it will not act so as to cause the proceeds of the Bonds, any moneys derived, directly or indirectly, from the use or investment thereof and any other moneys on deposit in any fund or account maintained in respect of the Bonds (whether such moneys were derived from the proceeds of the sale of the Bonds or from other sources) to be used in a manner which could cause the Bonds to be treated as “arbitrage bonds” within the meaning of the Code. The School by its execution of the Loan Agreement has covenanted to restrict the investment or other use of money in the funds and accounts created under the Indenture in such manner and to such extent, if any, as may be necessary, after taking into account reasonable expectations at the time the Bonds are delivered to their original purchaser, so that the Bonds will not constitute “arbitrage bonds” under the Code, and the Trustee agrees to comply with the School’s instructions to such end with respect to the investment of money in the funds and accounts created under the Indenture.

The Authority covenants that it will not sell its bonds or cause them to be sold to an institution described in Section 501(c)(3) of the Code (or any related person within the meaning of the Code) from whom the Authority may acquire “acquired purpose obligations” as defined in the Code referred to in the preceding paragraph pursuant to any arrangement, formal or informal, in an amount related to the amount of “acquired purpose obligations” to be acquired from such institution.

Defaults

The Indenture provides that each of the following events will constitute an “Event of Default” thereunder:

(a) if payment of the principal or redemption price of any Bond is not made when it becomes due and payable at maturity or upon call for redemption; or

(b) if payment of any interest on any Bond is not made when due and payable; or

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(d) if the Authority fails to comply with any provision of the Act or for any reason is rendered incapable of fulfilling its obligations thereunder or under the Indenture.

Remedies

The Indenture provides that if an Event of Default occurs, the Trustee may, and shall, upon written request of upon written request of the holders of a majority in aggregate in principal amount of all Bonds then Outstanding (100% in the case of an Event of Default described in clause (d) above), by notice in writing delivered to the Authority and the School, declare the principal of all Bonds then Outstanding to be immediately due and payable and upon such declaration such principal, together with interest accrued thereon, shall become immediately due and payable to the Owners. Upon the declaration of any such acceleration, the Trustee shall immediately exercise such rights as it may have as the assignee of the Loan Agreement to declare all payments under the Loan Agreement to be due and payable immediately.

Within five calendar days of the occurrence of any such acceleration, the Trustee shall notify, by first class mail, postage prepaid, the Owners of all Bonds then Outstanding of the occurrence of such acceleration, the date through which interest has accrued and the time and place of payment.

In addition, upon the occurrence and continuation of an Event of Default under the Indenture, the Trustee may pursue any available remedy at law or in equity by suit, action, mandamus or other proceeding to enforce the payment of principal of and interest on the Bonds.

However, the provisions described above are subject to the condition that if, after the principal of all Bonds has been so declared to be due and payable, all arrears of interest on the Bonds are paid by the Authority, and the Authority performs all other things in respect to which it may have been in default under the Indenture and pays the reasonable charges of the Trustee and of the Owners of the Bonds, including reasonable attorneys’ fees, then Owners of a majority in principal amount of the Bonds then Outstanding, by notice to the Authority and to the Trustee, may annul such declaration and its consequences.

The Owners of a majority in principal of the Bonds then Outstanding will have the right, after furnishing indemnity satisfactory to the Trustee, to direct in writing the method and place of conducting all remedial proceedings by the Trustee under the Indenture, except that such direction may not be in conflict with any rule of law or with the Indenture or unduly prejudice the rights of minority Bondholders and provided further that the Trustee may decline to follow such directions if the Trustee, upon advice of Counsel, determines that the taking of the action specified in such directions would involve it in personal liability against which indemnity would not be satisfactory.

No Bondholder shall have any right to pursue any remedy under the Indenture or the Loan Agreement unless:

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(a) a Responsible Officer of the Trustee shall have been given written notice of an Event of Default;

(b) the Holders of at least 25% in principal amount of all Bonds then Outstanding shall have requested the Trustee, in writing, to exercise the powers granted in the Indenture or to pursue such remedy in its or their name or names;

(c) the Trustee shall have been offered indemnity satisfactory to it against costs, expenses and liabilities (including attorney’s fees, costs and expenses); and

(d) the Trustee shall have failed to comply with such request within a reasonable time.

Notwithstanding the foregoing provisions or any other provision of the Indenture, the obligation of the Authority shall be absolute and unconditional to pay or cause to be paid, but solely from the Revenues and other funds pledged under the Indenture, the principal or redemption price of and interest on, the Bonds to the respective Holders thereof on the respective due dates thereof, and nothing in the Indenture shall affect or impair the right of action, which is absolute and unconditional, of such holders to enforce such payment.

Modifications and Amendments

Amendments and Supplements without Bondholders’ Consent. The Indenture provides that it may be amended or supplemented at any time without notice to or the consent of any of the Owners of the Bonds by a supplemental indenture consented to by the School, authorized by the Authority and filed with the Trustee for any one or more of the following purposes:

(a) to add additional covenants of the Authority or to surrender any right or power conferred upon the Authority in the Indenture;

(b) for any purpose not inconsistent with the terms of the Indenture or to cure any ambiguity or to correct or supplement any provision of the Indenture or in any supplemental indenture which may be defective or inconsistent with any other provision in the Indenture or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under the Indenture which shall not be inconsistent with the provisions of the Indenture and which shall not adversely affect the interests of the holders of the Bonds, including the appointment and duties of a Bond Registrar or Authenticating Agent;

(c) to modify, eliminate or add to the provisions of the Indenture to such extent as shall be necessary to effect the qualification of the Indenture under the Trust Indenture Act of 1939 or under any similar federal statute hereafter enacted, and to add to the Indenture such other provisions as may be expressly permitted by the Trust Indenture Act of 1939, as from time to time amended;

(d) to modify, eliminate or add to the provisions of the Indenture to such extent as shall be necessary to obtain, maintain or improve a rating of the Bonds by any Ratings Service;

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(e) to grant to or confer or impose upon the Trustee for the benefit of the Owners of the Bonds any additional rights, remedies, powers, authority, security, liabilities or duties which may lawfully be granted, conferred or imposed and which are not contrary to or inconsistent with the Indenture as theretofore in effect;

(f) to permit the Bonds to be converted to, or from, certificateless securities or securities represented by a master certificate held in trust, ownership of which, in either case, is evidenced by book entries on the books of the Securities Depository, for any period of time;

(g) to permit the appointment of a co-trustee under the Indenture;

(h) to authorize different authorized denominations of the Bonds and to make correlative amendments and modifications to the Indenture regarding exchangeability of Bonds of different authorized denominations, redemptions of portions of Bonds of particular authorized denominations and similar amendments and modifications of a technical nature;

(i) to modify, alter, supplement or amend the Indenture to comply with changes in the Code affecting the status of interest on the Bonds as excluded from gross income for federal income tax purposes or the obligations of the Authority or the School in respect of Section 148 of the Code; and

(j) to modify, alter, amend or supplement the Indenture in any other respect which is not materially adverse to the Owners of the Bonds.

Amendments with Bondholders’ Consent. The Indenture may be amended from time to time, except with respect to (a) the principal or interest payable upon any of the Bonds, (b) the Interest Payment Dates, the dates of maturity or the redemption provisions of any of the Bonds (except as otherwise provided in the Indenture), and (c) the provisions relating to amendments of the Indenture and the Loan Agreement, by a supplemental indenture consented to by the School (provided the School is not then in default under the Loan Agreement) and approved by the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding which would be affected by the action proposed to be taken. The Indenture may be amended with respect to the matters enumerated in clauses (a) through (c) above with the unanimous consent of all Owners and the School (provided the School is not then in default under the Loan Agreement).

Defeasance

The Indenture provides that when the principal or redemption price (as the case may be) of, and interest on, the Bonds have been paid, or provision has been made for their payment, together with the compensation of the Trustee and all other sums payable by the Authority, the right, title and interest of the Trustee shall cease and the Trustee, on demand of the Authority, will release the lien of the Indenture. If payment or provision for payment is made for less than all of the Bonds, the particular Bonds (or portion thereof) to be deemed paid shall be selected by lot by the Trustee, and the Trustee shall release the Indenture with respect to such Bonds.

Any Bond shall be deemed to be paid within the meaning of the Indenture when the Trustee holds in the Bond Fund, in trust and irrevocably set aside exclusively for such payment

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(i) moneys sufficient to make such payment and/or (ii) non-callable Government Obligations maturing as to principal and interest in such amounts and at such times as will provide sufficient moneys (without consideration of any reinvestment of such moneys) to make such payment in accordance with the Indenture. The Trustee and the Authority must also receive an opinion of Bond Counsel to the effect that (x) such deposit will not adversely affect the exclusion from gross income of the interest on any of the Bonds or cause any of the Bonds to be classified as “arbitrage bonds” within the meaning of Section 148 of the Code and (y) upon the making of such deposit, provision for payment of the Bonds will be deemed to have been made in accordance with the provisions of the Indenture described under this heading.

Concurrently with any deposit described in the preceding paragraph, the Trustee and the Authority must receive a certificate from a firm of independent public accountants or other experts in escrow fund cash flow verification to the effect that the amounts deposited with the Trustee are sufficient (without reinvestment) to make all payments that may become due on the Bonds. Notwithstanding the foregoing, no delivery to the Trustee under this subsection (b) shall be deemed a payment of any Bonds which are to be redeemed prior to their stated maturity until such Bonds shall have been irrevocably called or designated for redemption on a date thereafter on which such Bonds may be redeemed in accordance with the provisions of the Indenture and prior notice of such redemption shall have been given in accordance with the Indenture or the Authority shall have given the Trustee, in form satisfactory to the Trustee, irrevocable instructions to give, in the manner and at the times prescribed by the Indenture, notice of redemption. Neither the obligations nor moneys deposited with the Trustee pursuant to the provisions described under this heading shall be withdrawn or used for any purpose other than, and shall be segregated and held in trust for, the payment of the principal of and interest on the Bonds with respect to which such deposit has been made. In the event that such moneys or obligations are to be applied to the payment of principal of any Bonds more than 60 days following the deposit thereof with the Trustee, the Trustee shall deliver to the registered owners of the Bonds a notice stating that such moneys or obligations have been deposited and identifying the Bonds for the payment of which such moneys or obligations are being held.

Anything in the Indenture to the contrary notwithstanding, if moneys or Government Obligations have been deposited or set aside with the Trustee pursuant to the provisions described under this heading for the payment of the principal of the Bonds and the interest thereon and the principal of such Bond and the interest thereon shall not have in fact been actually paid in full, no amendment to the provisions described under this heading shall be made without the consent of the owner of each of the Bonds affected thereby.

Notwithstanding the foregoing, those provisions relating to the maturity of Bonds, interest payments and dates thereof, if any, and the Trustee’s remedies with respect thereto, and provisions relating to exchange, transfer and registration of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, the holding of moneys in trust, and the duties of the Trustee in connection with all of the foregoing and the fees, expenses and indemnities of the Trustee, shall remain in effect and shall be binding upon the Trustee, the Authority, the School and the Bondholders notwithstanding the release and discharge of the lien of the Indenture.

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APPENDIX D

PROPOSED FORM OF OPINION OF BOND COUNSEL

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[PROPOSED FORM OF OPINION OF BOND COUNSEL]

Re: $______Montgomery County Industrial Development Authority Revenue Bonds, Series 2019 (The Haverford School Project)

Ladies and Gentlemen:

We have acted as Bond Counsel to the Montgomery County Industrial Development Authority (the “Issuer”) in connection with the issuance of $______aggregate principal amount of its Revenue Bonds, Series 2019 (The Haverford School Project) (the “Bonds”). The Bonds are issued under and pursuant to the provisions of the Pennsylvania Economic Development Financing Law, Act of August 23, 1967, P.L. 251, as amended (the “Act”) and a Trust Indenture dated as of August 1, 2019 (the “Indenture”) between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”).

The Bonds are being issued to provide funds to be loaned to The Haverford School (the “School”) to finance certain costs of a project (the “Project”) consisting of: (i) the current refunding of the Issuer’s Revenue Refunding Bonds, Series of 2010 (The Haverford School Project) (the “2010 Bonds”), the proceeds of which were used to currently refund tax- exempt bonds issued to finance or refinance the cost of the construction, renovation, furnishing and equipping of various educational facilities on the School’s campus; (ii) the payment of (or reimbursement to the School for) a portion of the costs of construction of a new middle school building or other capital expenditures on the School’s campus; and (iii) the payment of certain costs of issuing the Bonds.

The Issuer and the School have entered into a Loan Agreement dated as of August 1, 2019 (the “Loan Agreement”) providing for the loan of the proceeds of the Bonds to the School to pay certain costs of the Project. Under the Loan Agreement the School is unconditionally obligated to make loan payments in the amounts and at the times necessary to pay, when due, the principal or redemption price of and interest on the Bonds. The Issuer has assigned certain of its interests under the Loan Agreement, including its right to receive payments thereunder in respect of the Bonds, to the Trustee for the benefit of the holders of the Bonds.

The School has represented in the Loan Agreement that it is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), is not a “private foundation” within the meaning of Section 509(a) of the Code, and is exempt from federal income tax under Section 501(a) of the Code. The School has covenanted that it will take whatever actions are necessary to continue to be organized and operated in a manner which will preserve and maintain its status as an organization which is described in

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Section 501(c)(3) of the Code and exempt from federal income taxes under Section 501(a) of the Code (except as to unrelated business income).

The Code sets forth certain requirements which must be met subsequent to the issuance and delivery of the Bonds for interest thereon to remain excludable from the gross income of the owners of the Bonds for federal income tax purposes. The Issuer and the School have covenanted to comply with such requirements. Noncompliance with such requirements may cause the interest on the Bonds to be includible in the gross income of the owners of the Bonds for federal income tax purposes, retroactive to the date of issue of the Bonds or as of some later date. Under the Loan Agreement, the School has covenanted that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on the Bonds under Section 103(a) of the Code. For the purposes of the opinions set forth below, we have assumed that the Issuer and the School will comply with the covenants set forth in the Loan Agreement relating to the tax-exempt status of the Bonds.

An officer of the Issuer responsible for issuing the Bonds and an authorized officer of the School have each executed a certificate stating the reasonable expectations of the Issuer and the School on the date of issue of the Bonds as to future events that are material for the purposes of Section 148 of the Code pertaining to arbitrage bonds. Also, the Issuer has caused or will cause to be filed with the Internal Revenue Service a report of the issuance of the Bonds as required by Section 149(e) of the Code as a condition of the exclusion from gross income of the interest on the Bonds.

In our capacity as Bond Counsel, we have examined such documents, records of the Issuer and other instruments as we deemed necessary to enable us to express the opinions set forth below, including original counterparts or certified copies of the Indenture, the Loan Agreement and the other documents listed in the Closing Memorandum in respect of the Bonds filed with the Trustee. We also have examined an executed Bond and assume that all other Bonds have been similarly executed and have been authenticated by the Trustee.

Based on the foregoing, it is our opinion that:

1. The Issuer is a body corporate and politic validly existing under the laws of the Commonwealth of Pennsylvania, with full power and authority under the Act to undertake the financing of the Project, to execute, deliver and perform its obligations under the Indenture and the Loan Agreement, and to issue and sell the Bonds.

2. The Indenture and the Loan Agreement have been duly authorized, executed and delivered by the Issuer and, assuming due authorization, execution and delivery by the other parties thereto, constitute legal, valid and binding obligations of the Issuer enforceable in accordance with their respective terms, except as the rights created thereunder and the enforcement thereof may be limited by bankruptcy, insolvency or other laws or equitable principles affecting the enforcement of creditors’ rights generally.

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3. The issuance and sale of the Bonds have been duly authorized by the Issuer and, on the assumption as to execution and authentication stated above, such Bonds have been duly executed and delivered by the Issuer and authenticated by the Trustee, and are legal, valid and binding limited obligations of the Issuer entitled to the benefit and security of the Indenture, except as the rights created thereunder and enforcement thereof may be limited by bankruptcy, insolvency or other laws or equitable principles affecting the enforcement of creditors’ rights generally.

4. Under the laws of the Commonwealth of Pennsylvania as presently enacted and construed, the Bonds are exempt from personal property taxes in Pennsylvania, and interest on the Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax.

5. Assuming the accuracy of the certifications of the Issuer and the School and their continuing compliance with the requirements of the Code, interest on the Bonds is excludable from gross income for purposes of federal income taxation under existing laws as enacted and construed on the date hereof. Interest on the Bonds is exempt from individual federal alternative minimum tax. We express no opinion regarding other federal tax consequences relating to ownership or disposition of, or the accrual or receipt of interest on, the Bonds.

We have not been engaged to express and do not express any opinion herein with respect to the adequacy of the security for the Bonds or the sources of payment for the Bonds or with respect to the accuracy or completeness of any offering document or other information pertaining to the offering for sale of the Bonds or as to any other matter not set forth herein.

We call your attention to the fact that the Bonds are limited obligations of the Issuer payable only out of payments to be made by the School pursuant to the Loan Agreement and certain other moneys available therefor, and that the Bonds do not pledge the credit or taxing power of the County of Montgomery, the Commonwealth of Pennsylvania or any political subdivision thereof. The Issuer has no taxing power.

Very truly yours,

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APPENDIX E

PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT

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______

CONTINUING DISCLOSURE AGREEMENT ______

Between

THE HAVERFORD SCHOOL

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Dissemination Agent

$[_____] Montgomery County Industrial Development Authority Revenue Bonds, Series 2019 (The Haverford School Project)

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CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement (as amended, modified or supplemented from time to time, this “Disclosure Agreement”) dated August __, 2019, between THE HAVERFORD SCHOOL (together with its permitted successors and assigns, the “School”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as dissemination agent (together with any successor dissemination agent for the Bonds described below and their respective successors and assigns, the “Dissemination Agent”);

WITNESSETH:

WHEREAS, pursuant to a Bond Purchase Agreement, dated August ___, 2019, among the Montgomery County Industrial Development Authority (the “Authority”), the School and PNC Capital Markets LLC, the Authority is issuing $[______] of its Revenue Bonds, Series 2019 (The Haverford School Project) (the “Bonds”) for the benefit of the School; and

WHEREAS, the Bonds are being issued pursuant to a Trust Indenture, dated as of August 1, 2019 (as amended, modified or supplemented from time to time, the “Indenture”), between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (in such capacity, and together with any successor trustee for the Bonds and their respective successors and assigns the “Trustee”) and the proceeds of the Bonds are being loaned to the School by the Authority pursuant to a Loan Agreement, dated as of August 1, 2019 (as amended, modified or supplemented from time to time, the “Loan Agreement”) between the Authority and the School; and

WHEREAS, Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934, as amended (the “Rule”), provides that a Participating Underwriter (as defined in the Rule) shall not purchase or sell municipal securities in connection with an Offering (as defined in the Rule) unless the Participating Underwriter has reasonably determined that an issuer of municipal securities or an obligated person for whom financial or operating data is presented in the final official statement has undertaken, either individually or in combination with other issuers of such municipal securities or obligated persons, in a written agreement or contract for the benefit of holders of such securities, to provide, either directly or indirectly through an indenture trustee or a designated agent, certain specified financial information and operating data and notices of certain listed events; and

WHEREAS, the School is the only Obligated Person (as defined in the Rule) with respect to the Bonds for purposes of the Rule; and

WHEREAS, in order to induce the Participating Underwriter to purchase the Bonds, the School desires to undertake to provide the information and notices required by the Rule.

NOW, THEREFORE, in consideration of the foregoing, of the issuance of the Bonds, and of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the School and the Dissemination Agent, each intending to be legally bound for itself, its successors and assigns, agree as follows:

SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the School for the benefit of the Bondholders of the Bonds and in order to assist the Participating Underwriter in complying with the Rule.

SECTION 2. Definitions. In addition to the definitions set forth in the Indenture and in the above recitals, which apply to any capitalized terms used in this Disclosure Agreement unless otherwise defined in this Section, capitalized terms shall have the following meanings:

“Annual Financial Information” shall mean the annual financial report, and other financial information provided by the School pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.

“Beneficial Owner” shall mean any Person which: (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including Persons holding Bonds through nominees, depositories or other intermediaries); or (b) is treated as the owner of any Bonds for federal income tax purposes.

“Bondholder” shall mean any Person who is the registered owner of any Bond and any Beneficial Owner, irrespective of whether such Person is the Registered Owner.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which banks in New York, New York or the Designated Office (as defined in the Indenture) of the Trustee or Payment Office (as defined in the Indenture) of the Trustee are required or permitted by law or executive order to close or the New York Stock Exchange is closed.

“Commonwealth” shall mean the Commonwealth of Pennsylvania.

“Disclosure Representative” shall mean the Chief Financial Officer of the School, or his or her designee, or such other person as the School shall designate in writing to the Dissemination Agent.

“EMMA” is the Electronic Municipal Market Access System maintained by the MSRB at http://emma.msrb.org/ or such other address as may be designated by the MSRB, which serves as the sole nationally recognized municipal securities information repository under the Rule.

“Event of Bankruptcy” means the appointment of a receiver, fiscal agent or similar officer for the School in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the School, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the School.

“Financial Obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) a guarantee of (i) or (ii). The term Financial Obligation shall not include

2 municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.

“Indemnitees” shall have the meaning set forth in Section 11(c) of this Disclosure Agreement.

“Listed Event” shall mean any of the events listed in Section 5(a) of this Disclosure Agreement.

“Losses” shall have the meaning set forth in Section 11(c) of this Disclosure Agreement.

“MSRB” shall mean the Municipal Securities Rulemaking Board.

“Rule” shall mean Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time.

“SEC” means the Securities and Exchange Commission.

SECTION 3. Provision of Annual Financial Information.

(a) The School shall, or shall cause the Dissemination Agent to, not later than the January 15th of each year immediately following the end of each of the School’s fiscal years, commencing with the report for the fiscal year ending June 30, 2019, provide to the MSRB via EMMA the Annual Financial Information which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Financial Information may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement; provided, that the audited financial statements of the School may be submitted separately from the balance of the Annual Financial Information and later than the date required above for the filing of the Annual Financial Information if they are not available by that date. If the School’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b).

(b) Not later than five (5) days prior to the date specified in subsection (a) for providing the Annual Financial Information to the MSRB via EMMA, the School shall provide the Annual Financial Information to the Dissemination Agent. If by such date the Dissemination Agent has not received a copy of the Annual Financial Information, the Dissemination Agent shall contact the School to determine if the School is in compliance with the first sentence of subsection (a).

(c) If the Dissemination Agent is unable to verify that the Annual Financial Information has been provided to the MSRB via EMMA by the date required in subsection (a), the Dissemination Agent shall send a notice to the MSRB, which notice shall be in substantially the form of Exhibit A attached hereto and incorporated herein by this reference.

(d) The Dissemination Agent shall, if the Dissemination Agent files the Annual Financial Information with the MSRB via EMMA pursuant to this Section 3, file a report with the School, the Authority and (if the Trustee is not the Dissemination Agent) the Trustee certifying that the Annual Financial Information has been provided pursuant to this Disclosure

3 Agreement, stating the date it was provided and including any acknowledgement, confirmation or receipt received from the MSRB.

SECTION 4. Content of Annual Financial Information. The School’s Annual Financial Information shall contain or include by reference the following:

(a) The audited financial statements of the School for the prior fiscal year, prepared in accordance with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards (GAAS). If the School’s audited financial statements are not available by the time the Annual Financial Information is required to be filed pursuant to Section 3(a), the Annual Financial Information shall contain unaudited financial statements and the audited financial statements shall be filed in the same manner as the Annual Financial Information when they become available.

(b) To the extent not included in the financial statements delivered pursuant to (a) above, an update of the financial and operating information set forth in the following subsections of “Appendix A – CERTAIN INFORMATION CONCERNING THE HAVERFORD SCHOOL” to the Official Statement dated August ____, 2019 prepared in connection with the initial offering of the Bonds: (i) both of the tables under the caption “Applications, Acceptances and Enrollments,” (ii) the first table under the caption “Tuition Rates,” (iii) the table under the caption “Annual Giving,” (iv) the table under the caption “Endowment and Similar Funds”, (v) the table under the caption “Historical Endowment Returns”, (vi) the table under the caption “Endowment Spending”, and (vii) the table under the caption “Costs and Financial Aid.”

SECTION 5. Reportable Events.

(a) The School agrees that it shall provide, or cause the Dissemination Agent to provide, in a timely manner, not in excess of ten (10) Business Days after the occurrence of the event, to the MSRB via EMMA, notice of any of the following Listed Events with respect to the Bonds (with the exception of the Listed Event described in number (xvii) below, which shall be given in a timely manner):

(i) principal and interest payment delinquencies;

(ii) non-payment related defaults, if material;

(iii) unscheduled draws on debt service reserves reflecting financial difficulties:

(iv) unscheduled draws on credit enhancements reflecting financial difficulties;

(v) substitution of credit or liquidity providers, or their failure to perform;

(vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form

4 5701 TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds;

(vii) modifications to rights of the holders of the Bonds, if material;

(viii) Bond calls, if material, and tender offers;

(ix) defeasances;

(x) release, substitution, or sale of property securing repayment of the Bonds, if material;

(xi) ratings changes;

(xii) an Event of Bankruptcy or similar event of the School;

(xiii) the consummation of a merger, consolidation, or acquisition involving the School or the sale of all or substantially all of the assets of the School, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;

(xiv) appointment of a successor or additional trustee or the change of name of a trustee, if material;

(xv) incurrence of a Financial Obligation of the School, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the School, any of which affect holders of the Bonds, if material;

(xvi) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the School, any of which reflect financial difficulties; and

(xvii) notice of any failure on the part of the School to meet the requirements of Section 5 hereof.

(b) Whenever the School concludes that a Listed Event has occurred, the Disclosure Representative shall promptly (i) notify the Dissemination Agent in writing of such occurrence, specifying the Listed Event, (ii) provide the Dissemination Agent with a copy of a Listed Event notice meeting the requirements of the Rule, and (iii) instruct the Dissemination Agent to file such Listed Event notice with the MSRB via EMMA. Upon receipt, the Dissemination Agent shall promptly file the Listed Event notice provided by the School with the MSRB via EMMA.

(c) Notwithstanding the foregoing, the Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of a Listed Event, notify the Disclosure Representative of the occurrence of such Listed Event, and (ii) within three (3) Business Days of

5 giving notice to the Disclosure Representative, file notice of such Listed Event with the MSRB via EMMA, unless the Disclosure Representative gives the Dissemination Agent written instructions not to file such notice because the Listed Event has not occurred.

(d) The Dissemination Agent shall deliver to the School no later than three (3) Business Days following the date of filing of each Listed Event notice by the Dissemination Agent confirmation of receipt of the notice by the MSRB, including any acknowledgement, confirmation or receipt received from the MSRB. The Dissemination Agent shall file a copy of each Listed Event notice of filed with the MSRB hereunder with the Authority for informational purposes only.

(e) The obligations of the School or the Dissemination Agent under this Disclosure Agreement to provide notice of Listed Events are in addition to, and not in substitution of, any obligations of the Trustee to provide notices of Events of Default to Bondholders under the terms of the Indenture. Nothing in this Disclosure Agreement, however, is intended to modify or limit the rights of the Trustee under the Indenture to provide notices or other information as it deems necessary in the performance of its duties thereunder.

SECTION 6. Termination of Reporting Obligation. The School’s obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds.

SECTION 7. Dissemination Agent.

(a) The School may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. In the event the Dissemination Agent is replaced or discharged, the School shall provide written notice of such event to the Authority and the Participating Underwriter. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the School pursuant to this Disclosure Agreement. The initial Dissemination Agent shall be The Bank of New York Mellon Trust Company, N.A..

(b) The Dissemination Agent may resign and be discharged from its duties or obligations hereunder by giving notice in writing of such resignation specifying a date when such resignation shall take effect. Any corporation or association into which the Dissemination Agent in its individual capacity may be merged or converted or with which it may be consolidated, or any corporation or association resulting from any merger, conversion or consolidation to which the Dissemination Agent in its individual capacity shall be a party, or any corporation or association to which all or substantially all the corporate trust business of the Dissemination Agent in its individual capacity may be sold or otherwise transferred, shall be the Dissemination Agent under this Disclosure Agreement without further act.

SECTION 8. Amendment; Waiver.

(a) Notwithstanding any other provision of this Disclosure Agreement, the School and the Dissemination Agent may amend this Disclosure Agreement (and the Dissemination Agent shall agree to any amendment so requested by the School if it does not

6 adversely affect the Dissemination Agent’s duties, rights and indemnifications hereunder), and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied:

(i) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an Obligated Person with respect to the Bonds, or the type of business conducted;

(ii) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(iii) The amendment or waiver either: (i) is approved by the Bondholders in the same manner as provided in the Indenture for amendments to the Indenture with the consent of the Registered Owners; or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Bondholders.

(b) The Dissemination Agent shall be entitled to receive a favorable opinion of nationally recognized bond counsel before being required to execute any proposed amendment or to accept any waiver.

(c) In the event of any amendment or waiver of a provision of this Disclosure Agreement, the School shall describe such amendment or waiver in the next Annual Financial Information, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information presented by the School.

SECTION 9. Additional Information; Format of Filings.

(a) Nothing in this Disclosure Agreement shall be deemed to prevent the School from disseminating any other information with respect to the School or the Bonds, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Financial Information or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the School provides additional information that is not specifically required by this Disclosure Agreement, the School shall have no obligation under this Disclosure Agreement to update such additional information or include it in any future Annual Financial Information or notice of occurrence of a Listed Event.

(b) All documents provided to the MSRB pursuant to the terms of this Disclosure Agreement shall be accompanied by identifying information as prescribed by the MSRB, and shall be made in electronic format or in any other format which meets any applicable requirements or guidelines of the SEC and of the MSRB. Unless otherwise prescribed by the MSRB, such submission to the MSRB shall be made via EMMA.

7 SECTION 10. Default. In the event of a failure of the School to comply with any provision of this Disclosure Agreement, the Dissemination Agent may (and, at the request of any Participating Underwriter or Bondholders owning at least 25% aggregate principal amount of Outstanding Bonds and the provision of indemnity satisfactory to the Dissemination Agent in its sole discretion, shall) or any Bondholder may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the School to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture or the Loan Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the School to comply with this Disclosure Agreement shall be an action to compel performance.

SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent.

(a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Dissemination Agent undertakes to perform only such duties as are expressly set forth herein. The duties and responsibilities of the Dissemination Agent hereunder shall be determined solely by the express provisions of this Disclosure Agreement, and no further duties or responsibilities shall be implied. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. The Dissemination Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document.

(b) The Dissemination Agent shall not be liable for any action taken or omitted by it in good faith unless a court of competent jurisdiction determines that the Dissemination Agent’s negligent or willful misconduct was the primary cause of any loss to the School. The Dissemination Agent shall not incur any liability for following the instructions herein contained or expressly provided for, or written instructions given by the parties hereto. In the administration of the Disclosure Agreement, the Dissemination Agent may execute any of its powers and perform its duties hereunder directly or through agents or attorneys and may consult with counsel to be selected and retained by it.

(c) The School agrees to indemnify and hold the Dissemination Agent, its officers, directors, employees and agents (collectively, the “Indemnitees”) harmless from and against any and all claims, liabilities, losses, damages, fines, penalties, and expenses, including out-of-pocket, incidental expenses, legal fees and expenses, the allocated costs and expenses of in-house counsel and legal staff and the costs and expenses of defending or preparing to defend against any claim (“Losses”) that may be imposed on, incurred by, or asserted against, the Indemnitees or any of them for following any instruction or other direction upon which the Dissemination Agent is authorized to rely pursuant to the terms of this Disclosure Agreement. In addition to and not in limitation of the immediately preceding sentence, the School covenants and agrees to indemnify and hold the Indemnitees and each of them harmless from and against any and all Losses that may be imposed on, incurred by, or asserted against the Indemnitees or any of them in connection with or arising out of (i) the Dissemination Agent’s performance under this Agreement, provided the Dissemination Agent has not acted with gross negligence or engaged in willful misconduct, (ii) any breach by the School of this Disclosure Agreement, or (iii) the Annual Financial Information or any notice given under Section 5 hereof. The provisions

8 of this Section 11 shall survive the termination of this Disclosure Agreement and the resignation or removal of the Dissemination Agent for any reason. Anything in this Disclosure Agreement to the contrary notwithstanding, in no event shall the Dissemination Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Dissemination Agent has been advised of such loss or damage and regardless of the form of action.

SECTION 12. No Recourse to the Authority; Indemnification. No recourse shall be had for the performance of any obligation, agreement or covenant of the School or the Dissemination Agent under this Disclosure Agreement against the Authority or against any member, director, official, employee, counsel, consultant and agent of the Authority or any person executing the Bonds. The Authority shall have no responsibility or liability for the School’s filing obligations under this Disclosure Agreement or for the contents of such filings. The School agrees to indemnify and save harmless the Authority and its members, officers, employees and agents against and from any claims, loss, expense (including reasonable attorney’s fees) or liability arising from or based upon (i) any breach by the School of this Disclosure Agreement or (ii) any Annual Financial Information or notices provided under this Disclosure Agreement or any omissions therefrom.

SECTION 13. Notices. Any notices or communications to or between any of the parties to this Disclosure Agreement may be given as follows:

To the Authority: Montgomery County Industrial Development Authority 1430 Dekalb Street Norristown, Pennsylvania 19404 Attention: Executive Director

To the School: The Haverford School 450 Lancaster Avenue Haverford, Pennsylvania 19041 Attention: Chief Financial Officer/Treasurer

To the Dissemination Agent: The Bank of New York Mellon Trust Company, N.A. 1735 Market Street, 9th Floor Philadelphia, Pennsylvania 19103 Attention: Client Service Manager

SECTION 14. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the School, the Dissemination Agent, the Participating Underwriter and the Holders from time to time of the Bonds, and shall create no rights in any other Person or entity.

SECTION 15. Counterparts; Electronic Signatures. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. To the fullest extent permitted by applicable law,

9 facsimile or electronically transmitted signatures shall constitute original signatures for all purposes under this Disclosure Agreement.

SECTION 16. Severability. If any provision in this Disclosure Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 17. Governing Law. This Disclosure Agreement shall be governed by and construed in accordance with the laws of the Commonwealth without regard to conflict of laws principles.

SECTION 18. Controlling Law. The laws of the Commonwealth shall govern the construction and interpretation of this Disclosure Agreement.

SECTION 19. Successors and Assigns. All of the covenants, promises and agreements contained in this Disclosure Agreement by or on behalf of the School or by or on behalf of the Dissemination Agent shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not.

SECTION 20. Headings for Convenience Only. The descriptive headings in this Disclosure Agreement are inserted for convenience of reference only and shall not control or affect the meaning or construction of any of the provisions hereof

SECTION 21. Entire Agreement. This Disclosure Agreement sets forth the entire understanding and agreement of the School and the Dissemination Agent with respect to the matters herein contemplated and no modification or amendment of or supplement to this Disclosure Agreement shall be valid or effective unless the same is in writing and executed by the parties hereto.

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IN WITNESS WHEREOF, the undersigned have duly authorized, executed and delivered this Disclosure Agreement as of the date first above written.

THE HAVERFORD SCHOOL

By: Name: George B. Lemmon, Jr. Title: Treasurer

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Dissemination Agent

By: Name: Title:

EXHIBIT A

NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT

Name of Bond Issue: $[_____] original aggregate principal amount Montgomery County Industrial Development Authority Revenue Bonds, Series 2019 (The Haverford School Project)

Date of Issuance: August [__], 2019

NOTICE IS HEREBY GIVEN that The Haverford School (the “School”) has not provided the Annual Financial Information with respect to the above-named Bonds as required by Section 3(a) of the Continuing Disclosure Agreement, dated August [___], 2019. The School anticipates that the Annual Financial Information will be filed by ______.

Dated: ______, ____

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Dissemination Agent

By: Name: Title:

cc: The Haverford School

A-1