Kent County Regional Sports Complex Project) Series 2016

New Issue —Book-Entry Only RATING: Sec “Rating” herein

In the opinion of Bond Counsel, interest on the 2016 Bonds is excludable from gross income for purposes of federal income tax, assuming continuing compliance with the requirements of the federal tax laws. Interest on the 2016 Bonds is not a preference item for purposes of either individual or corporate federal alternative minimum tax; however, interest paid to corporate holders of the 2016 Bonds may be indirectly subject to alternative minimum tax under circumstances described under “TAX MATTERS” herein. Bond Counsel is of the further opinion that, under existing law, so long as the interest on the 2016 Bonds remains excludable from gross income for federal income tax purposes, it will also be excluded from taxable income for the purposes of personal and corporate income taxes imposed by the State of Delaware; provided, however, no opinion will be expressed regarding franchise tax. See “TAX MATTERS” herein.

$20,760,000 KENT COUNTY, DELAWARE REVENUE BONDS (KENT COUNTY REGIONAL SPORTS COMPLEX PROJECT) SERIES 2016

Dated: Date of Delivery. Due: October 1, as shown on inside front cover

Kent County (the “Issuer”), pursuant to Chapter 41, Title 9, of the Delaware Code, as amended, Ordinance No. 86-5, enacted by Kent County Levy Court (“Levy Court”), the governing body of the Issuer, on October 21, 1986, as amended (the “General Ordinance”), and Ordinance No. 15-12 enacted by Levy Court on November 24, 2015, as amended and restated by Ordinance No. 16-08, enacted by Levy Court on May 24, 2016 (the “Project Ordinance”), is issuing its Revenue Bonds (Kent County Regional Sports Complex Project), Series 2016 in the aggregate principal amount of $20,760,000 (the “2016 Bonds”) pursuant to a Trust Indenture, dated as of June 1, 2016 (the “Indenture”), between the Issuer and Wilmington Trust, National Association, Wilmington, Delaware, as trustee (the “Trustee”). The proceeds of the 2016 Bonds will be loaned to Kent County Regional Sports Complex Corporation, a Delaware nonstock corporation (the “Borrower”), pursuant to a Loan and Security Agreement, dated as of June 1, 2016 (the “Loan Agreement”) and used for the following purposes: (i) to finance the design, construction and improvement of various turf fields and facilities relating to a regional sports complex known as DE Turf Sports Complex (the “Sports Complex”), (ii) to fund certain reserve funds, (iii) to pay capitalized interest and (iv) to pay costs of issuance of the 2016 Bonds (collectively, the “Project”).

The 2016 Bonds will be issued as registered bonds in book-entry only form in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York, which will act as securities depository for the 2016 Bonds. Purchases of beneficial interests in the 2016 Bonds will be made in book-entry only form and purchasers will not receive physical certificates representing the ownership interest in the 2016 Bonds purchased by them. See “DESCRIPTION OF THE 2016 BONDS —Book-Entry-Only System.”

Interest on the 2016 Bonds will accrue from the date of delivery and will be payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2016. The 2016 Bonds will mature on October 1 in the years and amounts as shown on the inside front cover of this Official Statement. The 2016 Bonds will be issued in authorized denominations of $5,000 or any integral multiple in excess thereof. The 2016 Bonds are subject to redemption as described herein. See “DESCRIPTION OF THE 2016 BONDS — Redemption of 2016 Bonds Prior to Maturity.”

The 2016 Bonds will be secured by the pledge of (i) the rights and interests of the Issuer under the Loan Agreement, except for the Issuer’s Unassigned Rights, (ii) all rights and interests of the Issuer in the Project, subject to Permitted Encumbrances and the Issuer’s Unassigned Rights, (iii) the Pledged Revenues and all rights and interests of the Issuer in the Pledged Revenues, subject to Permitted Encumbrances and the Issuer’s Unassigned Rights, (iv) the rights and interests of the Issuer and the Borrower under the Leasehold Mortgage and Security Agreement dated as of June 1, 2016 (the “Leasehold Mortgage”) and the Promissory Note issued by the Borrower pursuant to the Loan Agreement, (v) all Funds created under the Indenture (other than the Rebate Fund), subject to the terms thereof, and (vi) certain amounts payable by the Issuer pursuant to the terms of the Indenture. See “SECURITY AND SOURCES OF PAYMENTS FOR THE 2016 BONDS.”

In the event the Trustee does not receive the full payment required into the Bond Principal Fund and the Bond Interest Fund by the Disbursement Date that immediately precedes the date that is ninety (90) days prior to the next succeeding Interest Payment Date or Principal Payment Date, as applicable, from either the Borrower or from the Debt Service Reserve Fund, the County Administrator shall ask the Levy Court to make a loan equal to the amount of any deficiency in the Bond Principal Fund and the Bond Interest Fund (the “Levy Court Loan”). The County Administrator shall request the Levy Court to vote on any request for a Levy Court Loan as soon as possible after receiving notice from the Trustee regarding a shortfall, and in the Project Ordinance, the Levy Court has agreed to hold such a vote within sixty (60) days of receiving notice from the Trustee. Payments due on any Levy Court Loan will be subordinate to debt service on the 2016 Bonds. See “SECURITY AND SOURCES OF PAYMENTS FOR THE 2016 BONDS – Indenture – Levy Court Loan” and “RISK FACTORS – Nature of Limited Obligations” herein.

In addition, the Issuer has made a grant to the Borrower in an amount not to exceed $1,400,000 to be held in a separate escrow account but not part of the Trust Estate. The grant has been appropriated and funded but shall only be applied in certain circumstances. See “SECURITY AND SOURCES OF PAYMENTS FOR THE 2016 BONDS – Indenture – Issuer Grant” herein.

THE 2016 BONDS, AND THE INTEREST THEREON ARE SPECIAL LIMITED OBLIGATIONS OF THE ISSUER PAYABLE EXCLUSIVELY FROM REVENUES AND RECEIPTS UNDER THE LOAN AGREEMENT, AMOUNTS HELD UNDER THE INDENTURE AND OTHER AMOUNTS PAYABLE BY THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE. THE 2016 BONDS DO NOT CONSTITUTE A DEBT OR A LOAN OF CREDIT OR A PLEDGE OF THE FULL FAITH AND CREDIT OR TAXING POWER OF THE ISSUER, OR THE STATE OF DELAWARE, OR OF ANY POLITICAL SUBDIVISION THEREOF, WITHIN THE MEANING OF ANY STATE CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION AND SHALL NEVER CONSTITUTE NOR GIVE RISE TO A PECUNIARY LIABILITY OF THE ISSUER, OR THE STATE OF DELAWARE. THE 2016 BONDS SHALL NOT CONSTITUTE, DIRECTLY OR INDIRECTLY, OR CONTINGENTLY OBLIGATE OR OTHERWISE CONSTITUTE A GENERAL OBLIGATION OF OR A CHARGE AGAINST THE GENERAL CREDIT OR THE TAXING POWER OF THE ISSUER, OR THE STATE OF DELAWARE BUT SHALL BE SPECIAL LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY FROM THE SOURCES DESCRIBED IN THE INDENTURE, BUT NOT OTHERWISE.

THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. PURCHASE OF THE 2016 BONDS INVOLVES A CERTAIN DEGREE OF RISK. INVESTORS MUST READ THIS ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION, AND SHOULD GIVE PARTICULAR ATTENTION TO THE MATERIAL UNDER THE CAPTION “RISK FACTORS.”

The 2016 Bonds are offered when, as and if issued by the Issuer and received and accepted by the Underwriter and subject to the approval of legality by Ballard Spahr LLP, Wilmington, Delaware, Bond Counsel. Certain legal matters will be passed upon by Potter Anderson & Corroon LLP, Wilmington, Delaware as Borrower’s counsel, and by Saul Ewing LLP, Wilmington, Delaware as Underwriter’s counsel. It is expected that the 2016 Bonds in book-entry form will be available for delivery against payment therefor on or about June 30, 2016.

This Official Statement is dated June 22, 2016.

$20,760,000 KENT COUNTY, DELAWARE REVENUE BONDS (KENT COUNTY REGIONAL SPORTS COMPLEX PROJECT) SERIES 2016

Due Principal (October 1) Amount Interest Rate Price Yield CUSIP** 2020 $235,000 2.000% 101.844 1.550% 490229 AG6 2021 275,000 2.000 101.500 1.700 490229 AH4 2022 290,000 2.000 100.880 1.850 490229 AJ0 2023 310,000 1.800 98.654 2.000 490229 AK7 2024 325,000 2.000 98.869 2.150 490229 AL5 2025 345,000 2.200 99.169 2.300 490229 AM3 2026 365,000 2.250 98.194 2.450 490229 AN1

$2,195,000 3.500% Term Bonds due October 1, 2031; Price 103.933*; Yield 3.050%*; CUSIP** 490229 AP6 $2,925,000 3.125% Term Bonds due October 1, 2036; Price 98.152; Yield 3.250% ; CUSIP** 490229 AQ4 $9,455,000 5.125% Term Bonds due October 1, 2046; Price 116.233*; Yield 3.250%*; CUSIP** 490229 AR2 $4,040,000 3.250% Term Bonds due October 1, 2049; Price 96.058; Yield 3.450%; CUSIP** 490229 AS0

______

* Price/yield to the first optional call date of October 1, 2026.

** The above CUSIP (Committee on Uniform Securities Identification Procedures) numbers have been assigned by an organization not affiliated with the Issuer, the Borrower or the Underwriter, and such parties are not responsible for the selection or use of CUSIP numbers. The CUSIP numbers are included solely for the convenience of bondholders and no representation is made as to the correctness of such CUSIP numbers. CUSIP numbers assigned to securities may be changed during the term of such securities based upon a number of factors including, but not limited to, the refunding or defeasance of such issue or the use of secondary market financial products. None of the Issuer, the Borrower or the Underwriter have agreed to, and there is no duty or obligation to, update this Official Statement to reflect any change or correction in the CUSIP numbers set forth above.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS WHICH MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE 2016 BONDS. SUCH ACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

The Underwriter has provided the following sentence for inclusion in the Official Statement. The Underwriter has reviewed the information in this Official Statement pursuant to its responsibilities to investors under the federal securities laws, 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 Issuer, the Underwriter or the Borrower to give any information or to make any representations with respect to the 2016 Bonds, other than those 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 an offer to buy, and there shall not be a sale of the 2016 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the Issuer, the Borrower, The Depository Trust Company, and other sources that are believed to be reliable, but the Underwriter does not guarantee the accuracy or completeness of such information, and such information is not to be construed as a representation by the Underwriter. Except for the information concerning the Issuer, the information contained herein is not to be construed as a representation by the Issuer. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer or the Borrower, or in any other matter described herein, since the date hereof or the dates of the information contained herein.

The order and placement of materials in this Official Statement, including the Appendices, are not to be deemed a determination of relevance, materiality or importance, and this Official Statement, including the Appendices, must be considered in its entirety. The offering of the 2016 Bonds is made only by means of this entire Official Statement. This Official Statement is deemed “final” by the Issuer and the Borrower within the meaning of Rule 15c2-12(b) under the Securities Exchange Act of 1934.

THE 2016 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR HAS THE TRUST INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE 2016 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAWS OF THE STATES IN WHICH THE 2016 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN SUCH STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE 2016 BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT.

Certain statements included or incorporated by reference in this Official Statement constitute “forward- looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “project,” “plan,” “expect,” “estimate,” “anticipate,” “budget,” “intent” or other similar words. Such forward looking statements include, among others, certain statements under the sections in this Official Statement captioned “FEASIBILITY STUDY” and in EXHIBIT B to this Official Statement. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH 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 SUCH FORWARD-LOOKING STATEMENTS. INCLUDED IN SUCH RISKS AND UNCERTAINTIES ARE: (i) THOSE RELATING TO THE POSSIBLE INVALIDITY OF THE UNDERLYING ASSUMPTIONS AND ESTIMATES; (ii) POSSIBLE CHANGES OR DEVELOPMENTS IN SOCIAL, ECONOMIC, BUSINESS, INDUSTRY, MARKET, LEGAL AND REGULATORY CIRCUMSTANCES; AND (iii) CONDITIONS AND ACTIONS TAKEN OR OMITTED TO BE TAKEN BY THIRD PARTIES, INCLUDING CUSTOMERS, SUPPLIERS, BUSINESS PARTNERS AND COMPETITORS, AND LEGISLATIVE, JUDICIAL AND OTHER GOVERNMENTAL AUTHORITIES AND OFFICIALS. ASSUMPTIONS RELATED TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE, AND MARKET CONDITIONS AND FUTURE BUSINESS DECISIONS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY. FOR THESE REASONS, THERE CAN BE NO ASSURANCE THAT THE FORWARD- LOOKING STATEMENTS INCLUDED IN THIS OFFICIAL STATEMENT WILL PROVE TO BE ACCURATE. TABLE OF CONTENTS

Page No.

INTRODUCTION ...... 1 General ...... 1 Purpose of the 2016 Bonds ...... 1 Security for the 2016 Bonds ...... 1 ISSUER ...... 3 BORROWER ...... 3 THE PROJECT ...... 3 The Sports Complex ...... 3 The Contractor ...... 4 The Construction Contract ...... 4 Permits and Approvals ...... 4 PLAN OF FINANCE ...... 5 Sports Complex Budget ...... 5 Estimated Sources and Uses of Funds ...... 5 DEBT SERVICE REQUIREMENTS...... 6 DESCRIPTION OF THE 2016 BONDS ...... 7 General ...... 7 Redemption of 2016 Bonds Prior to Maturity ...... 7 Payment of Principal and Interest ...... 10 Transfers and Exchanges ...... 10 Book-Entry-Only System...... 10 SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS ...... 13 General ...... 13 Pledged Revenues ...... 13 Indenture ...... 13 Pledge by Borrower ...... 18 Limitations on Incurrence of Additional Indebtedness ...... 19 Financial Covenants ...... 19 Leasehold Mortgage...... 20 FEASIBILITY STUDY ...... 20 CSL International LLC ...... 20 CSL Feasibility Study ...... 20 ESTIMATED NET OPERATING INCOME AND DEBT SERVICE COVERAGE ...... 21 RISK FACTORS ...... 22 Sufficiency of Pledged Revenues ...... 22 Nature of Limited Obligations ...... 22 Competition...... 22 Economic and Other Factors ...... 23 No Operating History; Reliance on Projections ...... 23 CSL Feasibility Study ...... 23 Construction of the Sports Complex ...... 23 Construction of the Interchange ...... 23

Limited Remedies Available under the Indenture, Leasehold Mortgage and Ground Lease ...... 24 Potential Effects of Bankruptcy ...... 24 Security Interest in Pledged Revenues and Facility ...... 24 Tax-Exempt Status ...... 24 Other Possible Risk Factors ...... 25 TAX MATTERS ...... 25 Federal Tax Matters ...... 25 State of Delaware Tax Matters ...... 26 Changes in Federal and State Tax Law ...... 26 UNDERWRITING ...... 26 LEGAL MATTERS ...... 27 LITIGATION ...... 27 CONTINUING DISCLOSURE ...... 27 RATING ...... 28 CERTAIN RELATIONSHIPS ...... 28 MISCELLANEOUS ...... 28

EXHIBIT A – CERTAIN INFORMATION REGARDING THE BORROWER EXHIBIT B – FEASIBILITY STUDY EXHIBIT C – FORMS OF TRUST INDENTURE, LOAN AND SECURITY AGREEMENT AND LEASEHOLD MORTGAGE AND SECURITY AGREEMENT EXHIBIT D – FORM OF OPINION OF BOND COUNSEL EXHIBIT E – FORM OF CONTINUING DISCLOSURE AGREEMENT

KENT COUNTY, DELAWARE $20,760,000 REVENUE BONDS (KENT COUNTY REGIONAL SPORTS COMPLEX PROJECT) SERIES 2016

INTRODUCTION General

This Official Statement, including the cover page and the Exhibits attached hereto, is furnished in connection with the offering by Kent County (the “Issuer”) of its Revenue Bonds (Kent County Regional Sports Complex Project), Series 2016, in the aggregate principal amount of $20,760,000 (the “2016 Bonds”). The Issuer was created and organized pursuant to and in accordance with the provisions of the Constitution of the State of Delaware (the “State”) and under Chapter 41, Title 9 of the Delaware Code, as amended (the “Act”) and has authorized procedures for the issuance of economic development bonds pursuant to Ordinance No. 86-5 enacted by Kent County Levy Court (“Levy Court”), the governing body of the Issuer, on October 21, 1986, as amended (the “General Ordinance”). The 2016 Bonds are authorized by Ordinance No. 15-12 enacted by Levy Court on November 24, 2015, as amended and restated by Ordinance No. 16-08, enacted by Levy Court on May 24, 2016 (the “Project Ordinance”), the laws of the State, particularly the Act, and a Trust Indenture, dated as of June 1, 2016 (the “Indenture”), by and between the Issuer and Wilmington Trust, National Association, Wilmington, Delaware, as trustee (the “Trustee”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Indenture and the Loan Agreement (as defined below), the forms of which are set forth in EXHIBIT C – FORMS OF TRUST INDENTURE, LOAN AND SECURITY AGREEMENT, AND LEASEHOLD MORTGAGE AND SECURITY AGREEMENT. The Indenture authorizes the issuance of additional bonds (the “Additional Bonds”) having a lien on the Trust Estate equal to that of the 2016 Bonds (the “Additional Bonds,” and together with the 2016 Bonds, the “Bonds”).

Purpose of the 2016 Bonds

The proceeds of the 2016 Bonds will be loaned to Kent County Regional Sports Complex Corporation (the “Borrower”) pursuant to a Loan and Security Agreement between the Borrower and the Issuer, dated as of June 1, 2016 (the “Loan Agreement”). The Borrower will use the proceeds of the 2016 Bonds for the following purposes: (i) to finance the design, construction and improvement of various turf fields and facilities relating to a regional sports complex known as DE Turf Sports Complex (the “Sports Complex”), (ii) to fund certain reserve funds, (iii) to pay capitalized interest and (iv) to pay costs of issuance of the 2016 Bonds (collectively, the “Project”). The Borrower’s obligation to repay the loan will be evidenced by the issuance of a promissory note (the “2016 Note”).

Security for the 2016 Bonds

The 2016 Bonds are special limited obligations of the Issuer payable exclusively from revenues and receipts under the Loan Agreement, which revenues and receipts have been pledged and assigned to secure the payment of the 2016 Bonds, a Leasehold Mortgage and Security Agreement dated as of June 1, 2016 (the “Leasehold Mortgage”) from the Borrower to the Trustee and certain funds created under the Indenture. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS” herein.

Pursuant to the Indenture, the 2016 Bonds will be secured by a Debt Service Reserve Fund, to be funded with proceeds of the 2016 Bonds in an amount equal to $1,443,725, the Debt Service Reserve Fund Requirement.

the amount of any deficiency in the Bond Principal Fund and the Bond Interest Fund (the “Levy Court Loan”). The County Administrator shall request the Levy Court to vote on any request for a Levy Court Loan as soon as possible after receiving notice from the Trustee regarding a shortfall, and in the Project Ordinance, the Levy Court has agreed to hold such a vote within sixty (60) days of receiving notice from the Trustee. The interest rate and terms of the Levy Court Loan will be established at the time of the Levy Court Loan. Payments due on any Levy Court Loan will be subordinate to debt service on the 2016 Bonds. For more information, see “SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS – Indenture – Levy Court Loan” herein.

NOTWITHSTANDING THE COVENANT TO CAUSE THE LEVY COURT TO VOTE ON A REQUEST TO MAKE A LEVY COURT LOAN TO SATISFY A DEFICIENCY IN THE BOND PRINCIPAL FUND OR THE BOND INTEREST FUND, THE ISSUER’S OBLIGATIONS SHALL NOT BE CONSTRUED TO CONSTITUTE AN INDEBTEDNESS OF OR A PLEDGE OF THE FAITH AND CREDIT OF OR A LOAN OF THE CREDIT OF THE COUNTY. THE ISSUER’S COVENANT TO SEEK A LEVY COURT LOAN FROM THE LEVY COURT IS NOT AN AGREEMENT TO APPROPRIATE FUNDS AND THE ISSUER HAS NO LEGAL OR MORAL OBLIGATION TO MAKE ANY LEVY COURT LOAN.

In addition, the Issuer has made a grant to the Borrower in an amount not to exceed $1,400,000 to be held in a separate escrow account but not part of the Trust Estate. The grant has been appropriated and funded but is only available to make a debt service payment on the 2016 Bonds equal to the amount funded by the Borrower as of a Funded PPD or Funded IPD (i.e., the Disbursement Date that is immediately preceding the 90th day before an Interest Payment Date or a Principal Payment Date, as applicable) if (i) the Borrower funds any portion of the Bond Principal Fund and the Bond Interest Fund on a Funded PPD or Funded IPD, (ii) the Borrower files for bankruptcy during the next ninety (90) days before the debt service payment date, and (iii) the bankruptcy court stays the application of the funds in the Bond Principal Fund, the Bond Interest Fund and the Debt Service Reserve Fund. Any unused amount of the grant will be returned to the Issuer upon (i) the defeasance of the 2016 Bonds or (ii) once funds are applied in accordance with this paragraph after a bankruptcy filing of the Borrower, whichever comes first. For more information, see “SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS – Indenture – Issuer Grant” herein.

THE BRIEF DESCRIPTIONS OF VARIOUS DOCUMENTS SET FORTH IN THIS OFFICIAL STATEMENT HERETO DO NOT PURPORT TO BE COMPREHENSIVE OR DEFINITIVE, AND REFERENCE IS MADE TO EACH SUCH DOCUMENT FOR COMPLETE DETAILS OF ALL TERMS AND CONDITIONS. ALL STATEMENTS HEREIN ARE QUALIFIED IN THEIR ENTIRETY BY THE TERMS OF EACH SUCH DOCUMENT. FORMS OF THE INDENTURE, THE LOAN AGREEMENT AND THE LEASEHOLD MORTGAGE MAY BE FOUND IN EXHIBIT C.

Continuing Disclosure

In order to comply with the requirements of Rule 15c2-12, as amended (“Rule 15c2-12”), promulgated under the Securities Exchange Act of 1934, as amended, the Borrower and the Trustee, as dissemination agent (in such capacity, the “Dissemination Agent”), will enter into a Continuing Disclosure Agreement (the “Continuing Disclosure Agreement”) providing for, among other things, annual reporting with respect to certain information and the disclosure of the occurrence, if any, of certain events to the Municipal Securities Rulemaking Board. The Continuing Disclosure Agreement will constitute a written undertaking for the benefit of the Beneficial Owners from time to time of the 2016 Bonds. See “CONTINUING DISCLOSURE” herein and EXHIBIT E – FORM OF CONTINUING DISCLOSURE AGREEMENT.

Forward Looking Statements

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 include, among others, changes in economic conditions and various other events, conditions and circumstances, many of which

2 are beyond the control of the Borrower or the Issuer. Such forward-looking statements speak only as of the date of this Official Statement. The Borrower and the Issuer disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any changes in the Borrower’s or the Issuer’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

ISSUER

The Issuer is a political subdivision of the State of Delaware. The Issuer has Home Rule power pursuant to the Act. Pursuant to such power, the General Ordinance and the Project Ordinance, the Issuer is authorized to issue the 2016 Bonds, sell them to the Underwriter and loan the proceeds thereof to the Borrower. The Levy Court enacted the Project Ordinance authorizing the issuance and sale of the 2016 Bonds. The Issuer makes no representation regarding the security for the 2016 Bonds or the suitability of the 2016 Bonds for investment. The Issuer undertakes no obligation to administer or monitor the Project.

BORROWER

Kent County Regional Sports Complex Corporation (the “Borrower”) is a Delaware nonstock corporation incorporated pursuant to the authority and provisions of laws of the State of Delaware and has been recognized by the Internal Revenue Service as exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The Borrower was established for the specific purposes of developing and operating the Sports Complex. For information regarding the Borrower, see EXHIBIT A – CERTAIN INFORMATION REGARDING THE BORROWER.

THE PROJECT

The Sports Complex

The Kent County Regional Sports Complex – also known as “DE Turf Sports Complex” or “DE Turf” (the “Sports Complex”) – is envisioned to be a state-of-the-art athletic complex that is anticipated to become one of the preeminent destinations in the Mid-Atlantic Region for soccer, lacrosse, field hockey and other field-based sports and non-sports activities. The primary activities consist of camps, clinics, leagues, practices and local, regional and national tournament events. The Sports Complex, as designed, would consist of a total of 12 regulation-size fields (10 synthetic artificial turf fields and 2 natural grass). Some fields would be equipped with sports lighting, scoreboards and portable bleachers. One field would be designated the championship field and would include fixed seating for spectators and the potential to add additional seating through the use of portable bleachers. Additionally, the Sports Complex will include 900 parking spaces and support amenities such as paved walkways, shaded tent structures, restrooms, concessions, and administrative/maintenance buildings.

The Sports Complex is to be located along Delaware State Route 1 (the state’s main north-south highway) near the Town of Frederica, approximately 10 miles south of Dover and 30 miles northwest of the Delaware beaches. The Sports Complex will be within a four-hour drive of nearly 42 million people, including major regional metropolitan areas such as Philadelphia, Baltimore and Washington D.C., and is expected to draw from Mid-Atlantic states including North Carolina, Virginia, Maryland, Pennsylvania, New Jersey, New York and beyond.

The land upon which the Sports Complex will sit is owned by Kent County Levy Court and has been leased to the Borrower pursuant to Ground Lease dated March 12, 2013, as amended on May 26, 2015 (the “Ground Lease”) for $1.00 per year pursuant to a 60 year lease, with automatic renewal for an additional 30 year period unless either party delivers notice to the other party of its intention not to renew. Under the Ground Lease, the Borrower agrees to use the leased premises for the development, management and operation of a regional sports complex.

Direct access to the Sports Complex is to be provided by the construction of an approximately $26 million interchange at Tub Mill Pond Road that would provide direct ingress/egress to the Sports Complex from Delaware State Route 1. The Delaware Department of Transportation (“DelDOT”) awarded the construction contract for the interchange on January 11, 2016 and construction commenced on April 11, 2016. The interchange is expected to be completed on May 30, 2018. Construction is dependent on revenues available to DelDOT and is not guaranteed to be completed as scheduled. Construction has also commenced on a temporary entrance expected to be completed by July 31, 2016. The construction costs of the temporary entrance and the permanent interchange will be funded by DelDOT from state and federal funds and will not be funded from the revenues of the Borrower or proceeds of the 2016 Bonds.

Construction of the Sports Complex began in January 2016. Infrastructure improvements, including concrete curbing, sub-grading and initial drainage system work, have been completed to date. Foundations have been poured for certain buildings to be situated at the Sports Complex. Construction is scheduled to be completed by January 2017.

For additional information regarding the Sports Complex, see EXHIBIT B – FEASIBILITY STUDY.

The Contractor

The contractor selected for construction of the Sports Complex is Richard Y. Johnson & Son, Inc., located in Lincoln, Delaware (“RYJSON”). RYJSON is a full-service construction firm and has been general contractors, planners, and construction managers in Delaware for more than 60 years involved in the construction and renovation of commercial, educational and government buildings. Its staff engineers have expertise in civil and structural fields. RYJSON’s current and recent projects include Laurel Middle/High School in Laurel, Delaware (contract amount $53,858,236); Seaford High School in Seaford, Delaware (contract amount $21,619,989); W. B. Simpson Elementary School in Wyoming, Delaware (contract amount $17,331,951); and Milford Central Academy in Milford, Delaware (contract amount $32,200,695).

The Construction Contract

The Borrower and RYJSON entered into a construction contract dated December 17, 2015 (the “Construction Contract”), providing for the completion of the project by a date not later than 14 months from the date of commencement of construction. The Construction Contract is for a fixed sum of $16,647,026, subject to adjustment in accordance with the terms of the construction contract. See “RISK FACTORS – Construction of Sports Complex” herein.

Permits and Approvals

The Borrower has obtained the following permits and approvals pertaining to the Project: (i) Conditional Approval of the Sports Complex by the Kent County Levy Court on May 26, 2015, as transmitted by letter of the Kent County Levy Court dated May 29, 2015; (ii) U.S. Army Corps of Engineers (Regulatory Branch, Dover Field Office) written acknowledgment that the Sports Complex project qualifies for Nationwide Permit 18 (NWP18) for minor discharges to water, pursuant to email dated September 21, 2015; (iii) Sediment & Stormwater Plan Approval for the Sports Complex, pursuant to letter from Kent Conservation District dated October 6, 2015; (iv) Approval to Construct Water Supply Proposed System for the Sports Complex, pursuant to letter from Delaware Health and Social Services Division of Public Health dated November 4, 2015; and (v) Authorization to Construct (State Construction Permit) issued by State of Delaware Department of Natural Resources and Environmental Control, Division of Water, Surface Water Discharges Section, dated November 20, 2015.

The remaining permits and approvals required for construction and operation of the Sports Complex consist of customary notifications, inspections, surveys, and reviews of work in progress or completed work.

PLAN OF FINANCE

Sports Complex Budget

The budgeted amount for the development, construction and financing of the Sports Complex is approximately $26,000,000, including the deposit to the Debt Service Reserve Fund equal to the Debt Service Reserve Fund Requirement and the deposit to the Bond Interest Fund for capitalized interest, as further described below. On July 17, 2012, the State of Delaware Infrastructure Investment Committee unanimously approved a grant in the amount of $3,246,550 for infrastructure needs for the Sports Complex. Additionally, the State of Delaware re-appropriated $902,098.23 and $76,170.72 of funds that had initially been earmarked for other projects to the Sports Complex. As of the date hereof, all of the $4,224,818.95 pledged by the State of Delaware for the benefit of the Sports Complex has been received by the Borrower, and the Borrower has spent approximately $2,175,000 on architectural and engineering services, site preparation costs and its initial payment under the Construction Contract, along with other preliminary costs.

In addition to the amounts received from the State of Delaware, the Borrower has also received a $100,000 grant from the Greater Kent Committee, a local non-profit economic development organization, which is expected to be used for operating costs.

The costs of the construction of the Sports Complex not funded from amounts received from the State of Delaware and other sources will be funded from the proceeds of the 2016 Bonds. Additionally, 2016 Bond proceeds will be used on the date of closing for the deposit into the Debt Service Reserve Fund of an amount equal to the Debt Service Reserve Fund Requirement and for the deposit into the Bond Interest Fund of the amount representing the interest on the 2016 Bonds from their date of issuance through and including April 1, 2019.

Estimated Sources and Uses of Funds

The following table sets forth the estimated sources and uses of funds for the Project:.

Sources Par Amount of 2016 Bonds $20,760,000.00 Net Original Issue Premium 1,401,551.90 Contribution from State of Delaware 4,224,818.95 $26,386,370.85 Uses Sports Complex Construction and Development* $22,076,344.45 Capitalized Interest 2,271,607.58 Debt Service Reserve Fund 1,443,725.00 Costs of Issuance ** 594,693.82 $26,386,370.85

*Of such amount, $18,342,419.32 represents the amount being deposited into the Construction Fund held under the Indenture from proceeds of the 2016 Bonds, net of Issuer fees.

**Costs of issuance include the fees and expenses for the Underwriter and its counsel, Bond Counsel, Counsel to the Borrower, Issuer fees, Trustee fees, rating, printing costs and other costs associated with the issuance of the 2016 Bonds. No more than 2% of 2016 Bond proceeds will be used for costs of issuance.

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DEBT SERVICE REQUIREMENTS

The following table sets forth, for each year ending October 1, the amounts required for payment of principal of and interest on the 2016 Bonds. Amounts may not total due to rounding.

Period Ending Total (October 1) Principal Interest Debt Service 2016 - $209,296 $209,296 2017 - 827,982 827,982 2018 - 827,982 827,982 2019 - 827,982 827,982 2020 $235,000 827,982 1,062,982 2021 275,000 823,282 1,098,282 2022 290,000 817,782 1,107,782 2023 310,000 811,982 1,121,982 2024 325,000 806,402 1,131,402 2025 345,000 799,902 1,144,902 2026 365,000 792,312 1,157,312 2027 385,000 784,100 1,169,100 2028 410,000 770,625 1,180,625 2029 440,000 756,275 1,196,275 2030 465,000 740,875 1,205,875 2031 495,000 724,600 1,219,600 2032 525,000 707,275 1,232,275 2033 555,000 690,869 1,245,869 2034 585,000 673,525 1,258,525 2035 615,000 655,244 1,270,244 2036 645,000 636,025 1,281,025 2037 685,000 615,869 1,300,869 2038 735,000 580,762 1,315,762 2039 790,000 543,094 1,333,094 2040 845,000 502,606 1,347,606 2041 900,000 459,300 1,359,300 2042 965,000 413,175 1,378,175 2043 1,030,000 363,719 1,393,719 2044 1,095,000 310,931 1,405,931 2045 1,165,000 254,812 1,419,812 2046 1,245,000 195,106 1,440,106 2047 1,310,000 131,300 1,441,300 2048 1,355,000 88,725 1,443,725 2049 1,375,000 44,687 1,419,687 TOTAL $20,760,000 $20,016,391 $40,776,391

DESCRIPTION OF THE 2016 BONDS

General

The 2016 Bonds will be issuable as fully registered bonds without coupons in denominations of $5,000 or any integral multiple in excess thereof (“Authorized Denominations”). The 2016 Bonds will mature on the dates and in the amounts set forth on the inside front cover of this Official Statement, subject to redemption prior to maturity, and will bear interest until paid at the rates shown on the inside cover page of this Official Statement, payable semi-annually on April 1 and October 1 of each year, commencing on October 1, 2016 (each an “Interest Payment Date”).

Interest on the 2016 Bonds is computed on the basis of a 360-day year comprised of twelve 30-day months. Payments of principal of and premium, if any, with respect to the 2016 Bonds will be made upon surrender of the 2016 Bonds at the designated corporate trust office of the Trustee. So long as the 2016 Bonds are held in DTC’s book-entry only system, DTC (or a successor securities depository) or its nominee will be the registered owner of the 2016 Bonds for all purposes of the Indenture, the 2016 Bonds and this Official Statement, and payments of principal, interest and premium, if any, with respect to the 2016 Bonds will be made solely through the facilities of DTC. See “DESCRIPTION OF THE 2016 BONDS – Payment of Principal and Interest” and “- Book-Entry Only System” herein.

Redemption of 2016 Bonds Prior to Maturity

Optional Redemption

The 2016 Bonds are subject to redemption, at the option of the Issuer (which option shall be exercised upon the written direction of the Borrower) in whole or in part on any Business Day commencing October 1, 2026 (if less than all of such 2016 Bonds are to be redeemed, then such 2016 Bonds to be redeemed shall be selected as provided below), at the redemption price equal to 100% of the principal amount to be redeemed, together with accrued interest to the date fixed for redemption.

Extraordinary Redemption

The 2016 Bonds are subject to redemption at the option and upon the written direction of the Borrower, in whole at any time or in part on any Business Day from and to the extent of funds on deposit under the Indenture and available for such purpose at a redemption price equal to the principal amount of each 2016 Bond to be redeemed plus accrued interest to the redemption date, upon the occurrence of any of the following events:

(i) The Facilities shall have been damaged or destroyed in whole or in part to such extent that, as expressed in a Consulting Architect’s Certificate filed with the Trustee, either (A) the Facilities cannot reasonably be restored within a period of 12 consecutive months to the condition thereof immediately preceding such damage or destruction, (B) the Borrower is thereby prevented from carrying on its normal operations for a period of 12 consecutive months, (C) the cost of restoration thereof would exceed the Net Proceeds of insurance carried thereon pursuant to the requirements of the Loan Agreement or (D) the final maturity of the 2016 Bonds is within five (5) years of the date of such damage or destruction.

(ii) Title to, or the temporary use of, all or any substantial part of the Facilities shall have been taken under the exercise of the power of eminent domain by any governmental issuer, or Person, firm or corporation acting under governmental authority or because of a defect in title.

Borrower in good faith, the Loan Agreement shall have become void or unenforceable or impossible of performance in accordance with the intent and purposes of the parties as expressed in the Agreement. Redemption pursuant to this subsection (iii) shall be in whole only.

Only Net Proceeds of insurance or a condemnation award shall be used for a partial redemption of Bonds pursuant to subsections (i) or (ii) above.

Mandatory Sinking Fund Redemption

The 2016 Bonds stated to mature in the years 2031, 2036, 2046 and 2049 are subject to mandatory sinking fund redemption prior to maturity in part by lot at a redemption price equal to 100% of the principal amount redeemed plus accrued interest to the redemption date from amounts on deposit in the Bond Principal Fund on October 1 in the years and in the principal amounts specified in the sinking fund redemption schedules set forth below: 2016 Bonds Maturing October 1, 2031

Redemption Date Principal Amount to be (October 1) Redeemed or Purchased 2027 $385,000 2028 410,000 2029 440,000 2030 465,000 2031* 495,000

*Stated Maturity.

2016 Bonds Maturing October 1, 2036

Redemption Date Principal Amount to be (October 1) Redeemed or Purchased 2032 $525,000 2033 555,000 2034 585,000 2035 615,000 2036* 645,000

*Stated Maturity.

2016 Bonds Maturing October 1, 2046

Redemption Date Principal Amount to be (October 1) Redeemed or Purchased 2037 $685,000 2038 735,000 2039 790,000 2040 845,000 2041 900,000 2042 965,000 2043 1,030,000 2044 1,095,000 2045 1,165,000 2046* 1,245,000

*Stated Maturity. 8

2016 Bonds Maturing October 1, 2049

Redemption Date Principal Amount to be (October 1) Redeemed or Purchased 2047 $1,310,000 2048 1,355,000 2049* 1,375,000

*Stated Maturity.

In lieu of redeeming 2016 Bonds pursuant to mandatory sinking fund redemption, the Trustee may, at the written request of the Borrower, use such funds in the Bond Principal Fund or otherwise available under the Indenture for redemption of 2016 Bonds to purchase 2016 Bonds for which the Trustee has received a confirmation of purchase confirming purchase by the Borrower in the open market at a price not exceeding par plus accrued interest, such 2016 Bonds to be delivered to the Trustee for the purpose of cancellation. The Borrower may also purchase 2016 Bonds other than through the Trustee and deliver such 2016 Bonds to the Trustee for cancellation and receive credit against its mandatory sinking fund payments as provided in this paragraph. Any such purchase of 2016 Bonds for cancellation must be completed and the purchased 2016 Bonds delivered to the Trustee at least forty-five (45) days prior to the date set for the next succeeding mandatory redemption. It is understood that in the case of any such purchase of 2016 Bonds, the Issuer and the Borrower shall receive credit against its required mandatory sinking fund payments in the manner specified in a certificate of the Borrower or if no certificate is delivered in inverse order thereof.

Method of Selecting Bonds

In the event that less than all of the Outstanding 2016 Bonds shall be redeemed, the 2016 Bonds to be redeemed shall be in any order of maturity as selected by the Borrower, or if less than all of the 2016 Bonds in a single maturity shall be redeemed, the selection of 2016 Bonds or portions thereof to be redeemed shall be selected by lot by the Trustee (or by random drawing while the 2016 Bonds are held in book-entry form) in any manner which the Trustee deems appropriate.

Notices of Redemption

All or a portion of the 2016 Bonds shall be called for optional redemption by the Trustee as provided in the Indenture upon receipt by the Trustee at least 45 days prior to the redemption date of a notice from the Borrower specifying the principal amount of the 2016 Bonds to be called for redemption, the applicable redemption price or prices, and the provision or provisions of the Indenture pursuant to which such Bonds are to be called for redemption, provided that such notice shall not be required with respect to a sinking fund redemption pursuant to the Indenture and Bonds shall be called for sinking fund redemption by the Trustee pursuant to the Indenture without the necessity of any action by the Borrower. In the case of every redemption, the Trustee shall cause notice of such redemption by mailing by first-class mail a copy of the redemption notice to the Registered Owners of the 2016 Bonds designated for redemption in whole or in part, at their addresses as the same shall last appear upon the registration records. In each case, and subject to the delivery of Protected Funds as described below, such redemption notice shall be delivered to the Registered Owners not more than 60 nor less than 20 days prior to the redemption date, provided, however, that failure to give such notice, or any defect therein, shall not affect the validity of any proceedings for the redemption of such Bonds. The Trustee shall not mail any notice of redemption (other than with respect to a sinking fund redemption) unless it has received from the Borrower, at least 30 days before the redemption date specified in the notice of redemption, sufficient evidence of the Borrower’s ability to deliver Protected Funds to redeem all such Bonds called for redemption on the anticipated redemption date. If adequate Protected Funds are not received by the Trustee on the redemption date, no Bonds shall be redeemed. The Trustee shall furnish the Borrower with a copy of each notice of redemption given with respect to any optional redemption under the Indenture as soon as practicable after the delivery of notice to the Registered Owners of the 2016 Bonds.

If, at the time of mailing of the notice of redemption, there shall not have been deposited with the Trustee moneys sufficient to redeem all the Bonds called for redemption, such notice may state that it is conditional, that it is subject to the deposit of the redemption 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.

Each notice of redemption shall specify conditions precedent to redemption, if any, the date fixed for redemption, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of the 2016 Bonds to be redeemed, that interest accrued to the date fixed for redemption will be paid as specified in said notice, and that on and after said date interest thereon will cease to accrue. If less than all the Outstanding Bonds are to be redeemed, the notice of redemption shall specify the numbers of the 2016 Bonds or portions thereof to be redeemed.

For more information regarding the redemption provisions applicable to the 2016 Bonds, see EXHIBIT C - FORMS OF TRUST INDENTURE, LOAN AND SECURITY AGREEMENT AND LEASEHOLD MORTGAGE AND SECURITY AGREEMENT

Payment of Principal and Interest

Interest on the 2016 Bonds will be payable to the persons in whose names the 2016 Bonds are registered on the 2016 Bond register maintained by the Trustee at the close of business on the 15th calendar day (the “Regular Record Date”) of the month immediately preceding each Interest Payment Date notwithstanding any transfer or exchange of such Bond subsequent to such Regular Record Date and prior to such Interest Payment Date (except in the case of a default in interest which shall be paid to the persons in whose names the 2016 Bonds are registered on a Special Record Date). Interest on each 2016 Bond will be paid by check or draft mailed on each Interest Payment Date, to the address of each Registered Owner shown on the registration records kept by the Trustee; provided, however, that upon written request given to the Trustee at least ten (10) Business Days prior to a Regular Record Date, any Registered Owner of $1,000,000 or more in aggregate principal amount of Bonds will be paid by wire transfer of immediately available funds at the address specified in such request, which address must be in the continental United States. So long as the 2016 Bonds are held in DTC’s book-entry only system, DTC (or a successor securities depository) or its nominee will be the registered owner of the 2016 Bonds for all purposes of the Indenture, the 2016 Bonds and this Official Statement, and payments of principal, interest and premium, if any, with respect to the 2016 Bonds will be made solely through the facilities of DTC. See “BOOK-ENTRY ONLY SYSTEM.”

Transfers and Exchanges

The 2016 Bonds may be transferred or exchanged for an equal aggregate principal amount of Bonds in Authorized Denominations of the same series and of the same maturity upon surrender of such Bonds at the designated corporate trust office of the Trustee, duly endorsed for transfer or accompanied by an assignment executed by the Registered Owner or the Registered Owner’s attorney duly authorized in writing.

The Trustee will not be required to transfer or exchange any 2016 Bond: (i) subject to redemption during the period of five (5) days next preceding the mailing of notice of redemption, or (ii) after the giving of notice of redemption of any 2016 Bond.

For every transfer or exchange of the 2016 Bonds, the Trustee may charge the registered owner any taxes or other governmental charges required to be paid with respect to such exchange or transfer.

Book-Entry-Only System

The information contained in this section concerning DTC and the DTC Book-Entry Only System has been obtained from sources that the Issuer believes to be reliable. However, the Issuer takes no responsibility for the accuracy thereof. The beneficial owners should confirm the information with DTC or the Direct Participants, as the case may be.

DTC will act as securities depository for the 2016 Bonds. The 2016 Bonds will be issued as fully- registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered bond certificate will be issued for each maturity of the 2016 Bonds, in the aggregate principal amount of such maturity of the 2016 Bonds, 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 (the “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 only transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the “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 the 2016 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2016 Bonds on DTC’s records. The ownership interest of each actual purchaser of each 2016 Bond (the “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 2016 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the 2016 Bonds, except in the event that use of the book-entry only system for the 2016 Bonds is discontinued.

To facilitate subsequent transfers, all 2016 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 2016 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 2016 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 2016 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 2016 Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the 2016 Bonds unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer or the Trustee as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the 2016 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal, redemption premium, if any, and interest payments on the 2016 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Issuer or the Trustee, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the Issuer or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption premium, if any, or interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the 2016 Bonds at any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, 2016 Bond certificates are required to be printed and delivered.

The Issuer may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, 2016 Bond certificates will be printed and delivered.

THE ISSUER, THE BORROWER, THE TRUSTEE AND THE UNDERWRITER CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC WILL DISTRIBUTE TO ITS PARTICIPANTS OR THAT DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL DISTRIBUTE TO BENEFICIAL OWNERS OF THE 2016 BONDS (1) PAYMENTS OF THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, OR INTEREST ON THE 2016 BONDS, OR (2) CONFIRMATION OF OWNERSHIP INTERESTS IN THE 2016 BONDS, OR (3) REDEMPTION OR OTHER NOTICES, OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC, DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CURRENT RULES APPLICABLE TO DTC ARE ON FILE WITH THE SEC AND THE CURRENT PROCEDURES OF DTC TO BE FOLLOWED IN DEALING WITH ITS PARTICIPANTS ARE ON FILE WITH DTC.

NONE OF THE ISSUER, THE BORROWER, THE TRUSTEE OR THE UNDERWRITER WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC, DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS OF THE 2016 BONDS WITH RESPECT TO: (1) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ITS NOMINEE, OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT; (2) THE PAYMENT BY DTC TO ANY DIRECT PARTICIPANT OR BY ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, OR INTEREST ON ANY 2016 BONDS; (3) THE DELIVERY BY DTC, ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE INDENTURE TO BE GIVEN TO THE BONDHOLDERS; (4) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE 2016 BONDS; OR (5) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC, ANY DIRECT PARTICIPANT OR ANY INDIRECT PARTICIPANT.

SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS

General

The 2016 Bonds are special limited obligations of the Issuer, payable solely from the revenues and receipts, and security therefor, derived by the Issuer from the Loan Agreement, which revenues and receipts have been pledged and assigned to secure the payment thereof, from certain Funds held under the Indenture and from the Leasehold Mortgage.

The 2016 Bonds do not constitute a debt or a loan of credit or a pledge of the full faith and credit or taxing power of the Issuer, or the State of Delaware, or of any political subdivision thereof, within the meaning of any state constitutional provision or statutory limitation and shall never constitute nor give rise to a pecuniary liability of the Issuer, or the State or any political subdivision thereof. The 2016 Bonds shall not constitute, directly or indirectly, or contingently obligate or otherwise constitute a general obligation of or a charge against the general credit or taxing power of the Issuer or the State, but shall be special limited obligations of the Issuer payable solely from the sources described in the Indenture, but not otherwise.

Pledged Revenues

The 2016 Bonds are secured by, among other things, the Pledged Revenues and all rights and interests of the Issuer in the Pledged Revenues, subject to Permitted Encumbrances and except for the Issuer’s Unassigned Rights.

“Pledged Revenues” means, regardless of the source, all revenues, rentals, fees, third-party payments, receipts, donations, contributions or other income of the Borrower, to the extent permitted thereby and by law, including accounts receivables or other rights to receive such revenues, proceeds derived from insurance, condemnation proceeds, accounts, contract rights and other rights and assets, whether now or hereafter owned, held or possessed by the Borrower; and all gifts, grants, bequests and contributions (including income and profits therefrom) to the extent permitted by the terms thereof and by law.

In the Loan Agreement, the Borrower has covenanted to pay over to the Trustee, on the 20th calendar day of every month, its Net Revenues, which are equal to the Borrower’s Revenues minus Operating Expenses..

Indenture

The 2016 Bonds, together with any Additional Bonds, will be payable solely from the revenues and receipts pledged under the Indenture, and will be secured by an assignment and pledge of the following with the exception of the Issuer’s Unassigned Rights: (i) the rights and interests of the Issuer under the Loan Agreement; (ii) all rights and interests of the Issuer in the Project, subject to Permitted Encumbrances; (iii) the Pledged Revenues, subject to Permitted Encumbrances; (iv) the rights and interests of the Issuer and the Borrower under the Leasehold Mortgage and the 2016 Note; and (v) certain Funds created in the Indenture (other than the Rebate Fund), including the Debt Service Reserve Fund.

Flow of Funds

There shall be deposited in the Revenue Fund, on the 20th calendar day of every month, all Net Revenues and all other monies deposited into the Revenue Fund pursuant to the Loan Agreement or the Indenture.

All monies held on deposit in the Revenue Fund shall be disbursed by the Trustee on the following dates in the following order of priority:

FIRST: On the 25th calendar day of each month (each, a “Disbursement Date”), (i) commencing after the date of issuance of the Bonds, for deposit in the Bond Interest Fund an amount (after taking into consideration earnings or capitalized interest amounts then on deposit in

the Bond Interest Fund) equal to 1/6 of the interest on the Bonds which will be required on the next succeeding Disbursement Date that is immediately preceding the 90th day before an Interest Payment Date (each, a “Funded IPD”); provided that the entire amount due on an Interest Payment Date shall have been disbursed into the Bond Interest Fund at least ninety (90) days prior to such Interest Payment Date, plus (ii) all amounts due as to interest on the Bonds on the immediately preceding Disbursement Date pursuant to this paragraph which have not otherwise been credited to the Bond Interest Fund pursuant to this paragraph or transferred to the Bond Interest Fund pursuant to Sections 3.07 and 3.13 of the Indenture;

SECOND: On each Disbursement Date, commencing July 25, 2019, an amount equal to 1/12 of the principal on the Bonds which will be required on the next succeeding Disbursement Date that is immediately preceding the 90th day before a Principal Payment Date (each, a “Funded PPD”), which have not otherwise been credited to the Bond Principal Fund pursuant to this paragraph or transferred to the Bond Principal Fund pursuant to Section 3.07 of the Indenture; provided that the entire amount due on a Principal Payment Date shall have been disbursed into the Bond Principal Fund at least ninety (90) days prior to such Principal Payment Date;

THIRD: On each Disbursement Date, to the Issuer or the Trustee, as applicable, the fees, administrative cost and other expenses of and indemnity payments to such parties then due and payable.

FOURTH On each Disbursement Date, commencing after the date of issuance of the Bonds, to the Debt Service Reserve Fund, the amount required, if any, under Section 3.07 of the Indenture, for amounts therein to be equal to the Debt Service Reserve Fund Requirement;

FIFTH On a date that is not more than 50 days after the last Business Day of every Rebate Year and continuing until the full amount is so paid, to the Rebate Fund, any amount, as calculated by the Rebate Analyst, required of the Borrower to be deposited in the Rebate Fund;

SIXTH: On each Disbursement Date, commencing after the date of issuance of the 2016 Bonds, to the Operating Reserve Fund, the amount required, if any, subject to the limits set forth in Section 8.16 of the Loan Agreement, for the balance therein to equal the Operating Reserve Fund Requirement;

SEVENTH On each Disbursement Date, commencing after the date of issuance of the 2016 Bonds, to the Repair and Replacement Fund, the amount required, if any, subject to the limits set forth in Section 8.15 of the Loan Agreement, for the balance therein to equal the Repair and Replacement Fund Requirement;

EIGHTH: On each Disbursement Date, commencing after the date of issuance of the 2016 Bonds, any residual amounts remaining on deposit in the Revenue Fund after the Trustee has made the disbursements required in FIRST through SEVENTH above, to the Surplus Fund, if not in default under the Agreement.

Debt Service Reserve Fund

There shall be deposited at Closing from the 2016 Bond proceeds into the Debt Service Reserve Fund pursuant to the Loan Agreement, an aggregate amount equal to $1,443,725 (representing the initial “Debt Service Reserve Fund Requirement”). There shall also be deposited into the Debt Service Reserve Fund all other moneys required to be deposited therein pursuant to the Loan Agreement or the Indenture, and moneys received by the

Trustee when accompanied by written directions from an Authorized Representative of the Borrower that such moneys are to be paid into the Debt Service Reserve Fund. Amounts on deposit in the Debt Service Reserve Fund shall be invested pursuant to the Indenture. Interest and other income received on investments of Debt Service Reserve Fund moneys shall be transferred to the 2016 Bond Interest Fund so long as the Debt Service Reserve Fund is funded to an amount equal to the Debt Service Reserve Fund Requirement, as provided in the Indenture.

The Debt Service Reserve Fund shall secure, on a pro rata basis, and shall be available to be drawn upon, for the 2016 Bonds and any Additional Bonds, as further set forth in the Indenture.

Levy Court Loan

As long as any 2016 Bonds remain outstanding, the Trustee shall notify the Issuer if the Trustee does not receive the full payment required into the Bond Principal Fund and the Bond Interest Fund as of any Funded PPD or Funded IPD, respectively. Upon receipt of any such notice, the County Administrator shall ask the Levy Court to make a Levy Court Loan equal to the amount of any deficiency in the Bond Principal Fund and the Bond Interest Fund. The County Administrator shall request the Levy Court to vote on any request for a Levy Court Loan as soon as possible after receiving notice from the Trustee regarding a short fall in the Bond Principal Fund and the Bond Interest Fund. In the Project Ordinance, the Levy Court has agreed to hold such a vote within sixty (60) days of receiving notice from the Trustee regarding a deficiency in funds available to pay debt service. A vote by the Levy Court to approve or deny the loan request shall take place within sixty (60) days of the date of receipt of the loan request by the County Administrator and in no event later than the next debt service payment date. The amount of any loan approved by the Levy Court will be paid directly to DTC by the Issuer to pay debt service due on the 2016 Bonds.

Payments due on the Levy Court Loan will be subordinate to debt service on the Bonds and paid from the Surplus Fund. The interest rate and terms of the Levy Court Loan will be established at the time of the Levy Court Loan.

Additionally, if the Borrower files for bankruptcy and later emerges from bankruptcy, the Trustee will make a request to the Levy Court to fund a loan in the full amount of debt service required on the next succeeding debt service payment date (in accordance with the procedures described above) on each Funded PPD and Funded IPD to be used in case the Borrower files for bankruptcy once again causing the funds in the Bond Principal Fund, the Bond Interest Fund and other trustee’d funds to be unavailable for payment of such debt service.

Operating Reserve Fund

There shall be deposited into the Operating Reserve Fund as and when received (a) the amounts described under “ – Flow of Funds” above, (b) all other moneys deposited into the Operating Reserve Fund pursuant to the Loan Agreement or the Indenture, and (c) all other moneys received by the Trustee when accompanied by written directions not inconsistent with the Loan Agreement or the Indenture that such moneys are to be paid into the Operating Reserve Fund. There shall also be retained in the Operating Reserve Fund, interest and other income received on investment of moneys in the Operating Reserve Fund to the extent provided in the Indenture. On each Disbursement Date, any amounts on deposit in the Operating Reserve Fund in excess of the Operating Reserve Fund Requirement shall be transferred by the Trustee to the Bond Interest Fund and applied to the payment of the interest on the Bonds; provided, however, that the amount remaining in the Operating Reserve Fund immediately after such transfer shall not be less than the Operating Reserve Fund Requirement.

Payments shall be made from the Operating Reserve Fund upon receipt by the Trustee of a written requisition from an Authorized Representative of the Borrower setting forth the amount and the payee for the purpose of paying Operating Expenses and stating that the Borrower does not have sufficient funds on hand to make such payments when due.

15 On each Disbursement Date, funds held in the Operating Reserve Fund shall be used to fund a shortfall in the Bond Interest Fund, the Bond Principal Fund or the Debt Service Reserve Fund, provided that amounts are not available from the Surplus Fund and the Repair and Replacement Fund to fund such shortfall.

Repair and Replacement Fund

There shall be deposited into the Repair and Replacement Fund as and when received (a) the amounts described under “ – Flow of Funds” above, (b) all other moneys deposited into the Repair and Replacement Fund pursuant to the Loan Agreement or the Indenture, and (c) all other moneys received by the Trustee when accompanied by written directions not inconsistent with the Loan Agreement or the Indenture that such moneys are to be paid into the Repair and Replacement Fund. There shall also be retained in the Repair and Replacement Fund, interest and other income received on investment of moneys in the Repair and Replacement Fund to the extent provided in the Indenture. On each Disbursement Date, any amounts on deposit in the Repair and Replacement Fund in excess of the Repair and Replacement Fund Requirement shall be transferred by the Trustee to the Bond Interest Fund and applied to the payment of the interest on the Bonds; provided, however, that the amount remaining in the Repair and Replacement Fund immediately after such transfer shall not be less than the Repair and Replacement Fund Requirement.

Payments shall be made from the Repair and Replacement Fund upon receipt by the Trustee of a written requisition from an Authorized Representative of the Borrower setting forth the amount and the payee for the purpose of paying the cost of maintenance and replacements which may be required to keep the Facilities in sound condition, including but not limited to replacement of equipment, replacement of any roof or other structural component, exterior painting and the replacement of heating, air conditioning, plumbing and electrical equipment.

On each Disbursement Date, funds held in the Repair and Replacement Fund shall be used to fund a shortfall in the Bond Interest Fund, the Bond Principal Fund or the Debt Service Reserve Fund, provided that amounts are not available from the Surplus Fund to fund such shortfall.

Surplus Fund

There shall be deposited into the Surplus Fund as and when received the amounts described under “ – Flow of Funds” above. On or before each October 15 (each, a “Surplus Fund Transfer Date”), (i) so long as the Borrower has provided written notice to the Trustee that the Levy Court Loan Payment Conditions are satisfied on such Surplus Fund Transfer Date, funds in the Surplus Fund shall be paid to the Issuer to repay a Levy Court Loan and (ii) so long as the Borrower has provided written notice to the Trustee that the Surplus Fund Payment Conditions are satisfied on such Surplus Fund Transfer Date, all remaining funds in the Surplus Fund shall be paid to the Borrower. If on such Surplus Fund Transfer Date, the Trustee has not received notice that the Surplus Fund Payment Conditions are satisfied, such funds will be retained in the Surplus Fund until the subsequent Surplus Fund Transfer Date.

On each Disbursement Date, funds held in the Surplus Fund shall be used to fund a shortfall in the Bond Interest Fund, the Bond Principal Fund or the Debt Service Reserve Fund.

The Levy Court Loan Payment Conditions are as follows:

(a) Each of the Bond Principal Fund, the Bond Interest Fund, the Debt Service Reserve Fund, the Rebate Fund, the Repair and Replacement Fund, the Revenue Fund and the Operating Reserve Fund shall be fully funded in the amounts, if any, required at such time under this Indenture.

(b) The Borrower shall have met the covenants set forth in the Loan Agreement.

(c) No Event of Default under any Borrower Document has occurred and is continuing or would exist as a result of making the payment from the Surplus Fund.

The Surplus Fund Payment Conditions are as follows:

(b) The Debt Service Coverage Ratio for the past two Fiscal Years on such Surplus Fund Transfer Date shall not be less than 1.25:1.00.

(d) No Event of Default under any Borrower Document has occurred and is continuing or would exist as a result of making the payment from the Surplus Fund.

(e) No amount is outstanding on any Levy Court Loan.

(f) The Trustee shall have on deposit in the Bond Interest Fund the entire amount due on the next succeeding Interest Payment Date.

Additional Bonds

Additional Bonds secured by and payable solely from the Trust Estate may be issued in one or more additional series provided the following terms and conditions have been met:

(a) the Trustee has received a copy, duly certified by the Issuer, of the ordinance enacted by the Issuer authorizing the issuance of such Additional Bonds and the execution and delivery of a supplemental indenture, supplementing and amending the Indenture, which supplemental indenture shall not require the approval of the Registered Owners of the 2016 Bonds Outstanding, providing the date, interest rates and maturities of such Additional Bonds, options and requirements for redemption prior to maturity with respect to such Additional Bonds, deposit of proceeds to the various funds and accounts, including the Debt Service Reserve Fund, and such other terms as may be required by reason of the foregoing and which adopts the applicable provisions of the Indenture, and of an agreement supplementing and amending the Agreement;

(b) the Trustee and the Issuer have received an Opinion of Counsel to the Borrower in form and substance acceptable to the Trustee, the Issuer and Bond Counsel;

(c) the Trustee has received a certificate of an Authorized Representative of the Borrower to the effect that (i) the Borrower is not in default under the Loan Agreement or the Indenture (ii) the Borrower is not aware of any Events of Default under the Loan Agreement or the Indenture, and (iii) that such Indebtedness may be issued under the Loan Agreement;

(d) the Trustee will receive evidence from the Borrower that the issuance of the Additional Bonds will have no material adverse effect on the then-current rating on the outstanding Bonds;

(e) the Trustee and the Issuer have received an opinion of nationally-recognized municipal bond counsel to the effect that (i) the issuance of such Additional Bonds will not affect adversely the exclusion from gross income for federal income tax purposes of interest on any Outstanding Tax-Exempt Bonds, and (ii) the Additional Bonds to be delivered will be valid and legal special limited obligations of the Issuer in accordance with their terms and will be secured under the Indenture equally and on a parity with all other Bonds at the time Outstanding thereunder, as to the assignment to the Trustee of the Trust Estate;

(f) the Trustee has received original executed counterparts of the agreement supplementing and amending the Loan Agreement, the agreement supplementing and amending the Leasehold Mortgage (if necessary), and the supplemental indenture supplementing and amending the Indenture;

(g) the Trustee has received a request and authorization to the Trustee on behalf of the Issuer and signed by an Authorized Representative of the Issuer to authenticate and deliver such Additional Bonds to the purchasers therein identified, upon payment to the Trustee, but for the account of the Issuer, of a sum specified in such request and authorization, plus accrued interest thereon, if any, to the date of delivery;

(h) the Trustee will receive from the proceeds of the Additional Bonds or otherwise on the date of delivery of the Additional Bonds an amount equal to the additional Debt Service Reserve Fund Requirement for deposit into the Debt Service Reserve Fund; and

(i) the Trustee and the Issuer have received an executed opinion of nationally-recognized municipal bond counsel to the effect that (i) the Additional Bonds have been duly authorized, executed and delivered and constitute the binding special limited obligations of the Issuer, enforceable in accordance with their terms, subject to normal bankruptcy exceptions, and (ii) the interest on such Additional Bonds is excluded from gross income for federal income tax purposes (unless it is intended that such interest be taxable).

The provisions, covenants and agreements set forth in the Indenture to be performed by or on behalf of the Issuer and in the Loan Agreement to be performed by the Borrower shall be for the equal benefit, protection and security of the Registered Owners of any and all of the 2016 Bonds, including Additional Bonds, all of which, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the 2016 Bonds over any other thereof except as expressly provided in the Indenture.

Issuer Grant

The Issuer has made a grant to the Borrower in an amount not to exceed $1,400,000 to be held in a separate escrow account but not part of the Trust Estate. The grant has been appropriated and funded but is only available to make a debt service payment on the 2016 Bonds equal to the amount funded by the Borrower as of a Funded PPD or Funded IPD (i.e., the Disbursement Date that is immediately preceding the 90th day before an Interest Payment Date or a Principal Payment Date, as applicable) if (i) the Borrower funds any portion of the Bond Principal Fund and the Bond Interest Fund on a Funded PPD or Funded IPD, (ii) the Borrower files for bankruptcy during the next ninety (90) days before the debt service payment date, and (iii) the bankruptcy court stays the application of the funds in the Bond Principal Fund, the Bond Interest Fund and the Debt Service Reserve Fund. Any unused amount of the grant will be returned to the Issuer upon (i) the defeasance of the 2016 Bonds, or (ii) once funds are applied in accordance with this paragraph after the Borrower’s first bankruptcy filing, whichever comes first. Regardless of the amount of the grant applied in accordance with the above paragraph, if the Borrower emerges from bankruptcy, the Trustee will make a request to the Issuer to fund a loan (in accordance with the procedure set forth above under “SECURITY AND SOURCES OF PAYMENT FOR THE 2016 BONDS – Indenture – Levy Court Loan”) on each Funded PPD and Funded IPD thereafter to be used in case the Borrower files for bankruptcy again, causing the funds in the Bond Principal Fund, the Bond Interest Fund and other trustee’d funds to be unavailable for payment of such debt service. Pledge by Borrower

In fulfillment of its obligations under the Loan Agreement, the Borrower pledges to the Issuer for the payment of the Loan and the 2016 Note securing such Loan, and grants to the Issuer a security interest in the following: (i) all of the Borrower’s right, title and interest in and to the Facilities, including all related additions, replacements, substitutions and proceeds for the purposes of securing such Loan; (ii) all Pledged Revenues; and (iii) any and all other interests in real or personal property of every name and nature from time to time hereafter by delivery or by writing of any kind specifically mortgaged, pledged or hypothecated, as and for additional security by the Borrower or by anyone on its behalf.

Limitations on Incurrence of Additional Indebtedness

The Borrower shall be precluded from incurring additional Indebtedness secured by Liens on the Facilities or the Pledged Revenues that are senior to the Leasehold Mortgage and the security interest in the Pledged Revenues granted by the Loan Agreement or the Indenture. The Borrower may incur other Indebtedness secured by the Leasehold Mortgage and the security interest in the Pledged Revenues granted by the Loan Agreement only upon providing to the Trustee a certificate of an Authorized Representative of the Borrower, accompanied by a confirming Accountant’s Certificate, to the effect that (i) the requirements of the Indenture have been met if the other Indebtedness takes the form of Additional Bonds, and (ii) either:

(a) (I) the Debt Service Coverage Ratio for each of the past two Fiscal Years has not been less than 1:25:1.00, (II) the Net Income Available for Debt Service as determined in the most recent budget adopted by the Borrower must be sufficient to pay an amount representing not less than 125% of the combined Maximum Annual Debt Service for currently outstanding Long-Term Indebtedness related to the Facilities and the Long- Term Indebtedness related to the Facilities proposed to be incurred provided further that the Borrower may include in Net Income Available for Debt Service projected revenues derived by lease or sublease revenues projected to be received as evidenced by signed sublease documents customary in commercial real estate transactions, and (III) as of the date of issuance of the additional Indebtedness, the amount in the Debt Service Reserve Fund is not less than the Debt Service Reserve Fund Requirement, the amount in the Operating Reserve Fund is not less than the Operating Reserve Fund Requirement and the amount in the Repair and Replacement Fund is not less than the Repair and Replacement Fund Requirement; or

(b) the Additional Bonds are issued for the purpose of refinancing, replacement or refunding any Outstanding Bonds so long as the Borrower provides written certification to the Trustee that the debt service payable in each Fiscal Year on all Outstanding Bonds after the issuance of such Additional Bonds (excluding any Bonds that will be refunded or defeased with a portion of the proceeds of the Additional Bonds) does not exceed the debt service payable on all Bonds Outstanding prior to the issuance of such Additional Bonds in each Fiscal Year through final maturity of all Bonds (which maturity shall not be extended beyond the final maturity of the Bonds Outstanding prior to such refunding or defeasance).

Indebtedness subordinate to the obligations of the Borrower under the Loan Agreement and liens on the Facilities, Pledged Revenues or other assets of the Borrower securing such subordinate indebtedness, so long as same are subordinate to the Leasehold Mortgage and obligations under the Loan Agreement, are permitted by the Loan Agreement.

Financial Covenants

In the Loan Agreement, the Borrower has agreed to meet the following financial covenant as of the end of each Fiscal Year:

(a) Net Income Available for Debt Service for the fiscal year must not be less than 110% of the Maximum Annual Debt Service for currently outstanding Long-Term Indebtedness related to the Facilities.

If for any Fiscal Year, the Borrower fails to meet the financial covenant described above, the Borrower is required to engage a Management Consultant, as further described in the Loan Agreement. So long as the Borrower continues to make all payments due under the Loan Agreement and engages a Management Consultant as required by the Loan Agreement and accepts and continuously and substantially complies with the recommendations of the Management Consultant, failure to meet the financial covenant set forth above will not in and of itself constitute an Event of Default under the Loan Agreement. See EXHIBIT C - FORMS OF TRUST INDENTURE, LOAN AND SECURITY AGREEMENT AND LEASEHOLD MORTGAGE AND SECURITY AGREEMENT – LOAN AND SECURITY AGREEMENT – Section 8.14 Financial Covenants.

Leasehold Mortgage

In order to secure its obligations to make payments required under the Loan Agreement and to perform its other obligations under the Loan Agreement, the Borrower will execute and deliver a Leasehold Mortgage and Security Agreement dated as of June 1, 2016 (the “Leasehold Mortgage”) in favor of the Trustee. See EXHIBIT C for a form of the Leasehold Mortgage.

FEASIBILITY STUDY

CSL International LLC

CSL International LLC (“CSL”) provides a broad range of consulting services including market research and feasibility studies.

In 2015, CSL was retained by the Borrower to prepare a feasibility study with respect to the Sports Complex.

CSL Feasibility Study

CSL has prepared a feasibility study for the Borrower entitled “Feasibility Study: Kent County Regional Sports Complex,” dated May 12, 2016 (the “CSL Feasibility Study”), which is set forth in EXHIBIT B.

The CSL Feasibility Study is intended for the information of the Borrower for general planning purposes and for disclosure within this Official Statement. CSL has consented to inclusion of the CSL Feasibility Study in this Official Statement and has reviewed and consented to the provisions of this caption. All references herein to the CSL Feasibility Study are qualified in their entirety by reference to the definitive form of such report in EXHIBIT B. Prospective bondowners should read the CSL Feasibility Study carefully and in its entirety and form their own opinions about the validity and reasonableness of the assumptions and projections included therein. The projected revenues and expenses contained in the CSL Feasibility Study and included or reflected in this Official Statement are based on various assumptions concerning facts and events over which the Borrower has no control. No representation or warranty is or can be made about the amount or timing of any future income, loss, or revenues, or that actual results will be consistent with the CSL Feasibility Study or with the forecasts contained therein. The information in the CSL Feasibility Study is based on various assumptions, estimates and opinions. There is no assurance that actual events will correspond with the projections or the assumptions, estimates and opinions on which they are based.

The CSL Feasibility Study is forward-looking and involves certain assumptions and judgments regarding future events. Although the CSL Feasibility Study is based on currently available information, it is also based on assumptions about the future state of the national and regional economy as well as assumptions about future actions by various parties, which cannot be assured or guaranteed. The CSL Feasibility Study is not a prediction or assurance that a certain level of performance will be achieved or that certain events will occur. The actual results will vary from the CSL Feasibility Study, and the variations may be material. See “RISK FACTORS” herein and EXHIBIT B – “FEASIBILITY STUDY.”

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ESTIMATED NET OPERATING INCOME AND DEBT SERVICE COVERAGE

The table below has been prepared by the Borrower based on projections of the Borrower as well as certain information and methodologies derived from the Feasibility Study. The Borrower is solely responsible for the information presented below. The table below is forward-looking and involves certain assumptions and judgments regarding future events, which cannot be assured or guaranteed. Actual results will vary and the variations may be material.

KENT COUNTY SPORTS COMPLEX Estimated Net Operating Income and Debt Service Coverage by Year

Net Operating Debt Service Year _Revenues_ _Expenses_ ___Income___ Net Debt Service Coverage 2017 $1,420,512 $980,297 $440,215 -* N/A 2018 2,164,563 1,250,211 914,352 -* N/A 2019 2,436,391 1,329,948 1,106,443 $827,982.50 1.34 2020 2,557,684 1,389,421 1,168,263 1,060,632.50 1.10 2021 2,666,029 1,457,504 1,208,526 1,095,532.50 1.10 2022 2,692,689 1,472,079 1,220,611 1,104,882.50 1.10 2023 2,719,616 1,486,799 1,232,817 1,119,192.50 1.10 2024 2,746,813 1,501,667 1,245,145 1,128,152.50 1.10 2025 2,774,281 1,516,684 1,257,597 1,141,107.50 1.10 2026 2,802,023 1,531,851 1,270,173 1,153,206.25 1.10 2027 2,830,044 1,547,169 1,282,874 1,162,362.50 1.10 2028 2,858,344 1,562,641 1,295,703 1,173,450.00 1.10 2029 2,886,928 1,578,268 1,308,660 1,188,575.00 1.10 2030 2,915,797 1,594,050 1,321,747 1,197,737.50 1.10 2031 2,944,955 1,609,991 1,334,964 1,210,937.50 1.10 2032 2,974,404 1,626,091 1,348,314 1,224,071.88 1.10 2033 3,004,148 1,642,352 1,361,797 1,237,196.88 1.10 2034 3,034,190 1,658,775 1,375,415 1,249,384.38 1.10 2035 3,064,532 1,675,363 1,389,169 1,260,634.38 1.10 2036 3,095,177 1,692,116 1,403,061 1,270,946.88 1.10 2037 3,126,129 1,709,038 1,417,091 1,283,315.63 1.10 2038 3,157,390 1,726,128 1,431,262 1,296,928.13 1.10 2039 3,188,964 1,743,389 1,445,575 1,312,850.01 1.10 2040 3,220,854 1,760,823 1,460,031 1,325,953.13 1.10 2041 3,253,062 1,778,431 1,474,631 1,336,237.50 1.10 2042 3,285,593 1,796,216 1,489,377 1,353,446.88 1.10 2043 3,318,449 1,814,178 1,504,271 1,367,325.01 1.10 2044 3,351,633 1,832,320 1,519,314 1,377,871.88 1.10 2045 3,385,150 1,850,643 1,534,507 1,389,959.38 1.10 2046 3,419,001 1,869,149 1,549,852 1,408,203.13 1.10 2047 3,453,191 1,887,841 1,565,350 1,420,012.50 1.10 2048 3,453,191 1,887,841 1,565,350 1,421,706.25 1.10 2049 3,453,191 1,887,841 1,565,350 1,397,343.75 1.12 *Interest capitalized through and including April 1, 2019.

RISK FACTORS

The following discussion of some of the risk factors associated with the 2016 Bonds is not, and is not intended to be, exhaustive, and such risks are not necessarily presented in the order of their magnitude.

Sufficiency of Pledged Revenues

The 2016 Bonds, together with any Additional Bonds, are secured by and payable solely from funds payable by the Borrower under the terms and conditions of the Loan Agreement and as otherwise described therein. Based on present circumstances, the Borrower believes it will generate sufficient Pledged Revenues to meet its obligations under the Loan Agreement. However, the basis of the assumptions utilized by the Borrower to formulate this belief may otherwise change and no representation or assurance can be made that the Borrower will generate sufficient Pledged Revenues to meet its obligations.

Sports complex operations are very competitive and dependent upon rapidly changing public interest in sports complexes, tournaments, leagues, college recruitment and other such factors. Various risks associated with the development of a sports complex can adversely affect the financial performance of the Borrower, leading to potential decreases in overall revenue, the number of tournaments and leagues held, tournament and league attendance, registration fees, rental fees and profit margins. The ability of the Borrower to generate sufficient revenues is dependent upon, among other things: the ability of Borrower management to develop relationships with tournament organizers, local sports organizations, recruiters and college coaches; the ability to organize and manage a significant number of in-house tournaments; and the ability to minimize event related issues that could have a negative impact on customer satisfaction, including parking and field quality issues. The failure of the Borrower to adequately manage the Sports Complex in light of these factors could have a materially adverse impact on the operations of the Borrower and its ability to generate sufficient Pledged Revenues to meet its obligations under the Loan Agreement.

Nature of Limited Obligations

THE 2016 BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM REVENUES AND RECEIPTS UNDER THE LOAN AGREEMENT, AMOUNTS HELD UNDER THE INDENTURE AND OTHER AMOUNTS PAYABLE BY THE ISSUER PURSUANT TO THE TERMS OF THE INDENTURE. OTHER THAN SUCH AMOUNTS, THE ISSUER IS NOT LIABLE FOR ANY PAYMENTS DUE WITH RESPECT TO THE 2016 BONDS OF EITHER PRINCIPAL OR INTEREST, AND THE ISSUER HAS NO LEGAL OR MORAL OBLIGATION TO MAKE ANY APPROPRIATION OF OTHER AMOUNTS FOR SUCH PAYMENTS.

Competition

Competitive venues may offer more favorable terms and competitive rates in order to book leagues and tournaments which could adversely affect the marketability of the Sports Complex relative to its competitors. Other, more established facilities exist in the same regional market being targeted by the Sports Complex, and the ability to compete successively with these facilities will have a material impact on the financial results of the Borrower. See “Competitive Facilities” in EXHIBIT B – FEASIBILITY STUDY” for more information on the local and regional facilities that could provide competition to the Sports Complex.

Economic and Other Factors

Future economic and other factors may adversely affect the Borrower’s revenues and expenses and, consequently, the Borrower’s ability to make payments under the Loan Agreement. Among the factors that could have such adverse effects are: a general decline in economic conditions that could cause consumers to reduce discretionary spending on sports and sports tourism; changes in public opinion regarding the use of artificial turf for sports activities, including increased fear of health risks associated with artificial turf; negative weather conditions interfering with scheduled events; and personal injuries and accidents that subject the Borrower to claims and liabilities for injuries.

No Operating History; Reliance on Projections

Payment by the Trustee to the bondholders of principal of and interest due on the 2016 Bonds is dependent upon receipt of loan payments from the Borrower. The ability of the Borrower to make such loan payments when due is dependent on the Borrower’s ability to generate operating revenues from its operation of the Sports Complex. Neither the Borrower nor the Sports Complex has a history of financial results. There can be no assurance that actual results will be consistent with the projections contained in the CSL Feasibility Study. Various factors could cause actual results to differ significantly from projected results.

CSL Feasibility Study

The projected operating revenues contained in the CSL Feasibility Study and included or reflected in this Official Statement are based on various assumptions concerning facts and events over which the Issuer may have no control. No representation or warranty is or can be made about the amount or timing of any future income, loss, or revenues, or that actual results will be consistent with the CSL Feasibility or with the information contained therein. The information in the CSL Feasibility Study is based on various assumptions, estimates and opinions. There is no assurance that actual events will correspond with the assumptions and estimates on which they are based.

The CSL Feasibility Study is forward-looking and involves certain assumptions and judgments regarding future events. Although the CSL Feasibility Study is based on currently available information, it is also based on assumptions about the future state of the national and regional economy as well as assumptions about future actions by various parties, which cannot be assured or guaranteed. The CSL Feasibility Study is not a prediction or assurance that a certain level of performance will be achieved or that certain events will occur. The actual results will vary from the CSL Feasibility Study, and the variations may be material. Prospective bondowners should read the CSL Feasibility Study carefully and form their own opinions about the validity and reasonableness of such assumptions. See the discussion herein under the caption “CSL FEASIBILITY STUDY” herein and in EXHIBIT B – FEASIBILITY STUDY.

Construction of the Sports Complex

Construction of the Sports Complex could be delayed or could incur cost overruns as a result of many factors, including shortages of material and labor, work stoppages, labor disputes, weather interferences, or unforeseen engineering, environmental or geological problems. In the event that construction is delayed, the Borrower could fail to realize planned revenues from the operation of the Sports Complex. Additionally, if unforeseen construction expenses arise, the Borrower may not have sufficient funds to complete construction of the Sports Complex as initially designed. A failure to meet the initial design specifications of the Sports Complex could lead to a failure to generate the revenues forecast in the CSL Feasibility Study.

Construction of the Interchange

Construction of the interchange providing direct access to the Sports Complex could be delayed as a result of many factors, including shortages of material and labor, work stoppages, labor disputes, weather interferences, or unforeseen engineering, environmental or geological problems. A delay in the completion of the

construction of the interchange could lead to traffic problems associated with the events at the Sports Complex, which could have an adverse impact on the ability of the Sports Complex to book and host additional events, leading to a loss of revenues.

Limited Remedies Available under the Indenture, Leasehold Mortgage and Ground Lease

The 2016 Bonds are not subject to acceleration. The Ground Lease provides that the permitted use for the leased premises is limited to the development, management and operation of a regional sports complex. Under the Leasehold Mortgage, in the case of an event of default, the Trustee has the right to take possession of the leased premises and operate the Sports Complex or sell its leasehold interest in the Sports Complex. However, because of the limitations on the use of the leased premises and other factors, any such actions may not generate sufficient funds to make principal and interest payments on the Bonds when due.

Potential Effects of Bankruptcy

If the Borrower were to file a petition for relief (or if a petition were filed against such entity as debtor) under the United States Bankruptcy Code, 11 U.S.C. §§ 101 et. seq., as amended, or other similar laws that protect creditors, the filing could operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against the property of the debtor. If the bankruptcy court so ordered, the Borrower’s property and revenues could be used for the benefit of the Borrower despite the claims of its creditors (including the owners of the 2016 Bonds).

In a bankruptcy proceeding, the Borrower could file a reorganization 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 (including the owners of the 2016 Bonds). The plan, when confirmed by the court, binds all creditors who had notice or knowledge of the plan and discharges all claims against the Borrower 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. The Borrower is prohibited from creating secured creditors except as provided in the Loan Agreement. Each class of claims has accepted the plan if at least two- thirds in dollar amount and more than one-half the 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.

Security Interest in Pledged Revenues and Facility

The pledge of and security interest in the Pledged Revenues and the Facility and the lien and security interest in the equipment and personal property within the Sports Complex and other Leasehold Mortgaged Property may be limited by the following: (i) statutory liens; (ii) rights arising in favor of the United States of America or any agency thereof; (iii) present or future prohibitions against assignment contained in any federal statutes or regulations; (iv) constructive trusts, equitable liens or other rights impressed or conferred by any state or federal court in the exercise of its equitable jurisdiction; (v) federal bankruptcy or state insolvency laws affecting assignments of revenues earned after any effective institution of bankruptcy or insolvency proceedings by or against the Borrower; (vi) rights of third parties in any revenues, including revenues converted to cash, not in possession of the Trustee; and (vii) the requirement that appropriate continuation statements be filed in accordance with the Delaware Uniform Commercial Code.

Tax-Exempt Status

Under present Federal and State law, regulations and rulings, the income of 501(c)(3) organizations, such as the Borrower, is exempt from Federal and Delaware income tax, except for any unrelated business income. Failure of the Borrower to maintain its status as a 501(c)(3) organization or changes in such current laws, or the regulations, rulings or interpretations thereof could adversely affect the Borrower. Such failure would adversely affect the exclusion of interest on the 2016 Bonds from income for federal income taxation purposes.

Moreover, the ongoing tax-exempt status of interest on the 2016 Bonds is conditioned, under relevant provisions of the Code, on compliance by the Borrower with various requirements set forth, inter alia, in Sections 145 and 148 of the Code, requiring, among other things, that the Sports Complex be owned throughout the term of the 2016 Bonds by a governmental unit or an organization described in Section 501(c)(3) of the Code, that not more than five percent of the proceeds of the 2016 Bonds (inclusive of proceeds applied to defray issuance costs) be applied to any “private business use,” any use giving rise to “unrelated business income,” or other uses inconsistent with the charitable purposes of the Borrower, as a 501(c)(3) organization, and that certain investment earnings in respect of the 2016 Bonds be subject to non-arbitrage requirements imposed under Section 148 of the Code, including requirements to perform certain “rebate” computations and to make certain “rebate” payments of “arbitrage” earnings all as further provided in applicable statues, regulations, rulings and decisions. Failure to comply with such requirements could result in the loss of the tax-exempt status of interest on the 2016 Bonds to the owners thereof, and such interest could become taxable to such owners retroactive to the date of issuance of the 2016 Bonds.

Other Possible Risk Factors

The occurrence of any of the following events, or other unanticipated events, could adversely affect the operations of the Borrower: 1. Inability to control increases in operating costs, including salaries, wages and fringe benefits, supplies and other expenses, given an inability to obtain corresponding increases in operating revenues; and 2. Adoption of federal, state or local legislation or regulations having an adverse effect on the future operating or financial performance of the Borrower.

TAX MATTERS

Federal Tax Matters

In the opinion of Ballard Spahr LLP, Bond Counsel, interest on the 2016 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 2016 Bonds, assuming the accuracy of the certifications of the Issuer and the Borrower and continuing compliance by the Issuer and the Borrower with the requirements of the Internal Revenue Code of 1986, as amended (the “Code”). Interest on the 2016 Bonds is not an item of tax preference for purposes of either individual or corporate federal alternative minimum tax; however, interest on 2016 Bonds held by a corporation (other than an S corporation, regulated investment company, or real estate investment trust) may be indirectly subject to federal alternative minimum tax because of its inclusion in the adjusted current earnings of a corporate holder. Bond Counsel will express no opinion regarding other federal tax consequences of ownership or disposition of, or the accrual or receipt of interest on, the 2016 Bonds.

The Code establishes requirements that must be complied with subsequent to the issuance of the 2016 Bonds for interest thereon to be and remain excludable from gross income pursuant to Section 103 of the Code. Failure to comply with these requirements could cause the interest on the 2016 Bonds to be included in gross income, retroactive to the date of issue of the 2016 Bonds or at some later date. The requirements include, but are not limited to, (1) the provisions of Section 148 of the Code which prescribes yield and other limits within which the proceeds of the 2016 Bonds are to be invested and may require that certain investment earnings on the foregoing be rebated on a periodic basis to the United States, (2) use of the proceeds of the 2016 Bonds, and (3) use of the facilities financed with the 2016 Bonds. The Issuer and the Borrower have covenanted to comply with the provisions of the Code.

Original Issue Discount. The 2016 Bonds being offered at a discount (“original issue discount”) equal generally to the difference between the public offering price and the principal amount are referred to herein as the “Discount Bonds”. For federal income tax purposes, original issue discount on a Discount Bond accrues periodically over the term of such Discount Bond as interest which is excluded from the gross income for Federal

income tax purposes and subject to alternative minimum tax to the same extent as regular interest. The accrual of original issue discount increases the holder’s tax basis in the 2016 Bonds for determining taxable gain or loss upon sale or redemption prior to maturity. Holders should consult their tax advisors for an explanation of the accrual rules.

Original Issue Premium. The 2016 Bonds being offered at a premium (“original issue premium”) equal generally to the excess of their public offering price over their principal amount are referred to herein as the “Premium Bonds”. For federal income tax purposes, original issue premium is amortizable periodically over the terms of the Premium Bond through reductions in the holder’s tax basis for such Premium 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. Holders should consult their tax advisors for an explanation of the amortization rules.

State of Delaware Tax Matters

Bond Counsel will also deliver an opinion to the effect that, so long as the interest on the 2016 Bonds is excludable from gross income for federal income tax purposes, it will also be excludable from taxable income for the purposes of personal and corporate income taxes imposed by the State of Delaware; provided, however, Bond Counsel will express no opinion regarding franchise tax. Bond Counsel will express no opinion regarding other state or local tax consequences of ownership or disposition of, or the accrual or receipt of interest on, the 2016 Bonds.

Changes in Federal and State Tax Law

From time to time, there are Presidential proposals, proposals of various federal committees, and legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to herein or adversely affect the marketability or market value of the 2016 Bonds or otherwise prevent holders of the 2016 Bonds from realizing the full benefit of the tax exemption of interest on the 2016 Bonds. Further, such proposals may impact the marketability or market value of the 2016 Bonds simply by being proposed. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value, marketability or tax status of the 2016 Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the 2016 Bonds would be impacted thereby.

Purchasers of the 2016 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the 2016 Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any proposed or pending legislation, regulatory initiatives or litigation.

UNDERWRITING

The 2016 Bonds are being purchased by M&T Securities, Inc. (the “Underwriter”) pursuant to a Bond Purchase Contract, by and among the Underwriter, the Borrower and the Issuer (the “Bond Purchase Contract”). Pursuant to the Bond Purchase Contract, the Underwriter has agreed to purchase the 2016 Bonds at a purchase price of $22,161,551.90 (the principal amount of the 2016 Bonds plus net original issue premium of $1,401,551.90). The Borrower has agreed to pay the Underwriter a fee of $176,460 in connection with the sale of the 2016 Bonds from funds available to it and not from proceeds of the 2016 Bonds. The obligation of the Underwriter to accept delivery of the 2016 Bonds is subject to various conditions contained in the Bond Purchase Contract. The Bond Purchase Contract provides that the Underwriter will purchase all of the 2016 Bonds if any are purchased. The 2016 Bonds may be offered and sold to certain dealers, banks and others at prices lower that the initial offering prices, and such initial offering prices may be changed from time to time by the Underwriter.

The Underwriter has provided this paragraph for inclusion in this Official Statement. The Underwriter and its affiliates comprise a full service financial institution engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The Underwriter and its affiliates may have, from time to time, performed and may in the future perform, various investment banking services for the Borrower or the Issuer, for which they may have received or will receive customary fees and expenses. In the ordinary course of their various business activities, the Underwriter and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the Borrower and the Issuer.

LEGAL MATTERS

All legal matters incident to the authorization, issuance, sale and delivery of the 2016 Bonds by the Issuer are subject to the approving opinion of Ballard Spahr LLP, Wilmington, Delaware, Bond Counsel, whose approving opinion will be delivered with the 2016 Bonds, and the proposed form of which is set forth in EXHIBIT D – PROPOSED FORM OF OPINION OF BOND COUNSEL. The legal opinion delivered may vary from that form if necessary to reflect facts and law on the date of delivery.

Certain legal matters will be passed upon for the Borrower by Potter Anderson & Corroon LLP, Wilmington, Delaware, as Borrower’s counsel, and for the Underwriter by Saul Ewing LLP, Wilmington, Delaware as Underwriter’s counsel.

The various legal opinions to be delivered concurrently with the delivery of the 2016 Bonds will speak only as of their dates of delivery and will be qualified in certain customary respects, including as to the enforceability of the various legal instruments by limitations imposed by state and federal law affecting remedies and by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, the application of equitable principles and the exercise of judicial discretion in appropriate cases. The legal opinions express the professional judgment of counsel rendering them, but are not binding on any court or other governmental agency and are not guarantees of a particular result. LITIGATION

As of the date hereof, there is no litigation of any nature pending or threatened against the Issuer or the Borrower to restrain or enjoin the issuance, sale, execution, or delivery of the 2016 Bonds or the application of the proceeds thereof toward the costs of the Project, or in any way contesting or affecting the validity of the 2016 Bonds or any proceedings of the Issuer or the Borrower taken with respect to the issuance or sale thereof, or the pledge or application of any monies or security for the 2016 Bonds or the existence or powers of the Issuer.

There is no litigation pending or, to the knowledge of the Borrower, threatened against the Borrower, wherein an unfavorable decision would adversely affect the ability of the Borrower to construct or operate the Project or to carry out its obligations under the Loan Agreement or would have a material adverse impact on the financial position of the Borrower.

CONTINUING DISCLOSURE

The Borrower will execute and deliver a Continuing Disclosure Agreement (the “Disclosure Agreement”), with respect to the 2016 Bonds. The Disclosure Agreement is made for the benefit of the registered and Beneficial Owners (as defined in the Disclosure Agreement) of the 2016 Bonds and in order to assist the Underwriter in complying with its obligations pursuant to Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Continuing Disclosure Rule”). This is the Borrower’s first continuing disclosure undertaking under the Rule. See EXHIBIT E – FORM OF CONTINUING DISCLOSURE AGREEMENT.

RATING

The 2016 Bonds have been assigned a rating of “A-” (Stable Outlook) by S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P”). Such rating reflects only the views of S&P, at the time such rating was given, and neither the Issuer nor the Borrower makes any representation as to the appropriateness of the rating. Any explanation of the significance of the rating may be obtained only from S&P. The Borrower furnished to S&P information and materials relating to the 2016 Bonds and itself, certain of which information and materials have not been included herein. Generally, rating agencies base their ratings on such information and materials and on investigations, studies and assumptions by the rating agencies. There is no assurance that the rating will continue for any given period of time or that it will not be revised downward or withdrawn. Revision, qualification or withdrawal of the rating can be expected to have an adverse effect on the market price of the 2016 Bonds. Neither the Issuer nor the Borrower has undertaken any obligation to maintain any particular rating on the 2016 Bonds.

CERTAIN RELATIONSHIPS

M&T Securities, Inc., the Underwriter of the 2016 Bonds, is an affiliate of Wilmington Trust, National Association, the Trustee for the 2016 Bonds.

MISCELLANEOUS

The Borrower has furnished the information herein relating to itself and the Project. The Issuer has furnished only the information herein under the caption “ISSUER” and the caption “LITIGATION” as it relates to the Issuer. The Underwriter has furnished the information in this Official Statement with respect to the offering prices of the 2016 Bonds and the information under the caption “UNDERWRITING.”

All quotations from, and summaries and explanations of, the Indenture, the Loan Agreement, the Leasehold Mortgage and other documents referred to herein do not purport to be complete, and reference is made to said documents for full and complete statements of their provisions. All references herein to the 2016 Bonds are qualified by the definitive forms thereof and the information with respect thereto contained in the Indenture and the Loan Agreement. This Official Statement shall not be construed as constituting an agreement with purchasers of the 2016 Bonds. The cover page, introductory statement and the attached Exhibits are part of this Official Statement.

ANY STATEMENTS MADE IN THIS OFFICIAL STATEMENT INVOLVING MATTERS OF OPINION OR OF ESTIMATES, WHETHER OR NOT SO EXPRESSLY STATED, ARE SET FORTH AS SUCH AND NOT AS REPRESENTATIONS OF FACT AND NO REPRESENTATION IS MADE THAT ANY OF THE ESTIMATES WILL BE REALIZED.

OTHER THAN WITH RESPECT TO INFORMATION CONCERNING THE ISSUER CONTAINED UNDER THE CAPTIONS “ISSUER” AND “LITIGATION” AS IT RELATES TO THE ISSUER, NONE OF THE INFORMATION IN THIS OFFICIAL STATEMENT HAS BEEN SUPPLIED OR VERIFIED BY THE ISSUER, AND THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO (I) THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION; (II) THE VALIDITY OF THE 2016 BONDS OR (III) THE TAX STATUS OF THE INTEREST ON THE 2016 BONDS.

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The execution and delivery of this Official Statement have been duly authorized by the Issuer and the Borrower.

KENT COUNTY, DELAWARE

By: /s/ P. Brooks Banta President, Levy Court

KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION

By: /s/ William Strickland Board President

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EXHIBIT A

CERTAIN INFORMATION REGARDING THE BORROWER

Kent County Regional Sports Complex Corporation (the “Borrower”) is a Delaware nonstock corporation exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The Borrower was formed in 2015 for the purpose of owning, developing, constructing, and operating a sports complex and related recreational facilities in Kent County, Delaware known as “DE Turf Sports Complex” or “DE Turf.” The Borrower is a membership corporation with no authority to issue capital stock.

Governance of Borrower

The members of the Borrower are its Directors. The Borrower’s bylaws provide for nine (9) Class A Directors and ten (10) Class B Directors. Together, the Class A Directors and Class B Directors constitute the Borrower’s Board of Directors, which is its governing body (“Board of Directors” or “Board”). The Board of Directors may also consist of such other persons and have such other qualifications as may be specified by the Board from time to time.

The Class A Directors are (1) the Director of the Kent County Department of Community Services, or his designee with approval of the Board; (2) the Executive Director of Greater Kent Committee, Inc., or his designee with approval of the Board; (3) the Executive Director of the Delaware Sports Commission, Inc., or his designee with approval of the Board; (4) the Director of the State of Delaware Tourism Office, or his designee with approval of the Board; (5) the Director of the Kent County Tourism Office, or his designee with approval of the Board; (6) the President of Greater Kent Committee, Inc., or his designee; (7) an “at large” Director appointed by the Chairman of the Board (the “Chair”); (8) the Delaware State Senator from the 16th Senatorial District, or his designee; and (9) the Delaware State Representative from the 33rd Representative District, or his designee. Each Class A Director holds office until he or she fails to meet the applicable qualifications, at which time his or her term automatically expires and the person then meeting the applicable qualifications automatically becomes successor as a Class A Director.

The Class B Directors meet the following qualifications: one Class B Director appointed by each of the seven sitting Commissioners of the Kent County Levy Court, totaling seven (7) Class B Directors so appointed all of whom must reside in Kent County, Delaware; and three (3) “at large” Class B Directors appointed by the Chair. Each Class B Director sits at the pleasure of the entity or person who appointed the Class B Director. Each Class B Director holds office for a two-year period, or until his or her successor is appointed and qualified, or until the earlier of his or her (i) failure to meet the applicable qualifications, (ii) resignation, or (iii) removal.

The Borrower’s Class A Directors and Class B Directors have otherwise equal power and voting rights.

The nine Class A Directors are as follows:

1. Jeremy Sheppard, Director, Kent County Department of Community Services

2. Shelly Cecchett, Executive Director of the Greater Kent Committee, Dover Delaware.

3. Chris Giacomucci, Director of the Delaware Sports Commission, Dover, Delaware.

4. Linda Parkowski, Director of the State of Delaware Tourism Office, Dover, Delaware.

5. Wendie Vestfall, Director of the Kent County Tourism Office, Dover, Delaware.

6. Bill Strickland, President of the Greater Kent Committee, L&W Insurance, Dover, Delaware (Current Chair of the Board of the Borrower).

7. Cindy Small, Resiliency Coordinator, Univ. of Delaware Small Business Development Center

8. Lyndon D. Yearick, Delaware State Representative for the 34th Representative District.

9. Jack Peterman, Delaware State Representative for the 33th Representative District.

The ten Class B Directors are as follows:

1. Wilmer E. Abbott - Planning and Zoning Manager, Smyrna, Delaware.

2. Sean Mercer – Dentist, Mercer Dental Associates, Dover, Delaware.

3. David Bonar – Public Advocate, Division of the Public Advocate, Dover, Delaware.

4. David N. Rutt – Attorney, Moore & Rutt, Georgetown, Delaware.

5. John W. Paradee -Attorney, Baird Mandalas Brockstedt, LLC Dover, Delaware.

6. Michael Harrington Jr. - Vice President & General Manager, ERA Harrington Realty, Inc.

7. Robert Reed – Retired.

8. Carrie Lingo – Real Estate Agent, Jack Lingo Realtors, Rehoboth Beach, Delaware.

9. Dr. Matthew Robinson – Professor Sports Management, Univ. of Delaware.

10. Dr. Scott Hammer - Physician, Southern Delaware Medical Group, Milford, Delaware.

The Board of Directors meets on a regular basis as determined by the Chair at a time and place designated by the Chair. Special meetings of the Board of Directors may be called by the Chair. The Board of Directors may act by unanimous written consent in lieu of a meeting.

The Board of Directors elects the Chair and a Vice Chairman of the Board, a Secretary, and a Treasurer. The Board of Directors also appoints the Executive Director of the Borrower. The Executive Director is responsible for the overall direction and management of the Borrower within the framework of Board-approved objectives, policies, and programs. The specific responsibilities of the Executive Director are those prescribed by the Board of Directors from time to time and, to the extent not so prescribed, are those which generally are performed by a chief executive officer, subject to the control of the Board of Directors. The Executive Director receives compensation for the performance of his duties, as determined in the Board’s discretion.

Executive Personnel

Robert Smith, Executive Director – Mr. Smith joined the Borrower in October 2015, following 8 years with the Philadelphia Union (Major League Soccer) serving as Director of Operations and Business Development prior to becoming the Vice President of Soccer Development & Community Relations. While with the Philadelphia Union, he was responsible for design and development of all revenue generating youth development programs as well as game day production and event planning. In addition he was responsible for establishment of the Philadelphia Union Foundation and the development of after school programming and winning grants to launch the Soccer for Success partnership with Widener University. Other notable experiences include: (a) 12 years at NIKE Inc., during which time he held the following positions: (i) Regional Sales and Operations Manager, (ii) Regional Soccer Marketing and Sales, and (iii) Business Development and Grassroots Marketing Specialist; (b) over 10 years of Accounting and Business Development experience at United Sports Training Center where he served as CFO/Vice President of Development and Marketing and at Irex Corp., where he served as Corporate Controller. The United Sports Training Center is a multiple use sports complex located in West Bradford Township, Pennsylvania, that includes a 60 acre outdoor field facility consisting of 11 fields.

Mr. Smith holds degrees in Accounting and Business Administration, with a minor in Computer Science, from Geneva College. Mr. Smith has also previously served on the Board of Directors of the following organizations: NSCAA, the Philadelphia Union Foundation, the Will Trippley Foundation and the Coatesville Library. He currently sits on the Board of Directors of the JT Dorsey Foundation.

While at NIKE, Mr. Smith developed the NIKE Cup, a youth soccer tournament for FC DELCO, a youth club in Pennsylvania, that hosted 500 teams from across the country. The NIKE Cup is now known as the Players Cup and hosts close to 750 teams across the Mid-Atlantic region. In addition, Mr. Smith’s experience at the United Sports Training Center included input into final design and overseeing construction. During the construction process, he also secured contracts with local clubs, planned events and lead program development across multiple sports categories.

Mr. Smith will be responsible for the overall direction and management of the Borrower within the framework of Board-approved objectives, policies, and programs. Mr. Smith’s plans to implement the Board’s vision of the Sports Complex as a destination in and of itself, and not just a host of sporting events. The Sports Complex plans to offer meaningful experiences for the athletes and parents that visit the Sports Complex, including recruiting, hydration and nutrition seminars, skills demonstrations, mini clinics and interactive areas.

Mr. Smith is in negotiations with a number of soccer, field hockey and lacrosse groups to book tournaments to begin as early as late spring of 2017.

Development and Marketing

DE Turf is perfectly situated to take advantage of the approximately 40 million people who live within a three-hour drive of the complex. The Mid-Atlantic is rich with local recreational teams and travel leagues across many sports that could be potential targets to attract to utilize the facility. Connections forged with major sanctioning bodies – like USA Lacrosse, USA Field Hockey and US Youth Soccer – and state associations will help increase the reach of efforts to bring in events and tournaments.

The 85-acre, state-of-the-art facility, conceived as an economic driver for the State of Delaware, will be home to ten synthetic turf and two natural grass fields for sports, such as soccer, lacrosse, field hockey, rugby and ultimate Frisbee. The complex will include a championship stadium field. Fields will have lighting and scoreboards, and the synthetic turf will minimize the impact of inclement weather on

games and tournaments. Additionally, DE Turf will have 900 parking spaces, festival grounds, comfort stations, training areas and a cutting edge fieldhouse, created in partnership with an unrelated concessionaire, that will have interesting, healthy culinary offerings for athletes.

State lawmakers have supported DE Turf with the appropriation of more than $4.2 million in funds to construct the complex. DelDOT has also begun the construction of an interchange to improve access to the site. The complex has received tremendous support from the Delaware Sports Commission, the Delaware Tourism Office and various convention and visitor bureaus. Those relationships are already bearing fruit as many opportunities for the facility are already close to being finalized. Management expects that DE Turf will be able to hit the ground running when it opens. All stakeholders are working together to create a tournament within an experience, with the goal of making the tournament games just part of what travelers enjoy in Delaware. This supports the ultimate goal of turning DE Turf from a facility into a destination.

EXHIBIT B

FEASIBILITY STUDY

[ THIS PAGE INTENTIONALLY LEFT BLANK ] Feasibility Study: KENT COUNTY REGIONAL SPORTS COMPLEX May 12, 2016

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DE URF SPORTS COMPLEX

KENT COUNTY, DELAWARE

October 12, 2015

302-734-2513 59 ROOSEVELT AVE, DOVER DE 19901 [email protected] PHONE ADDRESS EMAIL

Sincerely yours,

Shelly Cecchett May 12, 2016

Ms. Shelly Cecchett Executive Director Greater Kent Committee 101 West Loockerman St. Suite 1B Dover, DE 19904

Dear Ms. Cecchett:

Conventions, Sports & Leisure International (“CSL”) is pleased to present this feasibility study for the proposed Kent County Regional Sports Complex. The attached report summarizes our research and analyses and is intended to assist project stakeholders in making informed decisions regarding potential sports complex development.

The information contained in this report is based on estimates, assumptions and other information developed from research of the market, knowledge of the sports industries and other factors, including certain information provided by the Greater Kent Committee and others. All information provided to us was not audited or verified and was assumed to be correct. Because procedures were limited, we express no opinion or assurances of any kind on the achievability of any projected information contained herein and this report should not be relied upon for that purpose. Furthermore, there will be differences between projected and actual results. This is because events and circumstances frequently do not occur as expected, and those differences may be material. We have no responsibility to update this report for events and circumstances occurring after the date of this report.

We sincerely appreciate the opportunity to assist you with this project, and would be pleased to be of further assistance in the interpretation and application of the study’s findings.

Very truly yours,

CSL International

Table of Contents

1. Introduction ...... 1

2. Market Conditions ...... 4

3. Competitive Facilities ...... 30

4. Sports Participation...... 44

5. Comparable Facility Benchmarking ...... 52

6. Potential User Interviews...... 72

7. Estimated Utilization ...... 81

8. Estimated Financial Operations ...... 87

1. INTRODUCTION

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1. Introduction

Expected to open in 2017, the proposed $24 million Kent County Regional Sports Complex, also known as “The Turf”, is envisioned to be a state-of-the-art athletic complex that is anticipated to become one of the preeminent destinations in the Mid-Atlantic Region for soccer, lacrosse, field hockey and other field-based sports and non-sports activities.

The origin of the sports complex project began in 2008 when the KENT COUNTY REGIONAL SPORTS COMPLEX State of Delaware’s tourism Site Plan and Location office identified a need for a large-scale sports complex in order to accommodate external requests to host sports tournaments that could not be accommodated due to a lack of appropriate facilities in Delaware. The Greater Kent Committee, a non-profit member organization established to identify emerging community issues and establish projects to improve the quality of life of Central Delaware residents, became the champion of the sports complex project and has been instrumental in developing plans and community support to date.

The Kent County Regional Sports Complex is envisioned to consist of 12 synthetic, regulation-size turf fields. Each field would be equipped with sports lighting, scoreboards and portable bleachers. One of these fields would be designated the championship field and would include fixed seating for 1,500 spectators with potential for more portable seating. Additionally, the Kent County Regional Sports Complex would include 900 parking spaces and support amenities such as paved walkways, shaded tent structures, restrooms, concessions, a playground and administrative/maintenance buildings.

A future phase, dependent on private fundraising, is envisioned to include the construction of a 13th field that would consist of a $2 million state-of-the-art, water-based synthetic field dedicated to field hockey.

1. Introduction

The Kent County Regional Sports Complex would be located along Delaware State Route 1 (the state’s main north-south highway) near the Town of Frederica, approximately 10 miles south of Dover and 30 miles northwest of the Dover beaches. The regional sports complex would be within a four-hour drive of nearly 42 million people, including major regional metropolitan areas such as Philadelphia, Baltimore and Washington D.C. and is expected to draw from Mid-Atlantic states including North Carolina, Virginia, Maryland, Pennsylvania, New Jersey, New York and beyond.

The Kent County Regional Sports Complex would comprise an 84-acre, rural site that is owned by the Kent County Levy Court and is leased to the Kent County Regional Sports Complex Corporation (“Corporation” or “KCRSCC”) for $1.00 per year for an initial term of 60 years with an option to extend the lease another 30 years. The KCRSCC is a non-profit entity established for the specific purpose of financing, owning and operating the sports complex.

The $24 million sports complex (excluding the 13th field dedicated to field hockey) is envisioned to be funded with state contributions and the net operating income of the sports complex. Specifically, the State of Delaware is expected to provide $4 million in funding and the remaining $20 million of project costs funded via tax-exempt bonds sold by M&T Securities.

These bonds are anticipated to be repaid from net operating income generated by the Kent County Regional Sports Complex. A debt service reserve fund is expected to be established from the proceeds of the bonds and would be available to make debt payments on the bonds if the Corporation does not have sufficient funds. If the debt service reserve fund is not replenished by the Corporation, the Kent County Levy Court would vote to determine whether to fund the shortfall and the Corporation would repay the County from future excess revenues. It should be noted that Kent County is not obligated to approve the funding of any shortfall. In the event Kent County elects not to fund any shortfall, the sports complex ownership could be transferred to the bondholders.

As a next step in the planning process to secure project funding, the Corporation retained Conventions, Sports & Leisure International (“CSL”) to provide an independent feasibility study for the proposed regional sports complex.

In order to assess the feasibility of the proposed Kent County Regional Sports Complex, CSL toured the sports complex site and surrounding area, met with key project stakeholders, analyzed local and regional market conditions, analyzed the regional competitive venue landscape, benchmarked similar complexes in comparable markets and interviewed sports and recreation organizations that could represent potential users that could be attracted to the proposed sports complex. Research results were used to quantify the potential demand for the proposed sports complex and estimate the potential financial operations of the proposed sports complex and its ability to service its debt obligations.

1. Introduction

KENT COUNTY REGIONAL SPORTS COMPLEX Feasibility Study Components Competitive Facility Analysis Comparable Venue Potential User Benchmarking Interviews

Market Market Demand Community Conditions Outreach

Financial Projections

The feasibility study’s findings are presented in the following sections:

1. Introduction 2. Market Conditions 3. Competitive Facilities 4. Sports Participation Trends 5. Comparable Facility Benchmarking 6. Potential User Interviews 7. Estimated Utilization 8. Estimated Financial Operations

The study is designed to assist the Kent County Regional Sports Complex Corporation, Kent County Levy Court, project finance officials and other project stakeholders in making informed decisions regarding the proposed development and should be read in its entirety to obtain the background, methods and assumptions underlying the findings.

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2. MARKET CONDITIONS

2. Market Conditions

The Kent County Regional Sports Complex is envisioned primarily to (i) host tournaments that draw participants from a regional area, fill local hotels and generate economic benefits for Kent County and the State of Delaware; and (ii) meet the needs of local sports participants for league play, practices, clinics, camps and other activities. As result, the viability of the Kent County Regional Sports Complex is dependent, to a large degree, on local and regional market conditions such as the size, demographic and socioeconomic characteristics of the area; transportation accessibility; the depth and breadth of visitor infrastructure (hotels, restaurants, shopping, attractions, etc.); and climate, among other factors.

This section provides an overview of the local and regional market area in order to provide a foundation for evaluating the market conditions under which the Kent County Regional Sports Complex would operate. The assessment of market conditions includes the following:

 Market Overview;  Demographic and Socioeconomic Characteristics;  Transportation Accessibility;  Visitor-Related Infrastructure;  Local Field Inventory; and,  Climate Conditions.

The remainder of this section summarizes key local and regional market characteristics and their potential implications on the viability of the Kent County Regional Sports Complex.

Market Overview

Delaware is comprised of three counties: Kent County, New Castle County and Sussex County. Each of the state’s three counties has distinct demographic and industrial characteristics. New Castle County, the northernmost and most populous county, is home to the majority of Delaware’s corporate community, anchored by several national financial firms headquartered in Wilmington. Located in southern Delaware, Sussex County is a popular tourist destination whose beaches draw visitors from throughout the Mid-Atlantic Region.

Located in the central part of the state, Kent County is home to the state capital and has a diverse economy with state government, education, health care, food manufacturing and the Dover Air Force Base representing significant sources of employment. Dover Downs, the Dover International Speedway and the Firefly Music Festival provide Kent County with three significant visitor attractions, although increased competition from casinos in neighboring states and a general downturn in NASCAR demand have had a negative impact on the county’s tourism in recent years.

Regionally, Delaware is located in relatively close proximity to several major markets along the Mid-Atlantic seaboard, including Philadelphia, Baltimore, Washington D.C., New York City, and

2. Market Conditions

Virginia Beach/Norfolk. In total approximately 42 million people, or 13.3 percent of the U.S. population, reside within a four-hour drive of the proposed Kent County Regional Sports Complex.

Demographic and Socioeconomic Characteristics

The historical, current and projected demographic and socioeconomic characteristics of Kent County, the State of Delaware and the surrounding regional area provide an indication of the market’s ability to support the Kent County Regional Sports Complex.

The demographic and socioeconomic data presented in this report is based on the anticipated market of the Kent County Regional Sports Complex. For purposes of this report, the market can be defined as the geographic area from which the majority of participants, spectators and corporate partners are expected to originate. The size of this area can be influenced by such factors as transportation systems, site accessibility, media coverage and competing athletic facilities in the surrounding region.

The primary market area for local league games, practices and camps hosted at the Kent County Regional Sports Complex is anticipated to mostly consist of residents from the Dover Core-Based Statistical Area (“CBSA”), which comprises Kent County (DE). A CBSA is a U.S. geographic area defined by the U.S. Office of Management and Budget based around an urban center of at least 10,000 people and adjacent areas that are socioeconomically tied to the urban center by commuting. It is anticipated that the Kent County Regional Sports Complex would also draw, to a lesser extent, from the populations of New Castle and Sussex counties for league games, practices and camps.

In addition, it is anticipated that the Kent County Regional Sports Complex will also service regional communities outside of Kent County and the State of Delaware for tournaments, camps and other such activities. For purposes of this report, a four-hour drive time radius around the Kent County Regional Sports Complex site was applied to estimate the potential regional market. Industry research indicates that participants in sports tournaments are generally willing to travel, on average, up to four hours by car to participate in regional tournaments. As such, it is expected that the majority of tournament participants traveling to the Kent County Regional Sports Complex will be derived from this four-hour drive time area. Occasionally, sports complexes can draw from national or international markets, but these opportunities are less frequent.

The tables on the following three pages provide a demographic and socioeconomic overview of Kent County, the State of Delaware and the regional four-hour drive time market compared with the United States as a whole.

2. Market Conditions

MARKET SNAPSHOT Local & Regional Demographic and Socioeconomic Characteristics

United Kent State of 4-Hour States Demographic Variable County¹ Delaware Drive Time Total

Population: 2010 Population 162,310 879,934 41,286,130 308,745,540 2015 Population 172,280 936,924 42,381,460 318,536,440 2020 Population 184,440 982,535 43,756,900 327,981,320 Historical CAGR (2010 to 2015)² 1.1% 0.8% 0.5% 0.6% Projected CAGR (2015 to 2020) 1.4% 1.0% 0.6% 0.8%

Age: Median Age 37.1 39.7 38.5 37.9 Age Distribution: Under 20 28.1% 24.5% 26.1% 25.6% 20 to 34 20.9% 20.0% 20.8% 20.8% 35 to 54 25.0% 25.7% 26.9% 26.0% 55 & Over 27.4% 29.8% 27.5% 27.6%

Household Income: Median Household Income $54,660 $59,598 $69,100 $53,220 Income Distribution: $0 to $24,999 17.5% 16.3% 18.5% 23.6% $25,000 to $49,999 27.1% 25.1% 20.0% 24.8% $50,000 to $74,999 18.8% 18.0% 15.7% 17.6% $75,000 to $99,999 14.2% 14.1% 12.3% 12.7% $100,000 to $149,999 14.1% 15.5% 15.2% 11.9% $150,000 and over 6.6% 11.0% 16.8% 9.4%

Ethnicity: White 65.7% 67.2% 61.7% 71.2% African-American 24.9% 21.8% 19.3% 12.7% Hispanic 7.3% 9.2% 17.0% 17.5% Asian 2.2% 3.7% 8.2% 5.1%

(1) Kent County comprises the Dover CBSA. (2) CAGR represents Compound Annual Growth Rate. (3) Hispanic is a subset of "White" in the U.S. Census categorizations. Source: ESRI.

2. Market Conditions

DEMOGRAPHIC AND SOCIOECONOMIC DATA City of Dover and Kent County

POPULATION DENSITY - KENT COUNTY CBSA POPULATION GROWTH - KENT COUNTY CBSA

Population distribution per square mile Population growth per square mile

AGE DISTRIBUTION - KENT COUNTY CBSA HOUSEHOLD INCOME DISTRIBUTION - KENT COUNTY CBSA

Population distribution Income distribution perAgesquare distribution mile Ageper distributionsquare mile per square mile per square mile

2. Market Conditions

DEMOGRAPHIC AND SOCIOECONOMIC DATA Kent County and Four-Hour Drive Time

POPULATION DENSITY - REGIONAL POPULATION GROWTH - REGIONAL

Population distribution per square mile Population growth per square mile

AGE DISTRIBUTION - REGIONAL HOUSEHOLD INCOME DISTRIBUTION - REGIONAL

Age distribution Age distribution per square mile Incomeper square distribution mile per square mile

2. Market Conditions

Population

The size and characteristics of the local and regional population base will have a direct impact on the sport complex management’s ability to attract participants and spectators to the Kent County Regional Sports Complex.

Key population characteristics of the Kent County Regional Sports Complex’s local and regional market include:

Local Market:

 Kent County’s population (i.e. Dover CBSA) of 172,280 residents represents approximately one fifth of the state population of 936,924 and ranks as the 246th most populous of the 929 CBSAs in the United States. Delaware is the 45th most populous of the 50 states.

 Population density in Kent County, as a measure of residents per square mile, is greatest northwest of the City of Dover and directly west of the Kent County Regional Sports Complex site. Within the state, more than half of the state’s population is clustered in New Castle County and, more specifically the City of Wilmington, which is part of the Philadelphia-Camden-Wilmington CBSA.

 Approximately 66 percent of Kent County residents identify themselves as white or Caucasian and 25 percent identify as African American. The Asian population (2.2 percent of the Kent County population) grew by approximately 75 percent from the 2000 census. The ethnicity of Delaware residents as a whole closely mirrors that of Kent County.

 Kent County is the least populated county in the state but experienced an annual population growth rate of 1.1 percent from 2010 to 2015, significantly higher than the national average (0.6 percent) and state average (0.8 percent). Over the next five years, the population of Kent County is projected to grow 1.4 percent annually, a rate nearly double the national average (0.8 percent) and 40 percent higher than the state average (1.0 percent).

 Within the next five years, Kent County’s population is estimated to grow to 184,440 and Delaware’s population is estimated to grow to 982,535.

2. Market Conditions

Regional Market:

 Approximately 42.4 million people live within a four-hour drive of the Kent County Regional Sports Complex, the area from which the majority of tournament and camp participants are anticipated to originate. This represents a significant market size relative to similar sports complexes operating in other U.S. markets.

 The historical and projected population growth rate of the regional (four-hour drive time) market is slightly less than the growth of the U.S. population as a whole. Within five years, the four-hour drive time market population is expected to increase to 43.8 million.

 The ethnicity of the market within a four-hour drive time of the Kent County Regional Sports Complex is more diverse than the immediate Kent County and state of Delaware market areas.

Because the immediate Kent County area is characterized by a modest population base, it will be important for the Kent County Regional Sports Complex to draw patrons and users from the regional four-hour drive time market base of 42.4 million people in order to maximize complex utilization, particularly for tournaments and camps. Perhaps one of the complex’s greatest strengths will be its central location within the Mid-Atlantic Region and accessibility from larger nearby metropolitan areas.

Age Distribution

The age distribution of a market’s population base is an important indicator of the types of programming that could maximize usage of the Kent County Regional Sports Complex. Younger age demographics tend to indicate a need for youth-oriented sports programming within a community such as soccer, lacrosse and field hockey, which have higher participation levels among youth while sports complexes in older-skewing markets may place more of an emphasis on adult-oriented programming such as softball.

Key age characteristics of the Kent County Regional Sports Complex’s local and regional market population include:

Local Market:

 Kent County has a median age of 37.1 years, which is slightly younger than the national median age (37.9 years) but older than other major regional markets such as Washington D.C. (34.5 years), Baltimore (35.1 years) and New York City (36.1 years).

2. Market Conditions

 More important than median age is the age distribution of the market. Approximately 23 percent of Kent County residents are under 18 years of age, the prime target market for popular youth sports such as soccer, lacrosse and field hockey.

 The younger age demographic of Kent County relative to state and national statistics is likely influenced by the presence of the Dover Air Force Base and numerous colleges and universities.

 The City of Dover has pledged to invest in a series of urban housing plans to attract a younger demographic to the area. In April 2015, the City board approved over $40 million in funds for an urban mixed-use development project including apartments and retail shops.

Regional Market:

 The median age within a four-hour drive time is 38.5, which is slightly older than the national median age (37.9 years) and slightly older than that of Kent County (37.1 years).

 Within a four-hour drive time, approximately 46.9 percent of residents are under the age of 35, which is slightly less than the national average (48.1 percent) and Kent County (49.0 percent).

Overall, Kent County and the regional market are characterized by a mix of youth and young adult population bases, which will likely comprise the majority of programming at the Kent County Regional Sports Complex. Some adult sports programming will also likely be required to maximize potential utilization and revenue generation at the sports complex.

Household Income

Household income is an important socioeconomic characteristic that provides insight into a market’s ability to allocate discretionary income to various participatory sports activities. Youth and adult sports participation directly correlates to household income, and industry research suggests that sports participants generally are associated with higher household incomes.

Key income characteristics of the Kent County Regional Sports Complex’s local and regional market include:

2. Market Conditions

Local Market:

 Kent County’s median household income is $54,660, approximately five percent above the national average of $53,220, with 35 percent of households earning over $75,000 annually. Kent County’s median household income is 8.3 percent lower than the median household income in Delaware as a whole ($59,598).

 In assessing the income characteristics of Kent County, it is important to factor in cost of living considerations. Compared to the national average cost of living index of 100, Kent County’s index is comparable at 101, which indicates cost of goods and services within the local market is about 1 percent higher than the national average.

Regional Market:

 The regional (four-hour drive time) median income is $69,100, nearly 30 percent higher than the national average and approximately 21 percent higher than Kent County, a positive statistic in that the regional market population may have a higher propensity to participate in sports, including more income to spend on sports travel and tournament participation.

 Regionally, 16.8 percent of households earn more than $150,000 annually, which is nearly twice the percentage of households earning that amount nationally (9.4 percent). In the State of Delaware, 11 percent of households earn more than $150,000 annually.

 While the cost of living of Kent County closely mirrors the national average, many of the major metropolitan areas located in the Mid-Atlantic region within a four- hour drive of the proposed sports complex are characterized by a much higher cost of living index such as New York City (216.7), Washington D.C. (140.1), Philadelphia (126.5), Baltimore (119.4), Richmond (104.5) and Norfolk/Virginia Beach (103.0), among others. The comparatively low cost of living index in Kent County relative to the regional market could be a marketing advantage in providing a lower-cost destination for tournaments and camp participants than other competing markets. This is particularly important in amateur sports where the participants are typically paying their own expenses.

 Sports complex management should also be cognizant of establishing rental rates for local league and practice use that are consistent with local cost of living considerations relative to rates that might be charged in regional metropolitan areas with higher household incomes and cost of living.

2. Market Conditions

Overall, the relatively higher income characteristics of the Kent Regional Sports Complex’s local and regional market coupled with the lower cost of living associated with the local area may be an advantage of the Kent County Regional Sports Complex relative to other sports complexes.

Corporate Base

Support from the local corporate community will be important to the Kent County Regional Sports Complex from both the standpoint of providing financial support (i.e., naming rights, sponsorships or philanthropy) as well as representing potential utilization for corporate leagues, team-building activities or other uses.

The table below provides a breakdown of the corporate base in Kent County, the State of Delaware and within a four-hour drive of the Kent County Regional Sports Complex.

CORPORATE BASE Local & Regional Market

Kent County State of Delaware 4-Hour Drive Time Corporate Base Distribution Companies % Companies % Companies % Sales Unknown 713 9.2% 4,829 9.6% 288,274 8.6% Under $1MM 6,704 86.9% 42,434 84.0% 2,819,134 84.1% $1 MM to $2.4 MM 150 1.9% 1,748 3.5% 127,104 3.8% $2.5 to $4.9 MM 60 0.8% 664 1.3% 50,606 1.5% $5 MM to $9.9 MM 38 0.5% 375 0.7% 28,849 0.9% $10 MM to $24.9 MM 34 0.4% 252 0.5% 21,047 0.6% $25 MM to $49.9 MM 11 0.1% 92 0.2% 7,953 0.2% Over $50 MM 4 0.1% 139 0.3% 8,629 0.3% Total Base 7,714 100.0% 50,533 100.0% 3,351,596 100.0%

Source: Hoover's.

There are 7,714 companies in Kent County, 50,533 companies in the State of Delaware and approximately 3.4 million companies within a four-hour drive of Kent County. The majority of companies are small-to-medium-sized companies with annual revenues between $1 million and $5 million.

Although a large portion of companies generate annual revenues under $1 million, the majority of advertising, sponsorship and naming rights opportunities offered at a sports complex are generally much smaller than those offered at larger professional sports venues, which provides a greater number of local companies with the opportunity to provide support and receive valuable exposure.

2. Market Conditions

Major Employers

The table below presents the major employers in Kent County as compiled by Kent Economic Partnership, Inc. The total employment levels cited herein represent employees within the area and do not represent the company’s total workforce size outside the immediate area, where applicable.

MAJOR EMPLOYERS Kent County

Total Rank Company/Organization Sector Employees 1 State of Delaware Government/Military 8,035 2 Dover Air Force Base Government/Military 6,400 3 Bayhealth-Kent Gen. & Milford Mem. Hospitals Healthcare 2,860 4 Walmart Retail 1,868 5 Dover Downs Travel & Hospitality 1,457 6 Perdue Farms Food and Beverage 1,277 7 Capital School District Education 1,000 8 Delaware State University Education 836 9 Delaware Home & Hospital for the Critically Ill Healthcare 650 10 Kraft Foods Food and Beverage 581 11 Lake Forest School District Education 571 12 Energizer-Playtex Products Inc Manufacturing 564 13 Midway Slots Travel & Hospitality 461 14 Delaware Technical & Community College Education 450 15 L.D. Caulk Dentsply Intl Inc. Healthcare 450 16 Procter & Gamble Manufacturing 392 17 City of Dover Government/Military 376 18 Smyrna School District Education 375 19 Eagle Group - Metal Masters Manufacturing 368 20 ILC Dover, Inc. Manufacturing 360 21 Kent County Government/Military 285 22 Sam's Club Retail 271 23 Wesley College Education 261 24 Baltimore Aircoil Co. Manufacturing 249 25 Hanover Foods Food and Beverage 213 26 Silver Lake Center Genesis Eldercare Healthcare 195 27 Westminster Village Healthcare 190 28 Hirsh Industries Manufacturing 180 29 Sears, Roebuck & Co Retail 180 30 Boscov's Department Store Retail 175

Source: Kent Economic Partnership, Inc.

The State of Delaware is the largest employer in Kent County with approximately 8,035 employees. Dover Air Force Base is the second largest employer in Kent County with approximately 6,400 employees, of which 3,900 are active duty military members, 1,500 are reservists and 1,000 are civilian employees.

2. Market Conditions

In all, government/military, education, healthcare and retail represent the top four industries among Kent County’s major employers. Government / military and education represent two industries that have steady job growth projections. Demand for healthcare sector jobs is also projected to grow due to an aging population within the United States in concert with longer life expectancies.

As of the first quarter of 2015, the unemployment rate in Kent County was 5.7 percent, which is lower than the unemployment rate in the City of Dover (6.2 percent) and comparable to the United States as a whole (5.5 percent). According to Sage Policy Group, job growth in Delaware is greater than neighboring states such as New York, Pennsylvania, Maryland, New Jersey and West Virginia due to growth of the energy sector. In 2014, over 11,000 jobs were created in Delaware, ranking 7th in the country in terms of employment growth.

Colleges and Universities

Delaware is home to 10 colleges and universities with an approximate total of 60,000 enrolled undergraduate students. Institutions within Kent County comprise approximately 16 percent of statewide enrollment, including Delaware State University (4,600 students), Delaware Tech University – Dover (3,100 students) and Wesley College (1,600 students).

The number of colleges and universities in the local and regional communities could serve as an important potential user base for the Kent County Regional Sports Complex through intramurals and select university events. As these local students graduate, they may also become part of Kent County’s growing young-adult population utilizing the sports complex for adult leagues and tournaments. Further, these young professionals could contribute to the foundation of youth sports participation at the Kent County Regional Sports Complex through their children.

Transportation Accessibility

Transportation access will be important to the success of the Kent County Regional Sports Complex. Ease of access is critical to the successful hosting of regional sports tournaments as well as more frequent use by local residents for practices, league play, camps, clinics and other uses. The map on the following page illustrates the Kent County Regional Sports Complex’s location within Kent County and the regional tournament market (four-hour drive time), including highway access and nearby airports.

2. Market Conditions

TRANSPORTATION ACCESSIBILITY Kent County and a Four-Hour Drive Time

Four-Hour Drive Time

Kent County CBSA

For purposes of this report, an analysis of the accessibility to the Kent County Regional Sports Complex is broken down into the following components:

 Driving Access; and,  Air Access.

2. Market Conditions

Driving Access

One of the greatest strengths of the Kent County area is the convenience of its location and drive time to numerous nearby metropolitan areas in the Mid-Atlantic Region. The table below presents a list of major metropolitan areas located within a four-hour drive time of the Kent County Regional Sports Complex.

Kent County is located within a four-hour drive time of DRIVING DISTANCE TRANSPORTATION ACCESSIBILITY approximately 42 million Regional Markets Near Kent County Regional Sports Complex Kent County people (approximately 13 City Miles from Drive percent of the total U.S. City State Population Site Time population), including several large metro areas such as Annapolis MD 38,700 69 mi 1h 23m New York City (20.0 million Washington DC 658,890 97 mi 2h 5m Baltimore MD 622,110 98 mi 1h 54m residents), Philadelphia (6.1 Philadelphia PA 5,900,000 99 mi 1h 41 m million residents), Reading PA 87,900 117 mi 2h 19m Washington D.C. (5.9 million Trenton NJ 84,920 127 mi 2h 4m residents) and Baltimore (2.8 Allentown PA 118,580 140 mi 2h 35m million residents), among Harrisburg PA 49,190 151 mi 2h 56m others. Atlantic City NJ 40,020 143 mi 2h 22m New York City NY 8,491,080 180 mi 3h 8m Norfolk VA 246,100 184 mi 3h 30m The primary highways Richmond VA 214,100 208 mi 3h 37m passing through Kent County Stamford CT 126,500 222 mi 3h 44m are State Highway 1 and U.S. Highway 13, both of which There is a total population in excess of 42 million within a four-hour provide north/south drive of Kent County. connectivity. Specifically, Source: US Census and Google Maps. Highway 1 provides a four- Note: Sorted in ascending order by distance / drive time from Kent County. lane connection to Interstate Highway 95 in northern Delaware, with Highway 13 following largely the same route to the north. To the south, Highway 1 connects with Rehoboth Beach and other parts of the Atlantic shore in Sussex County, while Highway 13 connects to Salisbury, MD and continue into the Virginia Beach-Norfolk-Newport News, VA-NC CBSA. A network of smaller highways connects Kent County to points to the west, including eastern Maryland. Several of these highways link with U.S. Highway 301 which crosses the Chesapeake Bay near Annapolis, providing connectivity to Washington D.C. and Baltimore.

A $29 million interchange at Tub Mill Pond Road is slated to be constructed in 2017 and will provide direct ingress/egress to the sports complex from Delaware State Route 1. However, the construction of this interchange is not guaranteed to be approved given DelDOT’s limited funding and various needs. Recently, a $2 million temporary entrance was approved to be constructed to provide interim access to the sports complex until the permanent interchange is completed. For purposes of this report, it is assumed that ingress/egress to the sports

2. Market Conditions

complex will be conducive to providing a positive guest experience regardless if the permanent interchange is constructed according to schedule.

Air Access

Although it is estimated that the vast majority of participants and visitors will originate from within a four-hour drive of the Kent County Regional Sports Complex and will arrive by car, air access can be an important factor in attracting participants and spectators originating from regional, national or international locations. Based on discussions with project stakeholders and sports organizations, several collegiate showcases and regional/national club team tournaments attract teams and college coaches from across the country that would arrive by plane.

Locally, access to air travel is fairly limited. Dover is home to two airports serving corporate and recreational flyers. The Delaware Airpark is a single-runway general aviation airport that serves as the home of Delaware State University’s flight training program and is the base airport for approximately 45 private aircrafts. The Civil Air Terminal at Dover Air Force Base utilizes the base’s tower and runways and has parking for approximately 60 aircrafts. While both airports provide the area with private air service, neither offers any commercial flights. There are also several municipal airports located within the regional market, including New Castle Airport (New Castle, DE) with seasonal service that could accommodate passenger transportation to the area.

Though commercial flights are not available locally, several larger international airports located within an approximate one- to three-hour drive of the Kent County Regional Sports Complex provide the region with national and international flights.

The table on the following page provides a snapshot of major local and regional airports anticipated to service the Kent County Regional Sports Complex.

2. Market Conditions

AIR ACCESS Local and Regional Airports

Distance from Average Number Sports Daily of Cities Airport Location Complex Flights Airlines Served

Local Municipal Airports New Castle Airport New Castle, DE 55 mi 200 1 7

Regional Commercial Airports with Passenger Service Philadelphia International Airport Philadelphia, PA 83 mi 700 15 51 Baltimore/Washington International Baltimore, MD 83 mi 734 14 82 Ronald Reagan Washington National Airport Washington, DC 100 mi 434 10 81 Dulles International Airport Washington, DC 124 mi 1,100 37 133 Atlantic City International Airport Egg Harbor Township, NJ 134 mi 288 2 10 Newark Liberty International Airport Newark, NJ 168 mi 582 30 192

Source: CSL research.

Philadelphia International Airport, located approximately 83 miles north of the Kent County Regional Sports Complex, is the 19th busiest airport in the United States, serving nearly 15 million passengers annually to more than 51 U.S. cities with 700 daily flights, including 120 international flights. The airport is an American Airlines/US Airways hub and the second largest airport hub in the United States.

Baltimore/Washington International, the other closest major hub of air transportation, is located 83 miles west of the Kent County Regional Sports Complex and is the 22nd busiest airport in the United States serving nearly 22 million passengers annually.

Other major airports located within a three-hour drive of Kent County include Ronald Reagan Washington National Airport (100 miles), Washington Dulles International Airport (124 miles), Newark Liberty International Airport (168 miles) and Atlantic City International Airport (134 miles).

While a number of major airports are located within a reasonable drive time of Kent County, the lack of immediate and convenient direct air access may limit the ability of the Kent County Regional Sports Complex to attract larger national or international tournaments on a consistent basis. Examples of some other major sports complexes and their distance from a major airport include: Toyota Park in Frisco, Texas (40 miles from Dallas-Fort Worth International Airport); Scheels Overland Park Soccer Complex in Overland Park, Kansas (37 miles from Kansas City International Airport); and, Maryland SoccerPlex (48 miles from Baltimore/Washington International Airport). The Kent County Regional Sports Complex distance (83 miles) is roughly double the distance from a major airport compared to the

2. Market Conditions

examples presented herein, adding transit time and cost for participants and spectators relative to other complexes located more proximate to major commercial airports.

Visitor-Related Infrastructure

The area’s visitor-related infrastructure, including overnight accommodations, restaurants, attractions, and other community amenities, are important factors that will impact the ability of the Kent County Regional Sports Complex to attract and successfully accommodate tournaments.

Hotel Inventory

The availability, quality and price of hotel rooms in the market are important considerations in determining the ability of the Kent County Regional Sports Complex to accommodate athletic tournaments and other activities that draw out-of-town attendees and generate economic benefits to the local area.

Generally, a 12-field complex has a maximum tournament capacity of approximately 200 teams. Based on industry standards of 20 hotel rooms per team, a tournament operating at full capacity would require 4,000 rooms if all teams required overnight accommodations. If 75 percent of teams required overnight accommodations, 3,000 rooms would be required. A tournament that has 50 percent of teams that require overnight accommodations would require 2,000 rooms.

The chart on the following page provides an overview of hotel inventory in Kent County.

2. Market Conditions

HOTEL INVENTORY Kent County

Total Total Guest Guest Accommodations City Rooms Accommodations City Rooms Dover Downs Hotel & Casino Dover 500 Baymont Inn & Suites Harrington 70 Holiday Inn Dover-Downtown Dover 135 Capital Inn-Dover Dover 69 Super 8 Dover Dover 132 Best Western Galaxy Inn Dover 64 Colonial Hotel Smyrna 112 Comfort Suites Dover 64 Residence Inn Dover Dover 98 Sleep Inn & Suites Dover 62 Hilton Garden Inn Dover Dover 95 Fairfield Inn & Suites Dover 58 MainStay Suites Dover 92 Days Inn & Suites Milford 57 Home2 Suites by Hilton Dover 91 Red Roof Inn Dover Dover 57 Comfort Inn & Suites Dover 89 Super 8 Harrington Harrington 43 Holiday Inn Express & Suites Harrington 86 Kent Budget Motel Dover 23 Days Inn Dover Downtown Dover 81 Relax Inn Dover Dover 19 Hampton Inn Dover Dover 81 Relax Inn Smyrna 14 Hampton Inn Milford Milford 81 Poynter's Motel Felton 12 Holiday Inn Express & Suites Dover 81 Shamrock Motel Dover 10 Best Western Smyrna Inn Smyrna 73 Dover Garden Suites Dover 9 Microtel Inn & Suites Dover 71 Causey Mansion Milford 4

Note: Does not include campgrounds and other lodging alternatives. Total Kent County Hotel Rooms 2,533 Source: Kent County Tourism

Within Kent County, there are approximately 2,500 hotel guestrooms, consisting of mostly limited-service and extended-stay accommodations. A higher proportion of limited service inventory is advantageous, as most traveling teams are relatively cost conscious when booking rooms for tournaments.

It is important to note that the majority of hotel rooms are located approximately 15 to 20 minutes away from the Kent County Regional Sports Complex site. The vast majority of tournament organizers and coaches interviewed for this study indicated that the distance of the hotel rooms to the sports complex site would not be an issue and that many of the regional sports complexes they use are more distant from the hotel room inventory.

In 2014, the average daily rate for a hotel room in Kent County was approximately $99.97 (compared to the national average of $113.42), and the hotel occupancy rate was 52.7 percent (below the national average of 64.4 percent), underscoring the potential importance of the Kent County Regional Sports Complex in generating room nights to support local hoteliers. It will be important for the Kent County Regional Sports Complex to work with local hotels, the Kent County Conventions and Visitor’s Bureau (“CVB”) and the Delaware Sports Commission to arrange hotel accommodations for participating

2. Market Conditions

teams and negotiate hotel rebates or commissions to the sports complex or tournament organizers.

In addition to Kent County hotel inventory, there are over 3,900 hotel rooms within 30 miles of the Kent County Regional Sports Complex at the Delaware beaches. A majority of these accommodations are full-service, providing a wide range of amenities including on-site restaurants, banquet halls, concierge service and other such amenities. Full- service accommodations within close proximity of the sports complex could serve as an important marketing feature for those families who wish to stay at the beaches or extend their stay beyond a two or three day tournament.

In general, the hotel room inventory in Kent County and the Delaware beaches should be sufficient to accommodate tournament (small, medium and large-sized) demand most weekends. However, there are several weekends associated with NASCAR events, the Firefly Music Festival and other events that require significant hotel rooms and could limit the ability of the sports complex to attract out-of-town teams during those weekends.

Visitor Attractions

The number and quality of area attractions are important considerations for tournament organizers and participants when selecting a tournament site. The ability to provide dining, entertainment and leisure activities in connection with tournaments is critical to the overall experience and assists in marketing the Kent County Regional Sports Complex as a destination. ATTRACTIONS AND ACTIVITIES With over 1,000 dining Kent County venues, numerous cultural Activities and Attractions Beaches and Coastal Attractions attractions, entertainment Amish Countryside Bethany Beach Christiana Mall Breakwater Lighthouses options, tax-free shopping Delaware Beer, Wine & Spirits Trail City of Lewes and annual events, Kent Delaware Culinary Trail Dewey Beach County and its surrounding Delaware History Trail Fenwick Island area can be marketed as a Delaware State Capitol Rehoboth Beach Boardwalk Delaware State Fair unique destination that Dover Mall could appeal a wide variety DuPont Gardens and Estates Sports and Other Entertainment out-of-town sports Fifers Orchard Dover International Speedway Fordham/Old Dominion Brewing Dover Downs Casino complex visitors. The table Harvest Ridge Winery Dover Golf Center to the right and the table on Historic Downtown Lewes Dover Indoor Tennis the following page Historic Downtown New Castle Dover Skate Center Kalmar Nyckel, The Tall Ship of Delaware Eagle Creek Golf Club summarizes specific area Painted Stave Distilling Jonathan’s Landing Golf Course attractions, activities and Pizzadili Vineyard and Winery Harrington Raceway and Casino events in the local area. Toast Our Coast Wine & Ale Trail Garrisons Lake Golf Club Tanger Outlets Wild Quail Golf and Country Club Woodside Farm Creamery

2. Market Conditions

ATTRACTIONS AND ACTIVITIES (cont'd) Kent County

Museums, Theatres and Entertainment Parks, Trails and Nature Reserves Delaware Agricultural Museum Blackbird State Forest Air Mobility Command Museum Bombay Hook Nat Wildlife Refuge

Barratt's Chapel and Museum Cape Henlopen State Park

Biggs Museum of American Art Delaware Geocaching Trail

Delaware State House Museum Delaware Outdoor Trail Delaware State Police Museum DuPont Nature Center First State Heritage Park Killens Pond State Park Hagley Museum and Library Harriet Tubman Underground Railroad John Dickinson Plantation Annual Events/Festivals Johnson Victrola Museum African American Festival Kent Gallery Wall Bethany Beach Arts Festival Messick Agricultural Museum Big Barrel Country Music Festival Milford Art Stroll Blueberry Festival Milford Museum Brewgrass Festival Parson Thorne Mansion Cider Fest Schwartz Center for the Arts DE Beer, Wine & Spirits Weekend Smyrna Museum Delaware Junction Festival Smyrna Opera House Fifer Fall Fest Star Hill Museum Firefly Music Festival The Children's Theatre June Jam The Old State House Miss Delaware Pageant Peach Ice Cream Day

Sea Witch Halloween Festival

World Championship Punkin Chunkin

Overall, Kent County, with its numerous annual festivals, casual dining options, historical sites, sports and other entertainment venues and nearby coastal attractions, can differentiate the sports complex as an affordable tournament-participant destination. In addition to the events and attractions outlined above, the sports complex’s marketability as a tournament destination will also be driven by the quality of its fields, its competitive pricing structure and its ability to form partnerships with local hotels, including those located in destination areas (e.g. Rehoboth Beach).

2. Market Conditions

Local Field Inventory

The table below provides an overview of the athletic facility resources in Kent County. In total, there are 16 multi-purpose fields located in Kent County that may have common uses (i.e., soccer, lacrosse, field hockey, etc.) envisioned for the Kent County Regional Sports Complex.

INVENTORY OF LOCAL ATHELTIC FIELDS Within Kent County

Total Multi-Purpose Facility Fields

Milford Youth Sports Complex 2

Alumni Stadium 1 Williams Park 1 Dover Park 1 Mayfair Park 1 Schutte Park 10

Total Current Kent County Inventory 16 Note: Does not include college, university or high school owned field inventory, informal park space (i.e., no permanent field markings or goals) or the 12 fields

that are part of the Kent County Regional Sports Complex.

It is important to note that the Kent County inventory consists of varying degrees of quality and availability of facilities and does not include public school athletic space such as fields at Dover High School or Delaware State University, which are not available for public use on a routine or widespread basis.

In order to assess the current supply of athletic field inventory in the local market, it is useful to consider national recreational statistics. The National Recreation and Park Association (“NRPA”) determines a national standard for the minimum acceptable field inventory for citizens of urban and rural communities. In 2014, the NRPA standard accounted for an average of 7,899 residents per rectangular field and a median of 3,929 residents per rectangular field.

The chart on the following page depicts the field inventory for Kent County over the next 30 years, based on NRPA population per rectangular field standards and anticipated population growth, and compares the expected field inventory for the population to the current field supply in Kent County.

2. Market Conditions

When applying the median field-per-resident to the population base in Kent County, the County should have 44 rectangular full-sized fields to provide an inventory that is commensurate with the median residents per field nationwide. Currently, the County has 16 rectangular fields (excluding local high schools, middle schools, universities, etc.). The addition of the Kent County Regional Sports Complex would increase the total local field inventory to 28 fields.

With the addition of the Kent County LOCAL FIELD INVENTORY ANALYSIS Regional Sports Based on Population per Field Metrics Complex fields, the for Kent County resulting field shortfall to meet local demand Median Average for practices, games, Population per Field¹ 3,929 7,899 camps, clinics and Population - Kent County other uses within the Current 172,280 172,280 County will be 16 in 10 years 190,000 190,000 fields. This field in 20 years 210,000 210,000 shortfall is anticipated in 30 years 230,000 230,000 to increase to 31 fields Estimated Field Needs based on Population per Facility over the next 30 years, Current 44 22 assuming no changes in 10 years 48 24 in field supply and in 20 years 53 27 continued population in 30 years 59 29 growth in the County. Current Field Inventory 16 16 Current Surplus (Shortfall) (28) (6) This analysis indicates Estimated Surplus (Shortfall) with 12 KCRSC fields the community need Current (16) 6 for additional fields for in 10 years (20) 4 practices, league in 20 years (25) 1 games and other in 30 years (31) (1) recreational uses within the County and Notes: is underscored by ¹Population per field based on National Recreation & Parks Association research reporting median and average population counts per rectangular field as reported by various input from local sports municipalities across the country. organizations that Demand estimates for local user needs only. Excludes tournament demand. reported difficulty in Current Field Inventory excludes all public school athletic facilities. finding fields to use.

It should be noted that the field needs estimated herein are intended only to provide a frame-of- magnitude of the need in the community, but is consistent with commonly-voiced concerns offered by local sports organizations as to the lack of availability and quality of athletic space in Kent County. This analysis should not be used as an exact measure of need, as this analysis is based only on the median residents per field provided in other communities nationwide.

2. Market Conditions

Climate Conditions

A key consideration in both league play and tournament organizers’ decisions to book a facility is the climate of the local area, particularly for outdoor events during times of extreme temperatures or excessive precipitation. The chart below summarizes the average monthly maximum and minimum temperatures as well as precipitation (rainfall) and snowfall amounts for the Kent County area.

CLIMATE NORMALS - KENT COUNTY 1981-2010

Temperature (°F) Average (inches) Month Maximum Minimum Average Precipitation Snowfall

January 43.4 27.1 35.2 3.4 4 6 February 47.0 29.0 38.0 3.1 7.7 March 54.9 35.6 45.2 4.3 0.3 April 65.7 44.3 55.0 3.9 0.0 May 74.7 53.8 64.2 4.3 0.0 June 83.2 63.4 73.3 4.0 0.0 July 87.0 68.4 77.7 4.1 0.0 August 85.2 67.0 76.1 4.4 0.0 September 79.3 60.1 69.7 4.1 0.0 October 68.8 48.7 58.7 3.4 0.0 November 58.5 39.8 49.2 3.5 0.2 December 47.4 31.0 39.2 3.7 2.9

Annual 66.3 47.4 56.9 46.1 15.7 Source: Office of the Delaware State Climatologist

Climate normals are data sets produced once every 10 years that detail averages of climatological variables, such as temperature and precipitation, for a three-decade period. The latest set of climate normal data was released in 2010 by the National Centers for Environmental Information.

Overall, Delaware has a temperate climate with annual temperatures averaging around 57 degrees, which could serve as a competitive advantage relative to other national sports complexes that may have higher average temperatures during peak utilization periods (spring and summer). In addition, average annual precipitation in Kent County averages 46 inches of rain and approximately 16 inches of snow. The synthetic playing surfaces of the Kent County Regional Sports Complex are expected to serve as a marketing advantage by minimizing the possibility that tournaments, games or practices are cancelled due to inclement weather or the need to limit activities in order to protect a natural grass field from wear and tear from overuse.

2. Market Conditions

Comparable sports complexes such as Overland Park Soccer Complex and Maryland SoccerPlex, with a combination of synthetic turf and/or natural grass fields, typically service 900 hours of annual field time on each grass field while accommodating approximately 1,800 hours of annual field demand per synthetic-turf field. According to the Synthetic Turf Council, utilization of turf fields can be as high as 3,000 hours annually with lighted fields. This increased utilization is a result of decreased field maintenance, extended scheduling hours, and fewer weather cancellations, among other factors.

One notable disadvantage to synthetic turf is that the surface can get significantly hotter than natural grass turf in high temperatures. The Kent County Regional Sports Complex will be able to mitigate heat issues associated with synthetic fields by using sprinklers to cool the fields, shade structures for participants and spectators and the use of lights to extend the useable hours in cooler parts of the day.

During the winter months in Kent County, where annual snowfall averages approximately 16 inches, the synthetic playing surface can be plowed and playable in times when natural grass fields would necessitate cancellations. It should be noted, however, there could still be cancellations due to extreme cold weather for the sake of participant and spectator safety.

It is important to note that, in recent years, concerns have been raised about the safety of synthetic turf fields due to speculation that the butadiene rubber used in production of most synthetic playing surfaces may be linked to instances of cancer in players, specifically in goalies. However, there seems to be a lack of conclusive evidence connecting synthetic-turf fields to higher instances of health issues in athletes. Should a credible, direct connection between synthetic turf fields and cancer be established, the marketability of the Kent County Regional Sports Complex could be diminished. For purposes of this report it is assumed that the Kent County Regional Sports Complex will make any necessary adjustments to the building program arising from safety concerns.

Summary

The viability of the Kent County Regional Sports Complex is dependent, in large part, on local market demographic and socioeconomic characteristics and the marketability of the community to potential visiting participants and spectators.

The following are key findings and conclusions of the market in which the Kent County Regional Sports Complex would operate:

2. Market Conditions

 Kent County is the least populated county in the state but had an annual population growth rate of 1.1 percent, significantly higher than the national average (0.6 percent) and state average (0.8 percent), from 2010 to 2015. Over the next five years, the population of Kent County is projected to grow 1.4 percent annually, a rate nearly double the national average (0.8 percent) and 40 percent higher than the state average (1.0 percent).

 Kent County and the regional market are characterized by a mix of youth and young adult population bases, which underscores the need for youth and adult programming at the Kent County Regional Sports Complex.

 Median household incomes in Kent County are $54,660, approximately five percent above the national average of $53,220, with 35 percent of households earning over $75,000 annually.

 The comparatively low cost of living index in Kent County relative to the regional market could be a marketing advantage in providing a lower-cost destination for tournaments and camp participants than other competing markets. This is particularly important in amateur sports where the participants are paying their own expenses.

 There are 7,714 companies in Kent County, 50,533 companies in the State of Delaware and approximately 3.4 million companies within a four-hour drive of Kent County.

 The number of colleges and universities in the local and regional communities could serve as a potential user base for the Kent County Regional Sports Complex through intramurals and select university events.

 The visitor-related infrastructure, including hotels, attractions and entertainment are generally sufficient to service sports tournaments hosted at the Kent County Regional Sports Complex; however, challenges could exist to host tournaments on weekends with other major events such as NASCAR races or the Firefly Music Festival which require a significant inventory of hotel rooms.

2. Market Conditions

 Kent County has a temperate climate with 15.7 inches of average annual snowfall and 46.1 inches of average annual precipitation. Assuming proper support infrastructure (e.g. snow plows) the Kent County Regional Sports Complex could differentiate itself from other sports complexes through its all-turf field inventory, which can service utilization throughout the year.

 Synthetic-turf fields are a competitive advantage compared to natural grass fields as they minimize cancellations due to weather conditions.

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The local/regional characteristics of the market of the Kent County Regional Sports Complex are considered together with an assessment of competitive facilities, trends in sports participation, comparable facilities and user interviews to estimate demand at the sports complex.

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3. COMPETITIVE FACILITIES

3. Competitive Facilities

The Kent County Regional Sports Complex’s operations will be impacted by the number and quality of local and regional facilities that compete to accommodate the same targeted uses, including but not limited to tournaments, leagues, practices and camps for sports such as soccer, lacrosse and field hockey, among others. Overall, 11 complexes were identified that could provide some level of competition to the Kent County Regional Sports Complex.

The local and regional competitive facilities outlined in the chart below were selected based on the following criteria: (i) complexes identified by project stakeholders and local sports organizations as key competitors; (ii) major sports complexes within four-hour drive of the Kent County Regional Sports Complex; (iii) minimum of six (6) multi-purpose fields, excluding baseball and softball and any all-indoor facilities; and, (iv) similar sports programming (i.e. league and tournament play for soccer, lacrosse, field hockey, etc.) as contemplated for the Kent County Regional Sports Complex.

LOCAL & REGIONAL ATHLETIC FACILITIES Major Complexes Delaware-Based Sports Complex Summary Total Total Synthetic-Turf Natural Grass Total Facility Location Fields Fields Fields¹ Kirkwood Soccer Complex New Castle, DE 1 14 15 Proposed Delaware Sports Complex Middletown, DE 0 20 20

Major Regional Sports Complex Summary

Total Total Total Synthetic-Turf Natural Grass Multi-Purpose Facility Location Fields Fields Fields

Virginia Beach Athletic Facilities Virginia Beach, VA 5 19 24 Hampton Roads Soccer Complex Virginia Beach, VA 2 12 14 Princess Anne Athletic Complex Virginia Beach, VA 0 7 7 Virginia Beach Sportsplex Virginia Beach, VA 3 0 3 Spooky Nook Sports Manheim, PA 16 0 16 Cedar Lane Regional Park Bel Air, MD 1 12 13 Total Turf Experience Pitman, NJ 12 1 13 United Sports West Bradford, PA 4 9 13 Classics Soccer Park Manheim, PA 3 7 10 Macclesfield Park Yardley, PA 1 7 8 YSC Sports Wayne, PA 8 0 8 The Proving Grounds Conshohocken, PA 6 1 7

(1) Multi-purpose fields are usually rectangular and can accommodate multiple sports such as soccer, lacrosse, field hockey, etc. Baseball fields that can accommodate an occasional soccer, lacrosse or field hockey game were not included.

There are two (2) major sports complexes within the local market (e.g. Delaware) and nine (9) regional sports complexes that are anticipated to compete with the Kent County Regional Sport

3. Competitive Facilities

Complex for league and/or tournament play. In all, these complexes have an average of 10 multi- purpose fields.

The map below shows the selected major local and regional sports complexes in relation to the Kent County Regional Sports Complex.

COMPETITIVE FACILITIES Local and Regional Markets

I D H J K G

F A E B

3. Competitive Facilities

The remainder of this section provides an overview of each local/regional competitive sports complex.

Kirkwood Soccer Complex New Castle, DE

Located in New Castle, approximately 44 miles from the Kent County Regional Sports Complex, the Kirkwood Soccer Complex is the home of the Kirkwood Soccer Club. The 60- acre site has 14 outdoor grass fields and one indoor turf field. The Kirkwood Soccer Complex also has a dedicated concession area, restrooms and parking. The complex is owned and operated by Kirkwood Soccer Club, a 501 (c) (3) non-profit entity.

Kirkwood Soccer Club hosts four (4) soccer tournaments annually that include a total of over 400 teams and 5,000 players. The KSC Boys and Girls Annual Premiere tournaments are the two largest events held at Kirkwood Soccer Complex with 200 teams and 2,000 players per tournament. The tournaments are organized by Global Teams Events and are sanctioned through US Youth Soccer as unrestricted events open to US Youth soccer and US Soccer Club teams.

In addition to hosting soccer tournaments, Kirkwood Soccer Club also sponsors and hosts a field hockey developmental league and a field hockey summer camp. Rental prices for public use of the complex start at $250 a game for grass fields, while the turf prices range from $300 per game for youth to $600 per game for adult use.

The Kirkwood Soccer Complex is sponsored by Chick-Fil-A, Adidas, Dick’s Sporting Goods, Coca-Cola, Rita’s, Sprowl Designs, Philadelphia Union, Joseph Frederick and Sons, ATI Physical Therapy, Delaware Orthopedic Specialists, Sherwin Williams, and US Youth Soccer.

In 2013, Kirkwood Soccer Club generated approximately $1.23 million in operating revenue and incurred approximately $1.27 million in operating expenses, for a total operating loss of approximately $40,000. In 2012, Kirkwood Soccer Club operated at a loss of approximately $60,000. These operating statistics are inclusive of both soccer club and sports complex operations.

3. Competitive Facilities

Proposed Delaware Sports Complex Middletown, DE

The proposed 170-acre Delaware Sports Complex is envisioned to be located in south Middletown, DE. Given its proximity (approximately 40 miles northwest of the Kent County Regional Sports Complex) and number of fields, it is anticipated that the proposed Delaware Sports Complex could represent significant competition to the Kent County Regional Sports Complex, if built.

The proposed Delaware Sports Complex is envisioned to include 20 full-size grass fields for soccer, lacrosse and field hockey. One of the fields will be designated as a championship field with seating for 3,000 to 4,000 spectators.

In addition, the proposed complex is envisioned to include 16 grass baseball fields, five tennis courts and a 160,000-square-foot indoor facility with an indoor synthetic turf soccer field, Olympic-sized pool and three sport courts. The proposal also includes an estimated 1,200 parking spaces for the proposed complex.

The facility is anticipated to be privately funded and would be owned and operated by local businessmen. The proposed Delaware Sports Complex ownership group also owns M-Town Sports Complex, an indoor-outdoor facility located in Middletown.

Currently, the funding for the proposed complex is not complete and it is unclear how much the facility will cost, but project representatives anticipate construction to begin as early as the fall of 2015, depending on project approvals. Some fields could be open for play as early as spring of 2016 if construction begins as expected.

Based on discussions with local and regional sports organizations, there are several advantages and disadvantages the proposed Delaware Sports Complex would have compared to the Kent County Regional Sports Complex. These advantages and disadvantages could include, but are not limited to:

Advantages Relative to Kent County Regional Sports Complex:

 Location and proximity to major interstate freeways;  Established participant base from nearby M-Town Sports Complex; and,  Proximity of existing hotel, restaurant and retail infrastructure.

3. Competitive Facilities

Disadvantages Relative to Kent County Regional Sports Complex:

 Grass fields subject to weather cancellations/conditions;  Limited number of lighted fields;  Anticipated higher annual maintenance costs due to grass fields; and,  Ingress / egress infrastructure concerns.

Virginia Beach Athletic Facilities Virginia Beach, VA

There are three Virginia Beach athletic facilities in extremely close proximity to one another that may provide competition to the Kent County Regional Sports Complex. These facilities are Hampton Roads Soccer Complex, Princess Anne Athletic Complex and the Virginia Beach Sportsplex. Though all three facilities are owned by the City of Virginia Beach, each operates completely independently from the others. Representatives from the three complexes indicated that they communicate with one another and occasionally collaborate to organize events. The three facilities are considered together in this section due to their exceptional proximity.

Hampton Roads Soccer Complex is owned by the City of Virginia Beach and operated by Hampton Roads Soccer Council, a 501 (c)(3) non-profit organization. The 21-field, 75-acre complex features seven small-sided fields and 14 full-sized fields, two of which have synthetic-turf playing surfaces. None of the fields at Hampton Roads are lighted. The $5 million facility was funded through a combination of soccer community assessments, corporate donations, grants and fundraising events and has generated an estimated economic impact of $8 million annually. Hampton Roads does not host its own events but rents out its fields for over 7,500 soccer matches annually, including 12 regional tournaments, Special Olympics events and championship games for various national soccer organizations, among other events.

Princess Anne Athletic Complex is owned and operated by the City of Virginia Beach Department of Parks and Recreation. The complex features eight (8) lighted, tournament- quality softball fields and seven (7) multi-purpose fields, two (2) of which are lighted. Youth and adult softball leagues play at the complex during the week. The multi-purpose fields are used for soccer league play and the city’s tackle football program. Field rental fees range

3. Competitive Facilities

from $100 to $275 for less than eight hours of play and $150 to $300 for eight hours or more of play, depending on the field. Lighted fields cost an extra $20 per hour of light use.

The Virginia Beach Sportsplex is owned by the City of Virginia Beach and operated by Hometown Sports Management. The facility comprises Sportsplex Stadium and two (2) multi- purpose turf fields. The stadium was the first soccer-specific stadium to be built in the U.S. from the ground up and features a capacity of 6,000 seats with six (6) luxury suites. The stadium has a full-sized turf field that, though originally built for soccer, is used as the home office for the Virginia Rush soccer organization and is also home to the Norfolk Blues rugby team and Southern Virginia Trojans semi-pro football team. Sportsplex Stadium has served as the home of multiple other professional sports franchises in the past, including the United Football League’s Virginia Destroyers. Two (2) additional synthetic-turf fields serve as the U.S. Field Hockey Regional Training Center. These practice fields are available to rent for field hockey events.

Spooky Nook Sports Manheim, PA

Located 80 miles northwest of downtown Philadelphia, Spooky Nook Sports is a 700,000-square-foot indoor sports complex featuring soccer, baseball, basketball, tennis, field hockey and lacrosse activities. Spooky Nook Sports opened in 2013 and cost approximately $26 million which was privately funded by Sam Beiler, former owner of Auntie Anne’s. The hotel and restaurant additions to Spooky Nook Sports cost approximately $9.5 million and opened in 2015. Spooky Nook Sports, including the hotel and restaurants on site, are privately owned and operated.

The facility has 10 basketball/volleyball courts and 16 multi-purpose surfaces. The facility has a pro shop, climbing gym and arcade, and is currently developing a business center and orthopedic office. The facility also has state-of-the-art batting cages and a turf infield, which allows players to train during inclement weather. Spooky Nook Sports management had initially included additional outdoor multi-purpose fields as part of the next phase of development. However, Spooky Nook Sports participant and spectator traffic exceeded projections, and the land previously slated for field development was converted to parking spaces to alleviate parking issues experienced at the facility. Management at Spooky Nook indicated that additional outdoor fields could be developed as part of a recent land

3. Competitive Facilities

acquisition, however, there are no timelines or specific number of fields decided on for the next phase of development.

Spooky Nook Sports hosts approximately one million people on an annual basis and is the largest indoor sports complex in the country. Although the complex hosts approximately 10 to 15 local tournaments each year, their programming is largely focused on youth and adult leagues. The complex runs over 80 soccer, field hockey, lacrosse, basketball and flag football leagues over the course of the year. Each league contains 10 to 12 local teams with 10 games per fall, winter and spring season. The facility also hosts 10 clinics including the Youth World Series Soccer Clinic, Shots & Stops Shooting & Goalkeeping Clinic and Super Kickers Clinic. Youth clinics run for four days and cost between $50 and $80 per registrant.

The facility’s main sponsors are Associates of Lancaster and USA Field Hockey. The complex also has over 20 local sponsors such as Lancaster General Health, Kunzler & Company Inc., LNP Media Group, Inc., Lapp Electric and the Pennsylvania National Guard. Sponsorship packages include signage and product displays.

Cedar Lane Regional Park Bel Air, MD

Located in Bel Air, MD, approximately 90 miles northwest of Kent County Regional Sports Complex, Cedar Lane Regional Park is a 110-acre multi-sport recreation complex. The $4.3 million complex was built in 2008 through a public-private partnership between Harford County Government and the Cedar Lane Sports Foundation. The complex contains 13 fields, including one synthetic field and 12 grass surfaces. The championship turf field has an LED video scoreboard and seating for approximately 1,000 spectators. Management at Cedar Lane Regional Park reported an estimated economic impact of over $35 million to Harford County in 2014. The complex is operated by the Cedar Lane Sports Foundation.

Throughout the year, Cedar Lane Regional Park hosts 19 weekend tournaments for soccer, lacrosse, field hockey and basketball. Major regional tournaments include Baltimore Soccer Mania, the US Lacrosse Women’s National tournament, Rock the Fields and LAX Inception. Cedar Regional Park hosts several college lacrosse showcases including the Summer Showcase, which allows regional lacrosse coaches to scout elite high school players. In addition to tournaments and showcases, Cedar Lane Regional Park hosts 15 youth and adult

3. Competitive Facilities

sport leagues. Soccer and lacrosse leagues are quite popular with over 12 teams per league. Soccer leagues are held from August to November and from March through May. Lacrosse leagues are held from March to June. Cedar Lane Regional Park also features four to five multi-sport camps during the summer for ages 8 to 15. Grass fields at the complex can be rented for $105 per hour while the turf field costs $145 per hour. Local teams can pay an additional $45 per hour for field lights.

Cedar Lane Regional Sports Park does not have a naming rights partner, but the University of Maryland, Visit Harford Tourism Board and Halpern Travel have provided charitable contributions to the facility since its opening in 2008.

Total Turf Experience Pitman, NJ

Total Turf Experience is an outdoor and indoor multi-sport facility located in Pitman, New Jersey, approximately 82 miles from Kent County Regional Sports Complex. The complex features 11 indoor soccer fields and two basketball courts. The facility also has two outdoor soccer fields for tournament use. Total Turf Experience has increased its programming to include soccer, lacrosse, field hockey, flag football and basketball. The facility is privately owned and operated by Total Turf Experience.

Total Turf Experience hosts 15 local and regional tournaments each year with approximately 100 teams per tournament. The facility regularly hosts over 40 youth and adult leagues, primarily focused on indoor soccer and basketball. The outdoor and indoor fields can be rented for practices, tournaments, birthday parties and fundraising events. The full-sized turf fields can be rented for between $100 and $150 per 90-minute session from April to October. During the peak season between November and March, the indoor turf fields can be rented for $200 to $420 per session.

Total Turf Experience also runs 10 week-long clinics over the course of the year. The clinics are designed to prepare competitive high school athletes for college sports. The annual International Development Festival allows local high school soccer players to train with and compete against players from the Liverpool, Chelsea, PSV and Celtic academy teams. Other notable clinics included the Headstrong Lacrosse Club, South Jersey Goalkeeping Academy, St. John’s University Soccer Camp and 5-Star Field Hockey clinic.

3. Competitive Facilities

The complex has five Platinum sponsors and six Silver sponsors. Sponsorship packages include advertising on indoor boards and signage within the indoor facility. Total Turf Experience partners with local hotels such as Hyatt Place, Holiday Inn and Courtyard Marriot to offer discounted hotel stays for out-of-town tournament participants.

United Sports West Bradford, PA

United Sports is a 60-acre sports complex located approximately 80 miles from Kent County Regional Sports Complex. Built in 1999 on the site of an inactive airport, the complex has 11 outdoor soccer fields, two indoor turf multi- purpose fields, three indoor baseball fields, three basketball courts and a hockey rink. There are approximately 1,000 on-site parking spaces. It is estimated that United Sports, through its tournaments and special events, creates a total economic impact of $7 million annually to Chester County. The $15 million complex was funded entirely by private contributions and is owned and operated by United Sports Co.

United Sports hosts approximately 19 tournaments and 300,000 total visitors on an annual basis. The complex generally attracts athletes from a 60-mile radius but also holds regional tournaments with teams from Boston, New York and Washington, D.C. Although its main sports are soccer and baseball, United Sports also accommodates a wide variety of activities including lacrosse, field hockey, basketball and flag football. The major annual soccer tournaments include the Philadelphia Union Victory Cup, FC Europa Turf Cup and FC DELCO Players Cup. United Sports also hosts several major field hockey tournaments including the Summer Sevens tournament, which accommodates over 50 teams between the U12 and adult levels. In addition to tournaments, United Sports hosts 29 soccer, lacrosse, field hockey and basketball leagues at the facility. The complex does not rent individual fields for team use.

Brandywine Hospital is the exclusive major sponsor of United Sports although the complex also partners with Sheraton, Courtyard Marriot, The Desmond, Wyndham Garden Exton Valley Forge and Hilton Garden Inn Exton/West Chester to offer discounted hotel rates for out-of-town tournament visitors.

3. Competitive Facilities

Classics Soccer Park Manheim, PA

Located in the southeast region of Pennsylvania and approximately 120 miles from Kent County Regional Sports Complex, the 32-acre Classics Soccer Park contains 10 fields. Three of the fields are turf, with one for 11 v 11 games and two others for 8 v 8 games. The state-of-the-art fields are used for tournaments, leagues, futsal matches, and individual training sessions. Parking options are spread throughout the park to make it convenient to access different fields. The park is owned and operated by Pennsylvania Classics Soccer Club. In 2014, the complex’s total operating profit was approximately $21,000.

Pennsylvania Classics Soccer Club hosts four regional tournaments at the complex. Two of the most widely-attended tournaments are the Challenger Invitational and the Winter College Showcase. In 2015, the Challenger Invitational hosted over 350 teams within the 8 to 19-year old divisions. Classics Soccer Park requires out-of-town participants to use Halpern Travel to book local hotels. The Winter College Showcase is held over two weeks and attracts over 270 college coaches and scouts.

In 2014, 208 boys’ teams and 128 girls’ teams participated in the tournament. Similar to the Challenger Invitational, this tournament also requires teams to use their hotel reservation service to be eligible for participation. In addition to tournament play, Pennsylvania Classics Soccer Club hosts all practices and home games at the complex. The Club has 40 teams and over 700 registered players from the U9 to U18 levels. Classics Soccer Park also hosts three summer soccer clinics at the facility. The Summer Striker and Goalkeeper Academy is held from Monday to Thursday and costs $95. The Summer Midfielder and Defender Academy is also held from Monday to Thursday at a cost of $95. The ADP Summer Camp costs $115 and is open exclusively to boys and girls between the ages of eight and 13.

Local and national sponsors for Classics Soccer Park include Kreider Farms, Perfect Image, High Real Estate Group, Jeanne and Ed Pruitt, Ilkhanoff and Silverstein Attorney-At-Law, Power Train, Philadelphia Hoagie Co., The Farmers Fire Insurance Co., Tri-Boro Construction supplies, Angelo’s Soccer Corner and Adidas.

3. Competitive Facilities

Macclesfield Park Yardley, PA

Located in Yardley, PA, 35 miles northeast of Philadelphia and approximately 120 miles northeast of Kent County Regional Sports Complex, Macclesfield Park is a 92-acre park that hosts soccer, baseball, softball and Pop Warner football activities. Macclesfield Park has eight multi-purpose fields, three lighted baseball fields, four sand volleyball courts, two 11 v 11 soccer fields, and five 8 v 8 soccer fields. The park is owned and operated by the Township of Lower Makefield, PA.

Macclesfield Park is dedicated to serving the recreational needs of the local community. The city hosts 20 formal and informal soccer, baseball, softball and youth football leagues over the course of the year. The Pennsbury School District also utilizes the fields for their middle school and high school practices and games. In addition, the park is also used for two Ultimate Frisbee leagues in the fall and spring months.

YSC Sports Wayne, PA

YSC Sports is located in Wayne, PA, approximately 93 miles from Kent County Regional Sports Complex. The complex features eight state-of-the art outdoor and indoor synthetic soccer fields. The five indoor soccer fields and three outdoor turf training fields are professional-grade surfaces. YSC Sports is the official youth development training center of the Philadelphia Union MLS team. The facility is owned and operated by YSC Sports.

YSC Sports hosts more than 10 youth soccer tournaments per year. Major tournaments include the CIA Capital Cup, FCE Turf Cup, FC Delco Players Cup and Columbus Day Explorer Cup. Team registration fees range from $525 to $850 depending on age group and the length of tournament. The facility also hosts 42 youth and adult leagues over the course of the year.

3. Competitive Facilities

On average, 12 to 15 teams play in each league for 10-game seasons. The maximum roster size for each team is 15. In the summer and winter, the complex hosts six week-long clinics for competitive youth players. Registration fees range from $275 to $300 per camp. Fields can also be rented by teams at a cost of approximately $120-$150 per hour depending on season and availability.

In addition to partnering with the Philadelphia Union, YSC Sports is sponsored by Alteva, Gatorade, Premier Sports Medicine and Independence Blue Cross. Companies that sponsor the YSC Sports Complex cannot have concurrent sponsorship deals with Union sponsors.

The Proving Grounds Conshohocken, PA

Located approximately 94 miles north of Kent County Regional Sports Complex, The Proving Grounds contains seven soccer fields designed for tournament play. With six synthetic turf fields featuring outdoor lighting and one grass field, the complex regularly hosts NCAA soccer, lacrosse, and field hockey games on a year-round basis. The complex also contains a 10,000-square foot indoor facility with a full-size indoor field, state-of-the-art scoreboard, and movable batting tunnels. The complex also has approximately 750 parking spaces to accommodate visitors for weekend tournaments. The Proving Grounds complex is owned by Tee’s Golf Center and managed by LFT Realty.

The Proving Grounds hosts between six and eight soccer, lacrosse and field hockey tournaments on an annual basis and plans to host 10 to 15 in a stabilized year of operations. On average, tournaments host 200 to 250 teams, primarily from Philadelphia, New York City, Dover and Baltimore. The major soccer tournaments, such as the FC DELCO Players Cup and Kick-Off Classic, are designed to attract regional college coaches and scouts. The Inter-AC Lacrosse Challenge, a major lacrosse tournament, is also head at The Proving Grounds.

The Proving Grounds was designed for tournament play, but the complex hosts approximately 10 soccer and lacrosse leagues over the course of the year. Local teams can also rent one of the six synthetic turf fields for a 90-minute session at a cost of $150. The Proving Grounds does not have any major sponsors, but management is actively pursuing a naming rights partner for the facility.

3. Competitive Facilities

It should be noted that there is a variety of other venues including local community parks, high school fields, collegiate fields and other facilities that would compete to host practices, games and other recreational uses. Additionally, there are other regional sports complexes with different market focuses (i.e. Sports at the Beach in Rehoboth Beach, DE [baseball/softball complex], Ripken Baseball in Aberdeen, MD or the Boo Williams Sportsplex in Hampton, VA [indoor basketball/volleyball facility], among others) that could compete for corporate sponsorship or could compete to host the same athletes that participate in multiple sports.

Summary

The viability of the Kent County Regional Sports Complex is dependent, in large part, on its position in the competitive sports complex landscape, which will directly influence its ability to attract league play and tournaments from the regional market.

The following are key findings and conclusions regarding the Kent County Regional Sports Complex’s competitive positioning within the regional market:

 Overall, the Kent County Regional Sports Complex will face competition from major existing regional complexes for larger tournaments.

 Nine (9) local and regional sports complexes were identified as potential competitors to the Kent County Regional Sports Complex, including the proposed Delaware Sports Complex which has yet to be constructed.

 On average, these sports complexes accommodate 12 multi-purpose athletic fields, which is comparable to the building program of the Kent County Regional Sports Complex.

 Typically, these sports complexes host a variety of leagues, practices, tournaments and camps which draw participation from within a similar regional base as the Kent County Regional Sports Complex.

 Competitive sports complexes host between four (4) and 20 tournaments and average 12 tournaments annually across soccer, field hockey, lacrosse and other sports.

 The Kent County Regional Sports Complex will offer a competitive advantage relative to its competitors as the only outdoor, all-turf facility in the regional market; however, a majority of the facilities identified in this report have some indoor field inventory which can be utilized during inclement weather or other conditions unsuitable for outdoor play. It should be noted that the use of indoor fields during inclement weather would be challenging given existing indoor facility rentals.

3. Competitive Facilities

 The proposed Delaware Sports Complex, which is envisioned to include 20 full-size grass fields, could represent significant competition to the Kent County Regional Sports Complex if it is developed.

 The proposed Delaware Sports Complex’s proximity to major interstates and local restaurants, along with an established participant base at nearby M-Town Sports Complex are advantages relative to the Kent County Regional Sports Complex. However, the entirely lit, all-turf Kent County Regional Sports Complex offers an ideal league and tournament infrastructure with its ability to maximize utilization throughout the day and throughout the year.

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The competitive landscape for the Kent County Regional Sports Complex is considered together with an assessment of local/regional characteristics, trends in sports participation, comparable facilities and user interviews to estimate demand at the sports complex.

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4. SPORTS PARTICIPATION TRENDS

4. Sports Participation Trends

In 2013, there were an estimated 143 million Americans (approximately 50 percent of the population of individuals age six and older) participating in outdoor sports, according to the Physical Activity Council. This level of participation has spurred sizeable growth in the sports tourism industry. One of the fastest-growing segments in travel, youth sports tourism is an estimated $7 billion annual industry, with parents often spending thousands of dollars so that their children can travel to and participate in local, regional and national tournaments. According to Sports Travel Magazine, 27 percent of all trips taken in 2013 were for the sole purpose of participating in an organized sporting event.

The purpose of this section is to provide an overview of sports participation locally, regionally and nationally. An understanding of these trends for each sport anticipated to be accommodated by the Kent County Regional Sports Complex provides a framework from which to quantify the size of the complex’s market and potential demand. Based on discussions with potential project stakeholders, team sports such as soccer, tackle football, lacrosse, field hockey and ultimate frisbee were identified as the primary sports that would most likely be targeted by the Kent County Regional Sports Complex and represent the bulk of complex utilization.

Specifically, this section is divided into the following categories:

 Participation Rates; and,  Demographic Characteristics.

The remainder of this section summarizes participation trends associated with the sports that the Kent County Regional Sports Complex could host.

Participation Rates

The national and regional statistical data presented herein for soccer, tackle football, and lacrosse was derived from the National Sporting Goods Association (“NSGA”). Research information from the NSGA is derived from a comprehensive annual report of participation rates in the United States based on approximately 40,000 interviews with individuals seven (7) years of age and older. The report is designed to identify and analyze trends, patterns and relationships within various sports and activities.

Because the NSGA study does not report participation statistics for field hockey and ultimate frisbee, national statistics on field hockey and ultimate frisbee were collected using data from the Sports and Fitness Industry Association (“SFIA”), which is a trade organization for leading industry sports and fitness brands. SFIA’s comprehensive report on national and regional field hockey and ultimate frisbee participation levels is based on approximately 20,000 interviews with individuals six (6) years of age and older.

4. Sports Participation Trends

2013 National Sports Participation

It is important to understand the overall participation rates for team sports on a national level. National participation rates can provide insights into the overall popularity of a sport. The participation rates and levels in this section reflect the number of frequent participants in each sport. The NSGA categorizes frequent participants as individuals who engage in a sport at least 50 times per year including practices and games.

The chart below presents a summary of the national participation rates of targeted team sports for 2013.

NATIONAL PARTICIPATION LEVELS KCRSC Targeted Sports

Soccer 12.8

Football 7.5 (Tackle)

Ultimate 5.1 Frisbee

Lacrosse 2.8

Field Hockey 1.4

0 2 4 6 8 10 12 14 Total Participants (millions)

Sources: NSGA, SFIA.

4. Sports Participation Trends

As shown, soccer (12.8 million) has the highest participation levels among sports anticipated to be hosted by the Kent County Regional Sports Complex. Tackle football ranks second among team sports analyzed with 7.5 million participants. Approximately 5.1 million people participate in ultimate frisbee. Lacrosse and field hockey have the lowest participation levels among team sports analyzed with 2.8 million and 1.4 million participants, respectively. These national participation rates can be partially attributed to the fact that, while lacrosse and field hockey tend to have higher participation rates in the northeastern regions of the country, their total participation numbers compared to other sports such as soccer, baseball or softball are lower.

Five-Year National Sports Participation Trends

In addition to analyzing the most recent year’s sports participation levels, it is also important to assess historical participation trends in order to understand which sports are experiencing a rise in popularity and which ones are remaining constant or declining in popularity. The table below presents a summary of the participation trends of team sports from 2009 to 2013 (the most recent year that participation statistics were available at the time of this report).

NATIONAL SPORT PARTICIPATION TRENDS (2009-2013) KCRSC Targeted Sports

Total Par cipants (millions) 18

Growth Rate 2009 to 2013 12 Lacrosse 7.7% Ultimate Frisbee 5.0% Field Hockey 2.0% 9 Soccer -5.9% Tackle Football -15.7%

0 2009 2010 2011 2012 2013

Soccer Tackle Football Lacrosse Ul mate Frisbee Field Hockey

Note: Data for lacrosse and flag football have only been collected since 2010 and 2012, respectively. Source: NSGA, SFIA.

4. Sports Participation Trends

As illustrated in the table on the previous page, lacrosse and ultimate frisbee show solid growth trajectories with growth rates of 7.7 percent and 5.0 percent, respectively. Participation in field hockey has also grown by 2.0 percent since 2009. Among those with negative participation trends since 2009, soccer has declined 5.9 percent and tackle football has declined 15.7 percent.

Overall, national sports participation has remained relatively stable since 2009, with the exception of tackle football. The notable decline in tackle football participation among young athletes can be attributed, in part, to mounting concerns over the long-term consequences of concussions and head injuries. Pop Warner and USA Football reports cite parental concerns over head injuries as the most common reason for youth disengagement from tackle football, followed by the downturn in the national economy and the trend of youth specializing in a single sport.

Participation Rates by Geographic Area

Local and regional participation rates are critical to understanding the strength of the Kent County Regional Sports Complex’s market area. The table below shows local and regional indices relative to the national average for the sports targeted by the Kent County Regional Sports Complex.

LOCAL AND REGIONAL PARTICIPATION RATES Kent County and Mid-Atlantic Region

Kent National Mid - Atlantic County Targeted Participation Participation Participation Sports Index Index Index

Lacrosse 100 190 102

Field Hockey 100 110 102

Soccer 100 137 100

Tackle Football 100 83 97

Note: Sorted by Kent County Participation index. Note: The NSGA and Sports Marketing do not calculate indices for ultimate frisbee. Source: NSGA and Sports Marketing.

As shown, participation rates locally, and more specifically within the Mid-Atlantic region, exceed the national average for lacrosse, soccer and field hockey but trail the national average in tackle football.

4. Sports Participation Trends

Specifically, the lacrosse participation rate in the Mid-Atlantic Region is estimated to be 90 percent above the national average. Soccer participation rates in Kent County are on par with the national average and 37 percent higher within the Mid-Atlantic region. Note that the NSGA does not measure ultimate frisbee participation indices on a local or regional level.

Estimated Target Market Size for Kent County Sports Regional Complex

In order to estimate the potential participant pool for the Kent County Regional Sports Complex, national participation percentages were adjusted to account for the local and regional indices and applied to their respective population bases. The table below summarizes the estimated population base from which the Kent County Regional Sports Complex could draw participants.

KENT COUNTY SPORTS COMPLEX Potential Participant Pool

Kent Four-Hour County Drive Time

Market Population: 172,280 42,381,460 Local Estimated Regional Estimated Rate - % Participation Rate - % Participation Targeted Sports: Soccer 30.2% 52,029 41.4% 17,534,905 Tackle Football 28.4% 48,964 24.3% 10,306,747 Lacrosse 13.3% 22,844 24.7% 10,468,221 Field Hockey 0.3% 529 0.3% 130,197

Total 124,366 38,440,070

Note: The NSGA does not calculate a local or regional participation rates for ultimate frisbee. Sources: NSGA for National Rates; Sports Marketing for Local Rates.

Based on this analysis, it is anticipated that the Kent County Regional Sports Complex will draw from a base of approximately 124,000 frequent participants within the local area for practice and league play, excluding ultimate frisbee, which was not assessed by the NSGA. The Kent County Regional Sports Complex is anticipated to draw from a base of nearly 38 million sports participants for tournaments, camps and other regional events.

National Participation Rates by Age

The age of sports participants can vary significantly by sport and is influenced by many factors including availability, cost to participate, skill level required, physical requirements and other

4. Sports Participation Trends factors. It is important to understand the age distribution of participants in sports targeted by the Kent County Regional Sports Complex in the context of age distribution characteristics of the local and regional market. For purposes of this analysis, the youth category includes seven (7) to 17 year-olds, the young adult category includes 18 to 34 year-olds, the middle age category includes 35 to 54 year-olds and seniors category includes participants aged 55 years and older.

The table below summarizes national sports participation by age group for the targeted sports at the Kent County Regional Sports Complex.

NATIONAL SPORTS PARTICIPATION BY AGE GROUP KCRSC Targeted Sports

70% 64.8%

60% 53.9% 47.9% 50%

Youth 40% Young 32.6% Adult 30.5% 30% Middle 25.4% Age Seniors 17.8% 20% 14.1%

10% 8.8%

1.5% 1.0% 1.7% 0% Soccer Tackle Football Lacrosse

Note: The NSGA and SFIA do not calculate participation by age group for field hockey or ultimate frisbee. Source: NSGA, SFIA.

According to the NSGA, the youth category (7 to 17 year-olds) represents the largest percentage of national sports participants for team sports. Among the targeted sports for the Kent County Regional Sports Complex, tackle football has the highest levels of participation (64.8 percent) among 7 to 17 year-olds while 53.9 percent of soccer participants and 47.9 percent of lacrosse participants fall within this age bracket. It is also notable that lacrosse reported a higher participation level within the middle age demographic (35 to 54 year-olds) than soccer, indicating a dedication to the sport beyond competitive play.

Although the NSGA does not study participation rates by age for ultimate frisbee and field hockey, sport federation studies indicate a high level of participation among individuals under

4. Sports Participation Trends the age of 35 in each sport. Studies by USA Ultimate show that 40 percent of ultimate frisbee participants are between the ages of 13 and 24 and 27 percent are aged 25 to 34. Similarly, USA Field Hockey determined that over 70 percent of registered players are under the age of 35.

National Participation by Income

Household income has a direct influence on sports PARTICIPANT MEDIAN HOUSEHOLD INCOME participation due to the KCRSC Targeted Sports fact that sports have different levels of annual investment, some of which may not be feasible for all people. The chart Soccer $79,492 to the right presents a summary of the median household incomes of team sports.

As shown, soccer has the Lacrosse $71,136 Median HH highest average median Income household income of U.S. Total: $79,492 among popular $53,200 team sports. With a 4-Hour Drive median household Time: income of $71,136, $69,100 Tackle lacrosse participants have $64,667 Football Kent County: a high household income $54,660 compared to other sports and the national median of $53,220. Note that the $0 $20,000 $40,000 $60,000 $80,000 $100,000

NSGA did not study the Source: NSGA average median household incomes for field hockey and ultimate frisbee participants.

Overall, the median household income of $71,886 among team sports identified in this report is consistent with the trend that sports participants come from households with higher incomes than the U.S. median. These findings indicate that participants in sports targeted by the Kent County Regional Sports Complex have a greater capacity to travel for regional or national tournaments.

4. Sports Participation Trends

Summary

A review of participation trends at a national, regional and local level provides a framework from which to assess the potential demand for programming at the Kent County Regional Sports Complex.

The following are key findings and conclusions of the sports participation research:

 Soccer (12.8 million) and ultimate frisbee (5.1 million) have the highest national participation rates among targeted sports.

 Tackle football reported the highest combined participation levels among 7 to 17 year olds (64.8 percent), followed by soccer (53.9 percent) and lacrosse (47.9 percent).

 Lacrosse and ultimate frisbee have shown the greatest amount of annual growth since 2009 (7.7 percent and 5.0 percent, respectively).

 Lacrosse is the fastest growing sport at the high school level, with 28 percent more schools sponsoring boys’ lacrosse and 31 percent more sponsoring girls’ lacrosse over the past five years.

 Within the Mid-Atlantic Region, lacrosse, soccer and field hockey had a higher participation rate relative to the national average. Lacrosse participation was 90 percent higher while soccer and field hockey were 37 percent and 10 percent higher.

 Overall, national sports participation has remained relatively stable since 2009, which is an indication of its inelasticity relative to the general economy. However, national participation rates in soccer and tackle football have declined during this period. According to the NSGA, budget cuts in school and municipal soccer programs have contributed to a decrease in participation. Growing concerns over concussions and contact injuries have affected participation rates in youth football programs.

 Participation among the sports targeted for the Kent County Regional Sports Complex (i.e. soccer, lacrosse, field hockey, etc.) is highest among the youth age cohorts (i.e. under 18 years of age) and should be the primary target market. However, in order to maximize utilization of the complex, programming targeted at college and young adult age cohorts will also be important. ******

An understanding of sports participation trends on the local, regional and national levels is considered together with an assessment of local/regional characteristics, competitive facilities, comparable facilities and user interviews to estimate demand at the proposed sports complex.

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5. COMPARABLE FACILITY BENCHMARKING

5. Comparable Facility Benchmarking

An assessment of the physical, operational and financial characteristics of comparable sports complexes is important in understanding the potential feasibility of the Kent County Sports Complex. Comparable sports complexes were identified based on discussions with project representatives, sports tournament organizers and our knowledge of the industry.

Five (5) sports complexes were identified as appropriate comparable venues, including:

 Scheels Overland Park Soccer Complex – Overland Park, KS;  Maryland SoccerPlex – Germantown, MD;  Elizabethtown Sports Park – Elizabethtown, KY;  Mohawk Sports Complex – Tulsa, OK; and,  River City Sportsplex – Midlothian, VA.

The chart below outlines the comparable complexes as compared to Kent County Regional Sports Complex, including location, market demographics and building programs.

COMPARABLE SPORTS COMPLEXES Overview

Kent County Scheels Regional Maryland River City Elizabethtown Overland Park Mohawk Market Characteristics Sports Complex SoccerPlex¹ Sportsplex Sports Park Soccer Complex Sports Complex Frederica, Germantown, Midlothian, Elizabethtown, Overland Park, Tulsa, Location Delaware Maryland Virginia Kentucky Kansas Oklahoma Year Opened 2017² 2000 2011 2012 2009 2013 Population (CBSA) 172,280 5,941,189 103,194 1,260,980 2,063,363 978,005 Population (4-Hour Drive Time) 42,381,460 29,936,827 20,113,013 16,428,992 11,520,146 9,728,620 Median Household Income $54,657 $91,943 $56,867 $48,012 $56,678 $50,400 Median Age 37.1 37.0 38.6 36.2 37.4 37.3 Regional Sports Participation Indices Lacrosse 190 190 190 35 61 36 Field Hockey 110 110 110 35 45 36 Soccer 137 137 137 57 111 70 Tackle Football 83 83 83 104 101 101 Outdoor Multi-Purpose Fields Synthetic 12 6 12 2 12 0 Grass 0 19 0 10 0 17 Total 12 25 12 12 12 17

¹The complex also includes eight (8) indoor basketball/volleyball courts and two (2) indoor synthetic-turf fields. ²Anticipated first year of operations for Kent County Regional Sports Complex.

The Kent County Regional Sports Complex has the largest regional market population, nearly 40 percent more than the regional market population of the next largest comparable complex. This provides the sports complex with a large base to draw from for tournaments. Kent County Regional Sports Complex has the second smallest local market population to attract from for league play, camps and clinics.

Sports participation in lacrosse, soccer and field hockey is comparable to Maryland SoccerPlex and River City Sportsplex and higher than other comparable facilities. Kent County Regional Sports Complex indexes lower in tackle football than most comparable facilities.

5. Comparable Facility Benchmarking

The remainder of this section provides a general overview of each comparable sports complex including key benchmark data that provides a framework to evaluate the potential physical, operational and financial parameters of the Kent County Regional Sports Complex.

Scheels Overland Park Soccer Complex

Location: Overland Park, KS Year Opened: 2009 Owner: City of Overland Park Operator: City of Overland Park Cost: $36 million Synthetic-Turf Fields: 12 Natural Grass Fields: 0

Opened in 2009, the Scheels Overland Park Soccer Complex (“SOPSC”) comprises 96 acres and is considered one of the premier soccer complexes in the country. SOPSC offers 12 lighted, regulation-size synthetic-turf fields and is similar in design to the Kent County Regional Sports Complex.

Located in Overland Park, Kansas (a suburb of Kansas City), SOPSC has additional amenities, including:

 Nearly 1,100-square feet of meeting space suitable for captains or volunteer meetings and event check-ins;  Field cooling system to minimize the effects of the afternoon temperatures of the synthetic turf;  Evaporative cooling fans located next to player benches;  Electronic video boards to post game results and information;  Office space for tournament and referee coordinators;  A tournament storage area;  A referee lounge, including men’s and women’s locker rooms;  A permanent first aid office;  Free Wi-Fi and use of an internal video and tournament bracketing display system;  Three CornerKick Café’s, offering food at the complex;  Basketball and tennis courts;  Multiple playgrounds; and,  Near 35 hotels, 200 restaurants, dozens of shopping centers and other local attractions.

5. Comparable Facility Benchmarking

Scheels Overland Park Soccer Complex is owned and operated by the City of Overland Park. SOPSC cost SOPSC Funding ($36 Million) approximately $36 million to build. Funding was provided by the City of Overland Park through a general bond secured by a hotel tax increase of three percent (from six percent to nine percent). As a result, income from facility operations is not required to support debt payments.

In 2014, the SOPSC hosted approximately 20 3% Hotel Tax tournaments. The sports complex has hosted several ($36 Million) 100% large tournaments in the past, including the Kansas State Cup, USYSA Region II President’s Cup, US Adult Soccer Regional and National Championships, USYSA National Championships and VW Masters. Approximately 40 percent of the tournaments hosted at the facility reached their maximum number of participating teams (approximately 210).

Tournaments are scheduled in each soccer season, with SOPSC management balancing league play with tournaments that generate economic impact within the community. Because the tournament schedule for soccer is heavily skewed towards the spring season, scheduling of league play on weekends is difficult in those months. Major holiday weekends such as Memorial Day are almost exclusively used for tournament programming. Summer months (May, June and July) have the most availability for tournaments, as these months tend to be utilized less for soccer due to higher outdoor temperature characteristic of the Kansas City area and summer breaks in school schedules. The summer months also typically see a higher frequency of camps and clinics scheduled due to the increased availability of fields.

Most of the tournaments hosted at SOPSC are regional tournaments, with the complex management estimating approximately 25 to 35 percent of participants and visitors originate beyond the local market and require hotel accommodations. Management at SOPSC cited having a strong state association within sport governing bodies as well as a good volunteer base required to win the bidding process for national tournaments as factors for success in winning national and larger regional tournaments.

Scheels Overland Park Soccer Complex works with five external tournament organizers each year to schedule tournaments. When the complex first opened, management decided to work with tournament organizers to accelerate utilization at the sports complex in the first few years of operations. Each tournament organizer schedules between three and four tournaments at the complex annually, on average. SOPSC has two staff members on-site to handle issues during tournaments, while the tournament organizers supply the referees, field marshals and other support personnel required to run the tournament. A tournament rental fee as well as a field fee (per field, per day) is charged to the tournament organizers by SOPSC.

5. Comparable Facility Benchmarking

In addition to the tournaments it attracts, Scheels Overland Park Soccer Complex also hosts two three-month league-play seasons each year, with the fall league running from August through October and the spring league running from March through May. During these peak seasons, the complex operates at nearly 100 percent capacity for five hours per day Monday through Thursday, six hours per day on Friday and 14 hours per day on Saturday and Sunday. During the non-league winter months (November through February) the complex operates at an estimated 75 percent capacity; during the non-league summer months (June and July) the complex operates at an estimated 60 percent capacity. Heartland Soccer Association, Sporting Blue Valley and Overland Park Soccer Club have contracts with SOPSC for league play.

Overall, SOPSC management SCHEELS OVERLAND PARK SOCCER COMPLEX estimates each field hosts between RENTAL RATES 2,000 and 3,000 games annually (or Full Field Half Field between 24,000 and 36,000 games Practice Field Rentals (per hour) (per hour) total). With this many hosted games, Blue Valley Soccer Club / Overland Park Soccer Club $34 $24 Heartland Soccer Association / Non-HSA clubs / Schools $43 $33 the complex attracted a total of Adult League $75 N/A approximately 996,000 visitors in Per Day/ Per Day/ 2013, consisting of approximately Per Field Per Field 176,000 league and tournament Games (5 hrs) (10 hrs) Blue Valley Soccer Club / Overland Park Soccer Club $150 $300 participants, 702,000 spectators, and Non-HAS/BVSC $200 $400 118,000 weekday participants. Per Day/ SOPSC generates an estimated Tournaments Rental Fee Per Field Saturday & Sunday; can include Friday 5-11 PM $14,000 $400 economic impact of $10 million Per Hour/ annually, driven mainly by the League Per Field approximately 40,000 hotel nights Non-BVSC (Adult) $75 generated by tournaments annually. Per Hour/ Camps/Clinics/Schools, Non-soccer or other sports Per Field All camps, clinics, schools, non-soccer or other sports $50 Rental rates at Scheels Overland Park Field House Per hour Soccer Complex range from $24 to Regular hours¹ $40 Prime hours² $50 $400 for fields rented on an hourly Equipment Rental Fixed basis, depending on event type, Projector Screen $10 length of time and field size. Two day Podium $10 Microphone $10 tournaments have a $14,000 Easel $5 tournament fee as well as a $400 per Video Projector $40 field per day rental rate. The table to *All rentals outside of regular operating hours will be subject to a 2 hour minimum the right details the rental rate fees at ¹ Regular hours: M-F 8AM - 5PM; Sat 7AM - 4PM; Sun 12PM - 5PM SOPSC. ² Prime hours (M-F 5PM - 10PM; Sat 4PM - 8PM; Sun 5PM - 8PM Source: Scheels Overland Park Soccer Complex

SOPSC management indicated that the complex’s rental rates are lower than the standard market rates in their area. For example, Sporting KC charges approximately $115 per hour to rent one of their auxiliary fields, approximately 50 percent higher than the most expensive hourly rental rate at SOPSC. The sports complex was originally planned as a community asset, and rental rates at SOPSC were initially set low in order to acclimate the residents in the area to higher rates;

5. Comparable Facility Benchmarking residents had previously only paid $1.00 to rent city facilities. Rental rates were also able to be set low because the sports complex is not required to cover debt with revenues generated by SOPSC.

The quality of the fields at SOPSC helped to curb area pushback on the rental fee rates when they were initially introduced, though management believes they could raise their current fees between $20 and $30 per hour without a significant loss in utilization. However, rental rates have only increased approximately $7.00 per hour over the past seven years.

SOPSC has approximately 1,100 paved parking spots on-site, and management indicated it is insufficient even though the standard industry rate is 70 parking spots per field and SOPSC averages 95 parking spots per field. SOPSC management echoes a sentiment often iterated by other sports facilities that have expressed their regret at not planning for additional parking spots above the accepted industry rates. The design of parking lots at SOPSC do not accommodate larger mini-vans and SUVs. In addition, ingress and egress lanes are also hampered by a lack of dedicated drop-off areas for participants and their equipment close to the fields. Strong consideration should be given to increasing the number of parking spaces currently planned at the Kent County Regional Sports Complex.

Scheels Overland Park Soccer Complex began operations using a third-party vendor for concessions. The City terminated that contract after three months and now provides concession service. SOPSC management changed the concession offering to be geared towards ballpark fare such as hot dogs, hamburgers, nachos, pretzels and the like. SOPSC estimated that concession profit approximates to $50,000 to $75,000 per year after bringing the operations in-house.

The table on the following page outlines the financial performance of Scheels Overland Park Soccer Complex from 2010 to 2014.

5. Comparable Facility Benchmarking

SCHEELS OVERLAND PARK SOCCER COMPLEX FINANCIAL PERFORMANCE

2010 2011 2012 2013 2014 Revenues Field Rental $782,615 $784,351 $842,044 $983,578 $794,557 Concessions $257,964 $274,768 $327,722 $317,920 $289,816 Sponsorships $65,000 $45,500 $76,500 $72,000 $88,300 Other Rental Income $94,506 $90,078 $98,398 $96,380 $84,648 Other Revenues $18,510 $13,907 $92,826 $18,136 $25,547

Total Revenues $1,218,595 $1,208,605 $1,437,491 $1,488,013 $1,282,868 Expenses Salaries, Wages and Benefits $395,272 $393,331 $442,623 $475,086 $452,811 Utilities $206,255 $248,675 $214,779 $219,671 $251,724 Repairs and Maintenance $186,616 $232,433 $250,321 $278,797 $210,437 Contractual Services $47,959 $57,985 $63,451 $59,331 $47,830 Operating Supplies $26,139 $10,864 $28,280 $42,403 $30,412 Insurance and Bonds $46,472 $50,254 $53,850 $56,635 $47,489 Construction Supplies $12,027 $2,551 $12,485 $8,191 $4,244 Communications $4,502 $5,732 $6,115 $7,318 $5,272 Leases/Rentals $25,981 $7,176 $4,952 $12,257 $9,873 Office Expenses $8,886 $3,378 $3,473 $6,060 $2,259

Total Expenses $960,107 $1,012,380 $1,080,328 $1,165,748 $1,062,352 EBITDA¹ $258,488 $196,225 $357,163 $322,265 $220,516

¹ EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Source: City of Overland Park.

Over the past five years, SOPSC has generated between $1.2 million and $1.4 million in annual revenue from field rental, concessions, sponsorships and other sources. Operating expenses have ranged from approximately $960,000 to $1.2 million over the past five years, resulting in a net income from operations ranging from approximately $200,000 and $360,000 during this period, with an average variance in EBITDA of 11 percent.

SOPSC achieved this level of operating income despite charging below market rental rates, the lack of a naming rights agreement (the naming rights deal with Scheels All Sports was negotiated in June 2015 which provides for $125,000 in additional annual revenue), no in-house generated tournaments, and the lack of gate or parking fees.

One revenue stream sports facilities can utilize to increase revenues is charging a gate fee to every individual entering the facility. The Seminole County Sports Complex, a 15-field complex

5. Comparable Facility Benchmarking opening in 2016, plans to charge a $5.00 gate fee for anyone 13 or older that enters the facility. SOPSC does not currently charge a gate fee. Management at SOPSC indicated that gate fees would be costly to collect due to the amount of staff necessary to cover the nine different entrances to the complex.

SOPSC management has considered implementing a parking fee for tournaments to increase revenues in the past, and are currently exploring this as an option moving forward. SOPSC management cited an online payment system for collecting the parking fee as an option, similar to a Des Moines-area sports facility that has implemented a program to collect parking fees during tournament registrations. This setup would require the cooperation of tournament organizers and the sports complex SOPSC management to implement. Another reason cited by management for this not being implemented to date is the fact that there has never been a parking charge previously and there would be a public relations concern with implementing one moving forward.

In 2013, SOPSC management indicated it had to cancel three tournaments and a number of scheduled practices due to unplayable, snow-covered fields and at or below freezing temperatures. Though synthetic turf fields are more weather resistant than natural grass fields and can be cleared of snow with the proper equipment, extreme weather conditions can still lead to cancellations or disrupted operations. The cancellation of these three tournaments cost SOPSC an estimated $130,000 in revenues through the loss of tournament rental fees, field rental fees and concessions.

Scheels All Sports signed a five-year exclusive naming rights deal for SOPSC worth $625,000 (or $125,000 per year) in June 2015. In addition, Scheels will incur the cost to install new name signage throughout the Park as well as providing $4,000 for new uniforms with the new name and logo. The City plans to save the sponsorship revenue to replace turf fields at the complex at a future date.

Maryland SoccerPlex & Discovery Sports Center

Location: Germantown, MD Year Opened: 2000 Owner (land): Montgomery County Operator: Maryland Soccer Foundation Cost: $22.1 million Synthetic-Turf Fields: 5 (3 outdoor, 2 indoor) Natural Grass Fields: 19

Located in Germantown, Maryland (a suburb of Washington, D.C.), the 162-acre Maryland SoccerPlex and Discovery Sports Center opened in October 2000 and is owned and operated by

5. Comparable Facility Benchmarking the Maryland Soccer Foundation, a 501 (c) (3) corporation. Maryland SoccerPlex has 22 (soon to be 24 in 2016) total outdoor soccer fields, including 18 full-size natural grass fields, two natural grass fields that are currently being built, three lighted synthetic-turf fields, and a championship field. The championship field has seating for approximately 5,000 spectators. The complex also features walking trails and a small lake.

In addition to the outdoor soccer fields, the Discovery Maryland SoccerPlex Funding Sports Center offers eight (8) indoor ($22.1 Million) basketball/volleyball courts that convert to two (2) synthetic turf fields for indoor soccer, a cafe, locker Private Contributions facilities, and 50,000 square feet of meeting space. ($3.3 Million) 15% Debt backed by The SoccerPlex cost approximately $22.1 million to Sports Complex develop, and is part of the South Germantown revenues Public Recreational Park. Funding of the complex was ($10.8 Million) Infrastructure 49% ($8 Million) derived through a public/private partnership 36% between the State of Maryland, Montgomery County and the Maryland Soccer Foundation.

The state and county contributed $8.0 million in infrastructure-related costs. The Foundation financed $14.1 million to develop the SoccerPlex and Discovery Sports Center. They also received several philanthropic gifts and sponsorship agreements, including $1.0 million naming right sponsorship by Discovery Communications, a $1.0 million donation from Discovery’s founder John Hendricks, and a $1.3 million pledge by Pepsi Cola to be the official soft drink provider for the sports complex. The County retains no revenue nor incurs any expense as part of the 40-year land lease agreement with Maryland SoccerPlex.

Maryland SoccerPlex is the home field of the Washington Spirit of the National Women’s Soccer League (NWSL). D.C. United of the Major Soccer League (MLS) has hosted several Open Cup matches at Maryland SoccerPlex. Other notable soccer organizations with matches hosted at the complex include the National College Athletic Association (NCAA) and the Atlantic Coast Conference (ACC). From 2009 to 2011, the complex served as the home of the Washington Freedom of Women’s Professional Soccer.

On average, the complex hosts 15 to 18 tournaments annually. Over the past 10 years the Maryland SoccerPlex has established relationships within the lacrosse community, which are often required in order to attract tournaments to be hosted at a sports complex. Maryland SoccerPlex management indicated that most lacrosse organizations want to attend tournaments where college coaches are in attendance to scout talent. The Maryland SoccerPlex management established partnerships with local lacrosse organizations with connections to the college coaches and successfully host tournaments at the sports complex.

5. Comparable Facility Benchmarking

In 2014, the complex hosted a total of 15 soccer tournaments that attract local, regional and national participants from February to November. Major tournaments hosted at the facility included the Maryland State Cup Finals, the Mid-Atlantic Cup, Potomac Memorial Day Tournament, the U.S. Youth Soccer National Championship, and the Bethesda Boys & Girls Thanksgiving Tournament, among others. In general, each tournament hosted at the complex attract between 200 and 325 teams from a variety of age groups.

In October and June, the Maryland SoccerPlex hosts two tournaments annually which are organized in-house. The remainder of the tournaments are organized by local soccer clubs as straight rentals or partnerships. Maryland SoccerPlex holds prime weekends for the tournaments they organize in-house. Although the most beneficial financial model is for the Maryland SoccerPlex to run tournaments in-house, management has found the diversity of partnerships and rentals helps to support the local community, generate revenue and distribute risk.

Third-party tournament organizers pay a rental fee and supply the referees, field marshals and support personnel necessary to host a tournament. Maryland SoccerPlex also has agreements with three soccer clubs to partner with them to host tournaments. For tournaments organized through these soccer clubs, an even split profit/loss agreement between the soccer club and Maryland SoccerPlex is in place for tournaments hosted at the sports complex.

The complex generates revenue through local league play in the spring and fall seasons, synthetic-turf field rentals and tournaments. In addition the majority of their revenue comes from programs/activities run in house rather than outside parties. In 2014, there were approximately 8,800 matches played at the complex (almost evenly split between league play and tournaments). The three turf fields averaged approximately 1,800 hours of activity, while each grass field averaged between 500 and 700 hours of activity annually.

Maryland SoccerPlex’s natural grass soccer fields have restricted utilization hours during the week to keep them in prime condition for tournaments and league games. Local and regional clubs such as Montgomery Soccer Inc., Bethesda Soccer Club, Damascus Soccer Club, Potomac Soccer Association, Maryland Rush Montgomery and the Soccer Association of Montgomery conduct a portion of their practice and league play at the facility.

Each of the 17 fields host five events per day on Saturdays and Sundays in the spring and fall. The vast majority of the complex’s approximate 650,000 annual visitors come to the facility to participate in tournaments and league play, and generate an estimated $24 million in economic impact and 50,000 hotel room nights, according to a study conducted in 2014.

5. Comparable Facility Benchmarking

Rental rates at Maryland SoccerPlex range from $80 to $190 per hour, depending on field size and MARYLAND SOCCERPLEX field lighting. To rent half of a field, the rental rate RENTAL RATES ranges from $80 per hour (without lights) to $115 per hour (with lights). To rent a full field, the Field Size Without Lights With Lights rental rate ranges from $160 per hour (without Half Field $80/hr $115/hr lights) to $190 per hour (with lights). The chart to Full Field $160/hr $190/hr the right details the rental rate fees for the Maryland SoccerPlex. Maryland SoccerPlex requires 75 percent of the rental payment 15 days before an event, and does not refund rental fees, even if there is bad weather.

The table to the right details the financial performance of MARYLAND SOCCERPLEX the Maryland SoccerPlex FINANCIAL PERFORMANCE from 2011 to 2013. 2011 2012 2013

Maryland SoccerPlex Revenues Programming $4,080,596 $4,414,367 $4,459,268 generates an average Commissions and Rebates $713,940 $107,675 $100,388 operating EBITDA (which Rental Income $8,133 $7,800 $7,800 excludes non-operational Program Guide Advertising $4,225 $9,460 $1,925 revenues such as asset sales) Total Revenues $4,806,894 $4,539,302 $4,569,381 of approximately $1.6 million Expenses on average annually. Personnel Services/Staff Costs $1,134,877 $1,216,712 $1,303,524 Maryland SoccerPlex Other Expenses $266,073 $337,921 $413,970 benefits from a larger Utilities $298,878 $296,348 $337,426 outdoor building program, Fertilizer/Sod/Seed $228,110 $233,217 $202,063 indoor facilities and a large Contracted Services $163,434 $200,671 $193,091 Referees $189,482 $197,748 $190,856 demographic base for league Maintenance/Repairs $169,951 $226,457 $187,802 play and tournaments. Office Expenses $110,186 $80,185 $96,940 Uniforms $68,101 $83,460 $76,129 As previously stated, the Insurance & Bonds $52,680 $56,020 $62,189 sports complex was financed Equipment $34,911 $40,868 $43,431 Printing/Shipping $377 $35,651 $33,012 in part through a $14.1 Technology $23,597 $23,645 $24,176 million debt issuance, Employee Training/Travel $4,718 $9,924 $5,303 resulting in annual debt Advertising $3,188 $3,186 $1,117 payments of approximately Total Expenses $2,748,563 $3,042,013 $3,171,029 $1 million. Current sports Operational EBITDA¹ $2,058,331 $1,497,289 $1,398,352 complex operating income is sufficient to cover annual ¹ EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Note: Operational EBITDA excludes non-operational revenue line items (e.g. Asset Sales). debt payments. The Source: Maryland SoccerPlex tax returns. Maryland Soccer Foundation

5. Comparable Facility Benchmarking puts all net profit earned by the facility into a capital reserve in order to pay for future improvements and repairs.

Maryland SoccerPlex does not have a title naming rights deal for the entire sports complex, but does have their indoor facility, the Discovery Sports Center, sponsored by Discovery Communications due to private donations from their founder when the facility was constructed and his continued philanthropy. Maryland SoccerPlex also has several sponsors, representing a mix of national and local brands, such as:

 Discovery Communications;  Dick’s Sporting Goods;  Holy Cross Germantown Hospital;  Demosphere;  Ben & Jerry’s;  Wounded Warriors Soccer; and,  Maryland-National Capital Park and Planning Commission.

Tournament-specific sponsorships are allowed within the bounds of existing Maryland SoccerPlex sponsorship agreements, and those revenues flow to the external tournament organizers.

Maryland SoccerPlex has 2,000 paved parking spaces on-site, an average of 75 spots per field. Around 2008, the facility noticed that the older teenagers started to drive themselves to practices, games and tournaments and the parents would come separately. The added traffic from participants and parents, combined with the higher number of participants that attend lacrosse events, has added stress to the complex’s parking facilities.

If Maryland SoccerPlex was to rebuild their facility knowing the issues they are currently experiencing with parking, Maryland SoccerPlex management would have planned for more spaces to accommodate the advent of small sided soccer and teenage drivers. Maryland SoccerPlex has multiple clusters of permanent restroom facilities near the parking and fields in order to better serve their visitors.

5. Comparable Facility Benchmarking

Elizabethtown Sports Park

Location: Elizabethtown, KY Year Opened: 2012 Owner: City of Elizabethtown Operator: City of Elizabethtown Cost: $31 million Synthetic-Turf Fields: 2 Natural Grass Fields: 10

The 158-acre City-owned and City-operated Elizabethtown Sports Park (“E-town”) opened in 2012. E-town features 10 multi-purpose natural grass fields that can be configured for multiple sports and field sizes, as well as two synthetic-turf championship fields with stadium seating, permanent football and soccer striping and permanent goal posts. Eight of the full-sized fields have lighting.

Located in Elizabethtown, Kentucky (a suburb of Louisville), Elizabethtown Sports Park has other amenities, including:

 12 baseball/softball fields;  Six full-sized concession stands;  Indoor restrooms;  Three covered pavilions;  Four playgrounds;  Three-mile walking/jogging trail;  Wi-Fi access throughout the park;  Wireless, electronic scoreboards at each field; and,  Shaded seating adjacent to baseball/softball fields.

The complex cost approximately $31 million to construct. It was financed through a City of E-Town Sports Park Funding Elizabethtown restaurant tax assessed at two ($31 Million) percent within the City limits. In 2014, the restaurant tax collected exceeded the $1 million originally projected by the City, bringing in nearly $2.7 million, allowing the city to cover the debt obligation and fund an escrow account for future capital improvements. City 2% On average, E-town hosts approximately 50 major Restaurant Tax events annually, of which approximately 20 are ($31 Million) tournaments, and the remaining events comprising 100%

5. Comparable Facility Benchmarking of camps, clinics and other events, excluding practices and league games.

Each tournament hosts approximately 70 to 80 teams. The priority of programming is given to events that bring in visitors and associated economic impact, including major holiday weekends. In 2014, an independent economic impact report estimated the sports complex’s economic impact on the Elizabethtown area between $11.9 million and $14.1 million. Key tournaments hosted at E-town include the Youth Baseball Nationals, Youth Softball Nationals and Game Day USA Softball/Baseball tournaments.

E-town hosts a number of league sports, including football, soccer, futsal, lacrosse, baseball and softball. E-town rents fields for league play but does not organize league play themselves. Local sports leagues are responsible for the organization of the league, including practices, games, tournaments and the hiring of referees and umpires. E-town runs an average of 250 games per season across all sports on their fields four nights a week, with weekends reserved for tournaments.

The rental rates for E-town are detailed in the chart below.

ELIZABETHTOWN SPORTS PARK RENTAL RATES

Type of Field Field Fee Light Fee Field Size (Per Field) (Per Field) Synthetic Soccer/Football (Fields 10 & 11) Full Size $450/day $40/hour $275/half day $40/hour Natural Grass Soccer Fields (Fields 1-9, 12) Full Size, 10 U, or 12 U $200/day $30/hour $125/half day $30/hour Baseball - Multi-use Fields 1 & 2 60', 65' (Bases); 210' (Fence) $175/day $30/hour $125/half day $30/hour Baseball - Multi-use Fields 3 & 4 50', 60', 65' (Bases); 200' (Fence) $175/day $30/hour $125/half day $30/hour Baseball - Baseball Fields 5 & 6 60', 65', 70', 80' (Bases); 250' (Fence) $175/day $30/hour $125/half day $30/hour Baseball - Multi-use Fields 7 & 8 60', 65', 70', 80' (Bases); 250' (Fence) $175/day $30/hour $125/half day $30/hour Baseball - Baseball Fields 10 & 12 60', 65', 70', 80' (Bases); 250' (Fence) $175/day $30/hour $125/half day $30/hour Baseball - Baseball Fields 9 & 11 90' (Bases); 345' (Fence) $175/day $30/hour $125/half day $30/hour Miracle Field 45' (Bases); 110' (Fence) $175/day N/A $125/half day N/A

Source: City of Elizabethtown

Rental rates at E-town range from $125 for a half day of soccer field time to $450 for a full day of soccer field time on the synthetic fields. These rates are in line with comparable sports complexes detailed in this report.

5. Comparable Facility Benchmarking

The chart on the following page depicts the financial performance of E-town for fiscal year 2013- 2014 and the budget for fiscal year 2014-2015 operations.

ELIZABETHTOWN SPORTS PARK FINANCIAL PERFORMANCE

2013/2014 2014/2015

Estimated Budgeted

Revenues Recreation Fees $621,000 $638,656 Expenses Salaries, Wages and Benefits $916,300 $988,777 Contractual Services: Advertising $1,000 $1,000 Utilities $184,235 $156,950 Insurance $30,230 $34,500 Other $18,040 $83,550

Total Contractual Services $344,855 $276,000 Materials & Supplies: Vehicle Parts & Labor $1,450 $4,500 Repairs & Maintenance Materials $35,000 $75,800 Agricultural & Technical Supplies $100,142 $127,500 Food & Concessions $131,000 $125,200 Other $7,500 $31,700 Total Materials & Supplies $314,592 $364,700 Other Expenses:

League Fees & Awards $0 $0 Sports Equipment $0 $22,000 Miscellaneous Expense $3,636 $200 Total Other Expenses $3,636 $22,200

Total Expenses $1,598,783 $1,651,677 EBITDA¹ ($977,783) ($1,013,021)

¹ EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Source: City of Elizabethtown.

As depicted, Elizabethtown Sports Park generates $621,000 in operating revenue and approximately $1.6 million in operating expenses for a total net loss of approximately $980,000 in 2013-2014. For 2014-2015, management has budgeted for an operating loss of approximately $1.0 million. A majority of E-town’s operating expense profile is due to oversized salaries, wages and benefits as a result of 11 full-time and 60 part-time positions. Salaries, wages and benefits for comparable facilities analyzed herein typically account for between 20 and 25 percent of total

5. Comparable Facility Benchmarking revenues, as opposed to E-town’s payroll profile which accounts for more than 100 percent of sports complex revenues.

E-town has approximately 1,150 paved parking spaces on-site. There is a grass field close by for overflow parking which management indicated has not alleviated parking traffic at the sports complex. Management has had issues with visitors parking on grass fields not intended for parking, and even ticketing and towing has not curbed this issue. The volume of cars and the layout of the parking, without any spaces located near the far fields, were both reasons cited by E-town management for parking issues at the sports complex.

Unlike many other sports complexes, E-town allows outside food and beverages to be brought in for tournaments. Even with this policy, management has stated that they earn approximately $15,000 to $20,000 in gross concession revenues per tournament weekend selling standard concession fare. They have one concession stand per pod located between fields throughout the complex.

Elizabethtown Sports Park has several sponsors. These sponsorships reflect a combination of local and national brands, such as:

 Blue Bunny; . Bluegrass Kettle Masters Inc.;  Lowe’s; . Duke’s Sporting Goods;  Waste Management; . Hardin Memorial Hospital;  Academy Sports + Outdoors; . Specialty Foods Group;  Chick-Fil-A; . Pepsi; and,  Fischer’s; . TruGreen.  National Guard;

E-town allows tournament-specific sponsorships as long as they are approved by the City and are in agreement with existing sponsorship agreements.

While the complex does not charge a gate fee, they do have agreements with tournament organizers to split gate fees if the organizer chooses to implement this fee. Parking is free at the complex, and as of now there are no plans to charge for it. Future changes complex management would like to make include enclosing the scoring and press box areas near the baseball fields, installing synthetic turf infields for some baseball fields and adding a few more fields to better accommodate larger tournaments.

5. Comparable Facility Benchmarking

Mohawk Sports Complex

Location: Tulsa, OK Year Opened: 2013 Owner: City of Tulsa Operator: Tulsa Sports Commission Cost: $9.8 million Synthetic-Turf Fields: 0 Natural Grass Fields: 17

The Mohawk Sports Complex was opened in 2013 on what was previously 350 acres of dirt fields and offers 17 international-size, natural-grass fields, 10 of which are lighted. Though its primary use is soccer, Mohawk Sports Complex also hosts lacrosse, ultimate frisbee, cross country, and rugby sporting events.

The complex is owned by the City of Tulsa and operated by Tulsa Sports Commission, a non-profit organization dedicated to creating a positive economic impact in the Tulsa region through various sports ventures. Originally named “Mohawk Soccer Complex”, the facility changed its name to “Mohawk Sports Complex” to better encompass the various other sports hosted on-site, such as lacrosse, ultimate frisbee, cross country and rugby.

The Mohawk Sports Complex features various amenities in addition to its 17 natural-grass fields, including:

 Team warm-up areas between fields;  Advanced irrigation and drainage systems;  Spectator seating;  Convenient restroom facilities;  A modern concession building;  Food trucks during tournaments;  Designated tournament headquarters or meeting room space;  Referee locker room;  Storage facilities;  Pavilion for events; and,  625 paved parking spots and grass overflow to accommodate an additional 1,200 cars.

5. Comparable Facility Benchmarking

Construction of Mohawk Sports Complex cost Mohawk Sports Complex Funding approximately $9.8 million and was funded by the ($9.8 Million) City of Tulsa through the Vision 2025 sales tax Private Donations ($5.2 million), 2006 third-penny sales tax ($3.8 ($13,000) million), and the 2001 third-penny sales tax 0.1% ($750,000), with the remaining $13,000 secured from Park Friends donations.

As a tournament-only facility, Mohawk Sports Complex hosted 18 tournaments in 2014 and will host 25 in 2015, with projections to reach 32 tournaments annually by 2017. All tournaments Sales Tax ($9.77 Million) are hosted through third-party tournament 99.9% organizers, with the organizers paying a rental fee for the fields used to the complex.

In 2013, Mohawk Sports Complex hosted large regional tournaments such as the Friendship Cup and the Midwest Labor Day Soccer Tournament, along with local events such as the Blitz United Soccer Club Spring Classic. The complex hosted the 2015 Lexus Tulsa Cup Soccer Tournament, the largest youth soccer tournament in the state of Oklahoma, as well as the US Youth Soccer National Championships in July 2015.

Management cited the bright future and big plans of the complex as key points in their bid to win the national championship game. The Oklahoma delegates in the Youth Soccer Association partnered with management to help win that tournament, and the benefits of a large-sized tournament has helped to accelerate the future plans for the complex. One year ago, Mohawk Sports Complex hired a staff of people to better manage tournaments and the sales and marketing of the complex.

Mohawk Sports Complex reports an attendance of 54,000 spectators per year, with a typical tournament bringing approximately 3,000 spectators and millions of dollars in economic impact to the area. The Lexus Tulsa Cup Soccer Tournament alone, a tournament Mohawk Sports Complex sees as below average size, provided $5.5 million in economic impact in 2015.

With only 625 paved parking spaces on-site, Mohawk Sports Complex has the smallest parking space inventory of any comparable facility detailed in this section. Management has recognized the lack of parking as a key area for improvement, setting up a grass overflow lot to aide in temporary parking for up to 1,200 total vehicles currently. There are plans to add a parking lot down the street from the complex, however, it would require a shuttle to bring patrons to the sports complex. Adding to the parking issue is the fact that there is only one permanent ingress and egress point for the complex. Mohawks Sports Complex is currently utilizing a dirt road egress point to help aide in traffic flow, with plans to add permanent options on the far side of the complex in the near future.

5. Comparable Facility Benchmarking

Permanent restroom and concession facilities exist near the front four fields. The other 13 fields do not have convenient access to these amenities, and management has implemented some creative solutions to alleviate this issue. Tournament organizers are required to rent portable toilets if their tournament utilizes more than six or seven fields. With a new concessionaire, Mohawk Sports Complex allows food trucks on the far side of the complex to address the lack of concessions on that side of the grounds. The complex receives a minimum fee from each food truck as well as 15 percent of sales above that minimum fee amount.

The complex does not currently have many sponsorship deals outside of a pouring rights agreement with Pepsi. Pepsi has written into its contract that no other competing brands can be sponsors at the park. Tournament organizers are allowed to bring their own sponsors for tournament events.

No gate fee is required at Mohawk Sports Complex, though tournament organizers can charge one if they choose and retain all revenues from that fee. As well, there are no parking fees currently in place, though management is considering adding a $10 one-night or $15 weekend parking fee at registration to help with the parking issues they are experiencing at the complex.

River City Sportsplex

Location: Midlothian, VA Year Opened: 2011 Owner: Shaw Industries, Inc. Operator: CBRE|Richmond Cost: Unknown Synthetic-Turf Fields: 12 Natural Grass Fields: 0

Proposed in December 2008 by SportsQuest founder Steve Burton, River City Sportsplex was originally envisioned as a 250-acre Olympic Village, including more than 20 synthetic-turf soccer fields, an indoor bicycle track, a 5,000-seat arena, an ice rink, swimming facilities, an indoor football field, a fitness membership center and sports training academy.

The complex was originally intended to be 100 percent privately financed through personal donations as well as selling tax-exempt, non-government guaranteed bonds from Chesterfield County that was to be repaid by the net operating income of the sports complex. Construction of the sports complex was started utilizing personal donations, but the sports complex was never built out to the final plan because the financing plan was never achieved. A total of 12 synthetic turf fields were constructed, but River City Sportsplex was eventually sold at a foreclosure auction to Shaw Industries, Inc., one of the sports complex creditors that supplied the synthetic playing surfaces for the sports complex. CBRE|Richmond was hired to manage the complex, though they are currently looking for a permanent sports complex management solution. 69

5. Comparable Facility Benchmarking

River City Sportsplex hosts league play and tournaments across a variety of sports, including soccer, lacrosse and rugby. The sports complex was one of only five sites selected by FC Barcelona for a summer camp series in 2015. Without an executive director to manage and facilitate conversations with third-party tournament organizers, River City Sportsplex is open for tournament rentals but is not currently pro-actively marketed as a tournament destination. If River City Sportsplex were more aggressively marketed to host regional tournaments, this sports complex could become a major competitor to the Kent County Sports Complex given its location and similar programming elements.

Summary

It is important to review comparable facilities in the local and regional markets in order to better understand various user groups, events, spectators, participants and sponsorships the operations of the Kent County Regional Sports Complex could attract.

The following are key findings and conclusions of the comparable facilities in the local and regional market which are similar to the Kent County Regional Sports Complex:

 On average, comparable sports complexes cost $26.2 million to construct. Three of the sports complexes were funded completely by sales tax revenues, while one was financed through a mix of private donations and public funding. Only one sports complex had a 100 percent private funding structure that was backed by net operating income of the sports complex and that facility’s funding failed to materialize as envisioned.

 Of those comparable complexes with available financials, revenues ranged between approximately $600,000 and approximately $4.6 million on average. Expenses of comparable complexes ranged between approximately $960,000 and approximately $3.0 million, on average, annually. For all comparable complexes, the top two expense categories annually were salaries, wages and benefits and utilities.

 The number of multi-purpose fields across all comparable sports complexes range from 12 fields to 25 fields, with an average of 16 fields. Two of the comparable sports complexes had all synthetic-turf fields, while one had all natural-grass fields and the remaining two comparable sports complexes had a mix of synthetic-turf and natural-grass fields.  Comparable complexes host between 15 and 22 tournaments annually, with an average number of participants and spectators estimated to be approximately 570,000 annually.

 Of those sports complexes that have had economic impact studies conducted, economic impact on the community ranges between approximately $10 million and approximately $24 million annually.

5. Comparable Facility Benchmarking

 Most comparable sports complexes detailed in this section range between 50 and 95 paved parking spaces per field. While most of the comparable sports complexes were at or slightly above the industry average of 75 paved parking spaces per field, most of the sports complex management noted that their parking inventory is insufficient to meet their parking demand.

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An understanding of comparable facilities is considered together with an assessment of local/regional characteristics, competitive facilities, sports participation trends and user interviews to estimate demand at the sports complex.

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6. POTENTIAL USER INTERVIEWS

6. Potential User Interviews

A central component in understanding the market potential for the Kent County Regional Sports Complex is gauging the level of interest of various sports organizations in utilizing the sports complex for tournaments, camps, league play, practices and other uses. In order to obtain feedback, interviews were conducted with a sampling of sports organizations representing key potential user segments.

Representatives from the following local, regional, and national sports organizations were contacted to assess their potential interest in utilizing the Kent County Regional Sports Complex:

 American Youth Soccer Organization;  Elite Connection;  Battle of the Bands;  FCA Lacrosse;  Camden Midstate Lacrosse Club;  Henlopen Soccer Club;  Central Delaware Soccer Association;  Hogan Lacrosse;  CHA Sports;  Impact Sports & Health;  Concord Soccer;  Kirkwood Soccer Club;  Delaware Lacrosse Academy;  MVP Delaware;  Delaware Shore Field Hockey;  Philadelphia Union;  Delaware Sports Commission;  River City Soccer Club;  Delaware Sports League;  Shore Byrds Field Hockey;  Delaware Technical Community College;  Silverbacks Lacrosse;  Delaware Union;  U.S. Lacrosse;  Delaware Wave Club;  U.S. Youth Soccer;  Delaware Youth Athletic Association;  USA Ultimate;  Delaware Youth Lacrosse Association;  Washington College;  Delaware Youth Soccer Association;  Wesley University Field Hockey;  DIAA;  White Mountain Sports; and,  Dover Air Force Base;  Others

The remainder of this section provides a summary of discussions with select sports clubs and organizations for the Kent County Sports Complex grouped according to the following primary uses:

 Soccer;  Lacrosse;  Field Hockey; and,  Other Uses.

6. Potential User Interviews

Soccer

Interviews were conducted with key soccer organizations in order to assess their interest in the Kent County Regional Sports Complex and gain insight into the state of the sport in the region. The following summarizes key feedback from various soccer representatives, including their interest in using the Kent County Regional Sports Complex.

 On average, regional soccer clubs manage approximately 40 boys and girls teams. The majority of these teams are competitive, but at least 10 percent are recreational and are designed to engage local residents who want to learn the sport.

 Club teams play in both the fall and spring seasons. The fall season spans from September to November, and the majority of competitive players also play on their high school teams during that period. The core of competitive play occurs during the spring from March to May.

 Overall, local soccer organizations emphasized the difficulty of booking fields during the spring season due to a current lack of quality inventory. Delaware soccer teams often compete with lacrosse organizations for fields and available weekends.

 According to national soccer representatives, it is preferred that a sports complex has at least 12 fields in order to host a tournament.

 Turf fields are an attractive option for soccer tournament directors who are often forced to reschedule events due to weather. Lighted fields will also allow tournament organizers to maximize field usage, particularly on Saturdays of weekend tournaments.

 Spooky Nook Sports Complex was cited by several organizations as the premier sports facility in the region. Soccer organizations were impressed by the surfaces and appreciated the wide variety of on-site activities available to tournament participants and their families. Several soccer teams in the southern and central parts of Delaware drive over two (2) hours to Spooky Nook Sports Complex for sports activities. Soccer organizations expressed strong interest in patronizing the Kent County Regional Sports Complex in order to minimize their commute time and expenses, provided the complex can provide facilities and amenities comparable to those seen at Spooky Nook Sports Complex.

 While the interest level of many Delaware-based soccer organizations in utilizing the Kent County Regional Sports Complex for practices and league play was very positive, the development of the proposed Delaware Sports Complex in Middletown could lessen the desire for certain soccer organizations to use the Kent County Regional Sports complex on a frequent basis for practices and games, particularly those teams that are located more proximate to Middletown.

6. Potential User Interviews

 Dover-based teams and teams south of Dover would most likely represent the key target markets for the Kent County Regional Sports Complex for practices and league games if the proposed Delaware Sports Complex in Middletown is developed. Without the development of the competitive complex, the Kent County Regional Sports Complex would be expected to attract more teams north of Dover.

 Local recreational adult soccer organizations expressed interest in using the Kent County Regional Sports Complex given the current lack of soccer fields for adult leagues in Delaware. In addition to soccer leagues, adult organizations also mentioned the strong likelihood of hosting flag football and kickball leagues at the Kent County Regional Sports Complex, depending on field availability.

 The proximity of the Kent County Regional Sports Complex to Delaware beaches was considered to be a significant differentiator relative to other comparable sports complexes. League and tournament organizations noted that participants would be more willing to participate if they could easily travel to the beach in connection with their participation at the sports complex.

 National soccer representatives say that the proximity of a sports complex to air access, accommodations and entertainment options is a factor when selecting a site for a tournament. However, representatives indicated that Kent County Regional Sports Complex’s location (within two hours of commercial air access and 15 minutes of local hotels) would not significantly deter tournament organizers’ interest in using the sports complex.

In general, interest in a new sports complex for use by local and regional soccer organizations was very positive, with most organizations citing a current lack of adequate facilities to host high- profile soccer tournaments. An all-synthetic, lighted facility was cited as a major competitive advantage for the Kent County Regional Sports Complex, allowing for maximum utilization throughout the year and minimizing cancellations due to inclement weather. In addition, soccer organizations believe the sports complex’s proximity to the beach will serve as a marketing advantage for tournament participants looking to extend their stay. However, the proposed facility in Middletown was cited as a potential major competitor, particularly with regards to local league play. Several representatives indicated that the all-grass facility could adequately service league play for those closer to Middletown.

Lacrosse

Interviews were conducted with representatives of local, regional and national lacrosse organizations to assess their interest in utilizing the Kent County Regional Sports Complex. The following summarizes key feedback from various lacrosse representatives, including their interest in using the Kent County Regional Sports Complex. 74

6. Potential User Interviews

 On average, lacrosse organizations have approximately 25 to 30 teams ranging from U8 to U18 levels. All lacrosse directors interviewed noted significant growth of the sport and increased programming over the past few years as positive indicators for potential usage of the Kent County Regional Sports Complex. In particular, national participation in girls’ lacrosse has increased by over 25 percent since 2005 as young girls are electing to play the sport in addition to soccer, softball and volleyball.

 Club lacrosse is primarily played in the spring season (March to June) to avoid conflicts with high school lacrosse (September to November) and other sports schedules. Many of the boys’ club lacrosse participants also play another sport for their high schools.

 Club lacrosse players train for the spring season by participating in “box lacrosse” leagues. Box lacrosse leagues are played on indoor hockey rinks and are affiliated with the Box Lacrosse Association of America (“BLAA”). Approximately 10 percent of all registered lacrosse players sign up for these indoor leagues.

 Local and regional tournaments constitute a core part of lacrosse programming, as many lacrosse leagues are still developing. Regional lacrosse tournaments host 48 to 64 teams per tournament, with the largest tournaments typically hosting upwards of approximately 120 teams. Competitive club teams typically play in three (3) to four (4) local or regional tournaments during the calendar year.

 Several lacrosse tournament organizers indicated that the success of lacrosse tournaments at the Kent County Regional Sports Complex would be dependent on connections to college coaches and recruiters. In addition to location and level of competition, lacrosse organizations consider the number of college coaches that plan to attend and recruit prospective athletes before committing to a tournament.

 All lacrosse organizations interviewed for this study noted that the East Coast lacrosse community is tight knit. Competitive club and college coaches often have tacit agreements to attend the same tournaments and compete against one another. It will be important that the Kent County Regional Sports Complex staff have strong ties to the East Coast lacrosse community in order to attract teams to lacrosse tournaments hosted at the sports complex.

 Team directors recommended adding a protective net behind each of the goals. This provision will shield spectators from errant shots. The fields should also be configured to allow spectators to walk to the stands without passing behind the goals, which is a common safety concern among youth team directors.

 Although the majority of regional lacrosse teams are based in Delaware, Pennsylvania, New York, Virginia and Connecticut, major tournaments also host teams from across the country. The directors of Silverbacks Lacrosse and Delaware Lacrosse Academy often invite teams from California, Texas and Hawaii to their tournaments to enhance the level 75

6. Potential User Interviews

of competition. This practice underscores the need for hotel rooms within the immediate vicinity of the Kent County Regional Sports Complex as a key to the successful hosting of large-scale lacrosse tournaments.

 The Kent County Regional Sports Complex’s building program, featuring synthetic-turf fields and lighting, was viewed favorably by lacrosse organizations. In particular, university program representatives said that synthetic-turf fields would prevent weather cancellations and that lights would allow for more games to be scheduled during weekend tournaments. If possible, the ability to schedule back-to-back games from 8 am to 11 pm during the Saturday of a typical weekend tournament was preferred for university events.

 Overall, lacrosse organizations prefer synthetic-turf fields to grass fields. Lacrosse organizations like the faster play on turf and want to avoid competing with soccer organizations for available grass fields. In addition, lacrosse directors often receive complaints about having worn down grass surfaces they have rented.

 In general, most lacrosse teams are willing to travel up to four hours by car for a regional tournament. Several teams from Delaware travel to River City Sportsplex near Richmond, Virginia to utilize the complex with its synthetic-turf fields and lighting. A tournament- grade facility in Delaware would minimize weekend travel for local lacrosse teams and would be convenient for parents with multiple athletes.

 When asked about the impact that the proposed Delaware Sports Complex in Middletown could have on their interest in using the Kent County Regional Sports Complex, the majority of lacrosse organizations said they anticipated using both facilities. They considered the Kent County Regional Sports Complex to be a tournament-grade facility that has the potential to host large regional events. The directors, particularly in Delaware and Pennsylvania, anticipated using the Middletown complex (if built) more for league play or summer clinics.

 Although the Kent County Regional Sports Complex was considered to be an attractive tournament venue, several lacrosse tournament organizers noted that teams travelling from beyond a two-hour drive time might be concerned about the availability of hotels within close proximity of the sports complex. On the other hand, it was cited that the proximity of the Kent County Regional Sports Complex to the ocean could attract parents who may want to combine a weekend tournament with a vacation.

Overall, lacrosse organizations emphasized the growth of the sport over the past decade and their enthusiasm for a new sports complex in Kent County. There is a significant need for high- quality fields in Delaware to accommodate tournament and league play, as lacrosse and soccer organizations frequently compete for available fields in the region during the summer months.

6. Potential User Interviews

Approximately 75 percent of the lacrosse organizations interviewed preferred synthetic-turf fields to grass, as it would allow them to play throughout the year and in all weather conditions.

All lacrosse organizations interviewed emphasized the importance of connections to college coaches and recruiters to successfully attract and host major regional tournaments. Competitive club teams and parents will commit to tournaments in which their players have better opportunities to be recruited by college coaches. Also, competitive teams often commit to the same regional tournaments to maintain a high standard of play; therefore, the tight-knit nature of the lacrosse community must be taken into consideration when scheduling and marketing lacrosse tournaments.

Field Hockey

It is anticipated that the Kent County Regional Sports Complex will also host field hockey leagues, camps and tournaments. The following summarizes key feedback from various field hockey representatives, including their interest in using the Kent County Regional Sports Complex.

 In the Northeast and Mid-Atlantic region, field hockey is played during the fall and spring seasons. The vast majority of field hockey players compete on high school teams but are not part of club field hockey organizations. Competitive club teams have approximately five (5) to ten (10) teams between the U12 and U18 levels.

 Due to the lack of competitive field hockey programming in the spring season, teams often travel beyond a four-hour drive time for weekend tournaments. A tournament- grade facility near Frederica would be an appealing option for local field hockey directors who do not want to commit parents to regional tournaments requiring flights and extended overnight stays.

 The established field hockey organizations would likely use the Kent County Regional Sports Complex for tournaments and summer clinics. Organizations anticipated bringing five (5) to ten (10) teams for each tournament. Some of the smaller field hockey organizations expressed interest in renting fields but want to expand their programs before committing to competitive tournaments.

 College recruiters typically observe prospective players during the fall high school season, so competitive field hockey club directors want to increase the visibility of their elite players during the season. If the Kent County Regional Sports Complex can host competitive tournaments with major college recruiters, field hockey club directors would be more willing to bring their teams.

 An elite annual field hockey camp in the region expressed strong interest in using the Kent County Sports Complex for its 200 to 400 participant camp, citing the number of fields and turf as key factors in their interest. In addition, the organization also mentioned the 77

6. Potential User Interviews

possibility of a neutral site college invitational at the Kent County Regional Sports Complex if the building program included an adequately-sized championship field for field hockey, which is currently being contemplated for phase two of the sports complex.

 Field hockey prefers carpet turf as the ideal playing surface, as it is smooth enough to allow for fast play and allows free movement of the field hockey ball. If a different kind of turf is to be used, field hockey directors indicated that having turf short enough to cover less than half of the ball and is well-irrigated could be a satisfactory playing surface for field hockey camps, clinics, games and tournaments. Additionally, field hockey representatives have expressed a preference for synthetic-turf playing surfaces, citing lower instances of injuries among players as an advantage due to a more consistent playing surface.

 Several field hockey clinic organizers indicated that the proposed turf fields for Kent County Regional Sports Complex would be a key differentiator to attract field hockey athletes. Field hockey players in Delaware high schools often play on natural grass surfaces and need experience on the turf if they hope to play at a collegiate or professional level. For that reason, many of the field hockey organizers and directors believe that the Kent County Regional Sports Complex will successfully attract significant field hockey programming.

There is a dedicated core of field hockey teams and organizations within a 4-hour drive of Kent County. In general, field hockey organizations expressed strong interest in utilizing the Kent County Regional Sports Complex, primarily for spring tournaments or summer clinics as most players are part of high school teams during the fall season. Tournaments or camps with connections to college coaches during the spring and summer (when kids are not playing for their high schools) were specifically mentioned as potential key differentiators for the sports complex.

The building composition of 12 all-turf fields was cited as a major competitive advantage of the Kent County Regional Sports Complex. In all, the Kent County Regional Sports Complex is anticipated to attract a dedicated core of field hockey participants within the region, especially once the 13th field-hockey specific field is developed as part of phase two of the sports complex.

Other Uses

The Kent County Regional Sports Complex would likely attract a number of other organizations to the sports complex. For instance, Dover Air Force Base has expressed a potential interest in using the Kent County Regional Sports Complex for its intramural league play, along with other fitness and sports events, representing an opportunity to serve over 9,000 members on the base. Representatives from the Dover Air Force Base citied the proximity of the Kent County Regional Sports Complex and number of fields as key reasons for their desire to use the sports complex.

6. Potential User Interviews

In addition to military use, colleges and universities have intramural sports that could also utilize the Kent County Regional Sports Complex.

As the largest sports complex within the County, the Kent County Regional Sports Complex also has the opportunity to host a number of community events. Festivals, fireworks displays, cause runs, such as 5Ks or 10Ks and parking lot events (i.e. car shows), are just a few additional events that could be hosted at the sports complex. Each of these types of events require large open spaces in order to operate, which could be accommodated by the Kent County Regional Sports Complex.

Summary

A review of potential user interviews provides a framework from which to assess the potential demand for programming at the Kent County Regional Sports Complex.

The following are key findings and conclusions of the potential user interviews conducted:

 There is evidence that the Kent County Regional Sports Complex would be successful across a spectrum of sports in its region. Field hockey and lacrosse representatives especially expressed enthusiasm for a new sports complex in Kent County due to the current need for high-quality synthetic-turf fields.

 The proximity of the Kent County Regional Sports Complex to the beaches was considered to be a significant differentiator relative to other comparable sports complexes.

 Dover-based soccer teams and teams south of Dover would most likely represent the key target markets for the Kent County Regional Sports Complex for practices and league games if the proposed Delaware Sports Complex in Middletown is developed. Without the development of the competitive complex, the Kent County Regional Sports Complex would be expected to attract more teams north of Dover.

 Turf fields are an attractive option for soccer tournament directors who are sometimes forced to cancel events due to weather. Lighted fields will allow tournament organizers to maximize field usage particularly on the Saturdays of weekend tournaments.

 Given that the East Coast lacrosse community is tight-knit and often have tacit agreements to attend the same tournaments, it will be important that the Kent County Regional Sports Complex staff have strong ties to the lacrosse community on the East Coast in order to attract teams to lacrosse tournaments hosted at the sports complex.

 Due to the lack of competitive field hockey programming in the spring season, teams often travel beyond a 4-hour drive time for weekend tournaments. A tournament-grade facility in Frederica would be an appealing option for field hockey directors who do not 79

6. Potential User Interviews

want to commit parents to regional tournaments requiring flights and extended overnight stays.

 Kent County Regional Sports Complex could also attract a number of other uses, such as intramural sports from Dover Air Force Base and local colleges and universities, festivals, fireworks displays and cause runs (e.g., 5K runs, 10K runs).

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An understanding of potential user feedback is considered together with an assessment of local/regional characteristics, competitive facilities, sports participation trends and comparable facilities to estimate demand at the sports complex.

7. ESTIMATED UTILIZATION

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7. Estimated Utilization

The purpose of this section is to summarize the anticipated utilization of the Kent County Regional Sports Complex based on the results of discussions with local sports organizations, regional and national tournament organizers, a review of local market conditions, competitive facilities, sports participation trends, and a review of the historical demand at comparable facilities.

This section of the report is divided into the following sections:

 Local Utilization  Tournament Utilization o In-House o Third-Party  Summary

The utilization assumptions presented in this section assume the facility is managed by professional, competent and experienced facility management personnel that will promote events in keeping with the sports complex’s goal of repaying annual debt service and spurring economic development. At the time of this report, the Kent County Regional Sports Complex Corporation has hired an executive director with extensive industry experience.

Local Utilization

The chart on the following page presents the estimated utilization for leagues, practices and camps at the Kent County Regional Sports Complex during the first five years of operations, after which the utilization of the sports complex is expected to stabilize. Local utilization is estimated based on the conversations with sports organizations outlined in section six (6) of this report, as well as industry knowledge of the operations of similar sports complexes around the country.

7. Estimated Utilization

ESTIMATED UTILIZATION - LEAGUES, PRACTICES AND CAMPS Kent County Regional Sports Complex

Inaugural Stabilized Year Year 2017 2018 2019 2020 2021

LEAGUE ATTENDANCE Number of Seasons per Year 2 2 2 2 2 Number of Divisions in League 10 12 14 15 16 Number of Teams per Division 10 10 10 10 10 Total Teams Per Season 100 120 140 150 160 Average Players per Team 15 15 15 15 15 Total Players per Season 1,500 1,800 2,100 2,250 2,400 Games per Season 12 12 12 12 12 Spectators per Team 1.5 1.5 1.5 1.5 1.5 SUBTOTAL - LEAGUE ATTENDANCE 54,000 64,800 75,600 81,000 86,400

PRACTICE ATTENDANCE League Teams per Season 100 120 140 150 160 Average Practices per Week per Team 1.5 1.5 1.5 1.5 1.5 Number of Available Weeks 36 36 36 36 36 Practice Slots Required (Leagues) 5,400 6,480 7,560 8,100 8,640 % of Practices held at KCRSC 50% 50% 50% 50% 50% Total League Practices at KCRSC 2,700 3,240 3,780 4,050 4,320 Community Use Factor 1.25 1.25 1.25 1.25 1.25 Total Annual Practice Slots Rented 3,375 4,050 4,725 5,063 5,400 Average Players per Team 15 15 15 15 15 Spectators per Player 0.5 0.5 0.5 0.5 0.5 SUBTOTAL - PRACTICE ATTENDANCE 75,938 91,125 106,313 113,906 121,500

CAMP ATTENDANCE Number of Camps per Year 10 11 12 13 14 Campers per Session 70 80 90 100 110 Total Annual Campers 700 880 1,080 1,300 1,540 Days per Camp 5 5 5 5 5 Sessions per Camp 2 2 2 2 2 Spectators per Player 0.5 0.5 0.5 0.5 0.5 SUBTOTAL - CAMP ATTENDANCE 10,500 13,200 16,200 19,500 23,100

TOTAL ATTENDANCE 140,438 169,125 198,113 214,406 231,000

7. Estimated Utilization

Tournament Utilization (In-House)

The chart on the right presents the estimated utilization for in-house tournaments at the Kent County Regional Sports Complex during the first five years of operations, after which the utilization of the sports complex is expected to stabilize. ESTIMATED UTILIZATION - IN-HOUSE TOURNAMENTS Kent County Regional Sports Complex

Inaugural Stabilized Year Year

2017 2018 2019 2020 2021

IN-HOUSE TOURNAMENTS: Soccer: Small 0 1 2 2 2 Medium 1 1 1 1 1 SUBTOTAL - SOCCER 1 2 3 3 3 Lacrosse Small 0 1 1 1 1 Medium 0 0 0 0 0 SUBTOTAL - LACROSSE 0 1 1 1 1 Field Hockey Small 0 0 1 1 1 Medium 1 1 1 1 1 SUBTOTAL - FIELD HOCKEY 1 1 2 2 2

TOTAL ANNUAL IN-HOUSE TOURNAMENTS 2 4 6 6 6 TEAMS PER TOURNAMENT: Soccer: Small 100 100 100 100 100 Medium 180 180 180 180 180 Lacrosse Small 100 100 100 100 100 Medium 120 120 120 120 120 Field Hockey Small 50 50 50 50 50 Medium 100 100 100 100 100 PLAYERS PER TEAM: Soccer 15 15 15 15 15 Lacrosse 15 15 15 15 15 Field Hockey 16 16 16 16 16

SPECTATORS PER PARTICIPANT 2.5 2.5 2.5 2.5 2.5

DAYS PER TOURNAMENT 2.5 2.5 2.5 2.5 2.5

TOTAL ANNUAL ATTENDANCE FOR IN-HOUSE TOURNAMENTS 26,875 45,625 60,000 60,000 60,000

7. Estimated Utilization

Tournament Utilization (Third-Party)

The chart on the following page presents the estimated utilization for third-party tournaments at the Kent County Regional Sports Complex during the first five years of operations, after which the utilization of the sports complex is expected to stabilize. ESTIMATED UTILIZATION - THIRD PARTY TOURNAMENTS Kent County Regional Sports Complex

Inaugural Stabilized Year Year

2017 2018 2019 2020 2021

THIRD-PARTY TOURNAMENTS: Soccer: Small 2 2 2 2 2 Medium 3 4 4 4 4 SUBTOTAL - SOCCER 5 6 6 6 6 Lacrosse Small 2 2 2 2 2 Medium 3 4 4 4 4 SUBTOTAL - LACROSSE 5 6 6 6 6 Field Hockey Small 0 0 0 0 0 Medium 0 0 0 0 0 SUBTOTAL - FIELD HOCKEY 0 0 0 0 0

TOTAL ANNUAL THIRD-PARTY TOURNAMENTS 10 12 12 12 12 TEAMS PER TOURNAMENT: Soccer: Small 100 100 100 100 100 Medium 180 180 180 180 180 Lacrosse Small 100 100 100 100 100 Medium 120 120 120 120 120 Field Hockey Small 50 50 50 50 50 Medium 100 100 100 100 100 PLAYERS PER TEAM: Soccer 15 15 15 15 15 Lacrosse 15 15 15 15 15 Field Hockey 16 16 16 16 16

SPECTATORS PER PARTICIPANT 2.5 2.5 2.5 2.5 2.5

DAYS PER TOURNAMENT 2.5 2.5 2.5 2.5 2.5

TOTAL ANNUAL ATTENDANCE FOR THIRD-PARTY TOURNAMENTS 121,875 150,000 150,000 150,000 150,000

7. Estimated Utilization

Summary

Based on the results of discussions with local sports organizations, regional and national tournament organizers, a review of local market conditions, competitive facilities, sports participation trends, and a review of the historical demand at comparable facilities, utilization levels were estimated for the Kent County Regional Sports Complex (summarized in the chart below).

UTILIZATION SUMMARY Kent County Regional Sports Complex

Inaugural Stabilized Year Year

2017 2018 2019 2020 2021 Total Attendance: Leagues 54,000 64,800 75,600 81,000 86,400 Practices 75,938 91,125 106,313 113,906 121,500 Camps 10,500 13,200 16,200 19,500 23,100 In-House Tournaments 26,875 45,625 60,000 60,000 60,000 Third-Party Tournaments 121,875 150,000 150,000 150,000 150,000

TOTAL ATTENDANCE 289,188 364,750 408,113 424,406 441,000

Tournaments: In-House Tournaments 2 4 6 6 6 Third-Party Tournaments 10 12 12 12 12 Total 12 16 18 18 18

In total, the Kent County Regional Sports Complex is projected to attract approximately 289,000 visitors in year one, increasing to approximately 441,000 annually by year five.

The following are key conclusions of the estimated utilization at the Kent County Regional Sports Complex presented above.

 The Kent County Regional Sports Complex is envisioned to attract approximately 140,000 players and spectators from league play, practices and camps in year one, increasing to approximately 231,000 by year five.

 It is estimated that Kent County Regional Sports Complex will host two (2) in-house tournaments in the first year of operations drawing approximately 27,000 tournament participants and spectators to the sports complex. In a stabilized year of operations, the

7. Estimated Utilization

Kent County Regional Sports Complex is estimated to host six (6) in-house tournaments and attract 60,000 participants and spectators.

 With an estimated 10 third-party tournaments in year one, increasing to 12 by year five, the Kent County Regional Sports complex is estimated to draw 122,000 tournament participants and spectators in an inaugural year, increasing to 150,000 during a stabilized year of operations.

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Estimated utilization at the Kent County Regional Sports Complex is estimated based on an assessment of local/regional characteristics, competitive facilities, sports participation trends, comparable facilities and potential user feedback.

8. ESTIMATED FINANCIAL OPERATIONS

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8. Estimated Financial Operations

The purpose of this section is to present estimated operating revenues and expenses for the Kent County Regional Sports Complex. The assumptions used in this analysis are based on the results the market analysis, industry trends, knowledge of the marketplace, historical financial results from comparable facilities and certain information provided by project representatives.

This presentation is designed to assist project stakeholders in estimating the financial attributes of the Kent County Regional Sports Complex and cannot be considered to be a presentation of actual future results. Accordingly, this analysis may not be useful for any other purpose. The assumptions disclosed herein are not all inclusive, but are those deemed to be significant; however, there will be differences between estimated and actual results, because events and circumstances frequently do not occur as expected, and these differences may be material.

Key assumptions used to estimate the potential financial operations of the Kent County Regional Sports Complex include, but are not limited to the following:

 The proposed sports complex will be considered state-of-the-art and will consist of 12 synthetic, regulation-size turf fields equipped with sports lighting, scoreboards and support amenities to ensure effective year-round use.

 The proposed sports complex and surrounding community will provide a positive guest experience commensurate with other sports complexes that have good reputations and will differentiate itself from regional competition through the quality of its fields, a centralized Mid-Atlantic location, proximity to hotel and visitor infrastructure, affordability, ability to minimize inclement weather cancellations and other factors important to complex participants and spectators.

 The proposed sports complex will be operated by a professional, competent and experienced staff that will have the appropriate industry relationships to effectively attract local, regional and national tournaments and camps in a broad spectrum of sports including soccer, lacrosse, field hockey, football and other field-based sports.

 Complex management will also proactively seek create its own in-house tournaments and programming in order to maximize sports complex revenues via collecting registration fees, securing event sponsors, selling concessions, selling merchandise, negotiating hotel rebates and controlling other key tournament revenue sources while paying associated tournament expenses and retaining tournament profits that normally would go to an outside tournament operator.

 The temporary entrance from Delaware State Route 1 will provide efficient and safe ingress and egress to the sports complex and the Delaware Department of Transportation (“DelDOT”) will construct a permanent $29 million interchange near Tub Mill Pond Road by 2017 providing long-term ingress and egress solutions for the sports complex.

8. Estimated Financial Operations

 The planned 900 parking spaces will be able to effectively accommodate peak demand, supporting an overall positive guest experience at the sports complex.

 The facility will be owned by Kent County Regional Sports Complex Corporation, a non-profit 501 (c) 3 entity, and will be exempt from property and income taxes.

 There are no material changes in the quantity or quality of current sports complexes in the local or regional marketplace.

 Future local, regional or national economic conditions will not adversely affect the market, including sports participation levels and the willingness to travel to participate in sports tournaments or camps.

The remainder of this section summarizes the estimated operating revenues and expenses for the Kent County Regional Sports Complex, comprised of the following:

 Operating Revenues;  Operating Expenses;  Operating Pro Forma; and,  Sensitivity Analysis.

It should be noted that revenue and expense estimates presented herein are presented for the first five years of sports complex operations, from initial startup operations through normalized (or stabilized) operations.

Operating Revenues

Operating revenues generated by the Kent County Regional Sports Complex will likely consist of field rental income, tournament registration fees, naming rights and sponsorships, concessions, hotel rebates and other revenues. A brief description of each revenue source is provided below.

League, Practice and Camp Rentals

Field rental income is expected to be a significant source of revenue for the Kent County Regional Sports Complex. It is anticipated that a portion of the utilization at the proposed sports complex will be contracted to third-party organizations for use in leagues, practices and camps. These third-party organizations would pay field rental fees assessed at competitive market rates commensurate with comparable quality sports complexes.

8. Estimated Financial Operations

The table below summarizes the assumptions used to estimate league, practice and camp field rental income in the first five years of operations at the proposed Kent County Regional Sports Complex.

ESTIMATED LEAGUE, PRACTICE AND CAMP RENTAL FEE INCOME Kent County Regional Sports Complex

Inaugural Stabilized Year Year

2017 2018 2019 2020 2021 League Rent: Games per Season 1,200 1,440 1,680 1,800 1,920 Number of Seasons 2 2 2 2 2 Hours per Game 2 2 2 2 2 Average Rental Fee per Hour $75 $75 $75 $75 $75

TOTAL LEAGUE RENTAL INCOME $360,000 $432,000 $504,000 $540,000 $576,000

2017 2018 2019 2020 2021 Practice Rent: Total Annual Practice Slots Rented 3,375 4,050 4,725 5,063 5,400 Hours per Practice 2 2 2 2 2 Average Rental Fee per Hour (Half-Field) $38 $38 $38 $38 $38

TOTAL PRACTICE RENTAL INCOME $189,844 $227,813 $265,781 $284,766 $303,750

2017 2018 2019 2020 2021 Camp Rent: Number of Camps 10 11 12 13 14 Rent per Camp $4,000 $4,000 $4,000 $4,000 $4,000

TOTAL CAMP RENTAL INCOME $40,000 $44,000 $48,000 $52,000 $56,000

TOTAL RENTAL FEE $589,844 $703,813 $817,781 $876,766 $935,750

Note: Assumptions for games per season, annual practice slots rented and camps are per Section 7: Estimated Utilization.

The rental rates for leagues, practices and camps estimated in this study are based on an analysis of rates at competitive and comparable sports complexes analyzed herein and vary depending on the type of utilization. For leagues, rental rates are assessed at $75 per hour, while practices are assessed at $38 per hour for a half field. Camp rental fees are estimated at $4,000 per camp.

In total, rental fee income is estimated to be $590,000 in the first year of operations, increasing to $936,000 by year five.

8. Estimated Financial Operations

Tournament Rental Income

It is anticipated that a majority of tournaments hosted at the proposed sports complex will be run by third-party organizations. These third-party organizations would pay field rental fees assessed at competitive market rates commensurate with comparable quality sports complexes. As a result, field rental income from third-party tournaments is expected to be a significant source of revenue for the Kent County Regional Sports Complex.

The table on the following page summarizes the assumptions used to estimate tournament field rental income in the first five years of operations at the proposed Kent County Regional Sports Complex.

8. Estimated Financial Operations

THIRD-PARTY TOURNAMENT RENTAL FEES Kent County Regional Sports Complex

Inaugural Stabilized Year Year

2017 2018 2019 2020 2021

Annual Third-Party Tournaments: Soccer: Small 2 2 2 2 2 Medium 3 4 4 4 4 Subtotal - Soccer 5 6 6 6 6 Lacrosse Small 2 2 2 2 2 Medium 3 4 4 4 4 Subtotal - Lacrosse 5 6 6 6 6 Field Hockey Small 0 0 0 0 0 Medium 0 0 0 0 0 Subtotal - Field Hockey 0 0 0 0 0 Total Annual Third-Party Tournaments 10 12 12 12 12 Rental Fees Per Tournament: Soccer: Small $30,000 $30,900 $31,827 $32,782 $33,765 Medium $45,000 $46,350 $47,741 $49,173 $50,648 Lacrosse Small $30,000 $30,900 $31,827 $32,782 $33,765 Medium $45,000 $46,350 $47,741 $49,173 $50,648 Field Hockey Small $30,000 $30,900 $31,827 $32,782 $33,765 Medium $45,000 $46,350 $47,741 $49,173 $50,648

TOTAL ANNUAL RENTAL FEE FOR THIRD-PARTY TOURNAMENTS $390,000 $494,400 $509,232 $524,509 $540,244

Note: Annual third-party tournament assumptions outlined in Section 7: Estimated Utilization.

Tournament rental fees are assessed per event and vary by size of the tournament. Rental fees range from $30,000 per event for small tournaments to $45,000 per event for medium-sized tournaments.

8. Estimated Financial Operations

Rental fee income from tournaments operated by third-party organizations is estimated to be approximately $390,000 in year one, increasing to $540,000 in year five.

In-House Tournament Registration Fees

To maximize the utilization and financial performance of the Kent County Regional Sports Complex, it is important that sports complex management proactively create in-house tournaments in order to realize all tournament registration fees instead of solely renting the complex to third-party tournament organizers. As a result, it is assumed that a number of tournaments held at the Kent County Regional Sports Complex will be organized and operated in-house. In-house tournament registration fee revenue generated by the complex will be a function of the number of tournaments, number of teams per tournament and the registration fee per team / participant.

The table on the following page summarizes the assumptions used to estimate tournament registration fee income in the first five years of operations at the Kent County Regional Sports Complex.

8. Estimated Financial Operations

IN-HOUSE TOURNAMENT REGISTRATION FEES Kent County Regional Sports Complex

Inaugural Stabilized Year Year

2017 2018 2019 2020 2021

Annual Team Registrations for In-House Tournaments: Soccer: Small 0 100 200 200 200 Medium 180 180 180 180 180 Subtotal - Soccer 180 280 380 380 380 Lacrosse Small 0 100 100 100 100 Medium 0 0 0 0 0 Subtotal - Lacrosse 0 100 100 100 100 Field Hockey Small 0 0 50 50 50 Medium 100 100 100 100 100 Subtotal - Field Hockey 100 100 150 150 150

Total Annual Registered Teams 280 480 630 630 630 Team Registration Fees for In-House Tournaments: Soccer: Small $450 $464 $477 $492 $506 Medium $750 $773 $796 $820 $844 Lacrosse Small $500 $515 $530 $546 $563 Medium $1,500 $1,545 $1,591 $1,639 $1,688 Field Hockey Small $500 $515 $530 $546 $563 Medium $1,500 $1,545 $1,591 $1,639 $1,688 TOTAL ANNUAL REGISTRATION FEES FOR IN-HOUSE TOURNAMENTS $285,000 $391,400 $477,405 $491,727 $506,479

Note: Annual team registrations calculated using assumptions outlined in Section 7: Estimated Utilization.

Registration fees assumed to be charged at the Kent County Regional Sports Complex are based on the registration fees charged in association with other regional tournaments and will depend on the sport and size of tournament. For soccer, registration fees range from $450 to $750 per team depending on size of the tournament. Lacrosse registration fees range from $500 to $1,500 per team while field hockey fees range from $500 to $1,500 per team.

8. Estimated Financial Operations

In total, income from registration fees is estimated to be $285,000 in year one, increasing to $506,000 by year five.

Naming Rights and Sponsorship

Naming rights and sponsorship revenues include pouring rights, the sale of signage related to banners, scoreboards, playing fields, and other advertising and sponsorship opportunities. Several comparable sports complexes have sold title facility naming rights. Recent examples of naming rights agreements for sports complexes are summarized in the chart below. NAMING RIGHTS Comparable Sports Complexes

Total Term Annual Facility Location Amount (years) Revenue

Rocky Mount Sports Complex Rocky Mount, NC $6,000,000 20 $300,000 PlainsCapital Park Lubbock, TX $3,000,000 10 $300,000 Discovery Center Germantown, MD $2,000,000 5 $400,000 Art Van Sports Complex Rockford, MI $1,800,000 20 $90,000 Cownie Sports Park Des Moines, IA $1,500,000 N/A N/A Toyota of Lewisville Railroad Park Lewisville, TX $1,500,000 10 $150,000 Grande Communication Stadium Midland, TX $1,200,000 25 $48,000 The Regency Athletic Complex Denver, CO $1,000,000 10 $100,000 Standard Process Inc. Athletic Complex Palmyra, WI $1,000,000 25 $40,000 Bethpage Ballpark Central Islip, NY $950,000 5 $190,000 WakeMed Park Cary, NC $925,000 3 $308,333 Scheels OverlandPark Soccer Complex Overland Park, KS $625,000 5 $125,000 Bakersfield Soccer Village Bakersfield, CA $500,000 5 $100,000 Deaconess Sports Park Evansville, IN $500,000 8 $62,500 GVTC Sportsplex San Antonio, TX N/A 6 N/A AVERAGE $1,607,143 11 $170,295

On average, comparable complexes secured naming rights agreements of $1.6 million or $170,000 annually, ranging from $40,000 annually for the Standard Process Inc. Athletic Complex in Palmyra, WI to $400,000 annually at the Maryland SoccerPlex for its indoor facility, the Discovery Sports Center.

8. Estimated Financial Operations

In addition to title facility naming rights, the sale of sports complex pouring rights could provide a meaningful source of annual revenue for the proposed complex. For example, WakeMed Park in Cary, North Carolina signed a three-year, $50,000 contract (approximately $17,000 annually) with Pepsi for the pouring rights to its sports complex. FieldHouse USA in Frisco, TX, signed a 10-year pouring rights agreement with Coke, worth approximately $200,000 annually, which substantially exceeds industry standards.

Overall, it is estimated that naming rights and sponsorship revenues at the Kent County Regional Sports Complex could total approximately $230,000 annually, including $150,000 annually in naming rights, $30,000 in pouring rights and $50,000 in other sponsorships to include but not limited to, in-house tournament presenting sponsors, field naming rights, signage and other such sponsorships.

Concessions (Net)

Concessions revenue consists of the sale of on-site food and beverages at the Kent County Regional Sports Complex. Concessions revenue is a function of the attendance attracted to the Kent County Regional Sports Complex and the average concessions spending per capita.

The average concessions spending per capita is assumed to range from $0.50 for practices and camps, $1.00 for leagues and $1.00 per day for tournaments (i.e. $3.00 for a three day tournament). These average concessions spending rates are based on an analysis of comparable sports complexes.

The table on the next page summarizes the assumptions used to estimate concessions revenue in the first five years of operations.

8. Estimated Financial Operations

ESTIMATED CONCESSIONS REVENUE Kent County Regional Sports Complex

Inaugural Stabilized Year Year

2017 2018 2019 2020 2021 Attendance Leagues 54,000 64,800 75,600 81,000 86,400 Practices 75,938 91,125 106,313 113,906 121,500 Camps 10,500 13,200 16,200 19,500 23,100 Tournaments 148,750 195,625 210,000 210,000 210,000 Total Attendance 289,188 364,750 408,113 424,406 441,000

Concessions per Cap Leagues $1.00 $1.00 $1.00 $1.03 $1.06 Practices $0.50 $0.50 $0.50 $0.52 $0.53 Camps $0.50 $0.50 $0.50 $0.52 $0.53 Tournaments (Per Day) $1.00 $1.00 $1.00 $1.03 $1.06

Profit Margin 50% 50% 50% 50% 50%

TOTAL CONCESSIONS INCOME (NET) $122,984 $156,294 $173,428 $184,217 $195,577

Note: Attendance assumptions outlined in Section 7: Estimated Utilization.

Total concessions revenue for the Kent County Regional Sports Complex is estimated to be approximately $123,000 in year one, increasing to $196,000 by year five.

Hotel Rebates

It is anticipated that the Kent County Regional Sports Complex will host tournaments that attract non-local participants to the community who will require hotel room accommodations. Typically, tournament organizers work closely with the hotel industry to identify several headquarter hotel properties in which group rates are negotiated along with a rebate or commission that is provided for each room night booked by tournament participants. Tournament organizers often will direct tournament participants to sponsored hotels directly through registration pages or tournament brochures. It is estimated that the Kent County Regional Sports Complex would negotiate a $10 per room night rebate (about 10 percent of the typical average daily rate in Kent County) for non- local participants during tournaments organized and operated in-house.

8. Estimated Financial Operations

In addition, it is estimated that the Kent County Regional Sports Complex will also negotiate a 25 percent rebate incentive from third-party organizers for tournaments held at the sports complex. Maryland SoccerPlex is a prominent example of a facility with a similar hotel rebate incentive.

The table below summarizes the assumptions used to estimate hotel rebates in the first five years of operations at the Kent County Regional Sports Complex.

ESTIMATED HOTEL REBATES Kent County Regional Sports Complex

Inaugural Stabilized Year Year

2017 2018 2019 2020 2021 Tournament Attendance 1 In-House 13,438 22,813 30,000 30,000 30,000 Third-Party 60,938 75,000 75,000 75,000 75,000

Key Assumptions: % of Participants Non- Local 75% 75% 75% 75% 75% % Staying in Kent County Hotels 50% 55% 60% 65% 65% Number of Nights per Person 2 2 2 2 2 Estimated Occupancy per Room 2.5 2.5 2.5 2.5 2.5

Tournament Attendance Non-Local In-House 10,078 17,109 22,500 22,500 22,500 Third-Party 45,703 56,250 56,250 56,250 56,250

Tournament Attendance Staying in Kent County In-House 5,039 9,410 13,500 14,625 14,625 Third-Party 22,852 30,938 33,750 36,563 36,563

Estimated Annual Room Nights In-House 4,031 7,528 10,800 11,700 11,700 Third-Party 18,281 24,750 27,000 29,250 29,250

Hotel Rebate per Room Night $10.00 $10.00 $10.00 $10.30 $10.61

Share for Third-Party Tournaments 25% 25% 25% 25% 25%

TOTAL HOTEL REBATE REVENUE $86,016 $137,156 $175,500 $195,829 $201,704

(1) Unique visitors (i.e. participants and spectators only counted once per visit).

8. Estimated Financial Operations

Total hotel rebate revenue for the Kent County Regional Sports Complex is estimated to be approximately $86,000 in year one, increasing to $202,000 by year five. It should be noted that the ability of the Kent County Regional Sports complex to secure hotel rebates will be dependent on a number of factors including adequate hotel inventory to service small to medium tournaments which can require up to 4,000 room nights per tournament and a strong tourism board to secure host hotel properties.

Other Revenue

Other revenue includes income generated from merchandise, gate fees, parking fees, ticketed events at the championship stadium, equipment rentals and other miscellaneous sources. Other revenue is estimated to be approximately $50,000 in year one, increasing to $56,000 by year five.

Operating Expenses

Operating expenses expected to be generated by the operations of the Kent County Regional Sports Complex include salaries and wages, tournament expenses, utilities, repairs and maintenance, materials and supplies, insurance, general and administrative costs and a replacement reserve. A description of each major source of expense is provided below.

Salaries and Wages

Based on the staffing levels of comparable sports complexes and the projected organizational chart prepared by the Kent County Regional Sports Complex, it is anticipated that the Kent County Regional Sports Complex staff would comprise an executive director, director of operations, events operations manager, marketing manager, facility manager, facility interns, administrative assistants and maintenance and custodial staff. Total salaries, wages and benefits associated with these positions are estimated to be approximately $449,000 in the first year of operations, increasing to $505,000 by year five.

The table on the next page outlines the key staffing assumptions estimated herein.

8. Estimated Financial Operations

STAFFING ASSUMPTIONS Kent County Regional Sports Complex

Position Salary Executive Director $90,000 Director of Operations $65,000 Events Operations Manager $40,000 Marketing Manager $45,000 Facility Manager $30,000 Facility Interns $15,000 Administrative Assistants $30,000 Maintenance $15,000 Custodian $15,000 Total Payroll $345,000

Benefits Factor 1.3

SALARIES AND BENEFITS $448,500

Tournament Expenses

Tournament expenses typically include, but are not limited to, game official expenses, awards, scorekeeping, team sanctioning, game equipment and other such expenses. For purposes of this report, these expenses are estimated at 40 percent of tournament registration fee revenue. This estimate is based on conversations with comparable sports complexes analyzed herein. Total tournament expenses incurred by the Kent County Regional Sports complex are estimated to be $114,000 in the first year of operations and increasing to $203,000 by year five.

Utilities

Estimates of utility costs for the Kent County Regional Sports Complex are based on an analysis of utilities costs incurred at comparable sports complexes adjusted to the Kent County marketplace and the anticipated size and utilization of the sports complex. Utilities include electricity, gas, water and steam. Annual utility expenses incurred by the Kent County Regional Sports Complex are estimated to be approximately $90,000 in the first year of operations, increasing to $101,000 by year five.

8. Estimated Financial Operations

Repairs and Maintenance

Repairs and maintenance cost estimates have been prepared based on an analysis of comparable facilities. For turf fields, it is estimated that the annual per field maintenance cost is approximately $5,000 in the early years, increasing to approximately $10,000 per year during stabilized operations. In addition, it is estimated that the sports complex will also require annual maintenance and repairs for various support buildings and community features. In total, it is estimated that the Kent County Regional Sports Complex will incur repairs and maintenance charges of approximately $75,000 per year, increasing to $150,000 annually by year five.

Materials and Supplies

Materials and supplies include items needed for administrative duties, field upkeep, cleaning and general maintenance of all facilities. Based on expenses incurred at comparable facilities, materials and supplies expenses are estimated to be approximately $70,000 in the first year of operations, increasing to $79,000 by year five.

Insurance

Insurance expense estimates represent premiums paid for various insurance policies, including but not limited to property and liability, casualty, auto and business interruption insurance policies. Annual insurance expenses incurred by the Kent County Regional Sports Complex total approximately $48,000 in the first year of operations, increasing to $54,000 by year five.

General and Administrative

General and administrative expenses typically consist of various office and administrative expenses incurred as a result of day-to-day facility operations. Such expenses typically include travel, telephone, printing, advertising, permits, and other miscellaneous services, and are estimated to total $75,000 in the first year of operations, increasing to $84,000 by year five.

Other Miscellaneous

Other miscellaneous expenses typically consist of various maintenance and repair expenses incurred as a result of day-to-day facility operations that are contracted out to third-party services. Such expenses typically include janitorial services, event labor

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8. Estimated Financial Operations

contractors, parking/shuttle expenses, community feature repairs and maintenance and other contractual services. Other miscellaneous expenses are estimated to total $50,000 in the first year of operations, increasing to $56,000 by year five.

Replacement Reserve

A replacement reserve should be established to fund future major capital improvements for the Kent County Regional Sports Complex. Such improvements could include field- turf replacement (approximately every 10 years), to ensure the sports complex remains a state-of-the-art venue capable of attracting local and regional programming throughout its term of indebtedness.

Based on industry standards, a replacement reserve should be funded in the amount of approximately one-half to one percent of hard and soft construction costs. For purposes of this report, an annual replacement reserve has been estimated in the amount of $200,000 annually, increasing to $225,000 by year five. It should be noted that further planning is required to understand the true cost of turf replacement based on a life-cycle of approximately 10 years and whether the reserve account estimated above is sufficient to cover field replacement costs in the future.

Operating Pro Forma

Based on the results of the market analysis, industry trends, knowledge of the marketplace, financial results from comparable facilities and the key assumptions outlined above, the table on the following page summarizes the estimated financial operations of the Kent County Regional Sports Complex for the first five years of operations.

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8. Estimated Financial Operations

ESTIMATED OPERATING REVENUES AND EXPENSES Kent County Regional Sports Complex

Inaugural Stabilized Year Year

2017 2018 2019 2020 2021 Operating Revenues League, Practice and Camp Rentals $589,844 $703,813 $817,781 $876,766 $935,750 Tournament Rental Income $390,000 $494,400 $509,232 $524,509 $540,244 In-House Tournament Registration Fees $285,000 $391,400 $477,405 $491,727 $506,479 Naming Rights and Sponsorship $230,000 $230,000 $230,000 $230,000 $230,000 Concessions (Net) $122,984 $156,294 $173,428 $184,217 $195,577 In-House Tournament Hotel Rebates $86,016 $137,156 $175,500 $195,829 $201,704 Other Revenue $50,000 $51,500 $53,045 $54,636 $56,275 Total Operating Revenues $1,753,844 $2,164,563 $2,436,391 $2,557,684 $2,666,029

Operating Expenses Salaries & Wages $448,500 $461,955 $475,814 $490,088 $504,791 Tournament Expenses $114,000 $156,560 $190,962 $196,691 $202,592 Utilities $90,000 $92,700 $95,481 $98,345 $101,296 Repairs & Maintenance $75,000 $82,500 $97,500 $120,000 $150,000 Materials and Supplies $70,200 $72,306 $74,475 $76,709 $79,011 Insurance $48,000 $49,440 $50,923 $52,451 $54,024 General & Administrative $75,000 $77,250 $79,568 $81,955 $84,413 Other Miscellaneous $50,000 $51,500 $53,045 $54,636 $56,275 Replacement Reserve $200,000 $206,000 $212,180 $218,545 $225,102 Total Operating Expenses $1,170,700 $1,250,211 $1,329,948 $1,389,421 $1,457,504

EBITDA $583,144 $914,352 $1,106,444 $1,168,263 $1,208,526

Note: EBITDA is defined as Earnings Before Interest, Taxes, Depreciation & Amortization.

It is estimated that the Kent County Regional Sports Complex could generate approximately $1.8 million in revenues and incur approximately $1.2 in annual operating expenses, resulting in EBITDA of approximately $583,000 in the first year of operations. By the fifth year, or stabilized year of operations, it is estimated that the Kent County Regional Sports Complex could generate $2.7 million in revenues and incur $1.5 million in expenses, resulting in EBITDA of approximately $1.2 million.

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8. Estimated Financial Operations

Sensitivity Analysis

Sports complex operations are very competitive and dependent on rapidly changing public interest in sports complexes, tournaments, leagues, college recruitment, and other such factors. Various risks associated with the development of a sports complex can adversely affect the financial performance of the Kent County Regional Sports Complex, leading to potential decreases in overall revenue, the number of tournaments and leagues held, tournament and league attendance, registration fees, rental fees, profit margins, and other such decreases. These risks include, but are not limited to:

 The success of a sport complex is dependent on the quality of its management. It will be critical that the Executive Director develop extensive relationships with key tournament organizers, local sports organizations, college coaches and recruiters and any adverse changes in these relationships or the lack of these relationships could adversely affect the utilization and resulting financial operations of the Kent County Regional Sports Complex.

 Comparable sports complexes analyzed herein are less reliant on in-house tournament organization than the Kent County Regional Sports Complex. The inability to organize and / or manage a significant number of in-house tournaments at the proposed sports complex could adversely impact the financial operations of the Kent County Regional Sports Complex. Conversely, an increased in-house tournament profile relative to the estimates herein could positively impact the financial performance of the Kent County Regional Sports Complex.

 Any event related issues (e.g. parking, field quality, etc.) that result in negative participant or spectator experiences at the Kent County Regional Sports Complex could affect the utilization and resulting financial operations of the Kent County Regional Sports Complex.

 The Kent County Regional Sports Complex will compete with other sports complexes in the region and across the Country to organize, manage or book sports leagues and tournaments.

 Competitive venues may offer more favorable terms and competitive rates in order to book leagues and tournaments which could adversely affect the marketability of the Kent County Regional Sports Complex relative to its competitors.

 Any changes in the regional competitive landscape could adversely affect the financial operations of the proposed sports complex in Kent County.

 Lack of approval for the construction of the $29 million permanent interchange at Tub Mill Pond Road that would provide direct ingress/egress to the regional sports complex from Delaware State Route 1, could worsen the fan experience and adversely

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8. Estimated Financial Operations

affect the utilization and resulting financial operations of the Kent County Regional Sports Complex.

 Hotel room supply could be constricted by the low occupancy percentage currently in the Kent County market.

 Technological changes or innovations to field turf or grass playing surfaces leading to increased utilization and decreased weather disruptions, could lead to a reduction in utilization at the Kent County Regional Sports Complex.

 Changes in public opinion over the use of field turf for sports activities could impact the utilization and resulting financial operations of the Kent County Regional Sports Complex.

 General economic conditions could worsen which could cause consumers to reduce discretionary spending on sports tourism.

 Unfavorable changes in labor conditions which may require the Kent County Regional Sports Complex to spend more to retain and attract key employees.

 The operations of an outdoor sports complex is seasonal in nature and the Kent County Regional Sports Complex, while constructed with turf fields, could be negatively impacted by poor weather conditions (ice / snow, rain, lightning, etc.) that may result in poor attendance or cancelled tournament / league games.

 There are inherent risks associated with events held at sports complexes. As a result, personal injuries and accidents could occur and the Kent County Regional Sports Complex could be subject to claims and liabilities for personal injuries.

 The attractiveness of the Kent County Regional Sports Complex could deteriorate over time due to the age of the sports complex and / or deferred maintenance issues.

To gain an understanding of the potential impact to the Kent County Regional Sports Complex’s estimated EBITDA associated with fluctuations in key study assumptions, a sensitivity analysis has been completed. The sensitivity analysis compares the operating revenue, operating expenses and resulting EBITDA before any applicable debt service that could result based on differing levels of tournaments, leagues, registration fees and naming rights agreements.

The table on the next page summarizes the results of the sensitivity analysis.

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8. Estimated Financial Operations

SENSITIVITY ANALYSIS Kent County Regional Sports Complex

Inaugural Stabilized Year Year

2017 2018 2019 2020 2021 Variable Base Analysis (18 Tournaments) Total Operating Revenues $1,753,844 $2,164,563 $2,436,391 $2,557,684 $2,666,029 Total Operating Expenses $1,170,700 $1,250,211 $1,329,948 $1,389,421 $1,457,504 EBITDA $583,144 $914,352 $1,106,444 $1,168,263 $1,208,526 24 Tournaments Per Year (10 In-House) Total Operating Revenues $2,884,820 $3,081,038 $3,278,812 $3,434,031 $3,568,667 Total Operating Expenses $1,480,700 $1,530,371 $1,588,807 $1,656,046 $1,732,128 EBITDA $1,404,120 $1,550,667 $1,690,005 $1,777,985 $1,836,539 Increased League Play (100 percent) Total Operating Revenues $2,349,672 $2,760,391 $3,032,220 $3,154,892 $3,264,658 Total Operating Expenses $1,170,700 $1,250,211 $1,329,948 $1,389,421 $1,457,504 EBITDA $1,178,972 $1,510,180 $1,702,272 $1,765,471 $1,807,154 Reduced League Play (50 percent) Total Operating Revenues $1,455,930 $1,866,648 $2,138,477 $2,259,080 $2,366,715 Total Operating Expenses $1,170,700 $1,250,211 $1,329,948 $1,389,421 $1,457,504 EBITDA $285,230 $616,437 $808,530 $869,659 $909,211 No Naming Rights Agreement Total Operating Revenues $1,523,844 $1,934,563 $2,206,391 $2,327,684 $2,436,029 Total Operating Expenses $1,170,700 $1,250,211 $1,329,948 $1,389,421 $1,457,504 EBITDA $353,144 $684,352 $876,444 $938,263 $978,526

Note: EBITDA is defined as Earnings Before Interest, Taxes, Depreciation & Amortization.

As shown, variations in several metrics can result in material impacts to EBITDA of the Kent County Regional Sports Complex. For instance, a reduction in league play by 50 percent decreases EBITDA projections by 32 percent on average over the first five years of operations. Similarly, the inability to secure a naming rights agreement for the sports complex would result in EBITDA variations of 25 percent on average. However, the ability of sports complex management to increase the number of tournaments to 24 (10 in-house) could result in a positive EBITDA variation of 73 percent on average over the first five years.

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8. Estimated Financial Operations

Risk Reduction

As a result of the potential variability in EBITDA associated with fluctuations in key study assumptions, Kent County Regional Sports Complex management should explore the following options in order to limit sensitivity risk:

 Secure an agreement with the Central Delaware Soccer Association and/or other Delaware sports organizations for the majority of league games, practices and camps assumed herein;

 Secure agreements with several third-party tournament organizers;

 Secure a naming rights agreement for the Kent County Regional Sports Complex;

 Secure partnerships with local hotels and negotiate hotel rebates or commissions to the sports complex; and,

 Seek to work with Delaware Soccer Complex, if built, to host larger tournaments which benefit the State of Delaware.

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EXHIBIT C

FORMS OF TRUST INDENTURE, LOAN AND SECURITY AGREEMENT AND LEASEHOLD MORTGAGE AND SECURITY AGREEMENT

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

TRUST INDENTURE

between

KENT COUNTY, DELAWARE,

as Issuer

and

WILMINGTON TRUST, NATIONAL ASSOCIATION

as Trustee

$20,760,000 Kent County, Delaware Revenue Bonds (Kent County Regional Sports Complex Project) Series 2016

Dated as of June 1, 2016

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS; INDENTURE TO CONSTITUTE CONTRACT ...... 3 SECTION 1.01. Definitions ...... 3 SECTION 1.02. Indenture to Constitute Contract ...... 13

ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND ISSUANCE OF BONDS ...... 14 SECTION 2.01. Authorized Amount of Bonds; Disposition of Proceeds of Bonds ...... 14 SECTION 2.02. All Bonds Equally and Ratably Secured by Trust Estate; Limited Obligation of Bonds and Pledges Securing the Same ...... 14 SECTION 2.03. Authorization of Bonds ...... 15 SECTION 2.04. Execution of Bonds ...... 16 SECTION 2.05. Registration, Transfer and Exchange of Bonds; Persons Treated as Registered Owners ...... 16 SECTION 2.06. Lost, Stolen, Destroyed and Mutilated Bonds...... 17 SECTION 2.07. Delivery of 2016 Bonds ...... 17 SECTION 2.08. Authentication Certificate ...... 18 SECTION 2.09. Cancellation and Disposal of Bonds ...... 18 SECTION 2.10. Temporary Bonds ...... 18 SECTION 2.11. Additional Bonds Authorized ...... 18 SECTION 2.12. Book-Entry System ...... 19 SECTION 2.13. CUSIP Numbers ...... 21

ARTICLE III REVENUES AND FUNDS ...... 21 SECTION 3.01. Pledge of Trust Estate ...... 21 SECTION 3.02. Establishment of Funds ...... 21 SECTION 3.03. Payments into the Bond Principal Fund and the Bond Interest Fund ...... 22 SECTION 3.04. Use of Moneys in the Bond Principal Fund and the Bond Interest Fund ...... 22 SECTION 3.05. Custody of the Bond Principal Fund and the Bond Interest Fund...... 22 SECTION 3.06. Payments into the Debt Service Reserve Fund ...... 22 SECTION 3.07. Use of Moneys in the Debt Service Reserve Fund ...... 22 SECTION 3.08. Custody of the Debt Service Reserve Fund ...... 23 SECTION 3.09. Right of Issuer to Cure Borrower Failure to Pay Debt Service ...... 23 SECTION 3.10. Revenue Fund ...... 24 SECTION 3.11. Repayment to the Borrower from the Funds ...... 25 SECTION 3.12. Payments into and Use of Moneys in the Cost of Issuance Fund ...... 25 SECTION 3.13. Termination of Cost of Issuance Fund ...... 25 SECTION 3.14. Custody of the Cost of Issuance Fund ...... 25 SECTION 3.15. Rebate Fund ...... 25 SECTION 3.16. Custody of the Rebate Fund ...... 26 SECTION 3.17. Nonpresentment of Bonds ...... 26 SECTION 3.18. Moneys to be Held in Trust ...... 26 SECTION 3.19. Insurance and Condemnation Proceeds ...... 27 SECTION 3.20. Construction Fund ...... 27 SECTION 3.21. Payments into and Custody of the Repair and Replacement Fund; Disbursements from Repair and Replacement Fund...... 28 SECTION 3.22. Payments into and Custody of the Operating Reserve Fund; Disbursements from Operating Reserve Fund ...... 29

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SECTION 3.23. Surplus Fund ...... 29 SECTION 3.24. Kent County Grant and Post-Bankruptcy Loan Request...... 29

ARTICLE IV COVENANTS OF THE ISSUER ...... 30 SECTION 4.01. Performance of Covenants ...... 30 SECTION 4.02. Instruments of Further Assurance ...... 31 SECTION 4.03. Payment of Principal, Premium, if any, and Interest ...... 31 SECTION 4.04. Tax Covenants ...... 31 SECTION 4.05. Unrelated Bond Issues ...... 32 SECTION 4.06. Security Instruments ...... 32 SECTION 4.07. Rights Under the Agreement ...... 32 SECTION 4.08. Performance Obligations ...... 32 SECTION 4.09. Limitations on Liability ...... 33

ARTICLE V REDEMPTION OF BONDS PRIOR TO MATURITY ...... 34 SECTION 5.01. Optional Redemption of Bonds ...... 34 SECTION 5.02. Redemption of Bonds Upon Damage, Destruction or Condemnation ...... 34 SECTION 5.03. Mandatory Sinking Fund Redemption ...... 35 SECTION 5.04. Method of Selecting Bonds ...... 36 SECTION 5.05. Notices of Redemption ...... 36 SECTION 5.06. Bonds Due and Payable on Redemption Date; Interest Ceases to Accrue ...... 37 SECTION 5.07. Cancellation ...... 37 SECTION 5.08. Partial Redemption of Bonds ...... 38

ARTICLE VI INVESTMENTS ...... 38 SECTION 6.01. Investment of Bond Principal Fund, Bond Interest Fund, Construction Fund, Debt Service Reserve Fund, Operating Reserve Fund, Cost of Issuance Fund, Repair and Replacement Funds, Surplus Fund and Rebate Fund ...... 38 SECTION 6.02. Tax Status of the Interest on the Tax-Exempt Bonds ...... 38 SECTION 6.03. Allocation and Transfers of Investment Income ...... 38

ARTICLE VII DISCHARGE OF INDENTURE ...... 39 SECTION 7.01. Discharge of this Indenture ...... 39 SECTION 7.02. Survival ...... 41

ARTICLE VIII DEFAULTS AND REMEDIES ...... 41 SECTION 8.01. Events of Default ...... 41 SECTION 8.02. Remedies for Events of Default Under This Indenture ...... 42 SECTION 8.03. Direction of Remedies ...... 43 SECTION 8.04. Rights and Remedies of Registered Owners ...... 43 SECTION 8.05. Application of Moneys ...... 43 SECTION 8.06. Trustee May Enforce Rights Without Bonds ...... 44 SECTION 8.07. Proofs of Claim ...... 44 SECTION 8.08. Delay or Omission No Waiver ...... 45 SECTION 8.09. No Waiver of One Default to Affect Another ...... 45 SECTION 8.10. Discontinuance of Proceedings on Default; Position of Parties Restored ...... 45 SECTION 8.11. Waivers of Events of Default ...... 45

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ARTICLE IX CONCERNING THE TRUSTEE ...... 46 SECTION 9.01. Duties of the Trustee ...... 46 SECTION 9.02. Fees, Indemnification and Expenses of Trustee ...... 48 SECTION 9.03. Resignation or Replacement of Trustee ...... 49 SECTION 9.04. Conversion, Consolidation or Merger of Trustee...... 49

ARTICLE X SUPPLEMENTAL INDENTURES AND AMENDMENTS OF THE AGREEMENT AND THE LEASEHOLD MORTGAGE ...... 50 SECTION 10.01. Supplemental Indentures Not Requiring Consent of Registered Owners ...... 50 SECTION 10.02. Supplemental Indentures Requiring Consent of Registered Owners ...... 50 SECTION 10.03. Execution of Supplemental Indentures ...... 51 SECTION 10.04. Issuer Consent Required to Less Restrictive Requirements of Indenture and Agreement ...... 51 SECTION 10.05. Consent of Borrower ...... 51 SECTION 10.06. Amendments, etc., of the Agreement Not Requiring Consent of Registered Owners ...... 52 SECTION 10.07. Amendments, etc., of the Agreement Requiring Consent of Registered Owners ...... 52 SECTION 10.08. Execution of Amended Agreement ...... 52 SECTION 10.09. Amendments, etc., of the Leasehold Mortgage Not Requiring Consent of Registered Owners ...... 52 SECTION 10.10. Amendments, etc., of the Leasehold Mortgage Requiring Consent of Registered Owners ...... 52 SECTION 10.11. Execution of Amended Leasehold Mortgage ...... 53 SECTION 10.12. Copies of Supplements and Amendments to the Rating Agency ...... 53

ARTICLE XI MISCELLANEOUS ...... 53 SECTION 11.01. Evidence of Signature of Registered Owners and Ownership of Bonds ...... 53 SECTION 11.02. Parties Interested Herein ...... 54 SECTION 11.03. Titles, Headings, Etc ...... 54 SECTION 11.04. Severability ...... 54 SECTION 11.05. Third Party Beneficiaries ...... 54 SECTION 11.06. Governing Law ...... 54 SECTION 11.07. Execution in Counterparts ...... 54 SECTION 11.08. Limitation of Liability of Officials of Issuer ...... 54 SECTION 11.09. Notices ...... 55 SECTION 11.10. Payments Due on Holidays ...... 56 SECTION 11.11. No Personal Liability of Officials of the Issuer or the Trustee ...... 56 SECTION 11.12. Bonds Owned by the Issuer or the Borrower ...... 56 SECTION 11.13. Undertaking to Provide Ongoing Disclosure; Financial Reports ...... 57 SECTION 11.14. Right to Inspect ...... 57 SECTION 11.15. Incorporation of Terms of Loan Agreement ...... 57 SECTION 11.16. Notices To Registered Owners ...... 57 SECTION 11.17. Notices To Holders of the Bonds and the Internal Revenue Service ...... 58 SECTION 11.18. Waiver of Jury Trial ...... 58 SECTION 11.19. Force Majeure ...... 58 EXHIBIT A FORM OF 2016 Bond EXHIBIT B COSTS OF ISSUANCE PAYABLE AT CLOSING EXHIBIT C FORM OF REQUISITION

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TRUST INDENTURE

THIS TRUST INDENTURE, dated as of June 1, 2016 (this “Indenture”), is between KENT COUNTY, DELAWARE (the “Issuer”), a county and political subdivision, public body and corporate, duly organized and existing under the Constitution and laws of the State of Delaware, and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national association duly organized and existing under the laws of the United States, as trustee (the “Trustee”), being authorized to accept and execute trusts of the character herein set out under and by virtue of the laws of the United States of America.

W I T N E S S E T H:`

WHEREAS, the Issuer has been created and organized pursuant to and in accordance with the provisions of the Constitution of the State of Delaware (the “State”) and under Chapter 41, Title 9 of the Delaware Code, as amended (the “Act”); and

WHEREAS, the Act together with Ordinance No. 86-5 enacted by Levy Court on October 21, 1986, as amended (the “General Ordinance”), and Ordinance No. 15-12 enacted by Levy Court on November 24, 2015 as amended and restated by Ordinance No. 16-08 enacted by Levy Court on May 24, 2016 (the “Project Ordinance” and, together with the General Ordinance, the “Ordinances”) authorizes the Issuer to issue revenue bonds for the purpose of financing the Project, as defined herein; and

WHEREAS, Kent County Regional Sports Complex Corporation (the “Borrower”), is a nonstock corporation under the laws of the State and has requested that the Issuer issue its bonds and loan the proceeds therefrom to the Borrower for the following purposes: (i) to develop the Kent County Regional Sports Complex on an approximately 92 acre site located at 4000 Bay Road, Frederica, Delaware, 19946, including proceeds to (a) prepare the site and construct 12 turf or grass fields equipped with sports lighting, scoreboards and portable bleachers and (b) construct parking spaces, fixed seating for spectators and amenities such as paved walkways, shaded tent structures, restrooms, concessions, and administrative/maintenance buildings; (ii) pay capitalized interest on the 2016 Bonds; (iii) fund reserve funds, if any; and (iv) pay the costs of issuance of the 2016 Bonds (collectively, the “Project”); and

WHEREAS, in order to finance the cost of the Project, the Issuer has agreed to issue its $20,760,000 Kent County, Delaware, Revenue Bonds (Kent County Regional Sports Complex Project) Series 2016 (the “2016 Bonds” and together with any Additional Bonds, the “Bonds”) pursuant to and secured by this Indenture; and

WHEREAS, the 2016 Bonds and the authentication certificate are to be substantially in the form of Exhibit A hereto, with such necessary or appropriate variations, omissions and insertions as permitted or required by this Indenture; and

WHEREAS, all acts and requirements necessary to make the Bonds, when authenticated by the Trustee and issued as provided in this Indenture, the valid, binding and legal obligations of the Issuer and to constitute this Indenture a valid, binding and legal instrument for the security of the Bonds in accordance with its terms, have been done and performed;

NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:

That the Issuer, in consideration of the premises and of the mutual covenants contained herein and of the purchase and acceptance of the Bonds by the Registered Owners thereof, and for other good and valuable consideration, the receipt of which is hereby acknowledged, in order to secure the payment

of the principal of, premium, if any, and interest on all Bonds at any time Outstanding under this Indenture, according to their tenor and effect, to secure the performance and observance of all the covenants and conditions in the Bonds and herein contained, and to declare the terms and conditions upon and subject to which the Bonds are issued and secured, has executed and delivered this Indenture and has granted, bargained, sold, alienated, assigned, pledged, set over and confirmed, and by these presents does grant, bargain, sell, assign, pledge, set over and confirm unto Wilmington Trust, National Association, as Trustee, for the benefit of the Registered Owners from time to time of the Bonds on a parity basis, and to its successors and assigns forever, all and singular the following described property, franchises and income:

(a) The rights and interests of the Issuer under the Loan and Security Agreement, dated as of June 1, 2016, as amended from time to time (the “Agreement”), between the Issuer and the Borrower, except the Issuer’s Unassigned Rights.

(b) All rights and interests of the Issuer in the Project, subject to Permitted Encumbrances, except the Issuer’s Unassigned Rights.

(c) The Pledged Revenues (as defined herein) and all rights and interests of the Issuer in the Pledged Revenues, subject to Permitted Encumbrances, except the Issuer’s Unassigned Rights.

(d) The rights and interests of the Issuer and the Borrower under the Leasehold Mortgage and the Promissory Notes (each defined herein).

(e) All Funds created in this Indenture (other than the Rebate Fund), except for moneys or obligations deposited with or paid to the Trustee for the payment or redemption of Bonds that are no longer deemed to be Outstanding hereunder, and all trust accounts containing all insurance and condemnation proceeds and all Revenues payable to the Trustee by or for the account of the Issuer pursuant to the Agreement and this Indenture, subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in this Indenture.

(f) Any and all other interests in real or personal property of every name and nature from time to time hereafter by delivery or by writing of any kind specifically mortgaged, pledged or hypothecated, as and for additional security hereunder by the Issuer or by anyone in its behalf or with its written consent in favor of the Trustee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same, subject to the terms hereof.

TO HAVE AND TO HOLD the same with all privileges and appurtenances hereby conveyed and assigned, or agreed or intended to be, to the Trustee and its successors in said trust and assigns forever,

IN TRUST, NEVERTHELESS, upon the terms herein set forth for the equal and proportionate benefit, security and protection of all Registered Owners of the Bonds issued under and secured by this Indenture without privilege, priority or distinction as to the lien or otherwise of any of the Bonds over any other of the Bonds except as otherwise provided in Article VII hereof or with respect to moneys otherwise held to redeem or pay particular Bonds hereunder;

PROVIDED, HOWEVER, that if the Issuer, its successors or assigns shall well and truly pay, or cause to be paid, the principal of the Bonds and the premium, if any, and the interest due or to become due thereon, at the times and in the manner mentioned in the Bonds according to the true intent and meaning thereof, and shall cause the payments to be made into the Bond Principal Fund and the Bond

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Interest Fund as hereinafter required or shall provide, as permitted hereby, for the payment thereof by depositing with the Trustee the entire amount due or to become due thereon, or certain securities as herein permitted and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of this Indenture to be kept, performed and observed by it, and shall pay or cause to be paid to the Trustee, the Issuer and the United States of America all sums of money due or to become due to it in accordance with the terms and provisions hereof, then upon such final payments this Indenture and the rights hereby granted shall cease, terminate, and be void; otherwise this Indenture to be and remain in full force and effect.

IT IS HEREBY EXPRESSLY ACKNOWLEDGED that the Issuer has entered into this Indenture and issued the Bonds to fulfill the public purposes of the Act, and the Trustee hereby accepts such trust and covenants to enforce the provisions of this Indenture and the Agreement so as to effect the public purposes of the Act.

THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all Bonds issued and secured hereunder are to be issued, authenticated and delivered, and all said property, rights, interests, and revenues and funds hereby pledged, assigned and mortgaged are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the Issuer has agreed and covenanted, and does hereby agree and covenant with the Trustee for the benefit of the Registered Owners from time to time of the Bonds as follows:

ARTICLE I

DEFINITIONS; INDENTURE TO CONSTITUTE CONTRACT

SECTION 1.01. Definitions. All words and phrases defined in Article I of the Agreement shall have the same meaning in this Indenture. In addition, the following terms, except where the context indicates otherwise, shall have the respective meanings set forth below:

“Act” means Chapter 41, Title 9 of the Delaware Code, as amended.

An “Act of Bankruptcy” shall have occurred if:

(a) The Borrower shall file a voluntary petition in bankruptcy, or shall be adjudicated bankrupt or insolvent, or shall file any petition or agreement seeking any reorganization, composition, readjustment, liquidation or similar relief for itself under any present or future statutes, laws or regulations or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of the Borrower or of all or any substantial part of its properties, or shall make any general assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due; or

(b) A petition shall be filed against the Borrower seeking any reorganization, composition, readjustment, liquidation or similar relief under any present or future statute, law or regulation and shall remain undismissed or unstayed for an aggregate period of 60 days (whether or not consecutive), or if any trustee, receiver or liquidator of the Borrower or of all or any substantial part of its properties shall be appointed without the consent or acquiescence of the Borrower and such appointment shall remain undismissed or unstayed for an aggregate period of 60 days (whether or not consecutive).

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“Additional Bonds” means any Additional Bonds authorized and issued pursuant to Section 2.11 herein.

“Agreement” or “Loan Agreement” means the Loan and Security Agreement dated as of June 1, 2016, between the Borrower and the Issuer, and any amendments and supplements thereto made in conformity therewith and with this Indenture.

“Authorized Attesting Officer” means the Clerk of the Peace of the Issuer, or such other officer or official of the Issuer who, in accordance with the laws of the State, the bylaws or other governing documents of the Issuer, or practice or custom, regularly attests or certifies official acts and records of the Issuer, and includes any assistant or deputy officer to the principal officer or officers exercising such responsibility.

“Authorized Denomination” means $5,000 or any integral multiple in excess thereof.

“Authorized Representative” means, in the case of the Issuer, the County Administrator, President of Levy Court or Finance Director of the Issuer and any other officer or employee of the Issuer designated by certificate of any of the foregoing as authorized by the Issuer to perform a specified act, sign a specified document or otherwise take action with respect to the Bonds; or, in the case of the Borrower, the Executive Director, President, any Vice President or the Secretary thereof and, when used with reference to the performance of any act, the discharge of any duty or the execution of any certificate or other document, any officer, employee or other person authorized to perform such act, discharge such duty or execute such certificate or other document.

“Beneficial Owner(s)” means the person or entity for whom the Bonds were deposited with DTC (in the name of its nominee, Cede & Co.).

“Bond Counsel” means Ballard Spahr LLP or such other firm of nationally recognized attorneys with a proven reputation in the field of municipal finance and experienced in the financing of facilities for non-exempt persons through the issuance of tax-exempt revenue bonds under the exemption provided under Section 103 of the Code, and approved by the Issuer and the Borrower.

“Bond Interest Fund” means the fund by that name created pursuant to Section 3.02 herein.

“Bond Principal Fund” means the fund by that name created pursuant to Section 3.02 herein.

“Bond Purchase Agreement” means the Bond Purchase Agreement, dated June 22, 2016, among the Issuer, the Borrower and the Underwriter.

“Bonds” means the 2016 Bonds and any Additional Bonds.

“Borrower” means (i) Kent County Regional Sports Complex Corporation, a duly organized and validly existing Delaware non-stock corporation and an organization described in Section 501(c)(3) of the Code, operated exclusively for charitable and educational purposes, or (ii) any surviving, resulting or transferee corporation, as provided in Section 8.02 of the Agreement.

“Borrower Documents” means the Agreement, the Leasehold Mortgage, the Lease, the Promissory Notes, the Bond Purchase Agreement, the Tax Certificate, and each of the other agreements, certificates, contracts or instruments to be executed by the Borrower in connection with the issuance of the Bonds or the financing of the expenses associated with the Project.

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“Business Day” means any day other than (i) a Saturday or Sunday, (ii) any day on which banking institutions located in Wilmington, Delaware are required or authorized by law or executive order to close, (iii) any day on which banking institutions located in the city or cities in which the Designated Office of the Trustee is located are required or authorized by law or executive order to close, (iv) any day on which the New York Stock Exchange is closed, or (v) any day on which the Federal Reserve System is closed.

“Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC.

“Closing Date” means June 30, 2016.

“Code” means the Internal Revenue Code of 1986, as amended; each reference to the Code is deemed to include (i) any successor internal revenue law and (ii) the applicable regulations whether final, temporary or proposed under the Code or such successor law. Any reference to a particular provision of the Code is deemed to include any successor provision of any successor internal revenue law and applicable regulations, whether final, temporary or proposed, under such provision or successor provision.

“Construction Fund” means the fund by that name created pursuant to Section 3.02 herein.

“Consulting Architect” means an independent, individual, licensed architect or engineer or independent, licensed engineering or architectural firm (which may be an individual or an engineering or architectural firm retained by the Borrower for other purposes) selected by the Borrower.

“Consulting Architect’s Certificate” means a written opinion or report signed by the Consulting Architect.

“Continuing Disclosure Agreement” means the Continuing Disclosure Agreement dated as of June 1, 2016, entered into by the Borrower pursuant to Section 2.05 of the Agreement.

“Cost of Issuance Fund” means the fund by that name created pursuant to Section 3.02 of this Indenture.

“Cost of the Project” means the sum total of all reasonable or necessary costs incidental to the Project which may be financed pursuant to the Act.

“County Grant” shall have the meaning assigned to such term in Section 3.24 hereof.

“Debt Service Coverage Ratio” means, for any Fiscal Year, the ratio (determined by the Borrower) obtained by dividing the Net Income Available for Debt Service for such Fiscal Year by the amount of debt service on the Bonds for that Fiscal Year.

“Debt Service Reserve Fund” means the fund by that name created pursuant to Section 3.02 herein.

“Debt Service Reserve Fund Requirement” means the initial amount of $1,443,725.00 which is equal to the Maximum Annual Debt Service on the Bonds.

“Designated Office” of the Trustee means the office of the Trustee at the address set forth in Section 11.09 or at such other address as may be specified in writing by the Trustee as provided in Section 11.09.

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A “Determination of Taxability” shall have been deemed to occur if a final decree or judgment of any federal court or a final action of the Internal Revenue Service determines that interest paid or payable on any tax-exempt Bond is or was includable in the gross income of the Owner of said tax-exempt Bond for federal income tax purposes under the Code; provided, however, no such decree or action will be considered final for this purpose unless the Issuer and the Borrower has been given written notice and, if it is so desired and is legally allowed, have been afforded the opportunity to contest the same, either directly or in the name of any Owner of a tax-exempt Bond, and until conclusion of any appellate review, if sought.

“Disbursement Date” means the 25th day of each calendar month.

“DTC” means The Depository Trust Company, New York, New York, and its successors and assigns.

“Facilities” means all of the land, buildings and equipment owned or leased by the Borrower at any time for purposes of the Borrower.

“Fiscal Year” means the Borrower’s fiscal year, which currently begins on January 1 and ends on December 31 of each calendar year.

“Funded IPD” means the Disbursement Date immediately preceding the 90th day before an Interest Payment Date.

“Funded PPD” means the Disbursement Date immediately preceding the 90th day before a Principal Payment Date.

“Funds” means the Bond Principal Fund, the Bond Interest Fund, the Debt Service Reserve Fund, the Cost of Issuance Fund, the Rebate Fund, the Repair and Replacement Fund, the Construction Fund, the Revenue Fund, the Operating Reserve Fund, the Surplus Fund and any other funds, accounts or subaccounts held by the Trustee hereunder.

“Generally Accepted Accounting Principles” means those accounting principles applicable in the preparation of financial statements of the Borrower, as promulgated by the Financial Accounting Standards Board or such other body recognized as authoritative by the American Institute of Certified Public Accountants.

“Government Obligations” means direct noncallable obligations of or direct noncallable obligations the timely payment of the principal of and interest on which is fully and unconditionally guaranteed by the United States of America.

“Indebtedness” means all indebtedness of the Borrower for borrowed moneys, including, without limitation, (i) any indebtedness which has been incurred or assumed in connection with the Project, (ii) all indebtedness, no matter how created, secured by the Project or the Pledged Revenues, whether or not such indebtedness is assumed by the Borrower, (iii) any leases required to be capitalized in accordance with Generally Accepted Accounting Principles, (iv) installment purchase obligations and (v) guaranties.

“Insurance Consultant” means an insurance consultant and/or risk management firm or an insurance broker or an insurance agent (which may be a consultant, firm, broker or agent with whom the Borrower or the Issuer regularly transacts business) selected by the Borrower.

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“Interest Payment Date” means with respect to the 2016 Bonds, each October 1 and April1, commencing October 1, 2016, or any other dates as specified in a Supplemental Indenture with respect to any series of Additional Bonds.

“Investment Obligations” means any of the following that at the time are lawful investments under the laws of the State and applicable banking regulations for the money held under this Indenture:

(a) Government Obligations and Obligations of the following federal agencies so long as such obligations are backed by the full faith and credit of the United States of America:

(i) U.S. Export-Import Bank

(ii) Rural Economic Community Development Administration

(iii) Federal Financing Bank

(iv) General Services Administration

(v) U.S. Maritime Administration

(vi) U.S. Department of Housing and Urban Development (PHAs)

(vii) Small Business Administration

(viii) Government National Mortgage Associate (GNMA)

(ix) Federal Housing Administration

(x) Farm Credit System Financial Assistance Corporation

(b) 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:

(i) Senior debt obligations rated in the highest long-term rating category by at least two (2) nationally recognized rating agencies issued by Fannie Mae or the Federal Home Loan Mortgage Corporation (FHLMC).

(ii) Senior debt obligations of the Federal Home Loan Bank System.

(iii) Senior debt obligations of other government sponsored agencies.

(c) U.S. dollar denominated deposit accounts, federal funds and bankers’ acceptances with domestic commercial banks which either (i) have a rating on their short-term certificates of deposit on the date of purchase in the highest short-term rating category of at least two (2) nationally recognized rating agencies, (ii) are insured at all times by the Federal Deposit Insurance Corporation, or (iii) are collateralized with direct obligations of the United States of America at 102% valued daily. All such certificates must mature no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank.)

(d) Commercial paper which is rated at the time of purchase in the highest short-term rating category of at least two (2) nationally recognized rating agencies and which matures not more than 270 days after the date of purchase.

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(e) Investments in (i) money market funds subject to SEC Rule 2a-7 and rated in the highest short-term rating category of at least two (2) nationally recognized rating agencies, including those of the Trustee and (ii) public sector investment pools operated pursuant to SEC Rule 2a-7 in which the issuer’s deposit shall not exceed 5% of the aggregate pool balance at any time and such pool is rated in one of the two highest short-term rating categories of at least two (2) nationally recognized rating agencies.

(f) Pre-refunded municipal obligations defined as follows: any bonds, certificates or other obligations of any state of the United States of America 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 the notice; and

(i) which are rated, based on an irrevocable escrow account or fund (the “escrow”), in the highest long-term rating category of at least two (2) nationally recognized rating agencies; or

(ii) (A) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or direct obligations of the United States of America, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds, certificates or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and

(B) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds, certificates or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate.

(g) General obligations of states with a short-term rating in one of the two highest rating categories and a long-term rating in one of the two highest rating categories of at least two (2) nationally recognized rating agencies. In the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less frequently than annually.

“Issuer” means Kent County, Delaware, a political subdivision duly organized and existing under the constitution and laws of the State of Delaware, and its successors and assigns.

“Issuer Documents” means collectively the Loan Agreement, this Indenture, the Bond Purchase Agreement, the Lease, the Tax Certificate and any other agreement, certificate, contract, or instrument to be executed by the Issuer in connection with the issuance of the Bonds or the financing of a portion of the expense associated with the Project.

“Issuer Indemnified Party” or “Issuer Indemnified Parties” means the Issuer, its past, present, and future council persons, officers, counsel, advisors, and agents individually and collectively.

1 “Issuer’s Fee” means /2 of 1% of the original principal amount of the Bonds, payable by the Borrower to the Issuer on or before the Closing Date, as provided in and pursuant to the Agreement.

“Issuer’s Unassigned Rights” means the rights of the Issuer to (a) inspect books and records, (b) give or receive notices, approvals, consents, requests, and other communications, (c) receive payment or

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reimbursement for expenses, (d) receive payment of the Issuer’s Fee, (e) immunity from and limitation of liability, (f) indemnification from liability by the Borrower, and (g) security for the Borrower’s indemnification obligation.

“Lease” means the Ground Lease dated March 12, 2013, as amended on May 26, 2015, between the Issuer and the Borrower.

“Leasehold Mortgage” means the Leasehold Mortgage and Security Agreement, dated as of June 1, 2016, between the Borrower, as mortgagor, and the Trustee, as mortgagee.

“Levy Court Loan Payment Conditions” means the following conditions:

(b) The Borrower shall have met the covenants set forth in the Loan Agreement.

(c) No Event of Default under any Borrower Document has occurred and is continuing or would exist as a result of making the payment from the Surplus Fund.

“Letter of Representations” means the Letter of Representations from the Issuer to DTC.

“Loan Agreement” or “Agreement” means the Loan and Security Agreement dated as of June 1, 2016 between the Issuer and Borrower.

“Long-Term Indebtedness” means all Indebtedness the final maturity of which (taking into account any extensions available at the sole option of the Borrower) is greater than one year after the initial incurrence thereof.

“Maximum Annual Debt Service” means, as of any date of calculation, the highest principal and interest payment requirements with respect to all Long-Term Indebtedness of the Borrower Outstanding for any succeeding Fiscal Year other than the final Fiscal Year prior to the final maturity of the Bonds.

“Net Income Available for Debt Service” means, for any period of determination thereof, Pledged Revenues of the Borrower for such period, plus all interest earnings on moneys held in the Construction Fund, the Repair and Replacement Fund and the Debt Service Reserve Fund established under this Indenture, plus the balance of the Construction Fund and the Repair and Replacement Fund, minus its total Operating Expenses for such period but excluding (i) any profits or losses which would be regarded as extraordinary items under Generally Accepted Accounting Principles, (ii) cancellation of indebtedness income, (iii) proceeds of Bonds and any other Indebtedness permitted by the Agreement, and (iv) proceeds of insurance policies, other than policies for business interruption insurance, maintained by or for the benefit of the Borrower, the proceeds of any sale, transfer or other disposition of the Project or any other of the Borrower’s assets by the Borrower, and any condemnation or any other damage award received by or owing to the Borrower.

“Net Proceeds” means, when used with respect to any insurance payment or condemnation award, the gross proceeds thereof less the expenses (including attorneys’ fees) incurred in the collection of such gross proceeds.

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“Net Revenues” means Pledged Revenues less Operating Expenses.

“Operating Expenses” means fees and expenses of the Borrower, including maintenance, repair expenses, utility expenses, real estate taxes, insurance premiums, administrative and legal expenses, miscellaneous operating expenses, advertising and promotion costs, payroll expenses (excluding taxes), the cost of material and supplies used for current operations of the Borrower, the cost of vehicles, equipment leases and service contracts, taxes upon the operations of the Borrower not otherwise mentioned herein, charges for the accumulation of appropriate reserves (excluding deposits to the Repair and Replacement Fund) for current expenses not annually recurrent, but which are such as may reasonably be expected to be incurred in accordance with Generally Accepted Accounting Principles, all in such amounts as reasonably determined by the Borrower; provided, however, “Operating Expenses” shall not include (i) those expenses which are actually paid from any revenues of the Borrower which are not Pledged Revenues, (ii) spending for items accounted for as capital expenditures (i.e. interest expense on the Bonds and other Long Term Indebtedness, depreciation and amortization) under Generally Accepted Accounting Principles, (iii) expenditures from the Construction Fund and the Repair and Replacement Fund or (iv) replenishments of the Debt Service Reserve Fund.

“Operating Reserve Fund” means the fund by that name created pursuant to Section 3.02 herein.

“Operating Reserve Fund Requirement” means an amount equal to six months of the budgeted Operating Expenses as of the first Business Day of each Fiscal Year.

“Opinion of Counsel” means an opinion in writing of legal counsel, who may be counsel to the Issuer or the Borrower.

“Outstanding” or “outstanding” means when used with respect to the Bonds, as of any particular time, all Bonds which have been duly authenticated and delivered by the Trustee under this Indenture, except:

(a) Bonds theretofore cancelled by the Trustee or delivered to the Trustee for cancellation after purchase in the open market or because of payment at, or redemption prior to, maturity;

(b) Bonds for the payment or redemption of which cash funds (or securities to the extent permitted in Section 7.01 hereof) shall have been theretofore deposited with the Trustee (whether upon or prior to the maturity or redemption date of any such Bonds); provided that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given or arrangements satisfactory to the Trustee shall have been made therefor, or waiver of such notice satisfactory in form to the Trustee, shall have been filed with the Trustee;

(d) Bonds for which the conditions enumerated in Section 5.06 hereof have been met; and

(e) Bonds owned by the Borrower.

“Participants” means those broker-dealers, banks and other financial institutions from time to time for which DTC holds Bonds as a securities depository.

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“Person” includes an individual, association, corporation, partnership, joint venture or a government or an agency or a political subdivision thereof.

“Principal Payment Date” means with respect to the 2016 Bonds, each October 1, commencing October 1, 2020 and, with respect to any series of Additional Bonds, such other dates as shall be specified in a Supplemental Indenture.

“Project” shall have the meaning assigned to such term in the Recitals hereof.

“Project Costs” means costs incurred by the Borrower, whether before or after issuance of the Bonds, and reimbursed not later than three years after the payment thereof, with respect to the Project.

“Promissory Notes” or “Notes” means, the 2016 Note, together with any promissory note related to a future series of Additional Bonds.

“Protected Funds” means any: (a) funds transferred from the Debt Service Reserve Fund, other than funds in the Debt Service Reserve Fund which have not been on deposit in the Debt Service Reserve Fund for a period of at least 91 consecutive days, during which period no Act of Bankruptcy shall have occurred; (b) proceeds of any other bonds issued to refund in whole or part the Bonds, or any other payments made by a party other than the Borrower to purchase or pay debt service on the Bonds, or any other funds (so long as an Opinion of Counsel familiar with bankruptcy matters and acceptable to the Trustee is first filed with the Trustee stating in effect that the proceeds of such revenue bonds, or other payments or funds, as the case may be, to the Registered Owners, will not constitute voidable preferences under Section 547 of the Bankruptcy Code if the Borrower, the Issuer or other third party making the payments were to become a debtor under the Bankruptcy Code); (c) moneys held by the Trustee in the Bond Interest Fund and/or Bond Principal Fund for a period of at least 91 consecutive days, during which period no Act of Bankruptcy shall have occurred; (d) cash proceeds (as defined in the Delaware Uniform Commercial Code) of any collateral pledged to the Trustee to secure payment of the Bonds or each of the Borrower’s obligations under the Agreement which are delivered to the Trustee within 10 days after receipt thereof by the Borrower; (e) moneys received by the Trustee from the buyer or buyers as the result of the sale of the Project; and (f) investment earnings from the foregoing funds.

“Rating Agency” means S&P or any other nationally recognized rating agency which rates the Bonds.

“Rebate Amount” means the amount of arbitrage computed annually for payment as of the last day of every fifth (5th) Rebate Year and required to be rebated to the United States pursuant to Section 148 of the Code and Treasury Regulation section 1.148-2 and any successor regulation as may be applicable thereto.

“Rebate Analyst” means an independent certified public accountant, financial analyst or bond counsel, or any firm of the foregoing, or financial institution, experienced in making the arbitrage and rebate calculations required pursuant to Section 148(f) of the Code, selected and retained and

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compensated by the Borrower pursuant to Section 2.03 of the Agreement to make the computations and give the directions required under Section 3.15 of this Indenture.

“Rebate Fund” means the fund by that name created pursuant to Section 3.02 herein.

“Rebate Year” means the period beginning on the date of issuance of the Bonds and ending on October 1, 2016, and for all other Rebate Years, the one year period beginning on the day after the end of the preceding Rebate Year and ending on the following October 1, as the case may be, unless the Borrower, the Issuer and the Trustee are advised by the Rebate Analyst that another period is required by law; provided, however, that the last Rebate Year for the Bonds shall end on the retirement date.

“Registered Owner” or “Owner” means the person or persons in whose name or names a particular Bond is registered on the registration records maintained for that purpose pursuant to Section 2.03 hereof.

“Regular Record Date” means the 15th calendar day of the month next preceding each Interest Payment Date.

“Repair and Replacement Fund” means the fund by that name created pursuant to Section 3.02 herein.

“Repair and Replacement Fund Requirement” means an annual amount equal to the cost to repair and replace the Facilities divided by the number of years in the expected life of the Facilities.

“Responsible Officer” means any officer in the Corporate Trust Department of the Trustee with direct responsibility for administering the Indenture.

“Revenue Fund” means the fund by that name created pursuant to Section 3.02 herein.

“Revenues” means all payments received by the Trustee for the account of the Issuer pursuant to the Agreement and this Indenture.

“S&P” means Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, 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, “S&P” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Borrower by notice to the Trustee.

“Short-Term Debt” means any indebtedness other than Long-Term Indebtedness, consisting of notes, commercial paper, a bank line of credit or any other instrument to finance operating costs of the Borrower and including deposits into the Bond Interest Fund or the Bond Principal Fund.

“Special Record Date” means a special record date, which shall be a Business Day, fixed to determine the names and addresses of owners for purposes of paying interest on a special Interest Payment Date for the payment of defaulted interest, all as further provided in Section 2.03 hereof.

“State” means the State of Delaware.

“Surplus Fund” means the fund by that name created pursuant to Section 3.02 herein.

“Surplus Fund Payment Conditions” means the following conditions:

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(b) The Debt Service Coverage Ratio for the past two Fiscal Years on such Surplus Fund Transfer Date shall not be less than 1.25:1.00.

(d) No Event of Default under any Borrower Document has occurred and is continuing or would exist as a result of making the payment from the Surplus Fund.

(e) No amount is outstanding on any Levy Court Loan.

(f) The Trustee shall have on deposit in the Bond Interest Fund the entire amount due on the next succeeding Interest Payment Date.

“Tax Certificate” means the Tax Certificate, dated the Closing Date, executed and delivered by the Issuer and the Borrower, as such certificate may be amended, supplemented or restated from time to time.

“2016 Bonds” means the $20,760,000 Kent County, Delaware, Revenue Bonds (Kent County Regional Sports Complex Project), Series 2016.

“2016 Note” means the Promissory Note, the form of which is set forth in Exhibit C of the Loan Agreement, dated the Closing Date made by the Borrower, as maker, to the Issuer, as payee, in the face amount of Twenty Million Seven Hundred Sixty Thousand Dollars ($20,760,000).

“Tax-Exempt Bonds” means Bonds of any series, the interest on which is not includible in the gross income of the owners of such Bonds for purposes of federal income taxation.

“Treasury Regulations” means the regulations promulgated by the United States Department of Treasury for the interpretation of the Code.

“Trust Estate” means the property pledged, assigned and mortgaged to the Trustee pursuant to the granting clauses hereof.

“Trustee” means Wilmington Trust, National Association, not in its individual capacity but solely as trustee, paying agent and registrar under this Indenture, or any successor corporate trustee.

“Trustee’s Expenses” means the reasonable expenses incurred by the Trustee under this Indenture, including reasonable counsel fees (including fees at trial or appellate proceedings).

“Trustee’s Fees” means the annual fee of the Trustee payable to the Trustee as Trustee, Registrar and Paying Agent under this Indenture. The Borrower shall pay the Trustee’s Fee pursuant to the Agreement and the indemnification of the Trustee as provided in the Agreement.

“Underwriter” means M&T Securities, Inc.

SECTION 1.02. Indenture to Constitute Contract. In consideration of the purchase and acceptance of any or all of the Bonds by those who shall own the same from time to time, the provisions

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of this Indenture shall be part of the contract of the Issuer with the Registered Owners of the Bonds, and shall be deemed to be and shall constitute contracts between the Issuer, the Trustee and the Registered Owners from time to time of the Bonds. The pledge made in this Indenture and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Registered Owners of any and all of the Bonds except as otherwise provided in Article VII hereof or with respect to moneys otherwise held to redeem or pay particular Bonds hereunder. All of the Bonds, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or pursuant to this Indenture.

ARTICLE II

AUTHORIZATION, TERMS, EXECUTION AND ISSUANCE OF BONDS

SECTION 2.01. Authorized Amount of Bonds; Disposition of Proceeds of Bonds.

(a) No Bonds may be issued under this Indenture except in accordance with this Article. The total principal amount of Bonds that may be issued hereunder is hereby expressly limited to $20,760,000, except as provided in Sections 2.05, 2.06, 2.10 and 2.11 hereof.

(b) The Trustee shall apply the proceeds of the 2016 Bonds (net of Underwriter’s discount) as set forth in the Issuer’s Request to Authenticate and Deliver Bonds.

SECTION 2.02. All Bonds Equally and Ratably Secured by Trust Estate; Limited Obligation of Bonds and Pledges Securing the Same. Except as hereinafter provided, all Bonds issued under this Indenture and at any time Outstanding shall in all respects be equally and ratably secured hereby, without preference, priority or distinction on account of the date or dates or the actual time or times of the issue or maturity of the Bonds, so that all Bonds at any time issued and Outstanding hereunder shall have the same right, lien and preference under and by virtue of this Indenture, and shall all be equally and ratably secured hereby.

THE BONDS, THE PREMIUM, IF ANY, AND THE INTEREST ON THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM REVENUES, INCOME AND RECEIPTS OF THE ISSUER PLEDGED TO THE PAYMENT OF THE BONDS. NEITHER THE ISSUER, THE STATE OF DELAWARE NOR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF DELAWARE (EXCEPT THE ISSUER, TO THE LIMITED EXTENT SET FORTH IN THE INDENTURE) SHALL IN ANY EVENT BE LIABLE FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM (IF ANY) OR INTEREST ON THE BONDS OR FOR THE PERFORMANCE OF ANY PLEDGE, OBLIGATION OR AGREEMENT OF ANY KIND WHATSOEVER EXCEPT AS SET FORTH IN THE BONDS, AND NONE OF THE BONDS OR ANY OF THE ISSUER’S AGREEMENTS OR OBLIGATIONS SHALL BE CONSTRUED TO CONSTITUTE AN INDEBTEDNESS OF OR A PLEDGE OF THE FAITH AND CREDIT OF OR A LOAN OF THE CREDIT OF OR A MORAL OBLIGATION OF ANY OF THE FOREGOING WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER.

NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS, OR FOR ANY CLAIM BASED ON THE BONDS, OR OTHERWISE IN RESPECT OF THE BONDS, OR BASED ON OR IN RESPECT OF THE INDENTURE OR ANY SUPPLEMENTAL INDENTURE, AGAINST THE GENERAL CREDIT OF THE ISSUER OR AGAINST ANY OFFICER, EMPLOYEE OR AGENT, AS SUCH, PAST, PRESENT OR FUTURE, OF THE ISSUER OR ANY SUCCESSOR, WHETHER BY VIRTUE OF

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SECTION 2.03. Authorization of Bonds. There is hereby authorized to be issued hereunder and secured hereby an issue of bonds designated as the “Kent County, Delaware, Revenue Bonds (Kent County Regional Sports Complex Project), Series 2016”. The Bonds shall be issuable as fully registered bonds in Authorized Denominations and shall be numbered separately and lettered, if at all, in such manner as the Trustee shall determine. The 2016 Bonds will be in substantially the form set forth in Exhibit A to this Indenture, with such variations, omissions and insertions as are permitted or required by this Indenture.

The 2016 Bonds shall be dated the Closing Date. The 2016 Bonds shall bear interest on the basis of a 360-day year, consisting of twelve 30-day months, from their date of issuance until payment of principal has been made or provided for, payable on each October 1 and April 1, commencing October 1, 2016, except that 2016 Bonds which are reissued upon transfer, exchange or other replacement shall bear interest from the most recent Interest Payment Date to which interest has been paid or duly provided for, or if no interest has been paid, from the date of the 2016 Bonds. The 2016 Bonds shall be issued in the principal amounts of, shall bear interest, and shall mature on the dates as set forth below:

2016 Bonds

Maturity Date (October 1) Principal Amount Interest Rate 2020 $ 235,000 2.000% 2021 275,000 2.000 2022 290,000 2.000 2023 310,000 1.800 2024 325,000 2.000 2025 345,000 2.200 2026 365,000 2.250 2031 2,195,000 3.500 2036 2,925,000 3.125 2046 9,455,000 5.125 2049 4,040,000 3.250

The principal of and premium, if any, on the Bonds shall be payable in lawful money of the United States of America at the designated corporate trust office of the Trustee or at the designated office of its successor in trust. Payment of interest on any Bond shall be made to the Registered Owner thereof by check or draft mailed on each Interest Payment Date by the Trustee to the Registered Owner at his or her address as it last appears on the registration records kept by the Trustee at the close of business on the Regular Record Date for such Interest Payment Date (except that the Registered Owners of at least $1,000,000 in aggregate principal amount of Bonds Outstanding may, by written request received at least 10 Business Days prior to the Regular Record Date, receive payment of interest by wire transfer at the address specified in such request, which address must be in the continental United States), but any such interest not so timely paid or duly provided for shall cease to be payable to the Registered Owner thereof at the close of business on the Regular Record Date and shall be payable to the Registered Owner thereof at the close of business on a Special Record Date for the payment of any such defaulted interest. Such Special Record Date shall be fixed by the Trustee whenever moneys become available for payment of the

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defaulted interest, and notice of such Special Record Date shall be given to the Registered Owners of the Bonds not less than 10 days prior thereto by first-class mail to each such owner as shown on the registration records on the date selected by the Trustee stating the date of the Special Record Date and the date fixed for the payment of such defaulted interest. All such payments shall be made in lawful money of the United States of America.

The 2016 Bonds are subject to the sinking fund provisions of Section 5.03 hereof. The Bonds are otherwise subject to prior redemption as herein set forth. The Bonds shall be substantially in the form and tenor hereinabove recited with such appropriate variations, omissions and insertions as are permitted or required by this Indenture.

The proceeds of the 2016 Bonds shall be applied as set forth in Section 4.01 of the Agreement.

SECTION 2.04. Execution of Bonds. The Bonds shall be executed in the name and on behalf of the Issuer by the manual or facsimile signature of an Authorized Representative and be attested with the manual or facsimile signature of an Authorized Attesting Officer.

In case any officer of the Issuer whose signature or whose facsimile signature shall appear on the Bonds shall cease to be such officer before the authentication of such Bonds, such signature or the facsimile thereof shall nevertheless be valid and sufficient for all purposes as if he or she had remained in office until authentication; and any Bond may be signed on behalf of the Issuer by such Persons as are at the time of execution of such Bond proper officers of the Issuer, even though at the date of this Indenture, such Person was not such officer.

SECTION 2.05. Registration, Transfer and Exchange of Bonds; Persons Treated as Registered Owners. The Issuer shall cause books for the registration and for the transfer of the Bonds as provided in this Indenture to be kept by the Trustee. Upon surrender for transfer of any Bond at the designated office of the Trustee duly endorsed for transfer or accompanied by an assignment duly executed by the Registered Owner or his attorney duly authorized in writing, the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds for a like series and aggregate principal amount of the same maturity. The Trustee shall not be responsible for ensuring that any transfer restrictions binding on a Beneficial Owner other than a Registered Owner of such Bond have been complied with in connection with any transfer of Bonds.

Bonds may be exchanged at the designated corporate trust office of the Trustee for a like series and aggregate principal amount of Bonds of the same maturity in Authorized Denominations. The Issuer shall execute and the Trustee shall authenticate and deliver Bonds which the Registered Owner making the exchange is entitled to receive, bearing numbers not contemporaneously Outstanding. The execution by the Issuer of any Bond of any Authorized Denomination shall constitute full and due authorization of such denomination and the Trustee shall thereby be authorized to authenticate and deliver such Bond.

The Trustee shall not be required to transfer or exchange any Bond subject to redemption during the period of five (5) days next preceding the mailing of notice of redemption as herein provided except that Bonds not subject to redemption pursuant to Article V hereof may be transferred or exchanged during such period in the event of redemption pursuant to Article V hereof. After the giving of such notice the Trustee shall not be required to transfer or exchange any Bond, which Bond or portion thereof has been called for redemption.

As to any Bond, the Person in whose name the same shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, except to the extent otherwise provided herein with respect to Regular Record Dates and Special Record Dates for the payment of interest, and payment

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of either principal or interest on any Bond shall be made only to or upon the written order of the Registered Owner thereof or his legal representative but such registration may be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums paid.

The Trustee shall require the payment by any Registered Owner requesting exchange or transfer of any tax or other generally imposed governmental charge required to be paid with respect to such exchange or transfer.

SECTION 2.06. Lost, Stolen, Destroyed and Mutilated Bonds. Upon receipt by the Issuer and the Trustee of evidence satisfactory to them of the ownership of and the loss, theft, destruction or mutilation of any Bond and, in the case of a lost, stolen or destroyed Bond, of indemnity satisfactory to them, and upon surrender and cancellation of the Bond, if mutilated, (a) the Issuer shall execute, and the Trustee shall authenticate and deliver, a new Bond of the same series, date, maturity and Authorized Denomination in lieu of such lost, stolen, destroyed or mutilated Bond or (b) if such lost, stolen, destroyed or mutilated Bond shall have matured or have been called for redemption, in lieu of executing and delivering a new Bond as aforesaid, the Trustee may pay such Bond. Any such new Bond shall bear a number not contemporaneously Outstanding. The applicant for any such new Bond may be required to pay all expenses and charges of the Issuer and of the Trustee in connection with the issuance of such Bond. All Bonds shall be held and owned upon the express condition that, to the extent permitted by law, the foregoing conditions are exclusive with respect to the replacement and payment of mutilated, destroyed, lost or stolen Bonds, negotiable instruments or other securities.

SECTION 2.07. Delivery of 2016 Bonds. Upon the execution and delivery of this Indenture, the Issuer shall execute and deliver the 2016 Bonds to the Trustee, and the Trustee shall authenticate the 2016 Bonds and deliver them to the initial purchaser thereof as directed by the Issuer and as hereinafter in this Section provided.

Prior to the delivery by the Trustee of any of the 2016 Bonds, there shall have been filed with or delivered to the Trustee the following:

(a) an ordinance duly enacted by the Issuer, authorizing the execution and delivery of the Agreement, the Tax Certificate, the Bond Purchase Agreement and this Indenture and the issuance of the 2016 Bonds;

(b) a duly executed copy of this Indenture, the Tax Certificate, the Agreement and the Leasehold Mortgage;

(d) the written order of the Issuer as to the delivery of the 2016 Bonds, signed by an Authorized Representative of the Issuer indicating that all conditions of closing have been met or waived;

(e) an opinion of Bond Counsel substantially to the effect that the 2016 Bonds constitute legal, valid and binding obligations of the Issuer and that the interest on the 2016 Bonds will be tax-exempt to the Beneficial Owners thereof;

(f) opinions of counsel with respect to the Borrower in form and substance acceptable to the Issuer, the Underwriter, the Trustee and Bond Counsel;

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(g) such other documents and opinions of counsel as the Issuer, the Underwriter, the Trustee or Bond Counsel may reasonably request.

SECTION 2.08. Authentication Certificate. The authentication certificate upon the Bonds shall be substantially in the form appended to the form of the Bonds attached hereto as Exhibit A. No Bond shall be secured hereby or entitled to the benefit hereof, or shall be valid or obligatory for any purpose, unless the certificate of authentication, substantially in such form, has been duly executed by the Trustee; and such certificate of the Trustee upon any Bond shall be conclusive evidence and the only competent evidence that such Bond has been authenticated and delivered hereunder. The certificate of authentication shall be deemed to have been duly executed if manually signed by an authorized signatory of the Trustee, but it shall not be necessary that the same authorized signatory sign the certificate of authentication on all of the Bonds issued hereunder. Bonds shall be dated the date of their authentication.

SECTION 2.09. Cancellation and Disposal of Bonds. Whenever any Outstanding Bonds shall be delivered to the Trustee for the cancellation thereof pursuant to this Indenture, upon payment of the principal amount thereof or for replacement pursuant to Section 2.06 hereof, such Bonds shall be promptly cancelled and disposed of by the Trustee in its customary manner. A certificate of disposal evidencing such disposal shall be furnished by the Trustee to the Issuer and the Borrower.

SECTION 2.10. Temporary Bonds. Pending the preparation of definitive Bonds, the Issuer may execute and the Trustee shall authenticate and deliver temporary Bonds. Temporary Bonds shall be issuable as registered Bonds without coupons, of any Authorized Denomination, and substantially in the form of the definitive Bonds but with such omissions, insertions and variations as may be appropriate for temporary Bonds, all as may be determined by the Issuer. Every temporary Bond shall be executed by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Bonds. As promptly as practicable the Issuer shall execute and shall furnish definitive Bonds and thereupon temporary Bonds may be surrendered in exchange therefor without charge at the designated corporate trust office of the Trustee, and the Trustee shall authenticate and deliver in exchange for such temporary Bonds a like aggregate principal amount of definitive Bonds. Until so exchanged the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds.

SECTION 2.11. Additional Bonds Authorized. Additional Bonds secured by and payable solely from the Trust Estate may be issued in one or more additional series provided the following terms and conditions have been met:

(a) the Trustee has received a copy, duly certified by the Issuer, of the ordinance enacted by the Issuer authorizing the issuance of such Additional Bonds and the execution and delivery of a supplemental indenture, supplementing and amending this Indenture, which supplemental indenture shall not require the approval of the Registered Owners of the Bonds Outstanding, providing the date, interest rates and maturities of such Additional Bonds, options and requirements for redemption prior to maturity with respect to such Additional Bonds, deposit of proceeds to the various funds and accounts, including the Debt Service Reserve Fund, and such other terms as may be required by reason of the foregoing and which adopts the applicable provisions of this Indenture, and of an agreement supplementing and amending the Agreement;

(b) the Trustee and the Issuer have received an Opinion of Counsel to the Borrower in form and substance acceptable to the Trustee, the Issuer and Bond Counsel;

(c) the Trustee has received a certificate of an Authorized Representative of the Borrower to the effect that (i) the Borrower is not in default under the Agreement or this

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Indenture, (ii) the Borrower is not aware of any Events of Default under the Agreement or this Indenture, and (iii) that such Indebtedness may be issued under Section 8.13 of the Agreement;

(d) the Trustee and the Issuer have received an opinion of nationally recognized municipal bond counsel to the effect that (i) the issuance of such Additional Bonds will not affect adversely the exclusion from gross income for federal income tax purposes of interest on any Outstanding Tax-Exempt Bonds, and (ii) the Additional Bonds to be delivered will be valid and legal special limited obligations of the Issuer in accordance with their terms and will be secured hereunder equally and on a parity with all other Bonds at the time Outstanding hereunder as to the assignment to the Trustee of the Trust Estate;

(e) the Trustee has received original executed counterparts of the agreement supplementing and amending the Agreement, the agreement supplementing and amending the Leasehold Mortgage (if necessary), and the supplemental indenture supplementing and amending this Indenture;

(f) the Trustee has received a request and authorization to the Trustee on behalf of the Issuer and signed by any Authorized Representative of the Issuer to authenticate and deliver such Additional Bonds to the purchasers therein identified, upon payment to the Trustee, but for the account of the Issuer, of a sum specified in such request and authorization, plus accrued interest thereon, if any, to the date of delivery;

(g) the Trustee will receive from the proceeds of the Additional Bonds or otherwise on the date of delivery of the Additional Bonds an amount equal to the additional Debt Service Reserve Fund Requirement for deposit into the Debt Service Reserve Fund;

(h) the Trustee and the Issuer have received an executed opinion of nationally recognized municipal bond counsel to the effect that (i) the Additional Bonds have been duly authorized, executed and delivered and constitute the binding special limited obligations of the Issuer, enforceable in accordance with their terms, subject to normal bankruptcy exceptions, and (ii) the interest on such Additional Bonds is excluded from gross income for federal income tax purposes (unless it is intended that such interest be taxable); and

(i) the Trustee will receive evidence from the Borrower that the issuance of the Additional Bonds will have no material adverse effect on the then-current rating on the outstanding Bonds.

The provisions, covenants and agreements herein set forth to be performed by or on behalf of the Issuer and in the Agreement to be performed by the Borrower shall be for the equal benefit, protection and security of the Registered Owners of any and all of the Bonds, all of which, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof except as expressly provided in this Indenture.

SECTION 2.12. Book-Entry System.

(a) Notwithstanding any other provision hereof, the Bonds shall be initially issued in the form of a separate single certificated fully registered Bond for each of the maturities set forth in Section 2.03 hereof. Upon initial issuance, the ownership of each Bond shall be registered in the registration records kept by the Trustee in the name of Cede & Co., as nominee of DTC. Except as provided in Section 2.12(d) hereof, all of the Outstanding Bonds shall be registered in the registration records kept by the Trustee in the name of Cede & Co., as nominee of DTC.

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(b) With respect to Bonds registered in the registration records kept by the Trustee in the name of Cede & Co., as nominee of DTC, the Issuer and the Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of which a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, neither the Issuer, the Borrower, nor the Trustee shall have responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other Person, other than a Registered Owner, as shown in the registration records kept by the Trustee, or any notice with respect to the Bonds, including any notice of redemption or (iii) the payment to any Participant or any other Person, other than a Registered Owner, as shown in the registration records kept by the Trustee, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The Issuer, the Borrower and the Trustee may treat and consider the Person in whose name each Bond is registered in the registration records kept by the Trustee as the absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Registered Owners, as shown in the registration records kept by the Trustee, or their respective attorneys duly authorized in writing, as provided in Section 2.05 hereof, and all such payments shall be valid and effective to fully satisfy and discharge the obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No Person other than a Registered Owner, as shown in the registration records kept by the Trustee, shall receive a certificated Bond evidencing the obligation to make payments of principal, premium, if any, and interest pursuant to this Indenture. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to Record Dates, the words “Cede & Co.” in this Indenture shall refer to such new nominee of DTC.

(c) The Trustee shall take all action necessary for all representations of the Issuer in the Letter of Representations solely with respect to the paying agents and the bond registrar, respectively, to at all times to be complied with.

(d) (i) DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the Issuer, the Borrower and the Trustee and discharging its responsibilities with respect thereto under applicable law.

(ii) The Trustee, in its sole discretion and without the consent of any other Person, may terminate the services of DTC with respect to the Bonds if the Trustee determines that DTC is unable to discharge its responsibilities with respect to the Bonds.

(iii) Upon the termination of the services of DTC with respect to the Bonds pursuant to subsection 2.12(d)(ii) hereof, or upon the discontinuance or termination of the services of DTC with respect to the Bonds pursuant to subsection 2.12(d)(i) or subsection 2.12(d)(ii) hereof after which no substitute securities depository willing to undertake the functions of DTC hereunder can be found which, in the opinion of the Trustee, is willing and able to undertake such functions upon reasonable and customary terms, the Trustee is obligated to deliver Bond certificates at the expense of the Beneficial Owners of the Bonds, as described in this Indenture, and the Bonds shall no longer be restricted to being registered in the registration records kept by the Trustee in the name of Cede & Co. as nominee of DTC, but may be registered in whatever name or names Registered Owners

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transferring or exchanging Bonds shall designate, in accordance with the provisions of this Indenture.

(e) Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, in the manner provided in the Letter of Representations.

SECTION 2.13. CUSIP Numbers. The Issuer in issuing the Bonds may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Bonds or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Bonds, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

ARTICLE III

REVENUES AND FUNDS

SECTION 3.01. Pledge of Trust Estate. Subject only to the rights of the Issuer to apply amounts under the provisions of this Article, a pledge of the Trust Estate to the extent provided herein is hereby made, and the same is pledged to secure the payment of the principal of, premium, if any, and interest on the Bonds. The pledge hereby made shall be valid and binding from and after the time of the delivery by the Trustee of the first Bond authenticated and delivered under this Indenture. The security so pledged and then or thereafter received by the Issuer shall immediately be subject to the lien of such pledge and the obligation to perform the contractual provisions hereby made shall have priority over any or all other obligations and liabilities of the Issuer with respect to the Trust Estate and the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer irrespective of whether such parties have notice thereof.

SECTION 3.02. Establishment of Funds. The Issuer hereby establishes and creates the following funds, which shall be special trust funds held by the Trustee:

(a) Bond Principal Fund;

(b) Bond Interest Fund;

(d) Cost of Issuance Fund;

(e) Construction Fund;

(f) Rebate Fund;

(g) Revenue Fund;

(h) Repair and Replacement Fund;

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(i) Operating Reserve Fund; and

(j) Surplus Fund.

SECTION 3.03. Payments into the Bond Principal Fund and the Bond Interest Fund. There shall be deposited into the Bond Principal Fund or the Bond Interest Fund, as appropriate, as and when received (a) disbursements from the Revenue Fund as provided in Section 3.10 herein, (b) all moneys transferred to the Bond Principal Fund or Bond Interest Fund pursuant to Section 3.07 or 6.03 hereof, (c) all other moneys deposited into the Bond Principal Fund or Bond Interest Fund pursuant to the Agreement or this Indenture, and (d) all other moneys received by the Trustee when accompanied by written directions from an Authorized Representative of the Borrower not inconsistent with the Agreement or this Indenture that such moneys are to be paid into the Bond Principal Fund or Bond Interest Fund. There shall also be retained in the Bond Principal Fund and Bond Interest Fund, respectively, interest and other income received on investment of moneys in the Bond Principal Fund and Bond Interest Fund to the extent provided in Section 6.03 hereof. If the Trustee does not receive payments into the Revenue Fund pursuant to Section 5.01(a) of the Agreement by the fifth (5th) calendar day after any required payment date pursuant to Section 5.01(a) of the Agreement, the Trustee will immediately notify the Issuer and the Borrower in writing of such nonpayment.

SECTION 3.04. Use of Moneys in the Bond Principal Fund and the Bond Interest Fund. Except as provided in this Section and in Sections 3.11, 3.15, 6.03 and 8.05 hereof, moneys in the Bond Principal Fund shall be used solely for the payment of the principal of and premium, if any, on the Bonds as due, and moneys in the Bond Interest Fund shall be used solely for the payment of the interest on the Bonds as due.

SECTION 3.05. Custody of the Bond Principal Fund and the Bond Interest Fund. The Bond Principal Fund and the Bond Interest Fund shall be in the custody of the Trustee, but in the name of the Issuer and the Issuer authorizes and directs the Trustee to withdraw sufficient funds from the Bond Principal Fund to pay the principal of and premium, if any, on the Bonds as the same become due and payable, to withdraw sufficient funds from the Bond Interest Fund to pay the interest on the Bonds as the same becomes due and payable and to withdraw sufficient funds from the Bond Interest Fund or the Bond Principal Fund for other purposes authorized in Section 3.04 hereof.

SECTION 3.06. Payments into the Debt Service Reserve Fund. There shall be deposited into the Debt Service Reserve Fund an aggregate amount equal to $1,443,725.00 (representing the initial “Debt Service Reserve Fund Requirement”). There shall also be deposited into the Debt Service Reserve Fund all other moneys required to be deposited therein pursuant to the Agreement or this Indenture, and moneys received by the Trustee when accompanied by written directions from an Authorized Representative of the Borrower that such moneys are to be paid into the Debt Service Reserve Fund. Amounts on deposit in the Debt Service Reserve Fund shall be invested pursuant to Section 6.01 herein. Interest and other income received on investments of Debt Service Reserve Fund moneys shall be transferred to the Bond Interest Fund so long as the Debt Service Reserve Fund is funded to an amount equal to the Debt Service Reserve Fund Requirement, as provided in Section 6.03 hereof.

SECTION 3.07. Use of Moneys in the Debt Service Reserve Fund. Except as provided in Sections 3.11, 3.15 and 6.03(b) hereof, moneys in the Debt Service Reserve Fund shall be used solely for the payment of the principal of, premium, if any, and interest on the Bonds in the event moneys in the Bond Principal Fund and in the Bond Interest Fund are insufficient to make such payments as of any Funded IPD or Funded PPD or when due, whether on an Interest Payment Date, sinking fund redemption date, maturity date or otherwise. Upon the occurrence of an Event of Default hereunder and the exercise by the Trustee of the remedy specified in Section 10.02 of the Agreement and Section 8.02 hereof, any

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moneys in the Debt Service Reserve Fund shall be transferred by the Trustee to the Bond Interest Fund, and with respect to any moneys in excess of the amount required to be transferred to the Bond Interest Fund, to the Bond Principal Fund and applied in accordance with Section 8.05 hereof. On the final maturity date of the Bonds any moneys in the Debt Service Reserve Fund may be used to pay the principal of and interest on the Bonds on such final maturity date. In the event of the redemption of the Bonds in whole, any moneys in the Debt Service Reserve Fund shall be transferred to the Bond Principal Fund and applied to the payment of the principal of and premium, if any, on the Bonds. The Trustee shall value the Investment Obligations in the Debt Service Reserve Fund annually on September 30 of each year, commencing September 30, 2016, at their market value by sources deemed to commercially reliable to the Trustee. If on any valuation date the amount in the Debt Service Reserve Fund (determined pursuant to this Section) is greater than the Debt Service Reserve Fund Requirement, such excess shall be transferred by the Trustee to the Bond Interest Fund and credited in accordance with Section 3.06 hereof. If on any valuation date the amount in the Debt Service Reserve Fund (determined pursuant to this Section) is less than the Debt Service Reserve Fund Requirement, the Trustee shall immediately notify the Borrower in writing of the amount of such deficit and request that the Borrower deposit with the Trustee such amount within fourteen (14) Business Days of its receipt of such notice.

SECTION 3.08. Custody of the Debt Service Reserve Fund. The Debt Service Reserve Fund shall be in the custody of the Trustee but in the name of the Issuer and the Issuer hereby authorizes and directs the Trustee to withdraw sufficient funds from the Debt Service Reserve Fund to pay the principal of, premium, if any, and interest on the Bonds and for the purpose described in Section 3.15(iii) hereof, which authorization and direction the Trustee hereby accepts. In the event there shall be a deficiency in the Bond Principal Fund or the Bond Interest Fund on any payment date for the Bonds, the Trustee shall promptly transfer the amount of such deficiency from the Debt Service Reserve Fund.

SECTION 3.09. Right of Issuer to Cure Borrower Failure to Pay Debt Service. As long as any 2016 Bonds remain outstanding, the Trustee shall notify the Issuer pursuant to Section 3.03 hereof if the Trustee does not receive the full payment required into the Bond Principal Fund and the Bond Interest Fund as of any Funded PPD or Funded IPD, respectively.

Upon receipt of any such notice, the Issuer shall ask the Kent County Levy Court (the “Levy Court”) to make a loan equal to the amount of any deficiency in the Bond Principal Fund and the Bond Interest Fund (the “Levy Court Loan”). The County Administrator shall request the Levy Court to vote on any request for a Levy Court Loan as soon as possible after receiving notice from the Trustee regarding a short fall in the Bond Principal Fund and the Bond Interest Fund. In the Project Ordinance, the Levy Court has agreed to hold such a vote within sixty (60) days of receiving notice from the Trustee regarding a deficiency in funds available to pay debt service. Upon receipt of a formal loan request from the Trustee, the County Administrator shall forward the loan request to be considered by the Kent County Levy Court to the President of Levy Court. The President of Levy Court shall put the loan request on the agenda of the next Finance Committee Meeting scheduled to take place after the date of receipt of the loan request. After the Finance Committee Meeting, the President of Levy Court shall place the loan request on the agenda of a Business Meeting of the Levy Court for consideration and action. A vote by the Levy Court to approve or deny the loan request shall take place within sixty (60) days of the date of receipt of the loan request by the County Administrator and in no event later than the next debt service payment date. The amount of any loan approved by the Levy Court will be paid directly to DTC by the Issuer to pay debt service due on the Bonds.

Payments due on the Levy Court Loan will be subordinate to debt service on the Bonds and paid from the Surplus Fund in accordance with Section 3.23 hereof. The interest rate and terms of the Levy Court Loan will be established at the time of the Levy Court Loan. Loans may also be requested post- bankruptcy as set forth in Section 3.24 hereof.

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SECTION 3.10. Revenue Fund. There shall be deposited in the Revenue Fund, on the 20th calendar day of every month, all Net Revenues into the Revenue Fund pursuant to Section 5.01 of the Agreement and all other monies deposited into the Revenue Fund pursuant to the Agreement or this Indenture.

All monies held on deposit in the Revenue Fund shall be disbursed by the Trustee on the following dates in the following order of priority:

FIRST: on each Disbursement Date, (i) commencing after the date of issuance of the Bonds, for deposit in the Bond Interest Fund an amount (after taking into consideration earnings, or until April 1, 2019, transfer amounts then on deposit in the Capitalized Interest Account) equal to 1/6 of the interest on the Bonds which will be required on the next succeeding Funded IPD; provided that the entire amount due on an Interest Payment Date shall have been disbursed into the Bond Interest Fund at least ninety (90) days prior to such Interest Payment Date, plus (ii) all amounts due as to interest on the Bonds on the immediately preceding Disbursement Date pursuant to this paragraph which have not otherwise been credited to the Bond Interest Fund pursuant to this paragraph or transferred to the Bond Interest Fund pursuant to Sections 3.07 and 3.13 hereof;

SECOND: on each Disbursement Date, commencing July 25, 2019, an amount equal to 1/12 of the principal on the Bonds which will be required on the next succeeding Funded PPD, which have not otherwise been credited to the Bond Principal Fund pursuant to this paragraph or transferred to the Bond Principal Fund pursuant to Section 3.07 hereof; provided that the entire amount due on a Principal Payment Date shall have been disbursed into the Bond Principal Fund at least ninety (90) days prior to such Principal Payment Date;

THIRD: on each Disbursement Date, to the Issuer or the Trustee, as applicable, the fees, administrative costs and other expenses of and indemnity payments to such parties then due and payable;

FOURTH: on each Disbursement Date, commencing after the date of issuance of the 2016 Bonds, to the Debt Service Reserve Fund, the amount required, if any, under Section 3.07 hereof, for amounts therein to be equal to the Debt Service Reserve Fund Requirement;

FIFTH: on a date which is not more than fifty (50) days after the last Business Day of every Rebate Year and continuing until the full amount is so paid, to the Rebate Fund, any amount, as calculated by the Rebate Analyst, required of the Borrower to be deposited in the Rebate Fund;

SIXTH: on each Disbursement Date, commencing after the date of issuance of the 2016 Bonds, to the Operating Reserve Fund, the amount required, if any, subject to the limits set forth in Section 8.16 of the Agreement, for the balance therein to equal the Operating Reserve Fund Requirement;

SEVENTH: on each Disbursement Date, commencing after the date of issuance of the 2016 Bonds, to the Repair and Replacement Fund, the amount required, if any, subject to the limits set forth in Section 8.15 of the Agreement, for the balance therein to equal the Repair and Replacement Fund Requirement;

EIGHTH: on each Disbursement Date, commencing after the date of issuance of the 2016 Bonds, any residual amounts remaining on deposit in the Revenue Fund after the Trustee has made the disbursements required in FIRST through SEVENTH above, to the Surplus Fund, if not in default under the Agreement.

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SECTION 3.11. Repayment to the Borrower from the Funds. Any amounts remaining in the Funds after payment in full of the Bonds (or pursuant to terms of Section 7.01 hereto), the fees and expenses and indemnity of the Trustee and the Levy Court Loan and all other amounts required to be paid hereunder and under the Agreement to the Issuer and the Trustee (including payments into the Rebate Fund and to the United States), shall be paid to the Borrower upon the expiration of the term of this Indenture.

SECTION 3.12. Payments into and Use of Moneys in the Cost of Issuance Fund. Bond proceeds shall be deposited into the Cost of Issuance Fund pursuant to Section 4.01 of the Agreement sufficient to pay costs of issuance related to the 2016 Bonds. There shall also be retained in the Cost of Issuance Fund interest and any other income received on investments of Cost of Issuance Fund moneys as provided in Section 6.03 hereof. Such moneys shall be expended to pay issuance expenses in accordance with the provisions of Section 4.02 of the Agreement. The Trustee is hereby authorized and directed to disburse funds in the Cost of Issuance Fund via check or wire for each payment in accordance with Section 4.02 of the Agreement; provided, however, the Trustee is authorized and directed on the Closing Date to pay against invoice those costs of issuance set forth on Exhibit B hereto.

The Trustee shall keep and maintain adequate records pertaining to the Cost of Issuance Fund and all payments therefrom, which shall be open to inspection by the Borrower, the Issuer or their duly authorized agents during normal business hours of the Trustee.

SECTION 3.13. Termination of Cost of Issuance Fund. Any amounts remaining on deposit in the Cost of Issuance Fund on January 1, 2017 shall be transferred to the Bond Interest Fund.

SECTION 3.14. Custody of the Cost of Issuance Fund. The Cost of Issuance Fund shall be in the custody of the Trustee but in the name of the Issuer and the Issuer authorizes and directs the Trustee to withdraw sufficient funds from the Cost of Issuance Fund for the purposes set forth in Section 4.02 of the Agreement and Section 3.12 hereof, which authorization and direction the Trustee hereby accepts.

SECTION 3.15. Rebate Fund. There shall be deposited into the Rebate Fund as and when received (i) investment income on moneys in the Funds to the extent provided in the written direction of the Borrower pursuant to Section 4.04 of the Agreement and subject to the limitations in Section 6.03 hereof, (ii) moneys received from the Borrower pursuant to Section 5.01(e) of the Agreement, (iii) moneys transferred to the Rebate Fund from the Debt Service Reserve Fund (but only to the extent that the amount on deposit therein is in excess of the Debt Service Reserve Fund Requirement), the Bond Principal Fund or the Bond Interest Fund pursuant to the provisions of this Section, and (iv) all other moneys received by the Trustee when accompanied by written directions not inconsistent with the Agreement or this Indenture that such moneys are to be paid into the Rebate Fund. The Trustee shall cause amounts on deposit in the Rebate Fund to be forwarded to the United States Treasury (at the address provided in the Tax Certificate) at the times and in the amounts set forth in the Borrower’s written direction pursuant to Section 4.04 of the Agreement.

Within 60 days after the end of each Rebate Year, the Borrower, in reliance upon a report of the Rebate Analyst, shall deliver to the Issuer and the Trustee a certificate stating that all necessary actions have been taken as required by this Indenture and the Tax Certificate including, but not limited to, (a) the required annual arbitrage rebate calculations, (b) the transfer of funds to the Rebate Fund to reserve for the anticipated Rebate Amount, and (c) payment of the Rebate Amount, if any, in accordance with section 148(f) of the Code and the direction of the Rebate Analyst.

If, upon receipt of the certification required by the immediately preceding paragraph, the moneys on deposit in the Rebate Fund are insufficient for the purposes thereof, notwithstanding Section 6.03 hereof, the Trustee, after first delivering a demand for such deficiency to the Borrower, shall transfer

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moneys to the Rebate Fund from the following Funds in the following order of priority: the Cost of Issuance Fund, the Construction Fund, the Repair and Replacement Fund, the Operating Reserve Fund, the Bond Principal Fund, the Bond Interest Fund and the Debt Service Reserve Fund. Upon receipt by the Trustee of a report of the Rebate Analyst to the effect that the amount in the Rebate Fund is in excess of the amount required to be therein, such excess shall be transferred to the Bond Interest Fund. The Trustee shall be entitled to rely conclusively upon such report of the Rebate Analyst in making such determination. This Section shall supersede all other Sections of this Indenture, to the end that the exclusion from gross income for the purposes of federal income taxation of interest on the Tax-Exempt Bonds shall not be adversely affected as a result of the inadequacy at any time of the Rebate Fund, unless the total amount held by the Trustee under all Funds established hereunder is insufficient, and no money for such purpose is provided by the Borrower.

If, at any time when the Borrower is required to retain or pay the Rebate Analyst, there is an insufficient amount of money in the Rebate Fund to retain or pay for the fees and expenses of the Rebate Analyst, then the Trustee shall deliver to the Borrower a demand for an amount sufficient to pay the Rebate Analyst.

SECTION 3.16. Custody of the Rebate Fund. The Rebate Fund shall be in the custody of the Trustee but in the name of the Issuer and the Issuer authorizes and directs the Trustee to withdraw funds from the Rebate Fund for the purposes set forth in Section 3.15 hereof, which authorization and direction the Trustee hereby accepts.

SECTION 3.17. Nonpresentment of Bonds. In the event any Bonds, or portions thereof, shall not be presented for payment when the principal thereof becomes due, either at maturity, the date fixed for redemption thereof, or otherwise, if funds sufficient for the payment thereof, including accrued interest thereon, shall have been deposited into the Bond Principal Fund and Bond Interest Fund or otherwise made available to the Trustee for deposit therein, then on and after the date said principal becomes due, all interest thereon shall cease to accrue and all liability of the Issuer to the Registered Owner or Registered Owners thereof for the payment of such Bonds, shall forthwith cease, terminate and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such fund or funds in a separate trust account for the benefit of the Registered Owner or Registered Owners of such Bonds, who shall thereafter be restricted exclusively to such fund or funds for any claim of whatever nature on his, her or their part under this Indenture with respect to said Bond or on, or with respect to, said Bond. Such moneys shall not be required to be invested during such period by the Trustee. If any Bond shall not be presented for payment within the period of three (3) years following the date when such Bond becomes due, whether by maturity or otherwise, the Trustee shall return to the Borrower such funds theretofore held by it for payment of such Bond and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Borrower. The obligations of the Trustee under this Section shall be subject, however, to any law applicable to the unclaimed funds or the Trustee providing other requirements for the disposition of unclaimed property.

SECTION 3.18. Moneys to be Held in Trust. All moneys required to be deposited with or paid to the Trustee under any provision of this Indenture shall be held by the Trustee in trust for the purposes specified in this Indenture, and, except for moneys deposited with or paid to the Trustee for the payment or redemption of specific Bonds and moneys held by the Trustee in the Rebate Fund and in the separate trust accounts pursuant to Sections 3.17 and 3.19 hereof (to the extent, in the case of moneys held pursuant to Section 3.19 hereof, such moneys are held pending disbursement for repair or replacement of the Project), shall, while held by the Trustee, constitute part of the Trust Estate and be subject to the lien hereof. Moneys held in the Rebate Fund shall be held in trust by the Trustee and shall be applied as provided in Section 3.15 hereof.

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SECTION 3.19. Insurance and Condemnation Proceeds. Reference is hereby made to the provisions of the Agreement wherein it is provided that under certain circumstances the Net Proceeds of insurance payments and condemnation awards are to be paid to the Trustee and to be disbursed and paid out as therein provided. The Trustee hereby accepts and agrees to perform such duties and obligations specified in the Agreement. The Trustee shall fully cooperate with the Borrower in the handling and conduct of any prospective or pending insurable event or condemnation proceeding with respect to the Project or any part thereof. The Trustee may also establish temporary funds or accounts, as necessary, in its books or records in order to facilitate compliance with the provisions of Section 7.01 of the Agreement.

SECTION 3.20. Construction Fund.

(a) Deposits into the Construction Fund. There shall be deposited into the Construction Fund as and when received (i) proceeds of the 2016 Bonds as set forth in the Issuer’s Request to Authenticate and Deliver Bonds, (ii) all other moneys deposited into the Construction Fund pursuant to the Agreement or this Indenture, and (iii) all other moneys received by the Trustee when accompanied by written directions not inconsistent with the Agreement or this Indenture that such moneys are to be paid into the Construction Fund. There shall also be retained in the Construction Fund, interest and other income received on investment of moneys in the Construction Fund to the extent provided herein.

(b) Custody of the Construction Fund. The Construction Fund shall be in the custody of the Trustee, but in the name of the Issuer and, absent an Event of Default hereunder, the Issuer hereby authorizes and directs the Trustee to make each disbursement authorized or required by the provisions of this Section 3.20 and to issue its checks therefor. The Trustee shall keep and maintain adequate records pertaining to the Construction Fund and all disbursements therefrom and shall annually file an accounting thereof with the Issuer and the Borrower. In the event of any Act of Bankruptcy by the Borrower, the Borrower undertakes pursuant to the Loan Agreement in no event to assert, claim or contend that any portion of the Construction Fund is property of its bankruptcy estate as defined by 11 U.S.C. § 541.

(i) The Trustee shall pay such costs of the Project as are authorized by an Issuer’s Request to Authenticate and Deliver Bonds or Closing Statement delivered at settlement for the 2016 Bonds. Any such request or closing statement shall be signed by the Issuer and approved by an Authorized Representative of the Borrower and shall specify the Person to whom payment is to be made, the obligation on account of which the payment is to be made, and the amount payable with respect thereto.

(ii) All subsequent payments from the Construction Fund shall be made only upon receipt by the Trustee of a requisition signed by an Authorized Representative of the Borrower, in the form of Exhibit C attached hereto.

(iii) Any closing statement or requisition may authorize the reimbursement to the Issuer or the Borrower for advances made in respect of the Project or the satisfaction of any indebtedness incurred by the Borrower, but only to the extent that such amounts are properly chargeable against the Construction Fund. Any such closing statement or requisition shall relate to the underlying Project Cost in respect of which the requested reimbursement or repayment of indebtedness is to be made.

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(d) Capitalized Interest Account. An amount designated in the Issuer’s Request to Authenticate and Deliver Bonds shall be deposited in a special, segregated capitalized interest account (the “Capitalized Interest Account”) to be established within the Construction Fund by the Trustee and applied, without need for further direction from the Issuer or Borrower, to pay capitalized interest on the 2016 Bonds until the completion of the Project as set forth in subsection (e) below; provided that any unexpended moneys in the Capitalized Interest Account as of April 1, 2019 shall be transferred to the Bond Interest Fund and the Borrower shall thereafter be responsible for paying any remaining interest and fees directly to the Persons entitled thereto.

(e) Procedure Upon Completion of the Project. Upon the completion of the Project, the Issuer shall cause the Trustee to be furnished with a Borrower’s certificate so stating (i) the completion date of the Project, (ii) that all construction has been completed in accordance with the approved plans and specifications and approved changes, if any, and (iii) the amounts, if any, to be reserved for the payment of any unpaid Project Costs. The Borrower certificate shall also state that all required insurance has been obtained. The Trustee shall thereupon transfer the balance in the Construction Fund and not reserved for the payment of unpaid Project Costs thereof to the Bond Interest Fund.

SECTION 3.21. Payments into and Custody of the Repair and Replacement Fund; Disbursements from Repair and Replacement Fund. There shall be deposited into the Repair and Replacement Fund as and when received (a) all payments by the Borrower pursuant to Section 3.10 hereof, (b) all other moneys deposited into the Repair and Replacement Fund pursuant to the Agreement or this Indenture, and (c) all other moneys received by the Trustee when accompanied by written directions not inconsistent with the Agreement or this Indenture that such moneys are to be paid into the Repair and Replacement Fund. There shall also be retained in the Repair and Replacement Fund, interest and other income received on investment of moneys in the Repair and Replacement Fund to the extent provided in Sections 6.01 and 6.03 hereof. On each Disbursement Date, any amounts on deposit in the Repair and Replacement Fund in excess of the Repair and Replacement Fund Requirement shall be transferred by the Trustee to the Bond Interest Fund and applied to the payment of the interest on the Bonds; provided, however, that the amount remaining in the Repair and Replacement Fund immediately after such transfer shall not be less than the Repair and Replacement Fund Requirement. The Repair and Replacement Fund shall be in the custody of the Trustee, but in the name of the Issuer and, absent an Event of Default hereunder, the Issuer hereby authorizes and directs the Trustee to make each disbursement authorized or required by the provisions of this Section 3.21 and to issue its checks or wire therefor. The Trustee shall keep and maintain adequate records pertaining to the Repair and Replacement Fund and all disbursements therefrom and shall annually file an accounting thereof with the Issuer and the Borrower. In the event of any Act of Bankruptcy by the Borrower, the Borrower undertakes pursuant to the Loan Agreement in no event to assert, claim or contend that any portion of the Repair and Replacement Fund is property of its bankruptcy estate as defined by 11 U.S.C. § 541.

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SECTION 3.22. Payments into and Custody of the Operating Reserve Fund; Disbursements from Operating Reserve Fund. There shall be deposited into the Operating Reserve Fund as and when received (a) all payments by the Borrower pursuant to Section 3.10 hereof, (b) all other moneys deposited into the Operating Reserve Fund pursuant to the Agreement or this Indenture, and (c) all other moneys received by the Trustee when accompanied by written directions not inconsistent with the Agreement or this Indenture that such moneys are to be paid into the Operating Reserve Fund. There shall also be retained in the Operating Reserve Fund, interest and other income received on investment of moneys in the Operating Reserve Fund to the extent provided in Sections 6.01 and 6.03 hereof. On each Disbursement Date, any amounts on deposit in the Operating Reserve Fund in excess of the Operating Reserve Fund Requirement shall be transferred by the Trustee to the Bond Interest Fund and applied to the payment of the interest on the Bonds; provided, however, that the amount remaining in the Operating Reserve Fund immediately after such transfer shall not be less than the Operating Reserve Fund Requirement.

The Operating Reserve Fund shall be in the custody of the Trustee, but in the name of the Issuer and, absent an Event of Default hereunder, the Issuer hereby authorizes and directs the Trustee to make each disbursement authorized or required by the provisions of this Section 3.22 and to issue its checks therefor. The Trustee shall keep and maintain adequate records pertaining to the Operating Reserve Fund and all disbursements therefrom and shall annually file an accounting thereof with the Issuer and the Borrower. In the event of any Act of Bankruptcy by the Borrower, the Borrower undertakes pursuant to the Loan Agreement in no event to assert, claim or contend that any portion of the Operating Reserve Fund is property of its bankruptcy estate as defined by 11 U.S.C. § 541.

On each Disbursement Date, funds held in the Operating Reserve Fund shall be used to fund a shortfall in the Bond Interest Fund, the Bond Principal Fund or the Debt Service Reserve Fund, provided that amounts are not available from the Surplus Fund and the Repair and Replacement Fund to fund such shortfall.

SECTION 3.23. Surplus Fund.

(a) There shall be deposited into the Surplus Fund as and when received all payments by the Borrower pursuant to Section 3.10 hereof.

(b) On or before each October 15 (the “Surplus Fund Transfer Date”), (i) so long as the Borrower has provided written notice to the Trustee that the Levy Court Loan Payment Conditions are satisfied on such Surplus Fund Transfer Date, funds in the Surplus Fund shall be paid to the Issuer to repay a Levy Court Loan and (ii) so long as the Borrower has provided written notice to the Trustee that the Surplus Fund Payment Conditions are satisfied on such Surplus Fund Transfer Date, all remaining funds in the Surplus Fund shall be paid to the Borrower. If on such Surplus Fund Transfer Date, the Trustee has not received notice that the Surplus Fund Payment Conditions are satisfied, such funds will be retained in the Surplus Fund until the subsequent Surplus Fund Transfer Date.

(c) On each Disbursement Date, funds held in the Surplus Fund shall be used to fund a shortfall in the Bond Interest Fund, the Bond Principal Fund or the Debt Service Reserve Fund.

SECTION 3.24. Kent County Grant and Post-Bankruptcy Loan Request.

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(a) The Issuer will make a grant to the Borrower in an amount not to exceed $1,400,000 to be held in a separate escrow account but not part of the Trust Estate (the “County Grant”). The County Grant would only be available to make a debt service payment on the 2016 Bonds equal to the amount funded by the Borrower as of a Funded PPD or Funded IPD if (i) the Borrower funds any portion of the Bond Principal Fund and the Bond Interest Fund on a Funded PPD or Funded IPD, (ii) the Borrower then files for bankruptcy during the next ninety (90) days before the debt service payment date, and (iii) the bankruptcy court stays the application of the funds in the Bond Principal Fund, the Bond Interest Fund and the Debt Service Reserve Fund. Any unused amount of the County Grant will be returned to the Issuer upon (i) the defeasance of the 2016 Bonds or (ii) once funds are applied in accordance with this Section 3.24(a) after Borrower’s first bankruptcy filing, whichever comes first.

(b) Regardless of the amount of the County Grant applied in accordance with Section 3.24(a) above, if the Borrower emerges from bankruptcy, the Trustee will make a request to the Issuer to fund a loan in the full amount of debt service on the next succeeding debt service payment date (in accordance with the procedure set forth in 3.09 above) on each Funded PPD and Funded IPD thereafter to be used in case the Borrower files for bankruptcy again, causing the funds in the Bond Principal Fund, the Bond Interest Fund and other trustee’d funds to be unavailable for payment of such debt service.

ARTICLE IV

COVENANTS OF THE ISSUER

SECTION 4.01. Performance of Covenants. The Issuer covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Indenture, in any and every Bond and in all proceedings of the Issuer pertaining thereto. The Issuer covenants, represents, warrants and agrees that:

(a) The Issuer is duly authorized under the Constitution and laws of the State, including particularly and without limitation the Act, to: (i) issue the Bonds and to execute and deliver this Indenture and the Loan Agreement and to endorse the Promissory Notes, (ii) assign its interest in the Loan Agreement (except the Issuer’s Unassigned Rights), and (iii) pledge and assign the Trust Estate in the manner and to the extent herein set forth for the benefit of the Registered Owners to secure the payment of principal and interest and any premium on the Bonds in accordance with the terms and provisions of this Indenture and the Bonds.

(b) All actions on its part required for the issuance of the Bonds and the execution and delivery of the Issuer Documents have been duly and effectively taken or will be duly taken as provided herein.

(c) This Indenture is a valid and enforceable instrument of the Issuer and that the Bonds in the hands of the Registered Owners thereof are and will be valid and enforceable obligations of the Issuer according to the terms thereof, except as the enforceability thereof may be limited by insolvency, bankruptcy, reorganization, moratorium or other laws affecting the enforcement of creditors’ rights generally or against public bodies such as the Issuer and by the application of general principles of equity.

(d) The Bonds are not subject to any state or local debt limit.

(e) Except as provided in Article X, the Issuer further covenants that it shall not alter, modify or cancel, or agree to alter, modify or cancel, any agreement which relates to or affects the Trust Estate.

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(f) Except as otherwise provided in this Indenture and the Loan Agreement, the Issuer shall not sell, convey, mortgage, encumber or otherwise dispose of any portion of the Trust Estate or create or authorize to be created any debt, lien or charge thereon.

(g) At the expense of the Borrower, the Issuer shall cooperate with the Borrower in the Borrower’s performing the Borrower’s obligation to cause this Indenture, or any related instruments or documents relating to the assignment made by the Issuer under this Indenture to secure the Bonds, to be recorded and filed in the manner and in the places which may be required by law in order to preserve and protect fully the security of the holders of the Bonds and the rights of the Trustee hereunder.

SECTION 4.02. Instruments of Further Assurance. The Issuer covenants that it will do, execute, acknowledge, and deliver or cause to be done, executed, acknowledged, and delivered by the parties within its control, such instruments supplemental hereto and such further acts, instruments, and transfers as may be necessary or as the Trustee may reasonably require for the better assuring, transferring, mortgaging, conveying, pledging, assigning, and confirming unto the Trustee, the Issuer’s interest in and to all interests, revenues, proceeds, and receipts pledged hereby to the payment of the principal of, premium, if any, and interest on the Bonds in the manner and to the extent contemplated herein. The Issuer shall be under no obligation to prepare, record, or file any such instruments or transfers.

SECTION 4.03. Payment of Principal, Premium, if any, and Interest. The Issuer will promptly pay or cause to be paid the principal of, premium, if any, and interest on all Bonds issued hereunder according to the terms hereof. The principal, premium, if any, and interest payments are payable solely from the Trust Estate, which is hereby specifically pledged to the payment thereof in the manner and to the extent herein specified. Nothing in the Bonds or in this Indenture shall be considered or construed as pledging any funds or assets of the Issuer other than those pledged hereby or creating any liability of the Issuer’s officers, council persons, counsel, employees or other agents.

SECTION 4.04. Tax Covenants. The Issuer agrees that:

(a) it will neither make nor direct the Trustee to make any investment or other use of the proceeds of any tax-exempt Bonds that would cause any tax-exempt Bonds to be "arbitrage bonds" as that term is defined in Section 148(a) of the Code and that it will comply with the requirements of the Code throughout the term of any tax-exempt Bonds;

(b) it (i) will take, or use its best efforts to require to be taken, all actions that may be required of the Issuer for the interest on any tax-exempt Bonds to be and remain not included in gross income for federal income tax purposes and (ii) will not take or authorize to be taken any actions within its control that would adversely affect that status under the provisions of the Code; and

(c) it will not take any action or permit or suffer any action to be taken if the result of the same would be to cause any tax-exempt Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code.

In furtherance of the covenants in this Section 4.04, the Issuer and the Borrower shall execute, deliver and comply with the provisions of the Tax Certificate, which is by this reference incorporated into this Indenture and made a part of this Indenture, and by its acceptance of this Indenture the Trustee acknowledges receipt of the Tax Certificate and acknowledges its incorporation into this Indenture by this reference.

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It is understood that the Borrower has assumed in the Agreement the responsibility of complying with the requirements of the Code to preserve the federal income tax exemption of the interest on any tax- exempt Bonds.

SECTION 4.05. Unrelated Bond Issues. Subsequent to the issuance of the Bonds, the Issuer expects to issue various series of bonds in connection with the financing of other projects (said bonds together with any bonds issued by the Issuer between the date hereof and issuance of the Bonds shall be referred to herein as the “Other Bonds”). Any pledge, mortgage, or assignment made in connection with any Other Bonds shall be protected, and any funds pledged or assigned for the payment of principal, premium, if any, or interest on the Other Bonds shall not be used for the payment of principal, premium, if any, or interest on the Bonds. Correspondingly, any pledge, mortgage, or assignment made in connection with the Bonds shall be protected, and any funds pledged or assigned for the payment of the Bonds shall not be used for the payment of principal, premium, if any, or interest on the Other Bonds.

SECTION 4.06. Security Instruments. The Trustee has received a recorded Leasehold Mortgage and recorded financing statements, as recorded with the Kent County, Delaware Recorder of Deeds (in the form prepared on the date of issuance of the Bonds). The Issuer will cause all supplements and continuation statements thereto to be recorded, registered and filed by the Borrower.

SECTION 4.07. Rights Under the Agreement. The Issuer will observe all of the obligations, terms and conditions required on its part to be observed or performed under the Agreement. The Issuer agrees that to the extent the Agreement gives the Trustee some right or privilege, or in any way attempts to confer upon the Trustee the ability for the Trustee to protect the security for payment of the Bonds, that such part of the Agreement shall be as though it were set out in this Indenture in full.

The Issuer agrees that the Trustee as assignee of the Agreement may enforce, in its name or in the name of the Issuer, all rights of the Issuer and all obligations of the Borrower under and pursuant to the Agreement (subject to certain exceptions stated in the granting clauses hereof) for and on behalf of the Registered Owners, whether or not the Issuer is in default hereunder.

This Indenture constitutes a “security interest” within the meaning of the Delaware Uniform Commercial Code. The security interest of the Trustee, as created by this Indenture, in the rights and other intangible interests described herein, shall be perfected by the filing of a financing statement by the Borrower at the direction of the Issuer, which financing statement shall be in accordance with the Delaware Uniform Commercial Code. Subsequent to the foregoing filing, financing and continuation statements shall be filed and re-filed, by the Borrower; provided that financing and continuation statements may be filed and re-filed by the Trustee whenever in the opinion of Bond Counsel (which opinion shall be reasonably acceptable to and addressed to the Trustee) such action is necessary to preserve the lien and security interest hereof. Any such filings or re-filings shall be prepared by the Borrower and delivered to the Trustee on a timely basis accompanied by any fees or requisite charges and the Opinion of Counsel referred to above. The Trustee will thereupon effect any such filings and re- filings of financing and continuation statements, and promptly notify the Borrower of any such filings. For the avoidance of doubt, the Trustee shall have no obligation to take any action in connection with any filings or re-filings of financing or continuation statements absent receipt of an opinion of Bond Counsel.

SECTION 4.08. Performance Obligations. Any performance by the Issuer of all duties and obligations imposed upon it hereby, the exercise by it of all powers granted to it hereunder, the carrying out of all covenants, agreements and promises made by it hereunder, and the liability of the Issuer for all covenants hereunder, shall be limited solely to the Trust Estate, including revenues and receipts derived from the Agreement, the Promissory Notes and the Leasehold Mortgage, and the Issuer and its officers

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and directors shall not be responsible for its or their duties, obligations, powers or covenants hereunder (except for any fraud or intentional misrepresentation thereby) except to the extent of the Trust Estate.

Subject to Section 4.03 hereof, the Issuer shall have no liability or obligation with respect to the payment of the principal of, premium, if any, or interest on the Bonds. None of the provisions of this Indenture shall require the Issuer to expend or risk its own funds or to otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers hereunder, unless payable from the revenues pledged hereunder, or the Issuer shall first have been adequately indemnified to its satisfaction against the cost, expense, and liability which may be incurred thereby. The Issuer shall not be under any obligation hereunder to perform any record keeping, it being understood that such services shall be performed or provided by the Trustee or the Borrower. The Issuer covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions expressly contained in this Indenture, in every Bond executed, authenticated, and delivered hereunder, in the Agreement and in all of its proceedings pertaining thereto; provided, however, that (a) the Issuer shall not be obligated to take any action or execute any instrument pursuant to any provision hereof until it shall have been requested to do so by the Borrower or the Trustee, and (b) the Issuer shall have received the instrument to be executed, and, at the Issuer’s option, shall have received from the Borrower assurance satisfactory to the Issuer that the Issuer shall be reimbursed for its reasonable expenses incurred or to be incurred in connection with taking such action or executing such instrument.

The Agreement sets forth covenants and obligations of the Issuer and the Borrower, and reference is hereby made to the same for a detailed statement of said covenants and obligations. The Issuer agrees to cooperate in the enforcement of all covenants and obligations of the Borrower under the Agreement and agrees that the Trustee, in its name, may enforce all rights of the Issuer (other than the Issuer’s Unassigned Rights) and all obligations of the Borrower under and pursuant to the Agreement and on behalf of the Registered Owners, whether or not the Issuer has undertaken to enforce such rights and obligations.

SECTION 4.09. Limitations on Liability. Notwithstanding any other provision of this Indenture to the contrary:

(a) The obligations of the Issuer with respect to the Bonds are not general obligations of the Issuer but are limited obligations of the Issuer payable by the Issuer solely from the Trust Estate or the County Grant.

(b) Nothing contained in the Bonds or in this Indenture shall be considered as assigning or pledging any funds or assets of the Issuer other than the Trust Estate or the County Grant.

(c) The Bonds are not and will not be a debt of the State, the Issuer or of any other political subdivision of the State, and none of the State, the Issuer or any other political subdivision of the State is or will be liable for the payment of the Bonds, except as set forth in Section 3.24(a).

(d) Neither the faith and credit nor the taxing power of the Issuer, the State nor of any other political subdivision of the State are pledged to the payment of the principal of and interest and any premium on the Bonds.

(e) No failure of the Issuer to comply with any term, condition, covenant or agreement in this Indenture or in any document executed by the Issuer in connection with the Leasehold Mortgage, or the issuance, sale and delivery of the Bonds shall subject the Issuer to

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liability for any claim for damages, costs or other charges except to the extent that the same can be paid or recovered from the Trust Estate or County Grant.

ARTICLE V

REDEMPTION OF BONDS PRIOR TO MATURITY

SECTION 5.01. Optional Redemption of Bonds.

(a) The 2016 Bonds are subject to redemption at the option of the Issuer (which option shall be exercised upon the written direction of the Borrower) from prepayment of the 2016 Note made by the Borrower pursuant to Section 11.01 of the Agreement in whole or in part on any Business Day on and after October 1, 2026 (if less than all of such 2016 Bonds are to be redeemed, then such 2016 Bonds to be redeemed shall be selected as provided in Section 5.04 hereof), at a redemption price of 100% of the principal amount to be redeemed, together with accrued interest to the date fixed for redemption.

(b) In case of optional redemption described in paragraph (a) above, the Borrower shall, at least 45 days prior to the redemption date (unless a shorter notice shall be satisfactory to the Trustee), deliver a written request to the Issuer and the Trustee notifying the Issuer and the Trustee of such redemption date, of the principal amount of Bonds to be redeemed and evidence of the Borrower’s ability to deliver Protected Funds to redeem such Bonds on the anticipated redemption date, and shall deliver to the Trustee, on the date set for such redemption, Protected Funds sufficient to pay the redemption price of all Bonds subject to redemption.

SECTION 5.02. Redemption of Bonds Upon Damage, Destruction or Condemnation.

(a) The Bonds are redeemable at the option and upon the written direction of the Borrower, in whole at any time or in part on any Business Day from and to the extent of funds on deposit under this Indenture and available for this purpose at a redemption price equal to the principal amount of each Bond to be redeemed plus accrued interest to the redemption date, upon the occurrence of any of the following events:

(i) The Facilities shall have been damaged or destroyed in whole or in part to such extent that, as expressed in a Consulting Architect’s Certificate filed with the Trustee, either (A) the Facilities cannot reasonably be restored within a period of 12 consecutive months to the condition thereof immediately preceding such damage or destruction, (B) the Borrower is thereby prevented from carrying on its normal operations for a period of 12 consecutive months, (C) the cost of restoration thereof would exceed the Net Proceeds of insurance carried thereon pursuant to the requirements of Section 6.03 of the Agreement or (D) the final maturity of the Bonds is within five (5) years of the date of such damage or destruction.

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administrative body (whether state or federal) entered after the contest thereof by the Borrower in good faith, the Agreement shall have become void or unenforceable or impossible of performance in accordance with the intent and purposes of the parties as expressed in the Agreement. Redemption pursuant to this subsection (iii) shall be in whole only.

Only Net Proceeds of insurance or a condemnation award shall be used for a partial redemption of Bonds pursuant to subsections (a)(i) or (ii) of this Section 5.02.

SECTION 5.03. Mandatory Sinking Fund Redemption. The 2016 Bonds stated to mature in the years 2031, 2036, 2046 and 2049 (the “2016 Term Bonds”) are subject to mandatory sinking fund redemption prior to maturity in part by lot at a redemption price equal to 100% of the principal amount redeemed plus accrued interest to the redemption date from amounts on deposit in the Bond Principal Fund as follows on October 1 in the years and in the principal amounts specified in the sinking fund redemption schedule set forth below:

2016 Term Bonds Maturing October 1, 2031

Redemption Date Principal Amount to be (October 1) Redeemed or Purchased 2027 $385,000 2028 410,000 2029 440,000 2030 465,000 2031* 495,000 ______*Stated Maturity

2016 Term Bonds Maturing October 1, 2036

Redemption Date Principal Amount to be (October 1) Redeemed or Purchased 2032 $525,000 2033 555,000 2034 585,000 2035 615,000 2036* 645,000 ______*Stated Maturity

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Bonds Maturing October 1, 2046

*Stated Maturity.

Bonds Maturing October 1, 2049

Redemption Date Principal Amount to be (October 1) Redeemed or Purchased 2047 $1,310,000 2048 1,355,000 2049* 1,375,000

*Final Maturity.

In lieu of redeeming Bonds pursuant to this Section, the Trustee may, at the written request of the Borrower, use such funds in the Bond Principal Fund or otherwise available hereunder for redemption of Bonds to purchase Bonds for which the Trustee has received a confirmation of purchase confirming purchase by the Borrower in the open market at a price not exceeding par plus accrued interest, such Bonds to be delivered to the Trustee for the purpose of cancellation. The Borrower may also purchase Bonds other than through the Trustee and deliver such Bonds to the Trustee for cancellation and receive credit against its mandatory sinking fund payments as provided in this paragraph. Any such purchase of Bonds for cancellation must be completed and the purchased Bonds delivered to the Trustee at least forty- five (45) days prior to the date set for the next succeeding mandatory redemption. It is understood that in the case of any such purchase of Bonds, the Issuer and the Borrower shall receive credit against its required mandatory sinking fund payments in the manner specified in a certificate of the Borrower or if no certificate is delivered in order thereof.

SECTION 5.04. Method of Selecting Bonds. In the event that less than all of the Outstanding Bonds in a Series shall be redeemed, the Bonds to be redeemed shall be in any order of maturity as selected by the Borrower, or if less than all of the Bonds in a single maturity shall be redeemed, the selection of Bonds or portions thereof to be redeemed shall be selected by lot by the Trustee (or by random drawing while the Bonds are held in book-entry form) in any manner which the Trustee may deem appropriate.

SECTION 5.05. Notices of Redemption. All or a portion of the Bonds shall be called for optional redemption by the Trustee as herein provided upon receipt by the Trustee at least 45 days prior to

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the redemption date of a notice from the Borrower specifying the principal amount of the Bonds to be called for redemption, the applicable redemption price or prices, and the provision or provisions of this Indenture pursuant to which such Bonds are to be called for redemption, provided that such notice shall not be required with respect to a sinking fund redemption pursuant to Section 5.03 hereof and Bonds shall be called for redemption by the Trustee pursuant to such Section without the necessity of any action by the Borrower. In the case of every redemption, the Trustee shall cause notice of such redemption by causing to be delivered a copy of the redemption notice to the Registered Owners of the Bonds designated for redemption in whole or in part, as their interests may appear upon the registration records. In each case, and subject to the delivery of Protected Funds as described below, such redemption notice shall be delivered to the Registered Owners not more than 60 nor less than 20 days prior to the redemption date, provided, however, that failure to give such notice, or any defect therein, shall not affect the validity of any proceedings for the redemption of such Bonds. The Trustee shall not cause to be delivered any notice of redemption (other than with respect to a sinking fund redemption) unless it has received from the Borrower, at least 25 days before the redemption date specified in the notice of redemption, sufficient evidence of the Borrower’s ability to deliver Protected Funds to redeem all such Bonds called for redemption on the anticipated redemption date. If adequate Protected Funds are not received by the Trustee on the redemption date, no Bonds shall be redeemed. The Trustee shall furnish the Borrower with a copy of each notice of redemption given with respect to any optional redemption under Section 5.01 hereof as soon as practicable after the delivery of notice to the Registered Owners of the Bonds.

Each notice of redemption shall specify conditions precedent to redemption, if any, the date fixed for redemption, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of the Bonds to be redeemed, that interest accrued to the date fixed for redemption will be paid as specified in said notice, and that on and after said date interest thereon will cease to accrue. If less than all the Outstanding Bonds are to be redeemed, the notice of redemption shall specify the numbers of the Bonds or portions thereof to be redeemed.

SECTION 5.06. Bonds Due and Payable on Redemption Date; Interest Ceases to Accrue. On the redemption date specified in any notice of redemption of the Borrower delivered pursuant to Section 5.05 hereof, an amount of Protected Funds sufficient to redeem all the Bonds called for redemption at the appropriate redemption price, including accrued interest to the date fixed for redemption, shall be deposited with the Trustee by the Borrower into the Bond Principal Fund or the Bond Interest Fund, as applicable. On the redemption date the principal amount of each Bond to be redeemed, together with the accrued interest thereon to such date and redemption premium, if any, shall become due and payable; and from and after such date, notice having been given and deposit having been made in accordance with the provisions of this Article, then, notwithstanding that any Bonds called for redemption shall not have been surrendered, no further interest shall accrue on any of such Bonds. From and after such date of redemption (such notice having been given and such deposit having been made) the Bonds to be redeemed shall not be deemed to be Outstanding hereunder, and the Issuer shall be under no further liability in respect thereof, as provided in Section 3.17 hereof.

SECTION 5.07. Cancellation. All Bonds which have been redeemed and all Bonds delivered to the Trustee by the Borrower for cancellation shall be cancelled by the Trustee and disposed of as provided in Section 2.09 hereof.

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SECTION 5.08. Partial Redemption of Bonds. Upon surrender of any Bond for redemption in part only, the Issuer shall execute and the Trustee shall authenticate and deliver to the Registered Owner thereof, the cost of which shall be paid by the Borrower, a new Bond or Bonds of the same maturity and of Authorized Denominations, in an aggregate principal amount equal to that portion of the Bond not redeemed.

ARTICLE VI

INVESTMENTS

SECTION 6.01. Investment of Bond Principal Fund, Bond Interest Fund, Construction Fund, Debt Service Reserve Fund, Operating Reserve Fund, Cost of Issuance Fund, Repair and Replacement Funds, Surplus Fund and Rebate Fund. So long as no Event of Default exists, on written instructions received by the Trustee from an Authorized Representative of the Borrower on which instructions the Trustee may conclusively rely, any moneys held as part of the Funds shall be invested by the Trustee in Investment Obligations (a) with respect to the Cost of Issuance Fund, maturing in the amounts and at the times necessary to provide funds to make the payments to which such moneys are applicable, (b) with respect to the Bond Principal Fund and the Bond Interest Fund, maturing in the amounts and at the times necessary to provide funds to make the necessary principal and interest payments, as applicable, and with respect to the Rebate Fund, maturing in the amounts and at the times necessary to provide funds to make the payments to which such moneys are applicable as determined by the Trustee, and (c) with respect to the Debt Service Reserve Fund, the Repair and Replacement Fund, the Operating Reserve Fund and the Construction Fund, maturing in the amounts and at the times necessary to provide funds to make the payments to which such moneys are applicable. If no such direction is received by the Trustee, the Trustee shall invest and reinvest such moneys in BlackRock FedFund (Dollar Shares) which qualifies as an investment referred to in subsection (e)(i) of the definition of Investment Obligations. All such Investment Obligations purchased shall mature or be redeemable on a date or dates prior to the time when the moneys so invested will be required for expenditure. The Trustee shall value the Investment Obligations held within the Funds on each September 30, commencing September 30, 2016. In computing for any purpose hereunder the amount in any Fund on any date, Investment Obligations purchased shall be valued at their market value by sources deemed to be commercially reliable by the Trustee. The Trustee, at the written direction of the Borrower, shall sell and reduce to cash a sufficient portion of such investments whenever the cash balance in a Fund is insufficient for the purposes of such Fund. The Trustee may make any and all investments permitted by the provisions of this Section through its trust or bond departments.

The Trustee hereby agrees to retain the documentation with respect to investments of moneys in the Funds as required by and as described in the Tax Certificate.

SECTION 6.02. Tax Status of the Interest on the Tax-Exempt Bonds. The Issuer hereby acknowledges that in order to ensure that the tax status of the interest on the Tax-Exempt Bonds is not adversely affected, it has secured from the Borrower the covenants set forth in Section 4.05 of the Agreement.

SECTION 6.03. Allocation and Transfers of Investment Income. Any investments shall be held by or under the control of the Trustee and shall be deemed at all times a part of the Fund from which the investment was made. Any loss resulting from such investments shall be charged to such Fund or appropriate subaccount therein. Any interest or other gain from any Fund from any investment or reinvestment pursuant to Section 6.01 hereof realized shall be retained therein or shall be allocated and transferred as follows:

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(a) Any interest or other gain realized as a result of any investments or reinvestments of moneys in the Bond Principal Fund and the Bond Interest Fund shall be retained in the respective Fund unless a deficiency exists in the Debt Service Reserve Fund due to a withdrawal at the time such interest is received or other gain is realized in the Bond Principal Fund or Bond Interest Fund, as the case may be, in which case such interest or other gain shall be paid into the Debt Service Reserve Fund, first from the Bond Principal Fund and then from the Bond Interest Fund.

(b) Any interest or other gain realized as a result of any investments or reinvestments of moneys in the Debt Service Reserve Fund shall be credited to the Debt Service Reserve Fund if the amount therein is less than the Debt Service Reserve Fund Requirement. If the amount in the Debt Service Reserve Fund is greater than the Debt Service Reserve Fund Requirement, such amount in excess of the Debt Service Reserve Fund Requirement shall be paid annually on each October1 into the Bond Interest Fund.

(c) Any interest or other gain realized as a result of any investments or reinvestments of moneys in the Construction Fund shall be retained in the Construction Fund.

(d) Any interest or other gain realized as a result of any investments or reinvestments of moneys in the Repair and Replacement Fund shall be credited to the Repair and Replacement Fund if the amount therein is less than the Repair and Replacement Fund Requirement. If the amount in the Repair and Replacement Fund is greater than the Repair and Replacement Fund Requirement, such amount in excess of the Repair and Replacement Fund Requirement shall be paid annually on each October 1 into the Bond Interest Fund.

(e) Any interest or other gain realized as a result of any investments or reinvestments of moneys in the Operating Reserve Fund shall be credited to the Operating Reserve Fund if the amount therein is less than the Operating Reserve Fund Requirement. If the amount in the Operating Reserve Fund is greater than the Operating Reserve Fund Requirement, such amount in excess of the Operating Reserve Fund Requirement shall be paid annually on each October 1 into the Bond Interest Fund.

(f) Any interest or other gain actually realized in cash (as opposed to unrealized market increases) as a result of any investments or reinvestments of moneys in the Cost of Issuance Fund and the Revenue Fund shall be retained in the respective Fund.

Notwithstanding the provisions of this Section, any interest or other gain from any Fund shall be transferred to the Rebate Fund to the extent required on behalf of, and pursuant to written direction of, the Borrower pursuant to Section 4.04 of the Agreement, except that no such transfer shall be made from any Fund if such transfer would cause the amount then on deposit in such Fund to be less than required by the provisions of this Indenture.

ARTICLE VII

DISCHARGE OF INDENTURE

SECTION 7.01. Discharge of this Indenture. If, when the Bonds secured hereby shall be paid in accordance with their terms (or payment of the Bonds has been provided for in the manner set forth in the following paragraph), together with all other sums payable hereunder, all amounts payable to the Issuer and the Trustee under the Agreement and all amounts payable to the United States pursuant to Section 148 of Code, have been paid then this Indenture and the Trust Estate and all rights granted

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hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. Also if all Outstanding Bonds secured hereby shall have been purchased by the Borrower and delivered to the Trustee for cancellation, and all other sums payable hereunder, all amounts payable to the Issuer and the Trustee under the Agreement and all amounts payable to the United States pursuant to Section 148 of the Code have been paid, or provision shall have been made for the payment of the same, then this Indenture and the Trust Estate and all rights granted hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such events, upon the request of the Borrower, the Trustee shall assign and transfer to the Borrower all property then held by the Trustee hereunder with respect to the Borrower and shall execute such documents as may be reasonably required by the Borrower and shall turn over to the Borrower the surplus in any Fund pursuant to Section 3.11 hereof, except to the extent otherwise required by Section 4.04 of the Agreement.

Payment of any Outstanding Bond shall, prior to the maturity or redemption date thereof, be deemed to have been provided for within the meaning and with the effect expressed in this Section if: (a) in case said Bond is to be redeemed on any date prior to its maturity, the Borrower shall have given to the Trustee in form satisfactory to it irrevocable instructions to give notice of redemption of such Bond on said redemption date, such notice to be given in accordance with the provisions of Section 5.05 hereof, (b) there shall have been deposited with the Trustee either cash moneys in an amount which shall be sufficient, or Government Obligations which shall not contain provisions permitting the redemption thereof at the option of the issuer, the principal of and the interest on which when due, and without any reinvestment thereof, will provide moneys which, together with the moneys, if any, deposited with or held by the Trustee at the same time, shall be sufficient to pay when due the principal of and premium, if any, and interest due and to become due on said Bond on and prior to the redemption date or maturity date thereof, as the case may be, (c) there shall have been delivered to the Trustee a certificate from a firm of certified public accountants certifying as to the sufficiency of the deposit made pursuant to the preceding clause (b), (d) an opinion of Bond Counsel satisfactory to the Trustee and the Issuer that said Bond is deemed paid within the meaning of this Indenture and such payment does not adversely affect the exclusion from gross income of interest on the Tax-Exempt Bonds, (e) an Opinion of Counsel that (i) the escrow deposit will not constitute a voidable preference or transfer under the Federal Bankruptcy Code or any other similar state or federal statute in the event the Issuer or the Borrower becomes a debtor within the meaning of the Federal Bankruptcy Code or comes within the protection of such similar state or federal statute (“Insolvency Event”) and (ii) in such Insolvency Event, the escrow deposit will not be treated as part of the estate of the Issuer or the Borrower, and (f) in the event said Bond is not by its terms subject to redemption within the next 45 days, the Borrower shall have given the Trustee in form satisfactory to it irrevocable instructions to give, as soon as practicable in the same manner as the notice of redemption is given pursuant to Section 5.05 hereof, a notice to the Registered Owner of such Bond that the deposit required by (b) above has been made with the Trustee and that payment of said Bond has been provided for in accordance with this Section and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal of and premium, if any, and interest on said Bond. Neither such securities nor moneys deposited with the Trustee pursuant to this Section or principal or interest payments on any such securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of and premium, if any, and interest on said Bond; provided any cash received from such principal or interest payments on such securities deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be reinvested in securities of the type described in clause (b) of this paragraph maturing at times and in amounts sufficient to pay when due the principal of and premium, if any, and interest to become due on said Bond on or prior to such redemption date or maturity date thereof, as the case may be. At such time as payment of a Bond has been provided for as aforesaid, such Bond shall no longer be secured by or entitled to the benefits of this Indenture, except for the purpose of any payment from such moneys or securities deposited with the Trustee.

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The release of the obligations of the Issuer and Borrower under this Section shall be without prejudice to the right of the Trustee or the Issuer to be paid reasonable compensation for all services rendered by it hereunder and all its reasonable expenses, charges and other disbursements incurred on or about the administration of the trust hereby created and the performance of its powers and duties hereunder.

Notwithstanding anything contained herein to the contrary, provision shall not be made for the payment of any Bonds if such provision would constitute an advance refunding under the Code, unless simultaneously with such provision for payment, the Borrower delivers to the Issuer and the Trustee an opinion of nationally recognized Bond Counsel acceptable to the Issuer and the Trustee to the effect that such provision will not adversely affect the exclusion from gross income of the interest on the Tax- Exempt Bonds.

The provisions contained in this Section 7.01 apply equally to the discharge of the lien of this Indenture for all of the Bonds or any portion thereof.

SECTION 7.02. Survival. Notwithstanding the payment in full of the Bonds, the discharge of this Indenture as set forth in Section 7.01 above, and the termination or expiration of the Agreement and the Leasehold Mortgage, all provisions in this Indenture concerning (a) the tax-exempt status of the Bonds (including, but not limited to provisions concerning Rebate), (b) the interpretation of this Indenture, (c) the governing law, (d) the forum for resolving disputes, (e) the Issuer’s right to rely on facts or certificates, (f) the indemnity of the Issuer’s directors, officers, counsel, advisors, and agents from liability, (g) the Issuer’s lack of pecuniary liability, and (h) the indemnity of the Trustee and the rights, powers and duties of the Trustee as may be necessary and convenient for the payment of amounts due or to become due on the Bonds and the registration, transfer, exchange and replacement of Bonds, shall survive and remain in full force and effect.

ARTICLE VIII

DEFAULTS AND REMEDIES

SECTION 8.01. Events of Default. Each of the following is hereby defined as and shall be deemed an “Event of Default” under this Indenture:

(a) Failure in the payment by the Issuer of the principal of or premium, if any, on any Bond when the same shall become due and payable, whether at the stated maturity thereof, on a sinking fund payment date or upon proceedings for redemption.

(b) Failure in the payment by the Issuer of any installment of interest on any Bond when the same shall become due and payable.

(c) Failure shall be made in the observance or performance of any covenant, agreement, contract or other provision in the Bonds or this Indenture (other than as referred to in (a) or (b) of this Section) and such default shall continue for a period of 30 days after written notice to the Issuer, the Borrower and the Trustee from the Registered Owners of at least 25% in aggregate principal amount of the Bonds then Outstanding or to the Issuer and the Borrower from the Trustee specifying such default and requiring the same to be remedied, provided, with respect to any such failure covered by this subsection (c), no Event of Default shall be deemed to have occurred so long as a course of action adequate to remedy such failure shall have been commenced within such 30-day period and shall thereafter be diligently prosecuted to completion and the failure shall be remedied thereby within 90 days of such notification.

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(d) A Determination of Taxability.

(e) The occurrence of an Event of Default (as defined therein) under any Borrower Document.

Subject to Section 9.01(h), upon the occurrence of an Event of Default under this Indenture, the Trustee shall promptly notify the Registered Owners and the Borrower by facsimile, confirmed overnight mail or courier, of such occurrence, which notification shall set forth the specific nature of the Event of Default and shall also state what actions are being taken or are being considered to be taken by the Trustee, the Issuer or the Borrower to remedy such Event of Default. Throughout the continuance of any Event of Default hereunder, the Trustee shall promptly notify the Registered Owners of any plan or proposal of any defaulting party or the Borrower relating to the curing of such Event of Default which is known to the Trustee.

The time periods for cure set forth in (c) above shall not be applicable to any events or actions which cause or might cause a Determination of Taxability.

SECTION 8.02. Remedies for Events of Default Under This Indenture. Upon the occurrence of an Event of Default hereunder, the Trustee may exercise and, at the written direction of the Owners of a majority of all the Bonds Outstanding, shall exercise the following rights and remedies:

(a) Receivership. Upon the filing of a bill in equity or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Registered Owners, the Trustee shall be entitled as a matter of right to the appointment of a receiver or receivers of the rents, revenues, income, products and profits related to the Borrower and the Facilities, pending such proceedings, but, notwithstanding the appointment of any receiver, trustee or other custodian, the Trustee shall be entitled to the possession and control of any cash, securities or other instruments at the time held by, or payable or deliverable under the provisions of this Indenture to, the Trustee.

(b) Suit for Judgment on the Bonds. The Trustee shall be entitled to sue for and recover judgment, either before or after or during the pendency of any proceedings for the enforcement of the lien of this Indenture, for the enforcement of any of its rights, or the rights of the Registered Owners, but any such judgment against the Issuer shall be enforceable only against the Trust Estate. No recovery of any judgment by the Trustee shall in any manner or to any extent affect the lien of this Indenture or any rights, powers or remedies of the Trustee hereunder, or any lien, rights, powers or remedies of the Registered Owners of the Bonds, but such lien, rights, powers and remedies of the Trustee and of the Registered Owners shall continue unimpaired as before.

No right or remedy is intended to be exclusive of any other right or remedy, but each and every such right or remedy shall be cumulative and in addition to any other right or remedy given hereunder or now or hereafter existing at law or in equity or by statute.

If any Event of Default hereunder shall have occurred and if requested by the Registered Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding, and after being indemnified or receiving other assurances as provided in Section 9.01 hereof, then the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Section as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Registered Owners.

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SECTION 8.03. Direction of Remedies. Anything in this Indenture to the contrary notwithstanding, the holders of a majority of the Bonds Outstanding shall have the right, at any time, to the extent permitted by law, by an instrument or instruments in writing executed and delivered to the Trustee, to direct the time, method, and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of this Indenture, or for the appointment of a receiver, or any other proceedings or remedies hereunder provided that such direction shall not be otherwise than in accordance with the provisions hereof. The Trustee shall not be required to act on any direction given to it pursuant to this Section unless indemnified to its reasonable satisfaction or receiving other assurances as provided in Section 9.01 hereof.

SECTION 8.04. Rights and Remedies of Registered Owners. No Registered Owner of any Bond shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of this Indenture or for the execution of any trust hereof or for the appointment of a receiver or any other remedy hereunder, unless a default has occurred of which the Trustee has been notified as provided in Section 9.01 hereof, or of which by Section 9.01 hereof it is deemed to have notice, nor unless such default shall have become an Event of Default and the Registered Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have made written request to the Trustee and shall have offered reasonable opportunity either to proceed to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name, nor unless they have also offered to the Trustee indemnity to its reasonable satisfaction or other assurances as provided in Section 9.01 hereof nor unless the Trustee shall thereafter fail or refuse to exercise within a reasonable period of time (not to exceed 30 days) the powers hereinbefore granted, or to institute such action, suit or proceeding in its own name; and such notification, request, and offer of indemnity or other assurances are hereby declared in every case at the option of the Trustee to be conditions precedent to the execution of the powers and trusts of this Indenture, and to any action or cause of action for the enforcement of this Indenture, or for the appointment of a receiver or for any other remedy hereunder; it being understood and intended that no one or more Registered Owners of the Bonds shall have the right in any manner whatsoever to affect, disturb or prejudice the lien of this Indenture by his, her or their action or to enforce any right hereunder except in the manner herein provided and that all proceedings at law or in equity shall be instituted, had, and maintained in the manner herein provided and for the equal benefit of the Registered Owners of the Bonds then Outstanding. Nothing in this Indenture contained shall, however, affect or impair the right of any Registered Owner of Bonds to enforce the payment, by the institution of any suit, action or proceeding in equity or at law, of the principal of, premium, if any or interest on any Bond at and after the maturity thereof, or the obligation of the Issuer to pay the principal of, premium, if any, and interest on each of the Bonds to the respective Registered Owners of the Bonds at the time and place, from the source and in the manner herein and in the Bonds expressed.

SECTION 8.05. Application of Moneys. All moneys received by the Trustee pursuant to any right given or action taken under the provisions of this Article shall, after payment of the costs and expenses of the proceedings resulting in the collection of such moneys, including the costs and expenses of the Registered Owners, any rebate payments, and the expenses, liabilities, indemnity payments and advances incurred or made by the Trustee, be held or deposited into the Bond Principal Fund and the Bond Interest Fund during the continuance of an Event of Default and shall be applied as follows:

(a) Unless the principal of all the Bonds shall have become or shall have been declared due and payable, all such moneys shall be applied:

FIRST, to the payment to the Persons entitled thereto of all installments of interest then due on the Bonds, in the order of the maturity of the installments of such interest and, if the amount available shall not be sufficient to pay in full any particular

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installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or privilege; and

SECOND, to the payment to the Persons entitled thereto of the unpaid principal of and premium, if any, on any of the Bonds which shall have become due (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of this Indenture), in the order of their due dates and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment ratably, according to the amount of principal due on such date, to the Persons entitled thereto, without any discrimination or privilege.

(b) If the principal of all of the Bonds entitled to share equally in such moneys shall have become or shall have been declared due and payable, to the payment of the principal and interest then due and unpaid upon the Bonds with preference or priority of principal over interest or interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond ratably according to the amounts due respectively for principal and interest, to the Persons entitled thereto without any discrimination or preference except as to any difference in the respective rates of interest specified in the Bonds.

Whenever moneys are to be applied pursuant to the provisions of this Section, such moneys shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such dates shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit of any such moneys and of the fixing of any such date, and shall not be required to make payment to the Registered Owner of any Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid.

Whenever all of the Bonds, the premium, if any, and interest thereon have been paid under the provisions of this Section and all expenses and fees of the Trustee and the Issuer, including the Issuer’s Fee, and all other amounts to be paid to the Issuer or the Trustee hereunder or under the Agreement have been paid, any balance remaining in the Funds shall be applied as provided in Section 3.11 hereof.

SECTION 8.06. Trustee May Enforce Rights Without Bonds. All rights of action and claims under this Indenture or any of the Bonds Outstanding may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or proceedings relative thereto; and any suit or proceeding instituted by the Trustee shall be brought in its name as Trustee, without the necessity of joining as plaintiffs or defendants any Registered Owners of the Bonds.

SECTION 8.07. Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Issuer or the Borrower or any other obligor upon the Bonds or the property of the Issuer, the Trustee (irrespective of whether the principal of the Bonds shall then be due and payable, from prepayment on the Promissory Notes, as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Issuer and/or the Borrower for the payment of overdue principal or interest) shall be entitled and empowered, by intervention of such proceeding or otherwise,

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(a) to file and prove a claim for the whole amount of principal, premium, if any, and interest owing and unpaid in respect of the Bonds then Outstanding and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Owners allowed in such judicial proceeding; and to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;

(b) and any receiver, assignee, trustee, liquidator, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Owner to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Owners, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agent and counsel.

So long as any Bonds are Outstanding the Trustee is hereby appointed, and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee, the true and lawful attorney-in-fact of the respective Owners of the Bonds, with authority to make or file, in the respective names of the Owners of the Bonds or on behalf of all Owners of the Bonds, as a class, any proof of debt, amendment to proof of debt, petition or other documents and to execute any other papers and documents and to do and perform any and all acts and things for and on behalf of all Owners of the Bonds as a class, as may be necessary or advisable in the opinion of the Trustee, in order to have the respective claim of the Owners of the Bonds against the Issuer, the Borrower or any other obligor allowed in receivership, insolvency, liquidation, bankruptcy or other proceeding, to which the Issuer, the Borrower or any other obligor, as the case may be, shall be a party. The Trustee shall have full power of substitution and delegation in respect of any such powers.

SECTION 8.08. Delay or Omission No Waiver. No delay or omission of the Trustee or of any Registered Owner to exercise any right or power accruing upon any default shall exhaust or impair any such right or power or shall be construed to be a waiver of any such default, or acquiescence therein; and every power and remedy given by this Indenture may be exercised from time to time and as often as may be deemed expedient.

SECTION 8.09. No Waiver of One Default to Affect Another. No waiver of any default hereunder, whether by the Trustee or the Registered Owners, shall extend to or affect any subsequent or any other then existing default or shall impair any rights or remedies consequent thereon.

SECTION 8.10. Discontinuance of Proceedings on Default; Position of Parties Restored. In case the Trustee or the Registered Owners shall have proceeded to enforce any rights under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee or the Registered Owners, then and in every such case the Issuer, the Trustee and the Registered Owners shall be restored to their former position and rights hereunder with respect to the Trust Estate, and all rights, remedies, and powers of the Issuer, the Trustee and the Registered Owners shall continue as if no such proceedings had been taken.

SECTION 8.11. Waivers of Events of Default. The Trustee, upon prior written consent of the Owners of two-thirds in aggregate principal amount of the Bonds Outstanding, may, and at the written direction of the Owners of two-thirds in aggregate principal amount of the Bonds Outstanding shall, waive any Event of Default hereunder and its consequences; provided, however, that there shall not be waived (a) any Event of Default in the payment of the principal of or premium on any Outstanding Bonds at the date of maturity or redemption thereof or any default in the payment when due of the interest on any such Bonds, unless prior to such waiver or rescission, all arrears of interest or all arrears of payments

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of the principal and premium, if any, and all expenses of the Trustee, and all amounts to be paid to the Issuer and the Trustee hereunder and under the Agreement, in connection with such default shall have been paid or provided for or, (b) any default in the payment of amounts set forth in Section 5.01(e) of the Agreement. In case of any such waiver or rescission, or in case any proceedings taken by the Trustee on account of any such default shall have been discontinued or abandoned or determined adversely to the Trustee, then and in every such case the Issuer, the Trustee and the Registered Owners shall be restored to their former positions and rights hereunder respectively, but no such waiver or rescission shall extend to or affect any subsequent or other default, or impair any rights or remedies consequent thereon.

ARTICLE IX

CONCERNING THE TRUSTEE

SECTION 9.01. Duties of the Trustee. The Trustee hereby accepts the trusts imposed upon it by this Indenture and agrees to perform said trusts, but only upon and subject to the following express terms and conditions, and no implied covenants or obligations shall be read into this Indenture against the Trustee:

(a) The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent corporate indenture trustee would exercise or use under similar circumstances.

(b) The Trustee may execute any of the trusts hereof or powers hereunder and perform any of its duties by or through attorneys, agents or receivers and the Trustee shall not be answerable for any misconduct or negligence on the part of any attorney or receiver appointed with due care by it hereunder. The Trustee shall be entitled to act upon an Opinion of Counsel concerning all matters of the trust hereof and its duties hereunder, and may in all cases pay and be reimbursed for such reasonable compensation to all such attorneys, agents, receivers and employees as may reasonably be employed in connection with the trusts hereof. The Trustee may act upon advice or an Opinion of Counsel and shall not be responsible for any loss or damage resulting from any action or nonaction taken by or omitted to be taken in good faith in reliance upon such advice or Opinion of Counsel.

(c) The Trustee shall not be responsible for any recital herein or in the Bonds (except in respect to the certificate of authentication of the Trustee endorsed on the Bonds), or for insuring the Project or collecting any insurance moneys or for the validity of the execution by the Issuer of this Indenture or of any supplements hereto or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby, or for the value of or title to the Project, and the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions or agreements on the part of the Issuer, or on the part of the Borrower, except as hereinafter set forth; but the Trustee may require of the Borrower full information and advice as to the performance of the covenants, conditions, and agreements as to the condition of the Project contained herein or in the Agreement. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with Section 6.01 hereof.

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(d) The Trustee shall not be accountable for the use of any Bonds authenticated or delivered hereunder. The Trustee may become the Registered Owner of the Bonds with the same rights which it would have if not Trustee.

(e) The Trustee shall be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram or other paper or document believed to be genuine and correct and to have been signed or sent by the proper Person or Persons. Any action taken by the Trustee pursuant to this Indenture upon the request or the consent of the Issuer or any Person who at the time of making such request or giving such consent is the Registered Owner of any Bonds shall be conclusive and binding upon all future owners of the same Bond and upon Bonds issued in place thereof.

(f) As to the existence or nonexistence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a certificate signed on behalf of the Issuer by an Authorized Representative of the Issuer or on behalf of the Borrower by an Authorized Representative of the Borrower or such other Person as may be designated for such purpose by the Issuer or the Borrower as sufficient evidence of the facts therein contained, and prior to the occurrence of a default of which the Trustee has been notified as provided in subsection (h) of this Section, or of which by said subsection it is deemed to have notice, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed necessary or advisable, but shall in no case be bound to secure the same.

(g) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty, and the Trustee shall not be answerable for other than its gross negligence or willful misconduct and shall not be answerable for any negligent act of its attorneys, agents or receivers which have been selected by the Trustee with due care, subject to Section 9.01(a) hereof.

(h) The Trustee shall not be required to take notice or be deemed to have notice of any default hereunder except failure by the Borrower to cause to be made any of the payments to the Trustee required to be made hereunder unless an officer in the trust department of the Trustee has actual notice thereof or the Trustee shall be specifically notified in writing of such default by the Issuer or the Registered Owners of at least a majority in aggregate principal amount of Bonds then Outstanding and all notices or other instruments required by this Indenture to be delivered to the Trustee, must, in order to be effective, be delivered at the address of the Trustee provided for in Section 11.09 hereof, and, in the absence of such notice so delivered, the Trustee may conclusively assume that there is no default except as aforesaid.

(i) All moneys received by the Trustee shall, until used or applied or invested as herein provided, be held in trust in the manner and for the purposes for which they were received but need not be segregated from other funds except to the extent required by this Indenture or law. The Trustee shall not be under any liability for interest on any moneys received hereunder except such as may be agreed upon.

(j) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right, but shall not be required, to inspect any and all of the Trust Estate, including all books, papers and records of the Issuer pertaining to the Project and the Bonds.

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(k) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises.

(l) Notwithstanding anything in this Indenture contained, the Trustee shall have the right, but shall not be required, to demand in respect of the authentication of any Bonds, the withdrawal of any cash, the release of any property or any action whatsoever within the purview of this Indenture, any showings, certificates, opinions, appraisals or other information or corporate action or evidence thereof, in addition to that by the terms hereof required, as a condition of such action by the Trustee deemed desirable for the purpose of establishing the right of the Issuer or the Borrower to the authentication of any Bonds, the withdrawal of any cash, the release of any property, or the taking of any other action by the Trustee.

(m) Before taking any action under Article VIII hereof, the Trustee may require that reasonable indemnity or other assurances be furnished to it for the reimbursement of all expenses which it may incur and to protect it against all risk and liability by reason of any action so taken, including without limitation any and all environmental liability, and except only any liability which may result from its negligence or willful default. The Trustee may take action without requiring such indemnification or other assurances and in such event, the Trustee shall be entitled to indemnification by the Borrower pursuant to Section 8.06 of the Agreement and to reimbursement of its fees and expenses pursuant to Section 9.02 hereof.

(n) The Trustee shall have no responsibility with respect to any information, statement or recital in any official statement, offering memorandum or other disclosure prepared or distributed in connection with the Bonds.

(o) The Trustee shall not be responsible for ensuring that the provisions of this Indenture or the Agreement are fair or equitable or as they may affect the Borrower.

(p) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture.

(q) in no event shall the Trustee be responsible or liable for special or indirect loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(r) the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Bonds and this Indenture.

SECTION 9.02. Fees, Indemnification and Expenses of Trustee. The Trustee shall be entitled to payment and reimbursement for its reasonable fees for its services rendered hereunder as and when the same become due, any indemnification amounts and all expenses reasonably and necessarily made or incurred by the Trustee in connection with such services, including legal fees and expenses, as and when the same become due as provided in Sections 5.01(d) and 8.06 of the Agreement. When the Trustee incurs expenses, is entitled to indemnification amounts or renders services in connection with an Event of Default the expenses (including the reasonable charges and expenses of its counsel), indemnification and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or state bankruptcy, insolvency or other similar law.

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SECTION 9.03. Resignation or Replacement of Trustee. The present or any future Trustee may resign by giving to the Issuer, the Borrower and the Registered Owners 60 days’ notice of such intent to resign. Such resignation shall take effect immediately and only upon the appointment of a successor and the acceptance of such trust by the successor trustee. The present or any future Trustee may be removed at any time by an instrument in writing by either the Issuer, the Borrower, or by the Registered Owners of a majority in aggregate principal amount of the Bonds and such removal shall take effect immediately on the appointment of a successor trustee. The Trustee may also be removed at any time for any breach of the trust set forth herein.

In case the present or any future Trustee shall at any time resign or be removed or otherwise become incapable of acting, a successor may be appointed by the Registered Owners of a majority in aggregate principal amount of the Bonds Outstanding by an instrument or concurrent instruments signed by such Registered Owners, or their attorneys-in-fact duly appointed; provided that the Issuer may appoint a successor until a new successor shall be appointed by the Registered Owners as herein authorized. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation or removal, the resigning or removed, the Trustee may petition, at the expense of the Borrower, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Bonds of such series. The Issuer upon making such appointment shall forthwith give notice thereof to the Registered Owners and the Borrower, which notice may be given concurrently with the notice of resignation given by any resigning Trustee. Any successor so appointed by the Issuer shall immediately and without further act be superseded by a successor appointed in the manner above provided by the Registered Owners of a majority in aggregate principal amount of the Bonds then Outstanding.

Every successor shall always be a bank or trust company in good standing, be qualified to act hereunder, be subject to examination by a federal or state authority and have capital and surplus of not less than $15,000,000. Any successor appointed hereunder shall execute, acknowledge and deliver to the Issuer an instrument accepting such appointment hereunder, and thereupon such successor shall, without any further act, deed or conveyance, become vested with all the estates, properties, rights, powers and trusts of its predecessor in the trust hereunder with like effect as if originally named as Trustee herein; but the Trustee retiring shall, nevertheless, on the written demand of its successor, execute and deliver an instrument conveying and transferring to such successor, upon the trusts herein expressed, all the estates, properties, rights, powers and trusts of the predecessor (subject, however, to the terms and conditions herein set forth, including, without limitation, the right of the predecessor Trustee to be paid and reimbursed in full for its fees and expenses pursuant to Section 9.02 hereof and to be indemnified pursuant to Section 8.06 of the Agreement), who shall duly assign, transfer and deliver to the successor all properties and moneys held by it under this Indenture. Should any instrument in writing from the Issuer be reasonably required by any successor for such vesting and confirming, the Issuer shall execute, acknowledge and deliver the said deeds, conveyances and instruments on the request of such successor.

The notices provided for in this Section to be given to the Registered Owners shall be given by the Trustee by mailing to the Registered Owners of the Bonds at their addresses as the same shall last appear upon the registration records. The notices provided for in this Section to be given to the Issuer, the Borrower and the retiring Trustee shall be given in accordance with Section 11.09 hereof.

SECTION 9.04. Conversion, Consolidation or Merger of Trustee. Any bank or trust company into which the Trustee or its successor may be converted, merged or with which it may be consolidated, or to which it may sell or transfer its corporate trust business as a whole or substantially as a whole shall be the successor of the Trustee under this Indenture with the same rights, powers, duties and obligations and subject to the same restrictions, limitations and liabilities as its predecessor, all without the execution or filing of any papers or any further act on the part of any of the parties hereto, anything

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herein to the contrary notwithstanding. In case any of the Bonds to be issued hereunder shall have been authenticated, but not delivered, any successor Trustee may adopt the certificate of any predecessor Trustee, and deliver the same as authenticated; and, in case any of such Bonds shall not have been authenticated, any successor Trustee may authenticate such Bonds in the name of such successor Trustee.

ARTICLE X

SUPPLEMENTAL INDENTURES AND AMENDMENTS OF THE AGREEMENT AND THE LEASEHOLD MORTGAGE

SECTION 10.01. Supplemental Indentures Not Requiring Consent of Registered Owners. The Issuer may and, at the written request of the Borrower, the Trustee may, without the consent of, or notice to, the Registered Owners, enter into such indentures supplemental hereto (which supplemental indentures shall thereafter form a part hereof) for any one or more or all of the following purposes:

(a) To add to the covenants and agreements of the Issuer contained in this Indenture for the protection or benefit of the Registered Owners, other covenants and agreements thereafter to be observed for the protection or benefit of the Registered Owners, or to surrender or limit any right or power herein reserved or conferred upon the Issuer;

(b) To cure any ambiguity, or to cure, correct or supplement any defect or inconsistent provision contained in this Indenture, or to make any provisions with respect to matters arising under this Indenture or for any other purpose if such provisions are necessary or desirable and do not materially adversely affect the interests of the Registered Owners of the Bonds;

(d) To modify, alter, amend or supplement this Indenture in such a manner as shall permit the qualification hereof under the Trust Indenture Act of 1939, as from time to time amended; or

(e) To provide for the issuance of Additional Bonds in accordance with Section 2.11 hereof.

SECTION 10.02. Supplemental Indentures Requiring Consent of Registered Owners. Exclusive of supplemental indentures covered by Section 10.01 hereof, the Registered Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, to consent to and approve the execution by the Issuer and the Trustee of such indenture or indentures supplemental hereto as shall be deemed necessary or desirable by the Issuer for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in this Indenture; provided, however, that without the consent of the Registered Owners of all the Bonds at the time Outstanding and adversely affected thereby nothing herein contained (exclusive of supplemental indentures covered by Section 10.01 hereof) shall permit, or be construed as permitting:

(a) an extension of the maturity of, or a reduction of the principal amount of, or a reduction of the rate of, or extension of the time of payment of interest on, or a reduction of a premium payable upon any redemption of, any Bond;

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(b) the deprivation of the Registered Owner of any Bond then Outstanding of the lien or the priority of the lien created by this Indenture (other than as permitted hereby when such Bond was initially issued);

(d) a reduction in the aggregate principal amount of the Bonds, if any, required for consent to such supplemental indenture or amendment to the Agreement.

If at any time the Issuer shall request the Trustee to enter into such supplemental indenture for any of the purposes of this Section, the Trustee shall, upon being reasonably indemnified by the Borrower (to the extent reasonably required by the Trustee) with respect to expenses, mail by first-class mail or otherwise deliver notice of the proposed execution of such supplemental indenture to the Registered Owners of the Bonds at their addresses as the same shall last appear upon the registration records. Such notice shall briefly set forth the nature of the proposed supplemental indenture and shall state that copies thereof are on file at the designated office of the Trustee for inspection by all Registered Owners. If, within 60 days following the mailing of such notice, the Registered Owners of the requisite principal amount of the Bonds Outstanding at the time of the execution of any such supplemental indenture shall have consented to and approved the execution thereof as herein provided, no Registered Owner of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Issuer from executing the same or from taking any action pursuant to the provisions thereof.

SECTION 10.03. Execution of Supplemental Indentures. The Trustee is authorized to join with the Issuer in the execution of any such supplemental indenture and to make further agreements and stipulations which may be contained therein, but the Trustee shall not be obligated to enter into any such supplemental indenture which materially adversely affects its rights, duties, or immunities under this Indenture. For supplemental indentures under Section 10.02, the Trustee shall be provided with an opinion of Bond Counsel acceptable to the Trustee to the effect that each such supplemental indenture (a) has been validly authorized and duly executed by the Issuer and is enforceable against the Issuer in accordance with its terms, (b) will not adversely affect the qualification of the Bonds as obligations which may be issued pursuant to the Act, (c) will not adversely affect the exclusion from gross income of interest on the Tax-Exempt Bonds for federal income tax purposes and (d) is permitted pursuant to the terms of this Indenture. Any supplemental indenture executed in accordance with the provisions of this Article shall thereafter form a part of this Indenture and all the terms and conditions contained in any such supplemental indenture as to any provision authorized to be contained therein shall be deemed to be part of this Indenture for any and all purposes. In case of the execution and delivery of any supplemental indenture, express reference may be made thereto in the text of the Bonds issued thereafter, if any.

SECTION 10.04. Issuer Consent Required to Less Restrictive Requirements of Indenture and Agreement. The Issuer has imposed certain requirements on the Trustee, the Borrower, the ownership or operation of the Facilities, or the Bonds which are more restrictive than those required by the Act, the Treasury Regulations, or the Code, and, for that reason, any proposed amendment, modification, or supplement to this Indenture or the Agreement which provides for less restrictive covenants than required by the Issuer, but permitted by law, shall require the Issuer’s consent, which may be withheld for any reason.

SECTION 10.05. Consent of Borrower. Anything herein to the contrary notwithstanding, a supplemental indenture under this Article shall not become effective unless and until the Borrower shall have consented to the execution and delivery of such supplemental indenture.

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SECTION 10.06. Amendments, etc., of the Agreement Not Requiring Consent of Registered Owners. The Issuer and the Trustee may, without the consent of or notice to the Registered Owners, consent to any amendment, change or modification of the Agreement as may be required (a) by the provisions of the Agreement or this Indenture, (b) for the purpose of curing any ambiguity or formal defect or omission, or (c) in connection with any other change therein which is not to the adverse prejudice of the Trustee or the Registered Owners of the Bonds.

SECTION 10.07. Amendments, etc., of the Agreement Requiring Consent of Registered Owners. Except for the amendments, changes or modifications referred to in Section 10.06 hereof, neither the Issuer nor the Trustee shall consent to any other amendment, change or modification of the Agreement without the giving of notice and the written approval or consent of the Registered Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, subject to the same limitations set forth in Section 10.02 hereof. Such notice and consent shall be given and procured as provided in Section 10.02 hereof. If at any time the Issuer shall request the consent of the Trustee to any such proposed amendment, change or modification of the Agreement under this Section 10.07, the Trustee shall, upon being reasonably indemnified by the Borrower seeking an amendment to the Agreement with respect to expenses, cause notice of such proposed amendment, change or modification to be given in the same manner as provided in Section 10.02 hereof. Such notice shall briefly set forth the nature of such proposed amendment, change or modification and shall state that copies of the instrument embodying the same are on file at the designated office of the Trustee for inspection by all Registered Owners. If, within 60 days following the mailing of such notice, the Registered Owners of the requisite principal amount of the Bonds Outstanding at the time of the execution of any such amendment, change or modification shall have consented to and approved the execution of the agreement reflecting such amendment, change or modification thereof as herein provided, no Registered Owner of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Issuer from executing the same or from taking any action pursuant to the provisions thereof.

SECTION 10.08. Execution of Amended Agreement. The Trustee shall, prior to its consent to any supplemental amendment or change to the Agreement under this Indenture, be provided with an opinion of Bond Counsel acceptable to the Trustee to the effect that such supplemental amendment or change to the Agreement (a) has been validly authorized and duly executed by the Issuer and the Borrower and is enforceable against the Issuer and the Borrower in accordance with its terms, (b) will not adversely affect the qualification of the Bonds as obligations which may be issued pursuant to the Act, (c) will not adversely affect the exclusion from gross income of interest on the Tax-Exempt Bonds for federal income tax purposes and (d) is permitted pursuant to the terms of this Indenture. After execution thereof, any supplemental amendment, modification or change to the Agreement executed in accordance with the provisions of this Article shall thereafter form a part of the Agreement and all the terms and conditions contained in any such amendment, modification or change to the Agreement as to any provision authorized to be contained therein shall be deemed to be part of the Agreement for any and all purposes.

SECTION 10.09. Amendments, etc., of the Leasehold Mortgage Not Requiring Consent of Registered Owners. The Trustee may, without the consent of or notice to the Registered Owners, consent to any amendment, change or modification of the Leasehold Mortgage as may be required (a) by the provisions of the Leasehold Mortgage or this Indenture, (b) for the purpose of curing any ambiguity or formal defect or omission, or (c) in connection with any other change therein which is not to the material adverse prejudice of the Trustee or the Registered Owners of the Bonds.

SECTION 10.10. Amendments, etc., of the Leasehold Mortgage Requiring Consent of Registered Owners. Except for the amendments, changes or modifications referred to in Section 10.09 hereof, the Trustee shall not consent to any other amendment, change or modification of the Leasehold

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Mortgage without the giving of notice and the written approval or consent of the Registered Owners of no less than a majority in aggregate principal amount of the Bonds at the time Outstanding, subject to the same limitations set forth in Section 10.02 hereof. Such notice and consent shall be given and procured as provided in Section 10.02 hereof. If at any time the Borrower shall request the consent of the Trustee to any such proposed amendment, change or modification of the Leasehold Mortgage, the Trustee shall, upon being reasonably indemnified by the Borrower with respect to expenses, cause notice of such proposed amendment, change or modification to be given in the same manner as provided in Section 10.02 hereof. Such notice shall briefly set forth the nature of such proposed amendment, change or modification and shall state that copies of the instrument embodying the same are on file at the designated office of the Trustee for inspection by all Registered Owners. If, within 60 days following the mailing of such notice, the Registered Owners of the requisite principal amount of the Bonds Outstanding at the time of the execution of any such amendment, change or modification shall have consented to and approved the execution of the agreement reflecting such amendment, change or modification thereof as herein provided, no Registered Owner of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee from executing the same or from taking any action pursuant to the provisions thereof.

SECTION 10.11. Execution of Amended Leasehold Mortgage. The Trustee shall, prior to its consent to any supplemental amendment or change to the Leasehold Mortgage under Section 10.10, be provided with an opinion of Bond Counsel acceptable to the Trustee to the effect that such supplemental amendment or change to the Leasehold Mortgage (a) has been validly authorized and duly executed by the Borrower and is enforceable against the Borrower thereunder in accordance with its terms, (b) will not adversely affect the qualification of the Bonds as obligations which may be issued pursuant to the Act, (c) will not adversely affect the exclusion from gross income of interest on any tax-exempt Bonds for federal income tax purposes and (d) is permitted pursuant to the terms of this Indenture. After execution thereof, any supplemental amendment, modification or change to the Leasehold Mortgage executed in accordance with the provisions of this Article shall thereafter form a part of the Leasehold Mortgage and all the terms and conditions contained in any such amendment, modification or change to the Leasehold Mortgage as to any provision authorized to be contained therein shall be deemed to be part of the Leasehold Mortgage for any and all purposes.

SECTION 10.12. Copies of Supplements and Amendments to the Rating Agency. A copy of any supplement or amendment entered into pursuant to this Article X shall be sent by the Borrower, on behalf of the Issuer, to the Rating Agency immediately upon execution thereof.

ARTICLE XI

MISCELLANEOUS

SECTION 11.01. Evidence of Signature of Registered Owners and Ownership of Bonds. Any request, consent or other instrument which this Indenture may require or permit to be signed and executed by the Registered Owners may be in one or more instruments of similar tenor, and shall be signed or executed by such Registered Owners in Person or by their attorneys appointed in writing. Proof of the execution of any such instrument or of an instrument appointing any such attorney, or the Registered Ownership of Bonds shall be sufficient (except as otherwise herein expressly provided) if made in the following manner, but the Trustee may, nevertheless, in its discretion require further or other proof in cases where it deems the same desirable:

(a) The fact and date of the execution by any Registered Owner or his or her attorney of such instrument may be proved by the certificate of any officer authorized to take

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acknowledgments in the jurisdiction in which he purports to act that the Person signing such request or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before a notary public.

(b) The Registered Ownership of any Bond and the amount and numbers of such Bonds and the date of owning the same shall be proved by the registration records of the Issuer kept by the Trustee.

Any request or consent of the Registered Owner of any Bond shall bind all future owners of such Bond in respect of anything done or suffered to be done by the Issuer or the Trustee in accordance therewith.

SECTION 11.02. Parties Interested Herein. With the exception of rights herein expressly conferred on the Borrower, nothing in this Indenture expressed or implied is intended or shall be construed to confer upon or to give to, any Person other than the Issuer, the Trustee and the Registered Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation hereof; and all the covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the Issuer shall be for the sole and exclusive benefit of the Issuer, the Trustee and the Registered Owners of the Bonds.

SECTION 11.03. Titles, Headings, Etc. The titles and headings of the articles, sections, and subsections of this Indenture have been inserted for convenience of reference only and shall in no way modify or restrict any of the terms or provisions hereof.

SECTION 11.04. Severability. In the event any provision of this Indenture shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

SECTION 11.05. Third Party Beneficiaries. Each of the Issuer Indemnified Parties (other than the Issuer) shall be considered to be intended third party beneficiaries of this Indenture. Nothing in this Indenture shall confer any right upon any Person other than the parties hereto and the specifically designated third party beneficiaries of this Indenture.

SECTION 11.06. Governing Law. This Indenture shall be governed by and interpreted in accordance with the internal laws of the State without regard to conflicts of laws principles.

SECTION 11.07. Execution in Counterparts. This Indenture 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.

SECTION 11.08. Limitation of Liability of Officials of Issuer. Anything in this Indenture to the contrary notwithstanding, it is expressly understood and agreed by the parties hereto that the Issuer may rely conclusively on the truth and accuracy of any certificate, opinion, notice, or other instrument furnished to the Issuer by the Trustee or the Borrower as to the existence of any fact or state of affairs required hereunder to be noticed by the Issuer.

No recourse shall be had for the enforcement of any obligation, covenant, promise, or agreement of the Issuer contained in this Indenture, any other Issuer Documents, or in any Bond or for any claim based hereon or otherwise in respect hereof or upon any obligation, covenant, promise, or agreement of the Issuer contained in any agreement, instrument, or certificate executed in connection with the Project or the issuance and sale of the Bonds, against any of the Issuer Indemnified Parties, whether by virtue of

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any Constitutional provision, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that no personal liability whatsoever shall attach to, or be incurred by, any of the Issuer Indemnified Parties, either directly or by reason of any of the obligations, covenants, promises, or agreements entered into by the Issuer with the Borrower or the Trustee, or to be implied therefrom as being supplemental hereto or thereto, and that all personal liability of that character against each of the Issuer Indemnified Parties, by the execution of the Bonds, this Indenture, and the other Issuer Documents, and as a condition of, and as part of the consideration for, the execution of the Bonds, this Indenture, and the other Issuer Documents, is expressly waived and released.

No agreements or provisions contained herein, nor any agreement, covenant, or undertaking by the Issuer in connection with the Project or the issuance, sale, and/or delivery of the Bonds shall give rise to any pecuniary liability of the Issuer or a charge against its general credit, or shall obligate the Issuer financially in any way, except as may be payable from the revenues pledged hereby for the payment of the Bonds and their application as provided in this Indenture. No failure of the Issuer to comply with any term, covenant, or agreement contained in the Bonds, this Indenture or the Agreement, or in any document executed by the Issuer in connection with the Project or the issuance and sale of the Bonds, shall subject the Issuer to liability for any claim for damages, costs, or other financial or pecuniary charge, except to the extent the same can be paid or recovered from the revenues pledged for the payment of the Bonds or other revenues derived under the Agreement. Nothing herein shall preclude a proper party in interest from seeking and obtaining, to the extent permitted by law, specific performance against the Issuer for any failure to comply with any term, condition, covenant, or agreement herein; provided that no costs, expenses, or other monetary relief shall be recoverable from the Issuer, except as may be payable from the revenues pledged under this Indenture for the payment of the Bonds or other revenue derived under the Agreement. No provision, covenant, or agreement contained herein, or any obligations imposed upon the Issuer, or the breach thereof, shall constitute an indebtedness of the Issuer within the meaning of any State constitutional or statutory limitation or shall constitute or give rise to a charge against the Issuer’s general credit. In making the agreements, provisions, and covenants set forth in this Indenture, the Issuer has not obligated itself, except with respect to the application of the revenues pledged in this Indenture for the payment of the Bonds or other revenues derived under the Agreement.

Except during the continuance of an Event of Default, the Borrower shall have the duty to direct the Trustee to invest or reinvest all money held for the credit of funds established by this Indenture in accordance with Article VI of this Indenture.

SECTION 11.09. Notices. Except as otherwise provided in Section 8.01, all notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by certified mail, facsimile (receipt confirmed), return receipt requested, postage prepaid, by electronic means (receipt confirmed) or overnight courier, addressed as follows:

If to the Issuer: Kent County, Delaware Kent County Administrative Complex 555 Bay Road Dover, DE 19901 Attention: Finance Director Telephone: (302) 744-2382 Facsimile: (302) 736-2279 Email: [email protected]

If to the Borrower: Kent County Regional Sports Complex Corporation 59 Roosevelt Drive Dover, DE 19901

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Attention: Executive Director Telephone: (302) 734-2513 Facsimile: (302) 734-4630 Email: [email protected] with a copy to: Michael W. Whittaker, Esquire Potter Anderson & Corroon LLP Hercules Plaza 1313 N. Market Street, 6th Floor P.O. Box 951 Wilmington, DE 19801 Telephone: (302) 984-6104 Facsimile: (302) 658-1192 Email: [email protected]

If to the Trustee: Wilmington Trust, National Association 1100 North Market Street Wilmington, DE 19890 Telephone: (302) 636-6395 Email: [email protected]

SECTION 11.10. Payments Due on Holidays. If the date for making any payment or the last day for performance of any act or the exercise of any right, as provided in this Indenture, is not a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day unless otherwise provided herein with the same force and effect as if done on the nominal date provided in this Indenture.

SECTION 11.11. No Personal Liability of Officials of the Issuer or the Trustee. No covenant or agreement contained in the Bonds or in this Indenture shall be deemed to be the covenant or agreement of any elected or appointed official, officer, agent, servant or employee of the Issuer in his or her individual capacity or any officer, agent, servant or employee of the Trustee in his or her individual capacity, and neither the members of the governing body of the Issuer nor any official executing the Bonds, including any officer or employee of the Trustee, shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof.

SECTION 11.12. Bonds Owned by the Issuer or the Borrower. In determining whether Registered Owners of Bonds in the requisite aggregate principal amount have concurred in any direction, consent or waiver under this Indenture, Bonds which are owned by the Issuer or the Borrower or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Borrower (unless the Issuer, the Borrower or such Person owns all the Bonds which are then Outstanding) shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only the Bonds which the Trustee actually knows are so owned shall be so disregarded. The Bonds so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Bonds and that the pledgee is not the Issuer or the Borrower or any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Borrower. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

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SECTION 11.13. Undertaking to Provide Ongoing Disclosure; Financial Reports.

(a) Pursuant to Section 2.05 of the Agreement, the Borrower has undertaken all responsibility for compliance with continuing disclosure requirements, and the Issuer and the Trustee shall have no liability to the Registered Owners of the Bonds or any other Person with respect to Securities Exchange Commission Rule 15c2-12, as amended. Notwithstanding any other provision of this Indenture, failure of the Borrower to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default hereunder or under the Agreement; however, a Registered Owner or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Borrower to comply with its obligations under Section 2.05 of the Agreement. For purposes of this Section, “Beneficial Owner” means 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.

(b) The Trustee agrees to transmit the information contained in Section 8.05(b) of the Agreement to the Registered Owners. The Trustee shall have no duty regarding such information other than to retain any such information that it receives and to transmit same in accordance herewith.

SECTION 11.14. Right to Inspect. Following reasonable notice to the Borrower, at any and all reasonable times, the Trustee, and the Issuer and their duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right during regular business hours to inspect fully the Facilities, including all books and records of the Borrower (excluding records the confidentiality of which may be protected by law), and to make such copies and memoranda from and with regard thereto as may be desired; provided however, that any disclosure to any third party of the results of any such inspection shall be made only if required by law and then only with proper respect and due regard for the confidentiality requests of donors to the Borrower.

Additionally, at the direction of the Borrower, the Issuer hereby appoints the Trustee to keep or cause to be kept proper books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts and disbursements received or disbursed according to this Indenture, and such books shall be available for inspections by the Registered Owner of any of the Bonds and by the Borrower during normal business hours of the Trustee and under reasonable conditions.

SECTION 11.15. Incorporation of Terms of Loan Agreement. The parties hereto acknowledge and agree that to the extent applicable, the terms and provisions of the Loan Agreement are incorporated herein as if they were contained in this Indenture.

SECTION 11.16. Notices To Registered Owners. Notwithstanding anything herein or in the Borrower Documents to the contrary, the Trustee shall give written notice to the Registered Owners and any nationally recognized municipal securities information repository as soon as is practicable after the Trustee has actual knowledge thereof of the following events:

(i) partial prepayment of the Loan;

(ii) default under this Indenture, the Agreement or any of the Borrower Documents;

(iii) a draw on the Debt Service Reserve Fund;

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(iv) any casualty, act of condemnation or loss;

(v) defeasance of any portion of the Bonds;

(vi) any transfer of a beneficial interest in the Borrower;

(vii) pending sale of any part of the Facilities;

(viii) appointment of a successor Trustee;

(ix) any supplements or amendments to this Indenture, the Agreement or any of the Borrower Documents, other than those described in Sections 10.01, 10.06 and 10.09;

(x) adverse tax opinions or events affecting the tax-exempt status of the Tax- Exempt Bonds;

(xi) Bond calls (which are other than mandatory sinking fund or scheduled redemptions) not otherwise contingent on an event;

(xii) release, substitution or sale of property securing repayment of the Bonds; and

(xiii) any name change of the Trustee.

The Trustee shall also comply with the notice requirements set forth in Section 8.05 of the Agreement.

SECTION 11.17. Notices To Holders of the Bonds and the Internal Revenue Service. The Trustee will report to the holders of the Bonds and to the Internal Revenue Service for each calendar year the amount of any “reportable payments” during such year with respect to payments on the Bonds.

SECTION 11.18. Waiver of Jury Trial. EACH OF THE ISSUER, THE BORROWER AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE BONDS OR THE TRANSACTION CONTEMPLATED HEREBY.

SECTION 11.19. Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

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-58- IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Indenture to be executed in their respective corporate names by their duly authorized officers, all as of the date first above written.

(SEAL) KENT COUNTY, DELAWARE

By: Name: P. Brooks Banta Title: President, Levy Court

By: Name: Loretta Wootten Title: Clerk of the Peace of the County of Kent County, DE

WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee

By Name: Title:

ACKNOWLEDGED AND AGREED:

KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION

By Name: Title:

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FORM OF 2016 Bond

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

EXCEPT AS OTHERWISE PROVIDED IN THE INDENTURE, THIS BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY (AS DEFINED HEREIN) OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY.

KENT COUNTY, DELAWARE REVENUE BONDS (KENT COUNTY REGIONAL SPORTS COMPLEX PROJECT) SERIES 2016

No. ______$______

MATURITY DATE DATED INTEREST RATE CUSIP

June 30, 2016 ____% per annum 490229___

REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT:

KENT COUNTY, DELAWARE (the “Issuer”), a political subdivision duly organized and existing under the Constitution and laws of the State of Delaware, for value received, hereby promises to pay, from the sources hereinafter described, the principal amount stated above in lawful money of the United States of America to the Registered Owner named above, or registered assigns, on the maturity date stated above (unless this Bond shall have been called for prior redemption, in which case on such redemption date), upon the presentation and surrender hereof at the designated corporate trust office of Wilmington Trust, National Association, as trustee (the “Trustee”) under a Trust Indenture, dated as of June 1, 2016 (the “Indenture”), by and between the Issuer and the Trustee, and to pay, from like sources, to the Person who is the Registered Owner hereof on the 15th day of the month next preceding any Interest Payment Date (the “Regular Record Date”) by check or draft mailed to such Registered Owner (except that registered owners of at least $1,000,000 in aggregate principal amount of the Bonds (as defined herein) Outstanding may, by written request received by the Trustee at least 10 Business Days (as defined in the Indenture) prior to the Regular Record Date, receive payment of interest by wire transfer at the address specified in such request, which address must be in the continental United States) at his or her address as it last appears on the registration books kept for that purpose at the offices of the Trustee, interest on said sum in like coin or currency from the date hereof at the interest rate set forth above,

A-1 payable semiannually on October1 and April 1 of each year, commencing October 1, 2016, until payment of the principal hereof has been made or provided for. Any such interest not so timely paid or duly provided for shall cease to be payable to the Registered Owner hereof at the close of business on the Regular Record Date and shall be payable to the Registered Owner hereof at the close of business on a Special Record Date for the payment of any defaulted interest. Such Special Record Date shall be fixed by the Trustee whenever moneys become available for payment of the defaulted interest, and notice of the Special Record Date shall be given to the registered owners of the Bonds not less than 10 days prior thereto. The 2016 Bonds shall bear interest on the basis of a 360-day year, consisting of twelve 30-day months.

This Bond is one of Kent County, Delaware, Revenue Bonds (Kent County Regional Sports Complex Project), Series 2016 (the “2016 Bonds”) duly authorized by the Issuer in the aggregate principal amount of $20,760,000, issued under and equally and ratably secured by the Indenture. The 2016 Bonds have been issued under the Act to: (i) develop the Kent County Regional Sports Complex on an approximately 92 acre site located at 4000 Bay Road, Frederica, Delaware, 19946 including to (a) prepare the site and construct 12 turf or grass fields equipped with sports lighting, scoreboards and portable bleachers and (b) construct parking spaces, fixed seating for spectators and amenities such as paved walkways, shaded tent structures, restrooms, concessions, and administrative/maintenance buildings; (ii) pay capitalized interest on the 2016 Bonds; (iii) fund reserve funds, if any; and (iv) pay the costs of issuance of the 2016 Bonds (collectively, the “Project”); and

As provided in the Indenture, Additional Bonds of the Issuer may be issued and secured on a parity basis with the 2016 Bonds. Such Additional Bonds may be issued from time to time in one or more series, in various principal amounts, may mature at different times, may bear interest at different rates and may otherwise vary as provided in the Indenture, and the aggregate principal amount of such Additional Bonds to be issued under the Indenture is limited only as provided in the Indenture.

This Bond is a special, limited obligation of the Issuer payable solely from and secured by (a) a pledge of certain rights of the Issuer under and pursuant to the Loan and Security Agreement dated as of June 1, 2016 (the “Agreement”), between the Issuer and the Borrower, (b) a pledge of the Funds and Pledged Revenues as defined in the Indenture (other than the Rebate Fund) and (to the extent provided in the Indenture) all trust accounts created under the Indenture and the Agreement, (c) an assignment of the Issuer’s security interest in the Pledged Revenues (as defined in and subject to the Indenture) of the Borrower to the extent permitted by law and (d) the County Grant as defined in the Indenture. The loan payments required by the Borrower under the Agreement constitute general obligations of the Borrower and are secured by a Leasehold Mortgage and Security Agreement, dated as of June 1, 2016 (the “Leasehold Mortgage”), on the leasehold and improvements comprising the Project as described therein.

THE FINANCING OF THE PROJECT HAS BEEN AUTHORIZED BY AN ORDINANCE DULY ENACTED BY THE ISSUER PURSUANT TO THE LAWS OF THE STATE OF DELAWARE. THE BONDS, THE PREMIUM, IF ANY, AND THE INTEREST ON THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM REVENUES, INCOME AND RECEIPTS OF THE ISSUER PLEDGED TO THE PAYMENT OF THE BONDS. NEITHER THE ISSUER, THE STATE OF DELAWARE NOR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF DELAWARE (EXCEPT THE ISSUER, TO THE LIMITED EXTENT SET FORTH IN THE INDENTURE) SHALL IN ANY EVENT BE LIABLE FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM (IF ANY) OR INTEREST ON THE BONDS OR FOR THE PERFORMANCE OF ANY PLEDGE, OBLIGATION OR AGREEMENT OF ANY KIND WHATSOEVER EXCEPT AS SET FORTH IN THIS BOND, AND NONE OF THE BONDS OR ANY OF THE ISSUER’S AGREEMENTS OR OBLIGATIONS SHALL BE CONSTRUED TO CONSTITUTE AN INDEBTEDNESS OF OR A PLEDGE OF THE FAITH AND CREDIT OF OR A LOAN OF THE CREDIT OF OR A MORAL

A-2 OBLIGATION OF ANY OF THE FOREGOING WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER.

NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THIS BOND, OR FOR ANY CLAIM BASED ON THIS BOND, OR OTHERWISE IN RESPECT OF THIS BOND, OR BASED ON OR IN RESPECT OF THE INDENTURE OR ANY SUPPLEMENTAL INDENTURE, AGAINST THE GENERAL CREDIT OF THE ISSUER OR AGAINST ANY OFFICER, EMPLOYEE OR AGENT, AS SUCH, PAST, PRESENT OR FUTURE, OF THE ISSUER OR ANY SUCCESSOR, WHETHER BY VIRTUE OF ANY CONSTITUTION, STATUTE OR RULE OF LAW, OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR OTHERWISE, ALL SUCH LIABILITY BEING, BY THE ACCEPTANCE OF THIS BOND AND AS PART OF THE CONSIDERATION FOR THE ISSUE OF THIS BOND, EXPRESSLY WAIVED AND RELEASED.

Redemption Provisions

Optional Redemption. The 2016 Bonds are subject to redemption, at the option of the Issuer (which option shall be exercised upon the written direction of the Borrower) from prepayment of the 2016 Note pursuant to Section 11.01 of the Agreement in whole or in part on any Business Day commencing October 1, 2026 (if less than all of such 2016 Bonds are to be redeemed, then such 2016 Bonds to be redeemed shall be selected as provided below), at the redemption price equal to 100% of the principal amount to be redeemed, together with accrued interest to the date fixed for redemption.

In case of optional redemption described in foregoing paragraph, the Borrower shall, at least 45 days prior to the redemption date (unless a shorter notice shall be satisfactory to the Trustee), deliver a written request to the Issuer and the Trustee notifying the Issuer and the Trustee of such redemption date, of the principal amount of Bonds to be redeemed and evidence of the Borrower’s ability to deliver Protected Funds to redeem such Bonds on the anticipated redemption date, and shall deliver to the Trustee, on the date set for such redemption, Protected Funds sufficient to pay the redemption price of all Bonds subject to redemption.

Redemption of Bond Upon Damage, Destruction, Condemnation or Failure to Complete.

(a) The Bonds are subject to redemption at the option and upon the direction of the Borrower, in whole at any time or in part on any Business Day from and to the extent of funds on deposit under the Indenture and available for such purpose at a redemption price equal to the principal amount of each Bond to be redeemed plus accrued interest to the redemption date, upon the occurrence of any of the following events:

(i) The Facilities shall have been damaged or destroyed in whole or in part to such extent that, as expressed in a Consulting Architect’s Certificate filed with the Trustee, either (A) the Facilities cannot reasonably be restored within a period of 12 consecutive months to the condition thereof immediately preceding such damage or destruction, (B) the Borrower is thereby prevented from carrying on its normal operations for a period of 12 consecutive months, (C) the cost of restoration thereof would exceed the Net Proceeds of insurance carried thereon pursuant to the requirements of the Agreement or (D) the final maturity of the Bonds is within five (5) years of the date of such damage or destruction.

(ii) Title to, or the temporary use of, all or any substantial part of the Facilities shall have been taken under the exercise of the power of eminent domain by

A-3 any governmental issuer, or Person, firm or corporation acting under governmental authority or because of a defect in title.

(iii) As a result of any changes in the Constitution of the State or the Constitution of the United States of America or of legislative or administrative action (whether state or federal) or by final decree, judgment or order of any court or administrative body (whether state or federal) entered after the contest thereof by the Borrower in good faith, the Agreement shall have become void or unenforceable or impossible of performance in accordance with the intent and purposes of the parties as expressed in the Agreement. Redemption pursuant to this subsection (iii) shall be in whole only.

Only Net Proceeds of insurance or a condemnation award shall be used for a partial redemption of Bonds pursuant to subsections (a)(i) or (ii) of this Section.

Mandatory Sinking Fund Redemption. The 2016 Bonds stated to mature in the years 2031, 2036, 2046 and 2049 (the “2016 Term Bonds”) are subject to mandatory sinking fund redemption prior to maturity in part by lot at a redemption price equal to 100% of the principal amount redeemed plus accrued interest to the redemption date from amounts on deposit in the Bond Principal Fund as follows on October 1 in the years and in the principal amounts specified in the sinking fund redemption schedule set forth below:

2016 Term Bonds Maturing October 1, 2031

Redemption Date Principal Amount to be (October 1) Redeemed or Purchased 2027 $385,000 2028 410,000 2029 440,000 2030 465,000 2031* 495,000 ______*Stated Maturity

2016 Term Bonds Maturing October 1, 2036

Redemption Date Principal Amount to be (October 1) Redeemed or Purchased 2032 $525,000 2033 555,000 2034 585,000 2035 615,000 2036* 645,000 ______*Stated Maturity

A-4 Bonds Maturing October 1, 2046

*Stated Maturity.

Bonds Maturing October 1, 2049

Redemption Date Principal Amount to be (October 1) Redeemed or Purchased 2047 $1,310,000 2048 1,355,000 2049* 1,375,000

*Stated Maturity.

Method of Selecting Bonds. In the event that less than all of the Outstanding Bonds in a Series shall be redeemed, the Bonds to be redeemed shall be in any order of maturity as selected by the Borrower, or if less than all of the Bonds in a single maturity shall be redeemed, the selection of Bonds or portions thereof to be redeemed shall be selected by lot by the Trustee (or by random drawing while the Bonds are held in book entry form) in any manner which the Trustee deems appropriate.

Notices of Redemption. All or a portion of the Bonds shall be called for optional redemption by the Trustee upon receipt by the Trustee at least 45 days prior to the redemption date, of a notice from the Borrower specifying the principal amount of the Bonds to be called for redemption, the applicable redemption price or prices, and the provision or provisions of the Indenture pursuant to which such Bonds are to be called for redemption, provided that such notice shall not be required with respect to a

A-5 mandatory sinking fund redemption and Bonds shall be called for a mandatory sinking fund redemption by the Trustee pursuant to such Section of the Indenture without the necessity of any action by the Borrower. In the case of every redemption, the Trustee shall cause notice of such redemption by causing to be delivered a copy of the redemption notice to the Registered Owners of the Bonds designated for redemption in whole or in part, as their interests may appear upon the registration records. In each case, and subject to the delivery of Protected Funds as described below, such redemption notice shall be delivered to the Registered Owners not more than 60 nor less than 20 days prior to the redemption date, provided, however, that failure to give such notice, or any defect therein, shall not affect the validity of any proceedings for the redemption of such Bonds. The Trustee shall not cause to be delivered any notice of redemption (other than with respect to a sinking fund redemption) unless it has received from the Borrower, at least 25 days prior to the redemption date specified in the notice of redemption, sufficient evidence of the Borrower’s ability to deliver Protected Funds to redeem all such Bonds called for redemption on the anticipated redemption date. If adequate Protected Funds are not received by the Trustee on the redemption date, no Bonds shall be redeemed. The Trustee shall furnish the Borrower with a copy of each notice of redemption given with respect to any optional redemption under Section 5.01 of the Indenture as soon as practicable after the delivery of notice to the Registered Owners of the Bonds.

Each notice of redemption shall specify conditions precedent to redemption, if any, the date fixed for redemption, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of the Bonds to be redeemed, that interest accrued to the date fixed for redemption will be paid as specified in said notice, and that on and after said date interest thereon will cease to accrue. If less than all the Outstanding Bonds are to be redeemed, the notice of redemption shall specify the numbers of the Bonds or portions thereof to be redeemed.

Bonds which are reissued upon transfer, exchange or other replacement shall bear interest from the most recent Interest Payment Date to which interest has been paid or duly provided for, or if no interest has been paid, from the date of the Bonds. The Bonds shall initially be issued as a single fully registered bond.

Bonds Due and Payable on Redemption Date; Interest Ceases to Accrue. On the redemption date specified in any notice of redemption of the Borrower delivered pursuant to Notices of Redemption above, an amount of Protected Funds sufficient to redeem all the Bonds called for redemption at the appropriate redemption price, including accrued interest to the date fixed for redemption, shall be deposited with the Trustee by the Borrower. On the redemption date the principal amount of each Bond to be redeemed, together with the accrued interest thereon to such date and redemption premium, if any, shall become due and payable; and from and after such date, notice having been given and deposit having been made in accordance with the provisions of this paragraph, then, notwithstanding that any Bonds called for redemption shall not have been surrendered, no further interest shall accrue on any of such Bonds. From and after such date of redemption (such notice having been given and such deposit having been made) the Bonds to be redeemed shall not be deemed to be Outstanding hereunder, and the Issuer shall be under no further liability in respect thereof, as provided in Section 3.17 of the Indenture.

This Bond is fully transferable by the Registered Owner hereof in Person or by his or her duly authorized attorney on the registration books kept by the Trustee, upon surrender of this Bond together

A-6 with a duly executed written instrument of transfer satisfactory to the Trustee; subject, however, to the terms of the Indenture which limit the transfer and exchange of Bonds during certain periods. Upon such transfer a new fully registered bond of Authorized Denomination or Denominations for the same aggregate principal amount will be issued to the transferee in exchange therefor, all subject to the terms, limitations and conditions set forth in the Indenture. The Trustee and the Issuer shall require the payment by any Registered Owner of this Bond requesting exchange or transfer of the reasonable expenses of the Issuer, if any, of a reasonable transfer or exchange fee and of any tax or other governmental charge required to be paid with respect to such exchange or transfer. The Issuer and the Trustee may deem and treat the Person in whose name this Bond is registered as the absolute owner hereof, whether or not this Bond shall be overdue, for the purpose of receiving payment and for all other purposes, except to the extent otherwise provided herein and in the Indenture with respect to Regular Record Dates and Special Record Dates for the payment of interest, and neither the Issuer nor the Trustee shall be affected by any notice to the contrary.

Notwithstanding the foregoing, so long as the ownership of the Bonds is maintained in book- entry form by The Depository Trust Company (the “Securities Depository”) or a nominee thereof, this Bond may be transferred in whole but not in part only to the Securities Depository or a nominee thereof or to a successor Securities Depository or its nominee.

To the extent permitted by, and as provided in, the Indenture, modifications or amendments of the Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Issuer and of the registered owners of the Bonds may be made by the Issuer and the Trustee but without the consent of the registered owners of the Bonds in certain cases described in the Indenture, including any change which does not materially adversely affect the interests of the Registered Owners of the Bonds, but also including provision for the issuance of Additional Bonds. Certain other amendments may be made by the Issuer and the Trustee with the consent of the Registered Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding; provided, however, that no such modification or amendment shall be made which will constitute an extension of the maturity of, or a reduction in the principal amount of, or a reduction of the rate of interest on or extension of the time of payment of interest on, or a reduction of any premium payable upon redemption of, any Bond, which are unconditional unless consented to by all Registered Owners adversely affected by such change. Any such consent by the Registered Owner of this Bond shall be conclusive and binding upon such Registered Owner and upon all future Registered Owners of this Bond and of any Bond issued upon the transfer or exchange of this bond whether or not notation of such consent is made upon this Bond.

The Registered Owner of this Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the pledge, assignment or covenants made therein or to take any action with respect to an event of default under the Indenture or to institute, appear in, or defend any suit, action or other proceeding at law or in equity with respect thereto, except as provided in the Indenture. In case an event of default under the Indenture shall occur, the principal of all the Bonds at any such time outstanding may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be rescinded by the Trustee, with the consent of the Registered Owners of a requisite principal amount of the Bonds then outstanding.

None of the members of the board of directors of the Borrower, the Levy Court of the Issuer or any Person executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof.

The liability and obligations of the Issuer under the Agreement and the Indenture with respect to all or any portion of the Bonds may be discharged at or prior to the maturity or redemption of the Bonds

A-7 upon the making of provision for the payment thereof on the terms and conditions set forth in the Agreement and the Indenture.

No covenant or agreement contained in the Bonds or in the Indenture shall be deemed to be the covenant or agreement of any appointed official, council person, officer, agent, servant or employee of the Issuer in his or her individual capacity or of any officer, agent, servant or employee of the Trustee in his or her individual capacity, and neither the members of the governing body of the Issuer nor any official executing the Bonds, including any officer or employee of the Trustee, shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof.

No covenant or agreement contained in the Agreement shall be deemed to be the covenant or agreement of any appointed official, officer, agent, board member, servant or employee of the Borrower in his or her individual capacity, and the members of the governing body of the Borrower shall not be liable personally or be subject to any personal liability or accountability by reason of the execution and delivery thereof.

It is hereby certified, recited and declared that all conditions, acts and things required by the Constitution or statutes of the State or by the Act or the Indenture to exist, to have happened or to have been performed precedent to or in the issuance of this Bond exist, have happened and have been performed.

Copies of the Indenture, the Agreement, the Leasehold Mortgage and other documents relating to the Bonds are on file at the designated office of the Trustee, and reference is made to those instruments for the provisions relating, among other things, to the limited liability of the Borrower, the terms of and security for the Bonds, the custody and application of the proceeds of the Bonds, the rights and remedies of the Registered Owners of the Bonds, amendments, and the rights, duties and obligations of the Issuer and the Trustee to all of which the Registered Owner hereof, by acceptance of this Bond, assents.

This Bond shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose until the Trustee shall have signed the certificate of authentication hereon.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

A-8 IN WITNESS WHEREOF, Kent County, Delaware has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of its Authorized Representative and attested by the manual or facsimile signature of its Authorized Attesting Officer.

(SEAL) KENT COUNTY, DELAWARE

By: Name: P. Brooks Banta Title: President, Levy Court

Attest:

By Name: Loretta Wootten Title: Clerk of Peace of the County of Kent County, DE

A-9 (FORM OF CERTIFICATE OF AUTHENTICATION)

This is one of the 2016 Bonds described in the within mentioned Trust Indenture.

WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee

By Authorized Signatory

A-10 (FORM OF ASSIGNMENT)

ASSIGNMENT

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

______(Social Security or Federal Taxpayer Identification Number)

______(Please print or typewrite Name and Address, including Zip Code, of Assignee)

the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints the Trustee under the Indenture as registrar and attorney to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises.

Dated:

Signature guaranteed by:

NOTICE: Signature of the registered owner NOTICE: The signature of the registered owner to must be guaranteed by an eligible guarantor this assignment must correspond with the name as it institution pursuant to Securities and appears on the face of the within Bond in every Exchange Rule 17Ad-15. particular, without alteration or enlargement or any change whatsoever.

A-11 EXHIBIT B

COSTS OF ISSUANCE PAYABLE AT CLOSING

FROM THE COST OF ISSUANCE FUND:

PAYEE PURPOSE AMOUNT

Wilmington Trust, National Association Trustee’s Fees (including counsel) $ M&T Securities, Inc. Underwriter Fee Ballard Spahr LLP Bond Counsel Fee Saul Ewing LLP Underwriter’s Counsel Fee Potter Anderson & Corroon LLP Borrower’s Counsel Fees Richards, Layton & Finger, P.A. Trustee's Counsel Fees Wilmington Trust, National Association Escrow Agent Fees S&P Global Ratings, a Standard & Poor’s Rating Agency Fees Financial Services LLC McElwee & Quinn Printing Fees TOTAL: $

B-1

EXHIBIT C

FORM OF REQUISITION

$20,760,000 Kent County, Delaware Revenue Bonds (Kent County Regional Sports Complex Project) Series 2016

REQUISITION FROM CONSTRUCTION FUND OR SUBACCOUNT THEREOF

To: Wilmington Trust, National Association Requisition No.: ______1100 North Market Street Date: ______Wilmington, DE 19890

Pursuant to the Trust Indenture dated as of June 1, 2016 (the “Trust Indenture”) by and between Kent County, Delaware, a county and political subdivision of the State of Delaware (the “Issuer”) and Wilmington Trust, National Association, as trustee (the “Trustee”) and pursuant to the Loan Agreement dated as of June 1, 2016 (the “Loan Agreement”) by and between the Issuer and Kent County Regional Sports Complex Corporation, a Delaware non-stock corporation (the “Borrower”), we request that you make a disbursement of funds from the Construction Fund held by you as Trustee under the Trust Indenture to the payees on the attached schedule in the amounts indicated thereon. We hereby certify that all such expenses qualify as Costs of the Project to be paid from the Construction Fund or referenced subaccount therein.

KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION

By: ______Authorized Representative of the Borrower

C-1 DISBURSEMENT SCHEDULE TO REQUISITION NO.

PAYEES * AMOUNT PURPOSE FUND/ACCOUNT

* See any invoices attached for additional payment instructions

C-2 [ THIS PAGE INTENTIONALLY LEFT BLANK ] LOAN AND SECURITY AGREEMENT

by and between

KENT COUNTY, DELAWARE, as Issuer

and

KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION, as Borrower

$20,760,000 Kent County, Delaware Revenue Bonds (Kent County Regional Sports Complex Project), Series 2016

Dated as of June 1, 2016

Pursuant to the Indenture (defined herein), the Issuer has transferred into Trust, granted a security interest in and assigned to the Trustee for the benefit of the Bondholders, all right, title, and interest of the Issuer in this Loan Agreement, except for any deposits to the Rebate Fund, and except for all rights of the Issuer to (1) inspect books and records, (2) give or receive notices, approvals, consents, requests, and other communications, (3) receive payment or reimbursement for expenses, (4) receive payment of its Issuer’s Fee, (5) immunity from and limitation of liability, (6) indemnification from liability by the Borrower, and (7) security for the Borrower’s indemnification obligation.

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS ...... 2

ARTICLE II REPRESENTATIONS ...... 7 Section 2.01 Representations by the Issuer ...... 7 Section 2.02 Representations by the Borrower ...... 8 Section 2.03 Borrower’s Tax Covenants ...... 11 Section 2.04 Borrower’s Covenant to Comply with Organizational Documents ...... 15 Section 2.05 Representations by Borrower to Provide Ongoing Disclosure ...... 15 Section 2.06 Environmental Representations ...... 15

ARTICLE III TERM OF THE AGREEMENT ...... 16

ARTICLE IV THE PROJECT; ISSUANCE OF THE BONDS ...... 17 Section 4.01 Agreement to Issue 2016 Bonds; Application of Bond Proceeds and Other Moneys 17 Section 4.02 Disbursements from the Cost of Issuance Fund ...... 17 Section 4.03 Obligation of the Borrower to Furnish Documents to Trustee ...... 17 Section 4.04 Investment of Moneys ...... 17 Section 4.05 Tax Covenants ...... 18

ARTICLE V PAYMENT PROVISIONS ...... 18 Section 5.01 Loan Payments and Other Amounts Payable ...... 18 Section 5.02 Pledge By Borrower ...... 19 Section 5.03 Payees of Payments ...... 20 Section 5.04 Obligations of Borrower Hereunder Unconditional ...... 20

ARTICLE VI MAINTENANCE, TAXES AND INSURANCE ...... 20 Section 6.01 Maintenance and Modifications of Facilities by Borrower ...... 20 Section 6.02 Taxes, Other Governmental Charges and Utility Charges ...... 21 Section 6.03 Insurance Required ...... 22 Section 6.04 Application of Net Proceeds of Insurance ...... 23 Section 6.05 Advances by Issuer or Trustee ...... 23 Section 6.06 Environmental Indemnity ...... 23 Section 6.07 Environmental Covenants ...... 24 Section 6.08 Additional Environmental Provisions ...... 26

ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION ...... 27 Section 7.01 Damage, Destruction and Condemnation ...... 27 Section 7.02 Mandatory Prepayment from Insurance or Condemnation Proceeds ...... 29 Section 7.03 No Change in Loan Payments; No Liens ...... 29 Section 7.04 Investment of Net Proceeds ...... 29

ARTICLE VIII SPECIAL COVENANTS ...... 29 Section 8.01 No Warranty of Condition or Suitability by the Issuer ...... 29 Section 8.02 Consolidation, Merger, Sale or Conveyance ...... 29

Section 8.03 Further Assurances ...... 30 Section 8.04 Audits ...... 30 Section 8.05 Financial Statements; Reports; Annual Certificate ...... 30 Section 8.06 Release and Indemnification Covenants ...... 31 Section 8.07 Authority of Authorized Representative of the Borrower ...... 33 Section 8.08 Authority of Authorized Representative of the Issuer ...... 33 Section 8.09 Licenses and Qualifications ...... 33 Section 8.10 Right to Inspect ...... 33 Section 8.11 Lease or other Disposition of the Facilities ...... 33 Section 8.12 Nonsectarian Use ...... 34 Section 8.13 Limitations on Incurrence of Additional Indebtedness ...... 34 Section 8.14 Financial Covenants ...... 35 Section 8.15 Repair and Replacement Fund Deposits...... 35 Section 8.16 Operating Reserve Fund Deposits...... 35 Section 8.17 Advance Refundings ...... 35

ARTICLE IX ASSIGNMENT AND PLEDGING; REDEMPTION OF BONDS ...... 36 Section 9.01 Creation of Security Interest ...... 36 Section 9.02 Assignment and Pledge by Issuer ...... 36 Section 9.03 Redemption of Bonds ...... 36

ARTICLE X EVENTS OF DEFAULT AND REMEDIES ...... 36 Section 10.01 Events of Default Defined ...... 36 Section 10.02 Remedies on Default ...... 38 Section 10.03 No Remedy Exclusive ...... 39 Section 10.04 Agreement to Pay Attorneys’ Fees and Expenses ...... 39 Section 10.05 Waiver ...... 39 Section 10.06 Proofs of Claim ...... 40 Section 10.07 Treatment of Funds in Bankruptcy ...... 40

ARTICLE XI PREPAYMENT OF THE LOAN ...... 40 Section 11.01 General Option to Prepay the Loan ...... 40 Section 11.02 Notice of Prepayment ...... 41 Section 11.03 Use of Prepayment Moneys ...... 41

ARTICLE XII MISCELLANEOUS ...... 41 Section 12.01 Notices ...... 41 Section 12.02 Binding Effect ...... 42 Section 12.03 Severability ...... 42 Section 12.04 Third Party Beneficiaries ...... 42 Section 12.05 Amounts Remaining in Funds ...... 42 Section 12.06 Amendments, Changes and Modifications ...... 42 Section 12.07 Execution in Counterparts ...... 43 Section 12.08 Governing Law ...... 43 Section 12.09 Filing ...... 43 Section 12.10 Cancellation at Expiration of Term of Agreement ...... 43 Section 12.11 No Pecuniary Liability of Issuer ...... 43 Section 12.12 No Personal Liability of Officials of the Borrower, Issuer or the Trustee ...... 43 Section 12.13 Special Limited Obligation of Issuer ...... 44

Section 12.14 No Warranty by Issuer or Trustee ...... 45 Section 12.15 Prior Agreements Superseded ...... 45 Section 12.16 Covenant by the Borrower with Respect to Statements, Representations and Warranties ...... 45 Section 12.17 Captions ...... 45 Section 12.18 Payments Due on Holidays ...... 46 Section 12.19 Provision of General Application ...... 46 Section 12.20 Survival ...... 46 Section 12.21 Notice of Change in Fact ...... 46

EXHIBIT A LEGAL DESCRIPTION ...... 1

EXHIBIT B FORM OF PROMISSORY NOTE ...... 3

iii

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT, dated as of June 1, 2016 (this “Agreement”), is between KENT COUNTY, DELAWARE (the “Issuer”), a county and political subdivision duly organized and existing under the Constitution and laws of the State of Delaware (the “State”), and KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION, a nonstock corporation duly organized and validly existing under the laws of the State (the “Borrower”).

W I T N E S S E T H:

WHEREAS, the Issuer is authorized by Chapter 41, Title 9 of the Delaware Code, as amended (the “Act”) to issue revenue bonds for the purpose of financing the Project, as defined herein; and

WHEREAS, the Borrower has requested that the Issuer issue its bonds and loan the proceeds therefrom to the Borrower for the following purposes: (i) the development of Kent County Regional Sports Complex (a/k/a/ DE Turf Sports Complex) on an approximately 92 acre site located at 4000 Bay Road, Frederica, Delaware, 19946 including to (a) prepare the site and construct 13 turf or grass fields equipped with sports lighting, scoreboards and portable bleachers and (b) construct parking spaces, fixed seating for spectators and amenities such as paved walkways, shaded tent structures, restrooms, concessions, and administrative/maintenance buildings; (ii) pay capitalized interest on the 2016 Bonds; (iii) fund reserve funds, if any; and (iv) pay the costs of issuance of the 2016 Bonds (collectively, the “Project”); and

WHEREAS, pursuant to and in accordance with the Act, the Issuer proposes to make a loan (the “Loan”) to the Borrower pursuant to this Agreement for the purpose of financing the Project; and

WHEREAS, the Issuer has determined to issue its Kent County, Delaware Revenue Bonds (Kent County Regional Sports Complex Project), Series 2016 (the “2016 Bonds” and, together with any future Additional Bonds, the “Bonds”) in the aggregate principal amount of $20,760,000, pursuant to a Trust Indenture dated as of June 1, 2016 (the “Indenture”), between the Issuer and Wilmington Trust, National Association, as trustee (the “Trustee”), in order to fund such Loan; and

WHEREAS, the Issuer proposes to loan to the Borrower and the Borrower desires to borrow from the Issuer the proceeds of the 2016 Bonds for the purposes of financing or refinancing the Project upon the terms and conditions hereinafter in this Agreement set forth.

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto formally covenant, agree and bind themselves as follows:

ARTICLE I

DEFINITIONS

All terms defined in Appendix I to the Indenture shall have the same meaning in this Agreement. In addition, the following terms, except where the context indicates otherwise, shall have the respective meanings set forth below:

“Accountant” means initially, Christine Lawrence, CPA, Dover, Delaware, or any other independent certified public accounting firm licensed to practice in the State of Delaware (which may be the firm of accountants that regularly audits the books and accounts of the Borrower) from time to time selected by the Borrower.

“Accountant’s Certificate” means a report, certificate or opinion by the Accountant.

“Agreement” or “Loan Agreement” means this Loan and Security Agreement and any amendments and supplements hereto made in conformity with the requirements hereof and of the Indenture.

“Dissemination Agent” means Wilmington Trust, National Association, and its successors and assigns.

“Environmental Damages” means all claims, judgments, damages, losses, penalties, fines, liabilities (including strict liability), encumbrances, Liens, privileges, costs, and expenses of investigation and defense of any claim, whether or not such claim is ultimately defeated, and of any good faith settlement or judgment, of whatever kind or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, including without limitation reasonable attorneys’ fees and expert consultants’ fees and disbursements, any of which are incurred at any time as a result of the existence of Regulated Chemicals upon, about, beneath or migrating, or threatening to migrate, onto or from the Facilities, or the existence of a violation of Environmental Requirements pertaining to the Facilities, regardless of whether or not such Environmental Damages were caused by or within the control of the Borrower.

“Environmental Law” means the Comprehensive Environmental Response, Compensation and Liability Act of 1976, 42 U.S.C. §§ 6901 et seq., Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by SARA, 42 U.S.C. §§ 1820 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1810 et seq., the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §§ 9601 et seq., the Clean Water Act, 33 U.S.C. §§ 1251 et seq. and the Clean Air Act, 42 U.S.C. §§ 7412 et seq., and any other applicable federal or state laws pertaining to the protection of the environment, as any such laws may be amended, modified or supplemented and any regulations promulgated pursuant to any of the foregoing.

2 “Environmental Report” means any Environmental Assessment Tests (each as defined in Section 6.08 herein), or other environmental report or audit conducted at the Facilities for any reason.

“Environmental Requirements” means all applicable federal, State, regional or local laws, statutes, rules, regulations or ordinances, concerning public health, safety or the environment, including, but not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601, et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. §§ 6901, et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251, et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. §§ 2601, et seq., the Emergency Planning and Community Right-To-Know Act of 1986, 42 U.S.C. §§ 11001, et seq., the Clean Air Act of 1966, as amended, 42 U.S.C. §§ 7401, et seq., the National Environmental Policy Act of 1975, 42 U.S.C. § 4321, the Rivers and Harbors Act of 1899, 33 U.S.C. §§ 401 et seq., the Endangered Species Act of 1973, as amended 16 U.S.C. §§ 1531, et seq., the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651, et seq., the Safe Drinking Water Act of 1974, as amended 42 U.S.C. §§ 300(f), et seq., and all rules, regulations, policies and guidance documents promulgated or published thereunder, and any State, regional or local statute, law, rule, regulation or ordinance relating to public health, safety or the environment, including, without limitation those relating to:

(a) releases, discharges, emissions or disposals to air, water, land or groundwater;

(b) the withdrawal or use of groundwater;

(d) the transportation, treatment, storage, disposal, release or management of hazardous substances or materials (including, without limitation, petroleum, its derivatives, by-products or other hydrocarbons), and any other solid, liquid, or gaseous substance, exposure to which is prohibited, limited or regulated, or may or could pose a hazard to the health and safety of the occupants of the Facilities or any property adjacent to or surrounding the Facilities;

(e) the exposure of persons to toxic, hazardous, or other controlled, prohibited or regulated substances; and

(f) any Regulated Chemical.

“Event of Default” means those defaults specified in Section 10.01 hereof and in Section 8.01 of the Indenture.

“Excess Net Revenues” means Pledged Revenues, less Operating Expenses, annual debt service, and Debt Service Reserve Fund deficiency payments.

“Exempt Person” means any organization described in Section 501(c)(3) of the Code and exempt from tax under Section 501(a) of the Code, the District of Columbia, any state of the United States of America, any possession of the United States of America and any political subdivision of any such State or possession if such political subdivision has more than an insubstantial amount of any of the power to tax, the power of eminent domain or the police power.

3 “Fiscal Year” means the Borrower’s fiscal year, which currently begins on January 1 and ends on December 31 of each calendar year.

“Gross Proceeds” has the meaning set forth in Section 1.148-l(b) of the Treasury Regulations.

“Hazardous Material” means: (a) any substances defined as “hazardous substances,” “pollutants,” “contaminants,” “hazardous materials,” “hazardous wastes,” or “hazardous or toxic substances” or related materials as now or hereafter defined in any Environmental Law; (b) those substances listed or otherwise identified as substances of the type referred to in the preceding subsection (a) in the regulations adopted and publications issued pursuant to any Environmental Law, as the same may be amended, modified or supplemented; (c) any friable asbestos, airborne asbestos in excess of that generally found in the atmosphere, respectively, where the Facilities are located, or any substance or material containing asbestos, excluding any such materials located on the Facilities prior to the date hereof so long as such materials are contained, maintained, abated or removed in compliance with all applicable Environmental Laws; and (d) any substance the presence of which on the Facilities is prohibited by any applicable Environmental Law; provided that Hazardous Material shall not include any such substances used in or resulting from the ordinary operation of the Facilities or for the cleaning of the Facilities, provided that such substances are stored, handled and disposed of in compliance with all applicable Environmental Laws and other applicable laws and regulations.

“Indenture” means the Trust Indenture, dated as of June 1, 2016, between the Issuer and the Trustee, including any indentures supplemental thereto made in conformity therewith, pursuant to which the Bonds are authorized to be issued and secured.

“Investment” has the meaning set forth in Section 1.148-l(b) of the Treasury Regulations.

“Irrevocable Deposit” means the irrevocable deposit in trust of cash in an amount (or Government Obligations, the principal of and interest on which will be in an amount) and under terms sufficient to pay all or a specified portion of the principal of, premium, if any, and/or the interest on, as the same shall become due, any Indebtedness which would otherwise be considered Outstanding. The trustee of such deposit shall have possession of any cash and securities (other than book-entry securities) and may be the Trustee or any other trustee authorized to act in such capacity.

“Issue Price” means the par amount of the Bonds plus original issue premium, if any, less original issue discount, if any.

“Issuer” means Kent County, Delaware, a political subdivision duly organized and existing under the Constitution and laws of the State of Delaware, and its successors and assigns.

“Land” means the real estate, interests in real estate, and other real property rights described in Exhibit A hereto, together with all real estate, interests in real estate and other real property rights made a part of the Land in connection with the substitution of such real estate and other real property rights pursuant to Section 8.11 hereof or as the result of replacement of property taken in condemnation, or otherwise, less such real estate, interests in real estate and other real property rights released under the provisions of Section 8.11 hereof or taken by the exercise of the power of eminent domain as provided in Section 7.02 hereof.

“Liabilities” means any causes of action (whether in contract, tort or otherwise), claims, costs, damages, demands, judgments, liabilities, losses, suits and expenses (including, without limitation, reasonable costs of investigation, and attorney’s fees and expenses) of every kind, character and nature whatsoever.

4 “Lien” means any mortgage or pledge of, security interest in, or lien or encumbrance on, any property which secures any Indebtedness or other obligation of the Borrower or which secures any obligation of any Person other than an obligation to the Borrower excluding liens applicable to property in which the Borrower has only a leasehold interest unless the lien secures Indebtedness.

“Loan” means the loan by the Issuer to the Borrower of the proceeds from the sale of the Bonds pursuant to this Agreement.

“Loan Payment(s)” means those payments required to be paid by the Borrower pursuant to Section 5.01(a) hereof.

“Management Consultant” means an independent professional firm, corporation or Person engaged by the Borrower (with written notice of the engagement to the Trustee) as may be required by the provisions hereof.

“Official Statement” means the Official Statement prepared in connection with the sale of the 2016 Bonds dated June 22, 2016.

“Permitted Encumbrance” means, as of any particular time, the following:

(a) Liens for taxes and special assessments on the Project not then delinquent;

(b) the Lease and the Leasehold Mortgage;

(d) utility, access, and other easements and rights-of-way, mineral rights and reservations, restrictions and exceptions which would not in the aggregate (i) materially interfere with or impair any present use of the Project or any reasonably probable future use of the Project, or (ii) materially reduce the value which would be reasonably expected to be received for the Project upon any sale (including any foreclosure of the mortgage granted by the Leasehold Mortgage);

(e) mechanics’ and materialmen’s Liens related to the Project when payment of the related bill is not overdue;

(f) mechanics’ and materialmen’s Liens, security interests or other encumbrances related to the Project to the extent permitted in Section 6.01 hereof;

(g) judgment Liens against the Borrower so long as such judgment is being contested and execution thereon is stayed or while the period for responsive pleading has not lapsed;

(h) (i) Rights reserved to or vested in any municipality or public authority by the terms of any right, power, franchise, grant, license or permit, or provision of law, affecting the Project, to (A) terminate such right, power, franchise, grant, license or permit, provided that the exercise of such right would not materially impair the use of the Project or materially and adversely affect the value thereof, or (B) purchase, condemn, appropriate, or recapture, or designate a purchaser of, the Project; (ii) Liens on the Project for taxes, assessments, levies, fees, water and sewer charges, and other governmental and similar charges not yet due or delinquent; (iii) easements, rights-of-way, servitudes, restrictions and other minor defects, encumbrances and irregularities in the title to the Project which do not materially impair the use of the Project or materially and adversely affect the value thereof; or (iv)

5 rights reserved to or vested in any municipality or public authority to control or regulate the Project or to use the Project in any manner, which rights do not materially impair the use of the Project or materially and adversely affect the value thereof;

(i) Liens and any other restrictions, exceptions, leases, easements or encumbrances which are existing on the date of initial issuance and delivery of the Bonds, provided that no such Lien (or the amount of Indebtedness secured thereby), restriction, exception, lease, easement or encumbrance may be increased, extended, renewed or modified to apply to the Project not subject to such Lien on such date, unless such Lien as so extended, renewed or modified or otherwise qualified as a Permitted Encumbrance hereunder or is otherwise permitted pursuant to Section 8.13 hereof;

(j) Liens on the Facilities and the Pledged Revenues for any Indebtedness which meets the conditions described in Section 8.13 hereof; and

(k) Liens arising by reason of an Irrevocable Deposit.

(l) Liens on the Facilities and the Pledged Revenue (subordinate to the Leasehold Mortgage) to secure payment of indebtedness subordinate to the obligations of the Borrower under Section 8.13 hereof.

“Person” includes an individual, association, corporation, partnership, joint venture or a government or an agency or a political subdivision thereof.

“Pledged Revenues” means, regardless of the source, all revenues, rentals, fees, third-party payments, receipts, donations, contributions or other income of the Borrower, to the extent permitted thereby and by law, including accounts receivables or other rights to receive such revenues, including, without limitation, proceeds derived from insurance, condemnation proceeds, accounts, contract rights and other rights and assets, whether now or hereafter owned, held or possessed by the Borrower; and all gifts, grants, bequests and contributions (including income and profits therefrom) to the extent permitted by the terms thereof and by law.

“Preliminary Official Statement” means the Preliminary Official Statement prepared in connection with the offering of the 2016 Bonds dated June 10, 2016.

“Principal Payment Date” or “sinking fund payment date” means, with respect to the 2016 Bonds, each October 1, commencing October 1, 2020 and, with respect to any series of Additional Bonds, such other dates as shall be specified in a Supplemental Indenture.

“Project” shall have the meaning assigned to such term in the recitals hereof.

“Promissory Notes” or “Notes” means, the 2016 Note, together with any promissory note related to a future series of Additional Bonds.

“Regulated Chemicals” means any substance, the presence of which requires investigation, permitting, control or remediation under any federal, State or local statute, regulation, ordinance or order, including without limitation:

(a) any substance defined as “hazardous waste” under the Resource Conservation and Recovery Act, as amended (42 U.S.C. §§ 6901 et seq.);

6 (b) any substance defined as a “hazardous substance” under the Comprehensive Environmental Response, Compensation and Liability Act, as amended (42 U.S.C. §§ 9601 et seq.);

(c) any substance defined as a “hazardous material” under the Hazardous Materials Transportation Act (49 U.S.C. §§ 1800 et seq.);

(d) any substance defined under any Delaware statute analogous to (a), (b) or (c), to the extent that said statute defines any term more expansively;

(e) asbestos;

(f) urea formaldehyde;

(g) polychlorinated biphenyls;

(h) petroleum, or any distillate or fraction thereof;

(i) any hazardous or toxic substance designated pursuant to the laws of the State; and

(j) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental authority.

“Repair and Replacement Fund Requirement” means an amount equal to 5% of the budgeted Operating Expenses as of the first Business Day of each Fiscal Year not to exceed $200,000.

“Retirement Date” means the date on which the last Bond is redeemed and cancelled.

“State” means the State of Delaware.

“Yield” of

(a) any Investment has the meaning set forth in Section 1.148-5 of the Treasury Regulations; and

(b) any Bonds has the meaning set forth in Section 1.148-4 of the Treasury Regulations.

ARTICLE II

REPRESENTATIONS

Section 2.01 Representations by the Issuer. The Issuer represents that:

(a) The Issuer is a political subdivision duly organized and existing under the Constitution and laws of the State of Delaware;

(b) In order to finance the costs of the Project, in an amount estimated by the Borrower, the Issuer has duly authorized the execution, delivery, and performance on its part of the Bond Purchase Agreement, the Indenture, and this Agreement;

(c) To accomplish the foregoing, the Issuer proposes to issue $20,760,000 in aggregate principal amount of its 2016 Bonds immediately following the execution and delivery of this

7 Agreement. The date, denomination or denominations, interest rate or rates, maturity schedule, redemption provisions and other pertinent provisions with respect to the Bonds are set forth in the Indenture;

(d) The Issuer makes no representation or warranty that the amount of the Loan will be adequate or sufficient to finance the Project or that the Project will be adequate or sufficient for the purposes of the Borrower; and

(e) The Issuer has not pledged, assigned, or granted, and will not pledge, assign, or grant any of its rights or interest in or under this Agreement for any purpose other than as provided for in the Indenture.

Section 2.02 Representations by the Borrower. The Borrower represents and covenants that:

(a) As of the date of this Agreement and so long as this Agreement shall remain in force and effect, that the Borrower: (i) is and shall continue to be exempt from federal income taxes under Section 501(a) of the Code or any future section resulting in exemption from such taxes; (ii) it shall not perform any act or enter into any agreement which shall adversely affect such federal income tax status; (iii) it shall not perform any act, enter into any agreement or use or permit the Project to be used in any manner (including in any unrelated trade or business) which would adversely affect the exclusion from gross income of interest on the Tax-Exempt Bonds pursuant to the Code; (iv) it shall not carry on or permit to be carried on in the Project or permit the Project to be used in or for any trade or business the conduct of which is not substantially related to the exercise of performance by the Borrower of the purposes or functions constituting the basis for its exemption under Section 501 of the Code to the extent that such use of the Project would adversely affect the exclusion from gross income of interest on the Tax-Exempt Bonds for federal income tax purposes; and (v) it is duly organized and existing as a nonstock corporation under the laws of the State, it is in good standing and authorized to transact business in the State, it will maintain, extend and renew its corporate existence under the laws of the State, and it will not do, suffer or permit any act or thing to be done whereby its right to transact its functions might or could be terminated or its activities restricted.

(b) (i) As of the date of this Agreement, the Borrower is an organization organized and operated (A) exclusively for charitable purposes within the meaning of Section 501(c)(3) of the Code, (B) not for pecuniary profit, and (C) in a manner that no part of the net earnings of which inures to the benefit of any person, private stockholder or individual, all within the same meaning, respectively, of 15 U.S.C. Section 77(c)(a)(4), Section 3(a)(4) of the Securities Act of 1933, as amended, and of 15 U.S.C. Section 78 1(g)(2)(D), Section 12(g)(2)(d) of the Securities Exchange Act of 1934, as amended, and (ii) the Borrower shall not perform any act or enter into any agreement which shall adversely affect such status as set forth in this paragraph (b) which would cause the Borrower to lose its exemption from federal income taxes.

(c) The Borrower is organized and operated for the purpose of providing recreational services, and with the power to own, develop, construct, rehabilitate, operate, equip, and maintain its facilities, the Borrower has been duly authorized to execute each of the Borrower Documents and consummate all of the transactions contemplated thereby, and the execution, delivery, and performance of the Borrower Documents will not conflict with or constitute a breach of or default by the Borrower under any other instrument or agreement to which the Borrower is a party or to which its property is bound.

(d) The Borrower’s execution, delivery, and performance of the Borrower Documents shall not constitute a violation of any order, rule, or regulation of any court or governmental agency having jurisdiction over the Borrower.

8 (e) There are no pending or, to the Borrower’s knowledge, threatened actions, suits, or proceedings of any type whatsoever affecting the Borrower, the Borrower’s property, or the Borrower’s ability to execute, deliver, and perform with respect to any of the Borrower’s Documents, except as otherwise set forth in the Preliminary Official Statement and the Official Statement.

(f) Neither the representations of the Borrower contained in the Borrower Documents, the Official Statement nor any oral or written statements, furnished by the Borrower, nor written statements furnished on behalf of the Borrower, to the Issuer, Bond Counsel or the Underwriter in connection with the transactions contemplated hereby, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained herein or therein not misleading. There are no facts that the Borrower has not disclosed to the Issuer and the Underwriter of the Bonds in writing that materially and adversely affect or in the future may (so far as the Borrower can now reasonably foresee) materially and adversely affect the properties, business, prospects, profits, or condition (financial or otherwise) of the Borrower, or the ability of the Borrower to perform its obligations under the Borrower Documents or any documents or transactions contemplated hereby or thereby.

(g) The Borrower’s federal employer identification number is 46-1001385.

(h) During the term of this Agreement, the Borrower intends to and will utilize or cause the Project and the facilities and equipment financed with the proceeds of the Bonds to be utilized as a permissible project within the meaning of the Act as in effect on the date hereof.

(i) To the Borrower’s knowledge, the use of the Project, as it is proposed to be operated, complies with all presently applicable zoning, development, pollution control, water conservation, environmental, and other laws, regulations, rules, and ordinances of the federal government and the State and the respective agencies thereof and the political subdivisions in which the Project is located.

(j) The Borrower has obtained, or will obtain before they are required, all necessary approvals of and licenses, permits, consents, and franchises from federal, state, county, municipal, or other governmental authorities having jurisdiction over the Facilities to acquire, construct, improve, equip, rehabilitate, and operate the Facilities, and to enter into, execute, and perform its obligations under this Agreement and the other Borrower Documents.

(k) To the Borrower’s knowledge, the Facilities, as designed and as proposed to be operated or caused to be operated by the Borrower, and when constructed or rehabilitated in accordance with such design, will meet all material requirements of law, including requirements of any federal, state, county, city or other governmental authority having jurisdiction over the Project or its use and operation.

(l) To the best of the Borrower’s knowledge, none of the Issuer Indemnified Parties has any significant or conflicting interest, financial, employment, or otherwise, in the Borrower, the Project, or in any of the transactions contemplated under the Borrower Documents.

(m) As of the Closing Date, there has been no material adverse change in the financial condition, prospects, or business affairs of the Borrower or the feasibility or physical condition of the Facilities subsequent to the date on which the Issuer enacted its ordinance approving the issuance of the Bonds.

(n) The Borrower (i) understands the nature of the structure of the transactions related to the financing of the Project; (ii) is familiar with all the provisions of the documents and

9 instruments related to such financing to which the Borrower or the Issuer is a party or which the Borrower is a beneficiary; (iii) understands the risk inherent in such transactions, including, without limitation, the risk of loss of the Project; and (iv) has not relied on the Issuer for any guidance or expertise in analyzing the financial consequences of such financing transactions or otherwise relied on the Issuer in any manner, except to issue the Bonds in order to provide funds for the Loan.

(o) The Borrower hereby acknowledges receipt of the Indenture, agrees to be bound by its terms, and accepts all obligations and duties imposed thereby.

(p) The Borrower covenants and agrees that it will not use or permit the use of any funds provided by the Issuer hereunder or any other funds of the Borrower directly or indirectly, in a manner which would, or enter into, or allow any “related person” (as defined in Code Section 147(a)(2)) to enter into, any arrangement, formal or informal, for the purchase of the Bonds that would, or take or omit to take any action that would, to the knowledge of the Borrower, cause any Bond to be an “arbitrage bond” within the meaning of Code Section 148 or “federally guaranteed” within the meaning of Code Section 149(b) and the applicable regulations promulgated from time to time thereunder. The Borrower further covenants to comply with the covenants and procedures set forth in Section 3.15 of the Indenture and to deposit in the Rebate Fund such amount as may be necessary to maintain the deposit in the Rebate Fund at the Rebate Requirement. Finally, the Borrower covenants to pay to the Trustee on demand all sums necessary to retain or pay the fees and expenses of the Rebate Analyst.

(q) Notwithstanding any provisions of this Section 2.02, if the Borrower shall provide to the Issuer and the Trustee an opinion of Bond Counsel that any specified action required under this Section or Section 3.15 of the Indenture is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Bonds, the Issuer, the Trustee and the Borrower may conclusively rely on such opinion in complying with the requirements of this Section and Section 3.15 of the Indenture and be protected in so doing, and the covenants hereunder shall be deemed to be modified to that extent.

(r) The Borrower shall provide the reports set forth in Section 8.05 hereof.

(s) The construction contracts entered into on or after the date hereof, if any, for the construction of the Project will contain provisions requiring the retention of 5% of each progress payment to the contractor until the construction of such building has been completed to the satisfaction of the Borrower. The Borrower will not amend such retention provisions without the prior written approval of the Issuer.

(t) All representations of the Borrower contained herein or in any certificate or other instrument delivered by the Borrower pursuant hereto, to the Indenture, or in connection with the transactions contemplated thereby, shall survive the execution and delivery thereof and the issuance, sale, and delivery of the Bonds as representations of facts existing as of the date of execution and delivery of the instrument containing such representation.

(u) The Borrower covenants and agrees to pay, when due, all costs and expenses of the Issuer incurred in connection with the Bonds or the Project not paid from the Cost of Issuance Fund, including, without limitation, each and all of the following:

(i) all indemnity payments;

10 (ii) all expenses incurred by the Issuer in connection with the Project, the Bonds, the Indenture, or any of the Borrower Documents, including, without limitation, its attorneys’ fees and expenses and its advisors’ fees and expenses;

(iii) the fees and expenses of the Rebate Analyst; and

(iv) the Issuer’s Fee to be collected at closing.

(v) The Borrower will not grant any Liens on the Facilities or the Pledged Revenues (other than the Lien against the Pledged Revenues effected by this Agreement and Permitted Encumbrances).

(w) Upon the execution by the Borrower of the Leasehold Mortgage and its subsequent recording, and upon the execution and filing of UCC-1 financing statements or amendments thereto, the Trustee will have a valid first Lien on and security interest in the Mortgaged Property (as defined in the Leasehold Mortgage) subject to no Liens, charges or encumbrances other than the Permitted Encumbrances, and the Borrower will take all necessary actions including filing continuation statements to preserve such Lien and security interest. The Borrower shall not change its name unless prior to the effective date of such change the Borrower shall have delivered to the Trustee an Opinion of Counsel to the effect that all filings and other actions necessary under the Uniform Commercial Code and other applicable law in order to preserve and protect such Lien and security interest following such name change have been made and taken; and

Section 2.03 Borrower’s Tax Covenants. The Borrower represents and covenants that:

(a) The Borrower shall not take any action or omit to take any action which, if taken or omitted, respectively, would adversely affect the excludability of interest on the Tax-Exempt Bonds from the gross income, as defined in Section 61 of the Code, of the owner thereof for federal income tax purposes. The Borrower and the Issuer shall execute such amendments hereof and supplements hereto (and shall comply with the provisions thereof) as may, in the opinion of Bond Counsel, be necessary to preserve or perfect such exclusion. The Borrower shall comply with each specific covenant in this Section at all times prior to the last maturity of the Bonds, unless and until there shall have been delivered to the Trustee and the Issuer an opinion of Bond Counsel to the effect that failure to comply with such covenant shall not adversely affect the excludability of interest on the Tax-Exempt Bonds from the gross income, as defined in Section 61 of the Code, of the owner thereof for federal income tax purposes, and thereafter such covenant shall no longer be binding upon Borrower.

(b) All representations, warranties, and certifications made by the Borrower in connection with the delivery of the Bonds on the closing date, including, but not limited to, those representations, warranties, and certifications contained in any certificate concerning tax-exempt status of the Tax-Exempt Bonds executed by the Borrower, are and shall be true, correct, and complete in all material respects.

(i) its purposes, character, activities, and methods of operation have not changed materially since its organization and are not materially different from the purposes, character, activities, and methods of operation contemplated at the time of its determination by the Internal Revenue Service to be an organization described in Section 501(c)(3) of the Code;

11 (ii) it has not and will not divert a substantial part of its corpus or income for a purpose or purposes other than the purpose or purposes for which it is organized or operated;

(iii) it has not operated, and will not operate, in a manner that would result in it being classified as an “action” organization within the meaning of Section 1.501(c)(3)-(1)(c)(3) of the Treasury Regulations, including, but not limited to, promoting or attempting to influence legislation by propaganda or otherwise as a substantial part of its activities;

(iv) none of its directors, officers, organizers or incorporators, or any Person controlled by it, or any other Person having a private or professional interest in the activities of it has acquired or received nor will such Persons be allowed to acquire or receive, directly or indirectly, without due compensation, goods, or services therefor, or any of the income or assets of the Borrower, in any form;

(v) it is not a “private foundation” within the meaning of Section 509(a) of the Code;

(vi) it has not received any indication or notice to the effect that its exemption from federal income taxation under Section 501(a) of the Code has been revoked or modified, or that the Internal Revenue Service is considering revoking or modifying such exemption, and such exemption is still in full force and effect;

(vii) the Borrower has timely filed and will timely file with the Internal Revenue Service all requests for determination, reports, and returns required to be filed by it to maintain its status as an organization described in Section 501(c)(3) of the Code, and such requests for determination, reports, and returns have not omitted or misstated any material fact;

(viii) the Borrower has not devoted nor will it devote more than an insubstantial part of its activities in furtherance of a purpose other than an exempt purpose within the meaning of Section 501(c)(3) of the Code; and

(ix) the Borrower has not taken any action, nor knows of any action that any other Person has taken, nor knows of the existence of any condition which would cause the Borrower to lose its exemption from federal income taxation under Section 501(a) of the Code or cause interest on the Tax-Exempt Bonds to be includable in the income of the recipients thereof for federal income tax purposes.

(d) (i) The weighted average maturity of the Tax-Exempt Bonds, calculated in accordance with the Code, does not exceed 120% of the average reasonably expected economic life (or expected remaining economic life in the case of a refinancing) of the facilities, calculated in accordance with Section 147(b) of the Code, financed or refinanced with the proceeds of the Tax-Exempt Bonds.

(ii) The Borrower shall be organized and shall conduct its operations in such a manner so as to qualify the Borrower as an organization described in Section 501(c)(3) of the Code.

(iii) The Borrower shall (or shall cause one or more other Exempt Persons to) own all portions of the Project at all times prior to the final maturity of the Tax-Exempt Bonds.

12 (e) The Borrower shall not use (or permit the use of) any proceeds of the Tax- Exempt Bonds, or any income from the investment thereof or any property financed or refinanced with such proceeds or income in any trade or business carried on by any Person which is not an Exempt Person or in any unrelated trade or business, as defined in Section 513(a) of the Code, of an Exempt Person or permit the direct or indirect loan of any such proceeds, income, or property to any Person other than an Exempt Person or to any Person which is an Exempt Person for use in an unrelated trade or business, as defined in Section 513(a) of the Code, if the amount of such proceeds, income, or property so used or loaned or portions thereof so used in the aggregate, when added to the cost of issuance financed directly or indirectly with Bond proceeds, exceeds 5% of the Net Proceeds of the Tax-Exempt Bonds. For purposes of this Subsection, property is considered to be “used” by a Person if:

(i) it is sold or otherwise disposed of, or leased, to such Person;

(ii) it is operated, managed, or otherwise physically employed, utilized, or consumed by such Person, excluding operation or management pursuant to an agreement which meets the guidelines set forth in Treasury Regulation Section 1.141-3(c), including any amendments or revisions thereto;

(iii) capacity in or output or service from such property is reserved or committed to such Person under a take-or-pay, output, incentive payment, or similar contract or arrangement;

(iv) such property is used to provide service to (or such service is committed to or reserved for) such Person on a basis or terms which are different from the basis or terms on which such service is provided (or committed or reserved) to members of the public generally; or

(v) substantial benefits and burdens of ownership of such property are otherwise effectively transferred to such Person; but the investment of amounts held for the credit of any fund or account established under the Indenture relating to the Tax-Exempt Bonds in accordance with the applicable provisions thereof shall not constitute “use” of property or a “loan” of proceeds. For purposes of this Subsection, proceeds are considered to be “loaned” to a Person if:

(A) property financed or refinanced with proceeds of the Bonds or any income from the investment thereof is sold or leased to such Person in a transaction which creates a debt for federal income tax purposes;

(B) capacity in or service from such property is committed to such Person under a take-or-pay, output, or similar contract or arrangement; or

(C) indirect benefits, or burdens and benefits of ownership, of such property are otherwise transferred to such Person in a transaction which is the economic equivalent of a loan,

and the amount of any such “loan” is the cost of such property financed or refinanced with proceeds or investment income of the Tax-Exempt Bonds.

(f) The Borrower shall not use or permit the use of any proceeds of the Tax-Exempt Bonds or any income from the investment thereof:

13 (i) to provide any airplane, skybox, or other private luxury box, any facility primarily used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises, or

(ii) to pay or otherwise finance costs of issuance of the Tax-Exempt Bonds (e.g., underwriting compensation, trustee and rating agency fees, printing costs, Issuer fees, and fees and expenses of counsel) in an amount which exceeds 2% of the Issue Price (exclusive of accrued interest) of the Tax-Exempt Bonds.

(g) The Borrower shall not take any action or omit to take any action with respect to the Gross Proceeds of the Tax-Exempt Bonds or of any amounts expected to be used to pay the principal thereof or the interest thereon which, if taken or omitted, respectively, would cause any Tax-Exempt Bond to be classified as an “arbitrage bond” within the meaning of Section 148 of the Code.

(h) Except as provided in the Indenture and this Agreement, the Borrower shall not pledge or otherwise encumber, or permit the pledge or encumbrance of, any money, investment, or investment property as security for payment of any amounts due under the Agreement or the Tax-Exempt Promissory Note, shall not establish any segregated reserve or similar fund for such purpose and shall not prepay any such amounts in advance of the redemption date of an equal principal amount of Tax-Exempt Bonds, unless in each case in the opinion of Bond Counsel addressed to the Trustee and the Issuer such action will not adversely affect the excludability of interest on any Tax-Exempt Bond from the gross income, as defined in Section 61 of the Code, of the owner thereof for federal income tax purposes.

(i) The Borrower shall not, at any time prior to the final maturity of the Bonds, direct or permit the Trustee to invest Gross Proceeds in any Investment (or to use Gross Proceeds to replace money so invested), if as a result of such investment the Yield of all Investments acquired with Gross Proceeds (or with money replaced thereby) on or prior to the date of such investment exceeds the Yield of the Tax-Exempt Bonds to stated maturity, except as permitted by Section 148 of the Code and Treasury Regulations thereunder or as provided in the Tax Certificate dated the closing date delivered by the Issuer of the Tax-Exempt Bonds.

(j) Except to the extent permitted by Section 149(b) of the Code and the Treasury Regulations and rulings thereunder, neither the Issuer nor the Borrower shall take or omit to take any action which would cause the Tax-Exempt Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code and the Treasury Regulations and rulings thereunder.

(k) The Borrower shall not direct or instruct the Trustee to invest Gross Proceeds of the Tax-Exempt Bonds in any manner which is inconsistent with the Indenture.

(l) As additional consideration for the purchase of the Tax-Exempt Bonds by the purchaser thereof, and in order to induce such purchase by measures designed to insure the excludability from gross income of the interest thereof for federal income tax purposes, the Borrower shall deliver to the Trustee, within 30 days after each fifth (5th) Rebate Year while any Tax-Exempt Bonds remain Outstanding, those reports and certifications demonstrating compliance with the rebate requirements of Section 148 of the Code. The Trustee shall not be liable for any calculations or representations made by the Borrower pursuant to this Section.

(m) Anything in this Agreement to the contrary notwithstanding, it is expressly understood and agreed by the parties hereto that the Issuer may rely conclusively on the truth and accuracy of any certificate, opinion, notice, representation or instrument furnished to the Issuer by the Trustee or the Borrower as to the existence of any fact or state of affairs required hereunder to be noticed

14 by the Issuer. The Trustee may rely conclusively on the truth and accuracy of any certificate, opinion, notice, representation or instrument furnished to the Trustee by the Borrower as to the existence of any fact or statement of affairs solely within the knowledge of the Borrower and which is required to be noticed, represented or certified by the Borrower to the Trustee hereunder.

(n) The Borrower covenants and agrees that it will not use or permit the use of any funds provided by the Issuer hereunder or any other funds of the Borrower directly or indirectly, in a manner which would, or enter into, or allow any "related person" (as defined in Section 147(a)(2) of the Code) to enter into, any arrangement, formal or informal, for the purchase of the Tax-Exempt Bonds that would, or take or omit to take any action that would, to the knowledge of the Borrower, cause the Tax- Exempt Bonds to be an "arbitrage bond" within the meaning of Code Section 148 or "federally guaranteed" within the meaning of Section 149(b) of the Code and the applicable regulations promulgated from time to time thereunder. The Borrower further covenants to comply with the covenants and procedures set forth in the Indenture and the Tax Certificate and to deposit in the Rebate Fund such amount as is required herein and in the Indenture. The Borrower covenants and agrees to pay to the Trustee on demand all sums necessary to retain or pay the fees and expenses of the Rebate Analyst.

(o) The Borrower shall employ, at its own expense, the Rebate Analyst (or other nationally recognized rebate analyst) so long as any Tax-Exempt Bonds remain Outstanding.

Section 2.04 Borrower’s Covenant to Comply with Organizational Documents. The Borrower covenants to comply fully and in all respects with the provisions of its organizational documents so long as any Bonds remain Outstanding.

Section 2.05 Representations by Borrower to Provide Ongoing Disclosure. The Borrower hereby covenants to enter into a written undertaking for the benefit of the holders of the Bonds required by Section (b)(5)(i) of Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (17 CFR Part 240, § 240.15c2-12) (the “Rule”) contemporaneously with the issuance of the Bonds which shall be assigned to the Trustee for the benefit of the Registered Owners and each Registered Owner shall be a beneficiary of this Section 2.05 and such undertaking with the right to enforce this Section 2.05 and undertaking directly against the Borrower.

Section 2.06 Environmental Representations. The Borrower and its successors and assigns hereby represents and warrants:

(a) Condition of Facilities: To the best of its knowledge, and after due inquiry, the Facilities, including all personal property, is free from contamination by Regulated Chemicals, including, but not limited to, friable asbestos, and there has not been thereon a release, discharge or emission, or a threat of release, discharge or emission, of any Regulated Chemical on, under, in, or about the Facilities, nor has any such Regulated Chemical migrated or threatened to migrate from other properties upon, about or beneath the Facilities.

(b) Previous Use of Facilities: To the best of the its knowledge, and after due inquiry, neither the Borrower nor any previous owner, tenant, occupant or user of the Facilities, nor any other Person, has engaged in or permitted any operations or activities upon, or any use or occupancy of the Facilities, or any portion thereof, whether legal or illegal, accidental or intentional, for the purpose of or in any way involving the handling, manufacture, treatment, storage, use, generation, release, discharge, refining, dumping or disposal of any Regulated Chemical, on, under, in or about the Facilities, nor has any such party transported any Regulated Chemical to, from or across the Facilities.

15 (c) Property Adjoining Facilities: To the best of its knowledge, and after due inquiry, any adjoining property has not been used as a manufacturing, storage or disposal site for Regulated Chemicals nor is any other property adjoining the Facilities affected by a violation of Environmental Requirements.

(d) Compliance with Environmental Requirements: To the best of its knowledge, and after due inquiry, the Facilities owned by the Borrower are in compliance with and has at all times been in compliance with all applicable Environmental Requirements and the Borrower has all permits and licenses required to be issued under the Environmental Requirements and is in full compliance with the terms and conditions of such permits and licenses; such permits and licenses are in full force and effect; and no changes exist in the facts or circumstances reported or assumed in the application for or granting of such permits or licenses.

(e) No Notice of Violations of Environmental Requirements: The Borrower has not received any notice, whether written or oral, concerning the Facilities owned by the Borrower, for any alleged violation or requiring compliance of Environmental Requirements, whether or not corrected to the satisfaction of the appropriate authority, or notice or other communication concerning alleged liability for Environmental Damages in connection with the Facilities owned by the Borrower, and to the best of Borrower’s knowledge there exists no investigation, administrative order, consent order and agreement, litigation, settlement or judgment, whether proposed, threatened, anticipated or in existence with respect to the Facilities owned by the Borrower.

(f) Survival of Representations and Warranties: The representations and warranties set forth in this Section 2.06 shall survive the expiration or termination of the Borrower Documents, the payment of the Bonds, and the discharge of any obligations owed by the parties to each other and will survive any transfer of title to the Facilities, whether by foreclosure, or otherwise and shall not be affected by any investigation by or on behalf of the Issuer or the Trustee or any information which the Issuer or the Trustee may have or obtain with respect thereto.

Moreover, the Borrower does hereby and specifically represent and warrant that it has no actual knowledge or reason to believe that any condition, previous use, compliance or violation of Environmental Requirements are contrary to the description in Section 2.06(a), (b), (c), (d), and (e).

ARTICLE III

TERM OF THE AGREEMENT

This Agreement shall remain in full force and effect from the date of delivery hereof until such time as all of the payments on the Promissory Notes shall have been fully paid or provision is made for such payment pursuant to the Indenture and all reasonable and necessary fees and expenses of the Trustee accrued and to accrue through final payment of the Promissory Notes, all fees and expenses of the Issuer accrued and to accrue through final payment of the Promissory Notes and all other liabilities of the Borrower accrued and to accrue through final payment of the Promissory Notes under this Agreement and the Indenture have been paid or provision is made for such payments pursuant to the Indenture; provided, however, notwithstanding any other provision hereof (a) the indemnification provisions of Sections 6.06 and 8.06 hereof and agreements contained in Section 10.04 hereof shall survive after the termination of the term of this Agreement; (b) all agreements, representations and certifications by the Borrower as to the exclusion from gross income of interest on the Bonds shall survive termination of the term hereof until the expiration of statutes of limitation applicable to the liability of the Registered Owners of the Bonds for federal and state income taxes with respect to interest on the Bonds; and (c) upon the defeasance of the Indenture, all such indemnification provisions shall be enforceable by the Issuer

16 Indemnified Parties, and all such agreements, representations and certifications regarding the exclusion from gross income of the interest on the Bonds shall be enforceable by the Registered Owners of the Bonds, directly against the Borrower until the expiration of statutes of limitation applicable to the liability of the Registered Owners of the Bonds for federal and state income taxes with respect to the interest on the Bonds.

ARTICLE IV

THE PROJECT; ISSUANCE OF THE BONDS

Section 4.01 Agreement to Issue 2016 Bonds; Application of Bond Proceeds and Other Moneys. In order to provide funds to make the Loan for payment of the Cost of the Project, the Issuer will sell and cause to be delivered to the initial purchasers thereof the 2016 Bonds and will make such Loan and direct the Trustee to deposit the proceeds of the 2016 Bonds (net of underwriter’s discount) as set forth in the Issuer’s Request to Authenticate and Deliver Bonds and the Indenture.

Section 4.02 Disbursements from the Cost of Issuance Fund. The Issuer has, in the Indenture, authorized and directed the Trustee to make payments from the Cost of Issuance Fund for the payment of issuance expenses as provided in this Section. Payments shall be made from the Cost of Issuance Fund only for paying the costs of legal, accounting, organization, marketing, trustee or other special services and other fees and expenses, incurred or to be incurred by or on behalf of the Issuer or the Borrower in connection with the issuance of the Bonds. The Issuer does not make any warranty either express or implied that the moneys in the Cost of Issuance Fund available for payment of the foregoing costs will be sufficient to pay such costs in full, and the Borrower agrees to pay costs in excess of the amount in the Cost of Issuance Fund from any moneys legally available for such purpose. Each payment out of the Cost of Issuance Fund shall be made only upon (i) receipt by the Trustee of an invoice from each payee in amounts not to exceed those as set forth in Exhibit B to the Indenture, or (ii) upon receipt by the Trustee of a requisition signed by the Borrower stating the payee, the amount to be paid and certifying that such cost was incurred in connection with the issuance of the Bonds.

Any amounts remaining on deposit in the Cost of Issuance Fund on January 1, 2017 shall be transferred by the Trustee to the Bond Interest Fund as provided in Section 3.13 of the Indenture.

Section 4.03 Obligation of the Borrower to Furnish Documents to Trustee. The Borrower agrees that the requisitions referred to in Section 4.02 hereof must be furnished to the Trustee before the Trustee will disburse funds held under the Indenture.

Section 4.04 Investment of Moneys. Any moneys held as a part of the Funds shall be invested, reinvested and transferred to other Funds by the Trustee as provided in Article VI of the Indenture. In addition, the Borrower covenants that any money held as a part of the Funds shall be invested in compliance with the procedures established by the Tax Certificate to the extent required to comply with the covenants contained in Section 4.05 hereof. The Borrower shall provide to the Trustee within 50 days of each 5th anniversary of the Closing Date commencing June 30, 2021, a certificate of the Borrower to the effect that (a) all requirements of the Agreement, the Indenture and the Tax Certificate with respect to the Rebate Fund have been met on a continuing basis, (b) the proper amounts have been and are on deposit in the Rebate Fund, and (c) timely payment of all amounts due and owing to the United States Treasury have been made, which certificate may be based in part on the computations of the Rebate Analyst. If the certifications required by either (b) or (c) above cannot be made, the certificate shall so state and shall be accompanied by either money of the Borrower together with a direction from the Borrower to the Trustee to either deposit such money to the Rebate Fund or to pay such money over to the

17 United States Treasury, as appropriate, or directions from the Borrower to the Trustee to transfer investment income available in any Fund to the Rebate Fund or to the United States Treasury, as appropriate. The Borrower acknowledges the provisions of Section 6.03 of the Indenture which limit the amount of money to be so transferred from the Funds at its direction.

If the certificate described in the preceding paragraph is not delivered to the Trustee within 50 days of each 5th anniversary of the Closing Date, commencing June 30, 2021, during the term of this Agreement, the Trustee shall (or shall cause an expert satisfactory to the Trustee to) notify the Borrower and do all things necessary to enable the Borrower (or such expert) to make such certification as soon as possible. The Trustee shall transfer moneys from other Funds as provided in Section 3.15 of the Indenture to the Rebate Fund or the United States Treasury, as appropriate, if required.

Section 4.05 Tax Covenants. The Borrower covenants for the benefit of the Issuer and the Registered Owners of the Tax-Exempt Bonds that it will not take any action or omit to take any action with respect to the Tax-Exempt Bonds, the proceeds thereof, any other funds of the Borrower or any of the property of the Borrower, including the Project, if such action or omission (a) would cause the interest on the Tax-Exempt Bonds to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Code, or (b) would cause interest on the Tax-Exempt Bonds to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Code except to the extent such interest is required to be included in the adjusted current earnings adjustment applicable to corporations under Section 56 of the Code in calculating corporate alternative minimum taxable income. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the Tax-Exempt Bonds until the expiration of statutes of limitations applicable to the liability of the Registered Owners of the Tax-Exempt Bonds for federal and state income taxes with respect to interest on the Tax-Exempt Bonds.

The Borrower further covenants, represents and warrants that the procedures set forth in the Tax Certificate implementing the above covenant shall be complied with to the extent necessary under the Code to maintain the exclusion from gross income of interest on the Tax-Exempt Bonds for federal income tax purposes (except to the extent noted in the preceding paragraph) or to avoid the application of any penalties under the Code, subject to any applicable statute of limitations.

ARTICLE V

PAYMENT PROVISIONS

Section 5.01 Loan Payments and Other Amounts Payable.

(a) The Borrower shall deposit, on the 20th calendar day of every month, all Net Revenues into the Revenue Fund, until the principal of, premium, if any, and interest on the Bonds and the Levy Court Loan, as applicable, shall have been paid or provision for the payment thereof shall have been made in accordance with the Indenture.

(b) On the redemption date, pursuant to Section 5.05 of the Indenture (other than a sinking fund redemption date), the Borrower shall pay as repayment of the Loan for deposit into the Bond Principal Fund an amount of money meeting the definition of Protected Funds which, together with the payments made by the Borrower on its Promissory Notes then on deposit in the Bond Principal Fund, is sufficient to pay the principal of and premium, if any, on the Bonds called for redemption in an amount equivalent to the principal amount of the Promissory Notes being prepaid and for deposit into the Bond Interest Fund an amount of money which, together with the payments made by the Borrower on its Promissory Notes then on deposit in the Bond Interest Fund, is sufficient to pay the interest accrued to the

18 redemption date of Bonds called for redemption in an amount equivalent to the principal amount of the Promissory Notes being prepaid.

(c) During the term of this Agreement, the Borrower shall pay or provide for the payment of all taxes and assessments, general or special, concerning or in any way related to the Facilities or any part thereof, and any other governmental charges and impositions whatsoever related to the Facilities, and premiums for insurance policies maintained on the Facilities as required by this Agreement.

(d) The Borrower agrees to pay or cause to be paid to the Trustee the reasonable and necessary fees and expenses of the Trustee, including its attorney fees and expenses, and any indemnity amounts due to the Trustee, as and when the same become due, upon submission of a statement therefor; provided that the Borrower may, without creating a default hereunder, contest in good faith any such fees or expenses.

(e) The Borrower shall pay or cause to be paid to the Trustee for deposit to the Rebate Fund all amounts required to be paid pursuant to the Tax Certificate at the times and in the manner specified therein.

(f) The Borrower agrees to pay or cause to be paid to the Issuer the Issuer’s Fee at closing, plus any amounts required to reimburse the Issuer for any expenses incurred by the Issuer, whether out-of-pocket or internal, in connection with this Agreement, the Indenture, the Bonds, the Tax Certificate, the Bond Purchase Agreement, the Project or any other instrument or action relating to the foregoing, including fees and disbursements of attorneys of the Issuer.

(g) The Borrower covenants to maintain the balance on deposit in the Debt Service Reserve Fund at an amount not less than the Debt Service Reserve Fund Requirement. If on any valuation date, the value of the Debt Service Reserve Fund (as determined pursuant to the Indenture) is less than the Debt Service Reserve Fund Requirement, upon notice from the Trustee of the amount of such deficit, the Borrower shall deposit such amount within fourteen (14) Business Days of its receipt of such notice. If at any time the amount on deposit in the Debt Service Reserve Fund is less than the Debt Service Reserve Fund Requirement due to a transfer of funds from such Fund because of a deficiency in the Bond Principal Fund or the Bond Interest Fund, the Trustee shall so notify the Borrower and the Borrower shall be required to restore the amount on deposit in the Debt Service Reserve Fund to an amount equal to the Debt Service Reserve Fund Requirement within six (6) months of such notice in six (6) equal monthly installments.

(h) The Borrower shall also, promptly upon the request of the Trustee, pay to the Trustee an amount necessary to pay the fees and expenses of the Rebate Analyst, unless directly paid to the Rebate Analyst by the Borrower.

In the event the Borrower should fail to make or fail to cause to be made any of the payments required by this Section, the item or installment in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid, and the Borrower agrees to pay the same and, with respect to the payments required by subsections (a), (b), (d), (e), (f), (g) and (i) of Section 5.01 hereof, to pay interest at the highest rate of interest borne by any of the Bonds, or the maximum rate permitted by law if less than such rate.

Section 5.02 Pledge By Borrower. In fulfillment of its obligations hereunder, the Borrower hereby pledges to the Issuer for the payment of the Loan and the Promissory Notes securing such Loan, and grants to the Issuer a security interest in, the following:

19 (i) all of the Borrower’s right, title and interest in and to the Facilities, including all related additions, replacements, substitutions and proceeds for the purposes of securing such Loan;

(ii) all Pledged Revenues; and

(iii) any and all other interests in real or personal property of every name and nature from time to time hereafter by delivery or by writing of any kind specifically mortgaged, pledged or hypothecated, as and for additional security by the Borrower or by anyone on its behalf.

Section 5.03 Payees of Payments. The Loan Payments provided for in Section 5.01(a) hereof shall be paid in funds immediately available in the city in which the designated corporate trust office of the Trustee is located directly to the Trustee for the account of the Issuer and shall be deposited into the Bond Principal Fund or the Bond Interest Fund as appropriate. The payments to be made to the Trustee under Section 5.01(d) hereof shall be paid directly to the Trustee for its own use. The payments provided for in Section 5.01(e) hereof shall be paid to the Trustee for the account of the Issuer and deposited into the Rebate Fund. Except for the Issuer's Fee paid at closing by requisition through the Trustee, the payments to be made to the Issuer under Section 5.01(f) hereof shall be paid directly to the Issuer. The payments to be made to the Rebate Analyst pursuant to Section 5.01(i) hereof shall be paid to the Trustee for further credit to the Rebate Analyst, unless paid directly to the Rebate Analyst by the Borrower.

Section 5.04 Obligations of Borrower Hereunder Unconditional. Except as provided herein, the obligations of the Borrower to make the payments required hereunder and to perform and observe the other agreements on its part contained herein shall be absolute and unconditional. This Loan Agreement is a general obligation of the Borrower. The Borrower (a) will not suspend or discontinue, or permit the suspension or discontinuance of, any payments provided for herein, (b) will perform and observe all of its other agreements contained in this Agreement, the Leasehold Mortgage and the Promissory Notes, and (c) except as provided in Article XI hereof, will not terminate this Agreement for any cause including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure to complete the Project, failure of consideration, eviction or constructive eviction, destruction of or damage to the Project, commercial frustration of purpose, or change in the tax or other laws or administrative rulings of or administrative actions by the United States of America or the State or any political subdivision of either, any failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability, or obligation arising out of or connected with this Agreement, whether express or implied, or any failure of the Trustee to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Indenture, whether express or implied. The Borrower may at its own cost and expense and in its own name or in the name of the Issuer, prosecute or defend any action or proceeding or take any other action involving third persons which the Borrower deems reasonably necessary in order to secure or protect its or its lessees’ rights of possession, occupancy and use of the Project.

ARTICLE VI

MAINTENANCE, TAXES AND INSURANCE

Section 6.01 Maintenance and Modifications of Facilities by Borrower. The Borrower agrees that during the term of this Agreement the Facilities shall be operated and maintained, in compliance with all governmental laws, building codes, ordinances, and regulations and zoning laws as shall be applicable to the Facilities, unless the same are being contested in good faith by appropriate proceedings which operate to stay any action to foreclose or otherwise realize on any property of the

20 Borrower. The Borrower agrees that during the term of this Agreement it will at its own expense (a) keep the Facilities in a safe condition required by law and (b) except to the extent the Borrower has determined that any portion of the Facilities is obsolete or not useful in its operations, keep the Facilities in good repair and in good operating condition, making from time to time all necessary repairs thereto (including external and structural repairs) and renewals and replacements thereof all of which shall be accomplished in a workmanlike manner in accordance with all applicable laws. The Borrower may dispose of portions of the Facilities that the Borrower determines to be obsolete or not useful to operations of the Facilities. The Borrower may also, at its own expense, make from time to time any additions, modifications or improvements to the Facilities (including modifications to the Facilities, if any) it may deem desirable for its purposes that do not substantially reduce its value; provided that all such additions, modifications and improvements made by the Borrower which are affixed to the Facilities shall become a part of the Facilities. The Borrower will not permit the removal of any personal property from the Facilities unless such personal property is obsolete, sold for fair market value or will be replaced with personal property of an equal or greater value. The Borrower will not permit any Liens, security interests or other encumbrances other than Permitted Encumbrances to be established or to remain against the Facilities for labor or materials furnished in connection with the Facilities or any additions, modifications, improvements, repairs, renewals or replacements made by it to the Facilities; provided that if the Borrower first notifies the Trustee of its intention to do so, the Borrower may, so long as no Event of Default has occurred and is continuing, diligently prosecute, in good faith, at its own expense, a contest of any mechanics’ or other Liens filed or established against the Facilities and in such event may permit the items contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless the Facilities or any part thereof will be subject to loss or forfeiture, in which event the Borrower shall promptly pay and cause to be satisfied and discharged all such unpaid items. The Issuer will, at the expense of the Borrower, cooperate fully with the Borrower in any such contest. In the event that the Borrower shall fail to pay any of the foregoing items required by this Section to be paid by the Borrower, the Issuer or the Trustee may (but shall be under no obligation to) pay the same, and any amounts so advanced therefor by the Issuer or the Trustee shall become an additional obligation of the Borrower under this Agreement to the one making the advance, which amount the Borrower agrees to pay on demand together with interest thereon at a rate which shall be 3% per annum above the highest rate of interest borne by any of the Bonds or the maximum rate permitted by law if less than such rate.

Section 6.02 Taxes, Other Governmental Charges and Utility Charges. The Borrower will pay, as the same become due, (a) all taxes and governmental charges of any kind whatsoever or payments in lieu of taxes that may at any time be lawfully assessed or levied against or with respect to the Facilities or any interest therein, or any machinery, equipment, or other property installed or brought by the Borrower therein or thereon which, if not paid, will become a Lien on the Facilities or a charge on the Pledged Revenues prior to or on a parity with the charge thereon under this Agreement, (b) all utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Facilities and (c) all assessments and charges lawfully made by any governmental body for public improvements that may be secured by a Lien on the Facilities provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Borrower shall be obligated to pay only such installments as may have become due during the term of this Agreement.

The Borrower may, at its own expense, but only if no Event of Default hereunder has occurred and is continuing, diligently prosecute and in good faith contest any such taxes, assessments and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges contested to remain unpaid during the period of such contest and any appeal therefrom if, in the Opinion of Counsel, the Facilities shall not be subject to loss or forfeiture. In the event that the Borrower is not able to obtain such Opinion of Counsel, such taxes, assessments or charges shall be paid promptly or secured by posting a bond with the Trustee in form satisfactory to the Trustee. The Issuer at the expense of the Borrower shall cooperate fully with the Borrower in any such contest. In the event that the

21 Borrower shall fail to pay any of the foregoing items required by this Section to be paid by the Borrower, the Issuer or the Trustee may (but shall be under no obligation to) pay the same and any amounts so advanced therefor by the Issuer or the Trustee shall become an additional obligation of the Borrower payable to the one making the advance, which amount the Borrower agrees to pay on demand together with interest thereon at a rate which shall be 3% per annum above the highest rate of interest borne by the Bonds or the maximum rate permitted by law if less than such rate.

Section 6.03 Insurance Required. Throughout the term of this Agreement, the Borrower shall keep, or cause to be kept, the Facilities insured against the following risks, paying as the same become due and payable all premiums with respect thereto:

(a) During construction, the contractor retained by the Borrower will carry builder's risk insurance. After construction is completed, the Borrower shall obtain, or cause to be obtained, Insurance against loss or damage to the Facilities and all improvements therein (including, during any period of time when the Borrower is making alterations, repairs or improvements to the Facilities, improvements and betterments coverage), all subject to standard form exclusions, with uniform standard extended coverage endorsement limited only as may be provided in the standard form of extended coverage endorsement at the time in use in the State, in an amount equal to the full replacement value of the Building or the aggregate principal amount of the Borrower’s Promissory Notes then Outstanding, whichever is greater.

(b) Commercial general liability, professional liability and automobile liability insurance against claims arising in, on or about the Facilities, including in, on or about the sidewalks or premises adjacent to the Facilities, providing coverage limits not less than the coverage limits customarily carried by owners or operators of facilities of similar size and character within the State.

(c) Such other forms of insurance as are customary in the industry or as the Borrower is required by law to provide with respect to the Facilities, including, without limitation, any legally required worker’s compensation insurance and disability benefits insurance.

All the insurance coverage required by this Section may be subject to deductible clauses in such amounts as are customary for facilities of similar size, type and character within the State.

All policies maintained (or caused to be maintained) by the Borrower pursuant to this Section shall be taken out and maintained with generally recognized, responsible insurance companies rated not less than “A” by A.M. Best, authorized in the State, which may include “captive” insurance companies or governmental insurance pools, selected by the Borrower. The insurance policies required by subsections (a), (b) and (c) of this Section shall name the Trustee, the Issuer and the Borrower as insureds as their respective interests may appear (provided that with respect to insurance maintained pursuant to subsections (b) and (d) of this Section and Section 4.09 herein, the Trustee shall also be named as a mortgagee under the terms of a standard Delaware mortgagee loss payable endorsement), and the Trustee shall also be named as an additional insured on the policy required by subsection (c) of this Section, and, provided further that all insurance proceeds for losses, and except for worker’s compensation, fidelity insurance and liability insurance, shall be paid directly to the Trustee. Such policies or certificates of insurance shall (i) provide that (except as to insurance required pursuant to subsection (d) of this Section) the insurer will mail 30 days’ written notice to the Issuer and the Trustee of any reduction in amount, material change in coverage or cancellation prior to expiration of such policy, and (ii) be satisfactory in all other respects to the Issuer.

The Borrower shall deliver to the Trustee (a) upon the commencement of the term of this Agreement, the certificate of insurance which the Borrower is then required to maintain pursuant to this

22 Section, together with evidence as to the payment of all premiums then due thereon, (b) at least 30 days prior to the expiration of any such policies evidence as to the renewal thereof, if then required by this Section, and the payment of all premiums then due with respect thereto, and (c) promptly upon request by the Issuer or the Trustee, but in any case within 90 days after the end of each Fiscal Year, a certificate of an Authorized Representative of the Borrower setting forth the particulars as to all insurance policies maintained by the Borrower pursuant to this Section and certifying that such insurance policies are in full force and effect, that such policies comply with the provisions of this Section and that all premiums then due thereon have been paid.

Section 6.04 Application of Net Proceeds of Insurance. The Net Proceeds of the insurance carried pursuant to subsection (a) of Section 6.03 hereof shall be applied as provided in Section 7.01 hereof. The Net Proceeds of the insurance carried pursuant to subsection (b) of Section 6.03 hereof shall be applied as provided in Section 7.01 hereof. The Net Proceeds of insurance carried pursuant to subsection (c) of Section 6.03 hereof shall be applied toward extinguishment or satisfaction of the liability with respect to which such insurance proceeds have been paid.

Section 6.05 Advances by Issuer or Trustee. In the event the Borrower shall fail to maintain the full insurance coverage required by this Agreement or shall fail to keep the Facilities in the condition required hereby (except as otherwise herein permitted), the Issuer or the Trustee may (but shall be under no obligation to) take out the required policies of insurance and pay the premiums on the same, or make the required repairs, renewals and replacements; and all amounts advanced therefor by the Issuer or the Trustee shall become an additional obligation of the Borrower under this Agreement to the one making the advance, which amounts the Borrower agrees to pay on demand together with interest thereon at a rate which shall be 3% per annum above the highest interest rate borne by any of the Bonds or the maximum rate permitted by law if less than such rate.

Section 6.06 Environmental Indemnity. In addition to the indemnification set forth in Section 8.06 hereof:

(a) Borrower and its successors and assigns, shall and do hereby indemnify and hold harmless the Registered Owners, the Beneficial Owners and the Trustee, their successors, assigns, trustees, directors, officers, employees, agents, contractors, subcontractors, licensees, and invitees (collectively referred to in this Section 6.06 as “Indemnified Parties”), for, from and against any and all Environmental Damages that the Indemnified Parties may incur as well as any and all loss, costs, damages, exemplary damages, natural resources damages, Liens, claims, actions, suits and expenses, (including, but not limited to, attorneys’ and paralegals’ fees and any and all other costs incurred in the investigation, defense and settlement of claims) that Indemnified Parties may incur as a result of or in connection with the assertion against Indemnified Parties, or against all or a portion of the Facilities, of any claim, civil, criminal or administrative, which:

(i) arises out of the actual, alleged or threatened discharge, dispersal, release, storage, treatment, generation, disposal or escape of any Regulated Chemical, including, but not limited to, any solid, liquid, gaseous or thermal irritant or contaminant, including, but not limited to, smoke, vapor, soot, fumes, acids, alkalis, chemicals, medical waste and waste (including materials to be recycled, reconditioned or reclaimed); or

(ii) actually or allegedly arises out of the use of any Regulated Chemical, the existence or failure to detect the existence or proportion of any Regulated Chemical in the soil, air, surface water or groundwater, or the performance or failure to perform the abatement or removal of any Regulated Chemical or of any soil, water, surface water or groundwater containing any Regulated Chemical; or

23 (iii) arises out of the actual or alleged existence of any Regulated Chemical on, in, under, or affecting all or a portion of the Facilities; or

(iv) arises out of any misrepresentations of Borrower concerning any matter involving Regulated Chemicals or Environmental Requirements; or

(v) arises out of Borrower’s failure to provide all information, make all submissions and filings, and take all steps required by appropriate government authority under any applicable environmental law, regulation, statute or program, whether federal, state or local, whether currently existing or hereinafter enacted.

Without prejudice to the survival of any other agreements of the Borrower hereunder, this indemnification shall survive any termination, payment, or satisfaction of the indebtedness and the termination of this Agreement, and any foreclosure or any other transfer of any kind of the Facilities and shall continue and survive ad infinitum.

Borrower’s indemnification contained herein shall be effective not only with any existing Environmental Requirements affecting the Borrower, Indemnified Parties and/or the Facilities, but also for any hereinafter enacted environmental law, regulation, statute or program, whether federal, state or local affecting Borrower, Indemnified Parties and/or the Facilities.

Borrower’s indemnification contained herein shall extend to any and all like claims which arise from the acts or omissions of any user, tenant, lessee, agent or invitee of Borrower.

The obligations under this Section shall not be affected by any investigation by or on behalf of Indemnified Parties, or by any information which Indemnified Parties may have or obtain with respect thereto.

Borrower’s indemnification shall include the duty to defend any and all claims, and Indemnified Parties may participate in the defense of any claim without relieving Borrower of any obligation hereunder. This duty to defend shall apply and constitute an obligation of Borrower regardless of any challenge by Borrower to this provision, the indemnification contained herein, or any other provision of this Agreement. This duty to defend shall apply regardless of the validity of Borrower’s indemnification, as may ultimately be determined by a court of competent jurisdiction.

Notwithstanding anything to the contrary contained in this Section 6.06, no indemnification shall be required for any Environmental Damage incurred solely as the result of the negligence or willful misconduct of the party seeking indemnification or Environmental Damage caused by or through the party seeking indemnification.

Section 6.07 Environmental Covenants.

(a) Use of Facilities. The Borrower will not intentionally or unintentionally conduct, or allow to be conducted, any business, operation, or activity on, under, or in the Facilities, or employ or use the Facilities or allow for it to be employed or used, to manufacture, transport, treat, store, or dispose any Regulated Chemical which would violate or potentially violate Environmental Requirements, including, but not limited to, any action which would:

(i) bring the Borrower, or the Facilities, within the ambit of, or otherwise violate, the Resource Conservation and Recovery Act of 1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. §§ 6901, et seq.;

24 (ii) cause, or allow to be caused, a release or threat of release, of hazardous substances on, under, in, or about the Facilities as defined by, and within the ambit of, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601, et seq.;

(iii) violate the Clean Air Act of 1970, as amended, 42 U.S.C. §§ 7401, et seq., or other similar state, regional or local statute, law, regulation, rule or ordinance, including without limitation, the laws of the State, or any other statute providing for the financial responsibility for cleanup for the release or threatened release of substances provided for thereunder.

The Borrower will not do or permit any act or thing, business or operation, that materially increases the dangers, or poses an unreasonable risk of harm, or impairs, or may impair, the value of the Facilities, or any part thereof.

(b) Maintenance of Facilities. The Borrower shall maintain the Facilities free from contamination by Regulated Chemicals and shall not intentionally or unintentionally allow a release, discharge or emission, or threat of release, discharge or emission, of any Regulated Chemical on, under, in or about the Facilities, and shall not permit the migration or threatened migration from other properties upon, about or beneath the Facilities.

(c) Notice of Environmental Problem. Borrower shall promptly (and in no event later than 15 days from Borrower’s receipt thereof) provide a copy to Trustee of any notice, letter, citation, order, warning, complaint, inquiry, claim or demand actually received by Borrower that:

(i) the Borrower and/or any tenants or sublessees have violated, or are about to violate, any federal, state, regional, parish or local environmental, health, or safety statute, law, rule, regulation, ordinance, judgment or order;

(ii) there has been a release, or there is a threat of release, of any Regulated Chemical from the Facilities;

(iii) the Borrower and/or any tenants or sublessees may be or are liable, in whole or in part, for the costs of cleaning up, remediating, removing or responding to a release of any Regulated Chemical;

(iv) any portion of the Facilities is subject to a Lien in favor of any governmental entity for any liability, costs or damages, under Environmental Requirements arising from, or costs incurred by such governmental entity in response to, a release of any Regulated Chemical.

(d) Response Action. The Borrower shall take all appropriate responsive action, including any removal and remedial action (“Response Action”), in the event of a release, emission, discharge or disposal of any Regulated Chemical in, on, under or about the Facilities, so as to remain in compliance with subsections (a) and (b) above, and to keep the Facilities free from, and unaffected by, Regulated Chemicals. The Borrower shall (i) provide Trustee, within 30 days after providing the notice required under Section 6.07(c) above, with a bond, letter of credit or similar financial assurance which is equal to the cost of the Response Action and which may be drawn upon by the Trustee for the purpose of completing the Response Action if an Event of Default occurs or if the Response Action is not completed within six (6) months of the issuance of the financial assurance and (ii) discharge any assessment, Lien or encumbrance which may be established on the Facilities as a result thereof.

25 (e) No Liens or Encumbrances. The Borrower shall prevent the imposition of any Liens or encumbrances against the Facilities for the costs of any response, removal, or remedial action or cleanup of any Regulated Chemicals. Should such a Lien or encumbrance be levied on the Facilities, the Borrower shall comply with subsection (d) above.

(f) Compliance with Environmental Requirements. The Borrower shall carry on the business and operations at the Facilities to comply in all respects and will continue to remain in compliance with all applicable Environmental Requirements and maintain all permits and licenses required thereunder.

(g) Additional Environmental Reports. As long as there are any Bonds Outstanding, the Borrower shall provide the Trustee with a copy of any Environmental Report performed during that time.

Section 6.08 Additional Environmental Provisions.

(a) Right to Notify Agencies. To the extent the Trustee receives written notice, whether from the Borrower or any other party, stating that the Borrower is in violation of any environmental law, statute, regulation, ordinance, rule or order, whether federal, state, or local, or that there has been a release or threat of release of any Regulated Chemical from or upon the Facilities, the Trustee retains the right to notify the respective governmental agency(ies). The Trustee agrees to make written demand upon the Borrower, as circumstances may require, to notify the respective agency(ies), however, the Trustee retains the right to separately notify the respective agency(ies), and the Borrower shall have no cause of action against the Trustee as a result of any such notification.

(b) Right of Inspection.

(i) Trustee at any time and from time to time, with reasonable cause and prior notice, either prior to or after the occurrence of any Event of Default hereunder, may require the Borrower to submit to the Trustee within 120 days of either the giving of the notice required under Section 6.07(c) hereof or a written request from the Trustee, a written report of a site assessment and environmental audit (“Environmental Assessment”), in scope, form and substance, and prepared by an independent, competent and qualified engineer showing that the engineer made all appropriate inquiry consistent with good commercial and customary practice, such that consistent with generally accepted engineering practice and procedure, no evidence or indication came to light which would suggest there was a release of substances on, under, in, or about any Facilities which could necessitate an environmental response action, and which demonstrates that the Facilities complies with, and does not deviate from, all applicable environmental statutes, laws, ordinances, rules and regulations, including any licenses, permits or certificates required thereunder, and that the Borrower is in compliance with, and has not deviated from, the representations and warranties set forth in Sections 2.06 and 6.07 hereof.

(ii) The Borrower hereby grants, and will cause any tenants or users of the Facilities to grant, to Trustee, its agents, attorneys, employees, consultants and contractors, upon reasonable notice, and under reasonable conditions established by Borrower, which do not impede the performance of the Environmental Assessment, an irrevocable license and authorization to enter upon and inspect the Facilities, and perform such sampling, tests, and analysis (“Tests”) including without limitation, subsurface testing, soils and groundwater testing, and other tests which may physically invade the Facilities, as the Trustee or its agent reasonably determines is necessary.

26 (iii) Borrower will cooperate with the Trustee’s consultants and supply to the consultants such historical and operational information as may be reasonably requested by the consultants, together with any notices, permits or other written communications pertaining to violations of Environmental Requirements and any and all necessary information and make available personnel having knowledge of such matters as may be required by the Trustee, Trustee’s agents, consultants and engineers to complete an Environmental Assessment.

(iv) Should the Borrower fail to perform an Environmental Assessment within the time period set forth in this Section 6.08(b)(i) hereof, Trustee shall have the right but not the obligation to retain an environmental consultant to perform said Environmental Assessment.

(v) The direct cost of performing any Environmental Assessment shall be paid by the Borrower upon demand of Trustee.

(c) Event of Default. If an Environmental Assessment reveals any violations of Environmental Requirements (other than violations, if any, revealed to the Issuer in writing prior to the date hereof or in any Environmental Assessment provided to the Issuer prior to the date hereof) or the Borrower receives a notice of a violation of Environmental Requirements, and the Borrower fails to cure the violation in the time period and the manner specified in Section 10.01(b) hereof, such action will constitute an Event of Default.

(d) No Assumption of Risk. The Trustee’s rights under this Section shall be exercised by it in its sole discretion and not for the benefit of the Borrower. The Trustee shall have no obligation (unless directed and indemnified as provided in the Indenture) to enter into the Facilities thereon or to take any other action which is authorized by this Article for the protection of its security interest. The Borrower specifically agrees and acknowledges that any action permitted under this Section shall not be construed to be the management or control of the Facilities by the Trustee.

ARTICLE VII

DAMAGE, DESTRUCTION AND CONDEMNATION

Section 7.01 Damage, Destruction and Condemnation. In the event of a casualty or condemnation with respect to the Facilities, and so long as no Event of Default exists and is continuing, the proceeds from any insurance policy or the proceeds of any condemnation award resulting from such casualty or condemnation, shall be used to repair or replace the portion of the Facilities damaged, destroyed or taken or to prepay the Loan in accordance with the terms hereof in accordance with the following provisions:

(a) In the event of a casualty or condemnation that results in an award less than or equal to $100,000 (which amount shall be increased as of each July 1 by a percentage equal to the past year’s increase in the Consumer Price Index for Kent County, Delaware (the “CPI Adjustment”) as provided by the Borrower to the Trustee by evidence reasonably acceptable to the Trustee) from any insurance policy or condemnation awards, such proceeds shall be paid directly to the Borrower to provide for the repair, replacement or restoration of the Facilities to substantially the same condition as it was prior to such damage, destruction or condemnation.

(b) Whenever such Net Proceeds from any insurance policy or condemnation award are greater than $100,000 (plus the applicable CPI Adjustment), such Net Proceeds shall be paid to the Trustee and held in the Construction Fund to be applied to repair, replace or restore the Facilities or, if

27 applicable, to the prepayment of the Loan as provided in Section 7.02. The Net Proceeds deposited into the Construction Fund from such insurance policy or condemnation award shall be disbursed by the Trustee periodically at the request of the Borrower for the repair, restoration or replacement of the Facilities upon the receipt by the Trustee from the Borrower of (i) a Consulting Architect’s Certificate which substantially states that such repairs, replacements or restorations will restore the Facilities to substantially its original condition, will be completed in accordance with plans and specifications previously provided to the Trustee, and that such repairs, replacements or restorations when completed in accordance with the plans and specifications previously furnished to the Trustee will comply with all applicable statutes, codes and regulations; (ii) a certificate of an Authorized Representative of the Borrower stating that sufficient moneys are available in the Construction Fund to pay for such repair, restoration or replacements to be completed and together with available business interruption insurance and other available Pledged Revenues, to pay debt service on the Bonds and Operating Expenses of the Facilities during the restoration period; (iii) requisitions and certificates from the Borrower substantially similar to those specified in a disbursing agreement; (iv) applicable Lien waivers; (v) a construction contract; and (vi) evidence that the Borrower has acquired all permits and licenses necessary for such construction; and, if such net proceeds are in excess of $250,000 (plus the CPI Adjustment), in addition to those requirements listed in (i) through (vi) above, an opinion of Bond Counsel to the effect that neither such repairs, replacements nor restorations nor such use of such casualty or condemnation proceeds adversely affects the exclusion from gross income for federal income tax purposes of interest on the Tax- Exempt Bonds. The Trustee shall retain 10% of the requested disbursements to be disbursed upon final completion of the repairs, replacements, restorations or improvements as certified by the Consulting Architect and receipt of certificates of occupancy, waivers of Liens and, if such net proceeds are in excess of $250,000, an endorsement to the title policy for the Facilities insuring the continued priority of the Leasehold Mortgage. If at any time during the restoration, the insurance or casualty proceeds are less than the estimated costs to restore, repair or replace the Facilities, the Borrower shall provide the Trustee with cash or cash equivalents in an amount equal to the shortfall. Notwithstanding the above provisions, all proceeds of business interruption insurance shall be paid to the Trustee and deemed to be Pledged Revenues for purposes of this Agreement, including, without limitation, Section 5.01 hereof.

(c) Notwithstanding any of the foregoing, if net proceeds from the casualty or condemnation of all or any portion of the Facilities exceed $100,000 (plus the applicable CPI Adjustment), and the Loan is not otherwise to be prepaid pursuant to Section 7.02 hereof, the Borrower shall immediately notify the Trustee and the Beneficial Owners regarding such casualty or condemnation and shall, no later than 90 days following the occurrence of the events resulting in the casualty or condemnation, notify the Trustee in writing whether or not the Borrower intends to repair and/or rebuild the Facilities. If the Borrower does not intend to repair and/or rebuild the Facilities, the Trustee shall cause such insurance proceeds to be used to prepay the Loan as provided in Section 7.02 hereof. If the Borrower intends to repair and/or rebuild the Facilities, said notice from Borrower shall contain the following additional information, together with a statement from the Borrower certifying to the accuracy of such information:

(i) a description of the damaged, destroyed or taken portion of the Facilities;

(ii) the estimated time to complete repair, replacement or restoration of the damaged, destroyed or taken portion of the Facilities, as determined by a qualified independent contractor retained by the Borrower;

(iii) the total estimated cost of such replacement, repair or restoration, as determined by a qualified independent contractor retained by the Borrower; and

28 (iv) the source of funds the Borrower has available (including, but not limited to, insurance proceeds), to complete the repair, replacement or restoration and to make payments due under this Agreement during the period of repair, replacement or restoration.

Section 7.02 Mandatory Prepayment from Insurance or Condemnation Proceeds. The Promissory Notes are subject to mandatory prepayment as a whole or in part at the principal amount thereof plus accrued interest thereon to the date of prepayment, but without premium, from the Net Proceeds of any insurance policy or condemnation award remaining after the repair, replacement, or improvement of the Facilities, if one or more of the events set forth in Section 5.02 of the Indenture are applicable to the Borrower and Bonds are required to be redeemed pursuant to Section 5.02 of the Indenture. The prepayment date shall be the earliest practicable dated selected by the Trustee and any such prepayment shall be applied as provided in Section 5.02 of the Indenture.

Section 7.03 No Change in Loan Payments; No Liens. All buildings, improvements and equipment acquired in the repair, rebuilding or restoration of the Project shall be deemed a part of the Project and shall be available for use and occupancy by the Borrower, without the payment of any payments hereunder other than the Loan Payments and other payments required to be made under this Agreement, to the same extent as if they were specifically described herein; provided that no buildings, improvements or equipment shall be acquired subject to any Lien or encumbrance other than Permitted Encumbrances.

Section 7.04 Investment of Net Proceeds. Any Net Proceeds of insurance payments or condemnation awards held by the Trustee pending restoration, repair or rebuilding shall be invested in Investment Obligations in the same manner as provided in Section 6.01 of the Indenture. Any earnings or profits on such investments shall be considered part of the Net Proceeds.

ARTICLE VIII

SPECIAL COVENANTS

Section 8.01 No Warranty of Condition or Suitability by the Issuer. The Issuer makes no warranty, either express or implied, as to the Project or that it will be suitable for the Borrower’s purposes or needs or that the proceeds of the Bonds will be sufficient to pay the Cost of the Project.

Section 8.02 Consolidation, Merger, Sale or Conveyance. The Borrower agrees that during the term of this Agreement it will maintain its corporate existence, will continue to be a nonstock corporation duly qualified to do business in the State, will not merge or consolidate with, or sell or convey, except as provided in Section 8.11 hereof, all or substantially all of its assets to, any Person unless no Event of Default has occurred and is continuing and it first acquires the consent of the Issuer to such transaction, provides to the Trustee notice of its intent at least 90 days in advance of such consolidation, merger, sale or conveyance, and unless the acquirer of such assets or the corporation with which it shall be consolidated or the resulting corporation in the case of a merger:

(a) shall assume in writing the performance and observance of all covenants and conditions of this Agreement;

(b) shall provide the Issuer and the Trustee with an opinion of Bond Counsel acceptable to the Issuer to the effect that such merger, consolidation, sale or conveyance, would not adversely affect the validity of any of the Bonds or the exclusion from gross income for federal income tax purposes of interest on any tax-exempt Bonds;

29 (c) shall provide the Issuer and the Trustee with an Opinion of Counsel to the Borrower (which may be rendered in reliance upon the Opinion of Counsel to such other corporation), stating that none of the other corporations which are a party to such consolidation, merger or transfer has any pending litigation other than that arising in the ordinary course of business or, has any pending litigation which might reasonably result in a substantial adverse judgment. For the purposes of the preceding sentence, the term “substantial adverse judgment” shall mean a judgment in an amount which exceeds the insurance or reserves therefor by a sum which is more than 2% of the aggregate net worth of the resulting, surviving or transferee corporation immediately after the consummation of such consolidation, merger or transfer and after giving effect thereto; and

(d) shall deliver to the Trustee within 45 days of the close of such transaction, copies of all documents executed in connection therewith, one document of which shall include an Opinion of Counsel to the Borrower that all conditions herein have been satisfied and that all liabilities and obligations of the Borrower under the Borrower Documents shall become obligations of the new entity; provided, however, the Borrower shall not be released from same.

Section 8.03 Further Assurances. The Issuer and the Borrower agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for carrying out the intention of or facilitating the performance of this Agreement, subject, however, to the terms and conditions of Section 10.05 of the Indenture.

Section 8.04 Audits. The Borrower agrees that it will have its books and records audited annually, commencing with the Fiscal Year ending December 31, 2017, as soon as practicable after the close of such Fiscal Year, and shall furnish in accordance with the requirements set forth below in Section 8.05 to the Issuer and the Trustee, a copy of the audit report (which report shall present quarterly information prepared in accordance with Generally Accepted Accounting Principles) accompanied by a certificate signed by an Authorized Representative of the Borrower setting forth, to the best of the Authorized Representative’s knowledge, whether or not the Borrower currently is, or has been during such Fiscal Year, in default of the performance of any covenant contained in the Borrower Documents and if so, specifying such default. The Borrower will notify the Issuer, the Beneficial Owners and the Trustee in writing of a change in its Accountant stating the reasons for such change.

Section 8.05 Financial Statements; Reports; Annual Certificate.

(a) Maintenance of Books and Accounts. The Borrower agrees that it will maintain and make available to the Beneficial Owners, the Issuer and the Trustee proper books of records and accounts of all of its operations with full, true and correct entries of all of its dealings substantially in accordance with Generally Accepted Accounting Principles and such other data and information as may reasonably be requested by the Issuer, the Beneficial Owners and the Trustee from time to time.

(b) Financial Reports. The Borrower shall provide to the Trustee and the Dissemination Agent the following information:

(i) a copy of the Borrower’s adopted annual budget for the present Fiscal Year within 30 days of adoption;

(ii) a copy of the Borrower’s annual financial report within 30 days of adoption;

30 (iii) a copy of revisions, if any, to the Borrower’s annual budget as approved by its governing board within 30 days of adoption;

(iv) at least once per quarter, unaudited financial statements for the previous quarter reflecting revenues and expenses in comparative form with the Borrower’s operating budget as submitted by the Borrower to its governing board;

(v) within 30 days of the end of a Fiscal Year, a copy of the calculation of the Debt Service Coverage Ratio for the prior Fiscal Year;

(vi) within 30 days after completion of the Borrower’s annual audit, a copy of the audited financial statements of the Borrower for such Fiscal Year, together with a copy of any management letter delivered by the auditors in connection with such financial statements (items (i) through (vi) collectively referred to herein as the “Reports”); and

(vii) any other information reasonably requested by a holder of Bonds that holds more than $1,000,000 of Bonds.

The Trustee shall have no duty regarding such information other than to retain any such information that it receives and to transmit same in accordance herewith. The Dissemination Agent shall post all such information received to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System in accordance with the Continuing Disclosure Agreement dated as of June 1, 2016 between the Borrower and the Dissemination Agent.

(c) Borrower Report. Further, the Borrower will deliver to the Trustee and the Issuer within six (6) weeks after the end of the Borrower’s Fiscal Year a certificate executed by the Borrower’s president or chief financial officer stating that:

(i) A review of the activities of the Borrower during such Fiscal Year and of performance hereunder has been made under his/her supervision; and

(ii) He/She is familiar with the provisions of this Agreement and the Tax Certificate and to the best of his/her knowledge, based on such review and familiarity, the Borrower has fulfilled all of its obligations hereunder and thereunder throughout the Fiscal Year, and there have been no defaults under this Agreement or the Tax Certificate or, if there has been a default in the fulfillment of any such obligation in such Fiscal Year, specifying each such default known to him/her and the nature and status thereof and the actions taken or being taken to correct such default.

Section 8.06 Release and Indemnification Covenants.

(a) The Borrower agrees to pay, defend, protect, indemnify, and hold each of the Issuer Indemnified Parties and the Trustee, its officers, directors, employees and agents (the “Trustee Indemnified Parties”) harmless for, from and against (i) any and all Liabilities directly or indirectly arising from or relating to the Loan, this Agreement, the Project, the Leasehold Mortgage, and the Tax Certificate, and (ii) any and all Liabilities directly or indirectly arising from or relating to the Bonds, the Indenture, or any document related to the issuance and sale of the Bonds, including, but not limited to, the following:

31 (i) Any injury to or death of any person or damage to property in or upon the Project or growing out of or connected with the use, non-use, condition, or occupancy of the Project or any part thereof;

(ii) Violation of any agreement, covenant, or condition of any of the Borrower Documents;

(iii) Violation of any agreement, contract, or restriction relating to the Project;

(iv) Violation of any law, ordinance, or regulation affecting the Project or any part thereof or the ownership, occupancy, or use thereof;

(v) the issuance and sale of the Bonds or any of them;

(vi) Any statement, information, or certificate furnished by the Borrower to the Issuer or the Trustee which is misleading, untrue, incomplete, or incorrect in any respect; and

(vii) Any acts or omissions of the Trustee.

(b) The Borrower also agrees to pay, defend, protect, indemnify, and hold each of the Issuer Indemnified Parties and the Trustee Indemnified Parties harmless for, from, and against any and all Liabilities directly or indirectly arising from or relating to (i) any errors or omissions of any nature whatsoever contained in any legal proceedings or other official representation or inducement made by or to the Issuer pertaining to the Bonds, and (ii) any fraud or misrepresentations or omissions contained in the proceedings of the Issuer relating to the issuance of the Bonds or pertaining to the financial condition of the Borrower which, if known to the original purchaser of the Bonds or the Underwriter, might be considered a factor in such Person’s decision to purchase the Bonds; provided, however, nothing in this subsection shall be deemed to provide the Issuer with indemnification for the Issuer’s omissions or misstatements contained in the Official Statement under the captions “ISSUER” and “LITIGATION,” as it relates to the Issuer.

(c) Paragraphs (a) and (b) above are intended to provide indemnification to each Issuer Indemnified Party and Trustee Indemnified Party for his or her active or passive negligence or misconduct; provided, however, nothing in paragraphs (a) and (b) above shall be deemed to provide indemnification to any Issuer Indemnified or any Trustee Indemnified Party with respect to any Liabilities caused by the fraud, gross negligence, or willful misconduct of such party.

(d) Any party entitled to indemnification hereunder shall notify the Borrower of the existence of any claim, demand, or other matter to which the Borrower’s indemnification obligation applies, and of which such party has received written notice and shall give the Borrower a reasonable opportunity to defend the same at its own expense and with counsel satisfactory to the Issuer Indemnified Party and Trustee Indemnified Party, as applicable, provided that the Issuer Indemnified Party and Trustee Indemnified Party shall at all times also have the right to fully participate in the defense. If the Issuer Indemnified Party or Trustee Indemnified Party is advised in an Opinion of Counsel that there may be legal defenses available to either of them which are different from or in addition to those available to the Borrower or if the Borrower shall, after receiving notice of the Borrower’s indemnification obligation and within a period of time necessary to preserve any and all defenses to any claim asserted, fails to assume the defense or to employ counsel for that purpose satisfactory to the Issuer Indemnified Party and Trustee Indemnified Party, as applicable, the Issuer Indemnified Party and Trustee Indemnified Party, as applicable, shall have the right, but not the obligation, to undertake the defense of, and to compromise or

32 settle the claim or other matter on behalf of, for the account of, and at the risk of, the Borrower. The Borrower shall be responsible for the reasonable counsel fees, costs, and expenses of the Issuer Indemnified and Trustee Indemnified Party in conducting its defense.

Notwithstanding the foregoing, the Borrower shall not be considered an “Indemnified Party” for purposes of this Section.

The benefits of this Section shall survive the termination of this Agreement and the resignation or removal of the Trustee.

Section 8.07 Authority of Authorized Representative of the Borrower. Whenever under the provisions of this Agreement or the Indenture the approval of the Borrower is required, or the Issuer or the Trustee is required to take some action at the request of the Borrower, such approval or such request shall be made by the Authorized Representative of the Borrower unless otherwise specified in this Agreement or the Indenture. The Issuer or the Trustee shall be authorized to act on any such approval or request and the Borrower shall have no complaint against the Issuer or the Trustee as a result of any such action taken in accordance with such approval or request. The execution of any document or certificate required under the provisions of this Agreement or the Indenture by an Authorized Representative of the Borrower shall be on behalf of the Borrower and shall not result in any personal liability of such Authorized Representative.

Section 8.08 Authority of Authorized Representative of the Issuer. Whenever under the provisions of this Agreement or the Indenture the approval of the Issuer is required, or the Borrower or the Trustee is required to take some action at the request of the Issuer, such approval or such request shall be made by the Authorized Representative of the Issuer unless otherwise specified in this Agreement or the Indenture. The Borrower or the Trustee shall be authorized to act on any such approval or request and the Issuer shall have no complaint against the Borrower or the Trustee as a result of any such action taken in accordance with such approval or request. The execution of any document or certificate required under the provisions of this Agreement or the Indenture by an Authorized Representative of the Issuer shall be on behalf of the Issuer and shall not result in any personal liability of such Authorized Representative.

Section 8.09 Licenses and Qualifications. The Borrower will do, or cause to be done, all things necessary to obtain, renew and secure all permits, licenses and other governmental approvals and to comply, or cause its lessees to comply, with such permits, licenses and other governmental approvals necessary for operation of the Facilities (subject, however, to Section 8.11 hereof).

Section 8.10 Right to Inspect. Following reasonable notice to the Borrower, at any and all reasonable times during business hours, the Trustee, the Issuer, and their duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right fully to inspect the Facilities, including all books and records of the Borrower (excluding records the confidentiality of which may be protected by law), and to make such copies and memoranda from and with regard thereto as may be desired; provided, however, that they shall maintain these books and records in confidence unless required by applicable law to do otherwise and it is necessary to distribute the information to some other third party under applicable law.

Section 8.11 Lease or other Disposition of the Facilities. The Borrower shall have the right to lease all or any part of the Facilities; provided, however, that the terms and provisions of any future leases will allow the Borrower to comply with the provisions of this Agreement and contain the restrictions upon the use of the Project contained in Section 8.12 of this Agreement, and, with respect to any lease the annual rental under which is equal to or greater than 5% of the unrestricted revenues of the Borrower for the most recent Fiscal Year or, when added to the annual rental payable under all other

33 leases of the Facilities then in force is equal to or greater than 10% of the unrestricted revenues of the Borrower for the most recent Fiscal Year, the written consent of the Issuer shall have been obtained. Other than leases permitted by this Section or as provided in Section 8.02 hereof, the Borrower agrees that it will not sell or otherwise dispose of the Facilities.

Section 8.12 Nonsectarian Use. The Borrower acknowledges that in order for the Bonds to be validly issued, it is necessary that the requirements of the United States Constitution and the Constitution of the State with respect to the establishment and free exercise of religion be satisfied. The Issuer has been advised by Bond Counsel that under the law in effect as of the date of issue of the Bonds and as interpreted by the courts, the financing of nonsecular facilities (e.g., places of religious worship) could be in violation of these constitutional requirements. The Borrower covenants that it will not operate the Facilities in a pervasively sectarian manner for so long as the Bonds are outstanding and will not use the proceeds of the Bonds to acquire, construct, install, or refinance any facilities which are intended to be used, other than a de minimis amount, for sectarian purposes. The Borrower will comply with all applicable state and federal laws concerning discrimination on the basis of race, creed, color, sex, sexual orientation, national origin, or religious belief and will respect, permit, and not interfere with the religious beliefs of persons working for the Borrower. The Borrower may rely upon the Opinion of Counsel acceptable to the Issuer in order to determine whether it is in compliance from time to time with the covenants contained in this paragraph.

Section 8.13 Limitations on Incurrence of Additional Indebtedness. The Borrower shall be precluded from incurring additional Indebtedness secured by Liens on the Facility or the Pledged Revenues that are senior to the Leasehold Mortgage on the Facility and the security interest in the Pledged Revenues granted by this Agreement or the Indenture. The Borrower may incur other Indebtedness secured by the Leasehold Mortgage on the Project and the security interest in the Pledged Revenues granted by this Agreement only upon providing to the Trustee a certificate of an Authorized Representative of the Borrower, accompanied by a confirming Accountant’s Certificate, to the effect that (i) the requirements of Section 2.11 of the Indenture have been met, but this clause (i) applies only if the other Indebtedness takes the form of Additional Bonds, and (ii) either:

(a) (i) the Debt Service Coverage Ratio for each of the past two Fiscal Years has not been less than 1.25:1.00, (ii) the Net Income Available for Debt Service as determined in the most recent budget adopted by the Borrower must be sufficient to pay an amount representing not less than 125% of the combined Maximum Annual Debt Service for currently outstanding Long-Term Indebtedness related to the Facilities and the Long-Term Indebtedness related to the Facilities proposed to be incurred provided further that the Borrower may include in Net Income Available for Debt Service projected revenues derived by lease or sublease revenues projected to be received as evidenced by signed sublease documents customary in commercial real estate transactions, and (iii) as of the date of issuance of the additional Indebtedness, the amount in the Debt Service Reserve Fund is not less than the Debt Service Reserve Fund Requirement, the amount in the Operating Reserve Fund is not less than the Operating Reserve Fund Requirement and the amount in the Repair and Replacement Fund is not less than the Repair and Replacement Fund Requirement; or

34 Indebtedness subordinate to the obligations of the Borrower under this Agreement and liens on the Facilities, Pledged Revenues or other assets of the Borrower securing such subordinate indebtedness, so long as same are subordinate to the Leasehold Mortgage and obligations under this Agreement, are permitted by this Agreement.

Section 8.14 Financial Covenants.

(a) At each Fiscal Year end, the Borrower shall meet the following financial covenant: Net Income Available for Debt Service for the fiscal year must not be less than 110% of the Maximum Annual Debt Service for currently outstanding Long-Term Indebtedness related to the Facilities.

(b) If for any Fiscal Year, the Borrower fails to meet the financial covenant set forth in subsection (a), the Borrower (at the Borrower’s sole expense) shall engage a Management Consultant (with written notice of the engagement to the Trustee), which shall deliver a written report to the Borrower and the Trustee containing recommendations concerning the Borrower’s: (1) operations; (2) investment management practices; and (3) other factors relevant to meeting such financial covenant for the next ending Fiscal Year and:

(i) Within 45 days after its engagement, the Management Consultant will submit its consultant report, together with a certificate of the Borrower indicating the Borrower’s substantial acceptance or rejection of all or any material portion of the recommendations of the Management Consultant, to the Trustee; and

(ii) So long as the Borrower continues to make all payments due under this Agreement and engages a Management Consultant as required above and accepts and continuously and substantially complies with the recommendations of the Management Consultant, failure to meet the financial covenant set forth in subsection (a) will not in and of itself constitute an Event of Default.

Section 8.15 Repair and Replacement Fund Deposits. The Borrower hereby covenants that, unless the amount on deposit in the Repair and Replacement Fund equals or exceeds the Repair and Replacement Fund Requirement (in which case no additional deposits are required), the Borrower shall pay or cause to be paid to the Trustee, for deposit to the Repair and Replacement Fund pursuant to Section 3.21 of the Indenture, payments the total of which shall not in any Fiscal Year exceed the Repair and Replacement Fund Requirement.

Section 8.16 Operating Reserve Fund Deposits. The Borrower hereby covenants that, unless the amount on deposit in the Operating Reserve Fund equals or exceeds the Operating Reserve Fund Requirement (in which case no additional deposits are required), the Borrower shall pay or cause to be paid to the Trustee, for deposit to the Operating Reserve Fund pursuant to Section 3.22 of the Indenture, payments the total of which shall not in any Fiscal Year exceed the Operating Reserve Fund Requirement.

Section 8.17 Advance Refundings. If the Borrower causes the Bonds or any portion of them to be advance refunded, the Borrower agrees to seek a rating from S&P or another nationally recognized rating agency on the refunded Bonds (if such rating will increase the rating on the refunded Bonds).

35 ARTICLE IX

ASSIGNMENT AND PLEDGING; REDEMPTION OF BONDS

Section 9.01 Creation of Security Interest. With respect to the Pledged Revenues governed by the UCC, this Agreement shall constitute a security agreement between the Borrower as debtor and the Trustee as assignee of the Issuer’s right and interests in and under this Agreement and the Borrower hereby grants to the Trustee a security interest in the Pledged Revenues.

Section 9.02 Assignment and Pledge by Issuer. The Issuer shall assign certain of its rights and interests in and under this Agreement, including the Pledged Revenues, to the Trustee pursuant to the Indenture as security for payment of the principal of, premium, if any, and interest on the Bonds. The Borrower hereby consents to such assignment.

Section 9.03 Redemption of Bonds. Upon the agreement of the Borrower to deposit moneys into the Bond Principal Fund and the Bond Interest Fund in an amount sufficient to redeem Bonds subject to redemption, the Trustee, at the written request of the Borrower, shall forthwith take all steps (other than the payment of the money required for such redemption) permitted and necessary under the applicable redemption provisions of the Indenture to effect redemption of all or part of the then Outstanding Bonds on the redemption date.

ARTICLE X

EVENTS OF DEFAULT AND REMEDIES

Section 10.01 Events of Default Defined. The following shall be “Events of Default” under this Agreement (subject to the notice requirements of Section 12.21 herein) and the term “Event of Default” shall mean, whenever it is used in this Agreement, any one or more of the following events:

(a) Failure by the Borrower to pay the Loan Payments required to be paid under Section 5.01(a) hereof and continuation thereof for a period of five (5) days.

(b) Failure by the Borrower to observe and perform any covenant, condition or agreement on its part to be observed or performed herein other than as referred to in subsection (a) of this Section hereof, for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied, shall have been given to the Borrower by the Issuer or the Trustee; provided, with respect to any such failure covered by this subsection (c), no Event of Default shall be deemed to have occurred so long as a course of action adequate in the judgment of the Trustee to remedy such failure shall have been commenced within such 30-day period and shall thereafter be diligently prosecuted to completion and the failure shall be remedied thereby within ninety (90) days of such occurrence.

(c) The dissolution or liquidation of the Borrower, or failure by the Borrower promptly to contest and have lifted any execution, garnishment, or attachment of such consequence as will impair its ability to meet its obligations with respect to the Facilities or to make any payments under this Agreement. The phrase “dissolution or liquidation of the Borrower,” as used in this subsection, shall not be construed to include the cessation of the corporate existence of the Borrower resulting either from a merger or consolidation of the Borrower into or with another domestic corporation or a dissolution or liquidation of the Borrower following a transfer of all or substantially all of its assets under the conditions permitting such actions contained in Section 8.02 hereof.

36 (d) The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of the Borrower in an involuntary case under the federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Borrower or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.

(e) The commencement by the Borrower of a voluntary case under the federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the Borrower or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of the Borrower generally to pay its debts as such debts become due, or the taking of corporate action by the Borrower in furtherance of any of the foregoing.

(f) Failure of the Borrower to comply with any covenants contained in the Tax Certificate.

(g) The occurrence of an Event of Default under the Leasehold Mortgage or any of the Borrower Documents.

(h) Any representation or warranty made by the Borrower herein or made by the Borrower in any statement or certificate furnished by the Borrower either required hereby or in connection with the execution and delivery of this Agreement and the sale and the issuance of the Bonds, shall prove to have been untrue in any material respect as of the date of the issuance or making thereof.

(i) Judgment for the payment of money in excess of $50,000.00 (which is not covered by insurance) is rendered by any court or other governmental body against the Borrower, and the Borrower does not discharge same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof within 60 days from the date of entry thereof, and within said 60-day period or such longer period during which execution of such judgment shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal while providing such reserves therefor as may be required under Generally Accepted Accounting Principles.

(j) A writ or warrant of attachment or any similar process shall be issued by any court against the Facilities of the Borrower, and such writ or warrant of attachment or any similar process is not released or bonded within 60 days after its entry.

(k) Any of Borrower’s representations and warranties herein or in any of the other Borrower Documents with respect to environmental matters are false in any material respect.

(l) The occurrence and continuation of any event of default under any other parity Indebtedness of the Borrower or any agreement in connection with or securing such parity Indebtedness if as a result of such event of default the holder of such parity Indebtedness would have the right to declare the principal thereof to be immediately due and payable.

The foregoing provisions of subsection (b) of this Section are subject to the following limitations: if by reason of force majeure the Borrower is unable in whole or in part to carry out its agreements herein contained, other than the obligations on the part of the Borrower contained in Article V and in Sections 4.04, 6.02, 6.03 and 8.06 hereof, the Borrower shall not be deemed in default during the continuance of

37 such inability. The term “force majeure” as used herein shall mean, without limitation, the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States or of the State of Delaware or any of their departments, agencies, or officials, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquake; fire; hurricane; tornadoes; storms; floods; washouts; droughts; arrests; restraint of government and people; explosions; breakage or accident to machinery, transmission pipes or canals; partial or entire failure of utilities; or any other cause or event not reasonably within the control of the Borrower. The Borrower agrees, however, if possible, to remedy with all reasonable dispatch the cause or causes preventing it from carrying out its agreements; provided, that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the Borrower, and the Borrower shall not be required to make settlement of strikes, lockouts or other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the Borrower unfavorable to the Borrower.

Section 10.02 Remedies on Default. If an Event of Default occurs hereunder, then the majority of bondholders must direct the Trustee to pursue a remedy unless such Event of Default is waived as contemplated in Section 10.05 hereof. Whenever an Event of Default referred to in Section 10.01 hereof shall have occurred and is continuing, the Issuer, or the Trustee where so provided herein, may, and at the direction of the Owners of majority of all Bonds Outstanding shall, take any one or more of the following remedial steps:

(a) The Trustee (acting as assignee of the Issuer) or the Issuer (in the event of a failure of the Trustee to act under this subsection), as and to the extent provided in the Indenture, may declare the Loan Payments payable hereunder for the remainder of the term of this Agreement to be immediately due and payable, whereupon the same shall become due and payable.

(b) The Trustee (acting as assignee of the Issuer) or the Issuer (in the event of a failure of the Trustee to act under this subsection), as and to the extent provided in the Indenture, may exercise the power of sale or foreclose under the Leasehold Mortgage on the property subject thereto and may exercise all the rights and remedies of a secured party under the Delaware Uniform Commercial Code with respect thereto and with respect to the Pledged Revenues.

(c) The Trustee (acting as assignee of the Issuer) or the Issuer (in the event of a failure of the Trustee to act under this subsection), as and to the extent provided in the Indenture, may take whatever action at law or in equity as may appear necessary or desirable to collect the amounts then due and thereafter to become due, or to enforce performance or observance of any obligations, agreements, or covenants of the Borrower under this Agreement.

Notwithstanding the foregoing, prior to the exercise by the Issuer or the Trustee of any remedy that would prevent the application of this paragraph, the Borrower may, at any time, pay all accrued payments hereunder (exclusive of any such payments accrued solely by virtue of declaration pursuant to subsection (a) of the first paragraph of this Section) and fully cure all defaults, and in such event, the Borrower shall be fully reinstated to its position hereunder as if such Event of Default had never occurred.

In the event that the Borrower fails to make any payment required hereby, the payment so in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid.

Whenever any Event of Default has occurred and is continuing under this Agreement, the Trustee may, but except as otherwise provided in the Indenture shall not be obligated to, exercise any or all of the rights of the Issuer under this Article, upon notice as required to the Issuer. In addition, the Trustee shall

38 have available to it all of the remedies prescribed in the Indenture. If the Trustee is not enforcing the Issuer’s rights in a manner to protect the Issuer or is otherwise taking action that brings adverse consequences to the Issuer, then the Issuer may, without the consent of the Trustee, take whatever action at law or in equity may appear necessary or appropriate to enforce the Issuer’s Unassigned Rights and to collect all sums then due and thereafter to become due to the Issuer under this Agreement.

Any amounts collected pursuant to action taken under the immediately preceding paragraph (other than sums collected for the Issuer on account of the Issuer’s Unassigned Rights, which sums shall be paid directly to the Issuer), after reimbursement of any costs incurred by the Issuer or the Trustee in connection therewith shall be applied in accordance with the provisions of the Indenture.

If the Issuer or the Trustee, shall have proceeded to enforce their rights under this Agreement and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Issuer or the Trustee, then and in every such case, the Borrower, the Issuer and the Trustee shall be restored to their respective positions and rights hereunder, and all rights, remedies and powers of the Borrower, the Issuer and the Trustee shall continue as though no such proceedings had been taken.

Section 10.03 No Remedy Exclusive. No remedy herein conferred upon or reserved to the Issuer or the Trustee is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Issuer to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than notice required herein or by applicable law. Such rights and remedies given the Issuer hereunder shall also extend to the Trustee, the Beneficial Owners and the Registered Owners of the Bonds, subject to the Indenture.

Section 10.04 Agreement to Pay Attorneys’ Fees and Expenses. In the event the Borrower should breach any of the provisions of this Agreement and the Issuer or the Trustee should employ attorneys or incur other expenses for the collection of Loan Payments or the enforcement of performance or observance of any obligation or agreement on the part of the Borrower herein contained, the Borrower agrees that it will on demand therefor pay to the Issuer and the Trustee, as the case may be, the reasonable fees of such attorneys and such other reasonable expenses incurred by the Issuer and the Trustee. The obligations of the Borrower arising under this Section shall continue in full force and effect notwithstanding the final payment of the Bonds or the termination of this Agreement for any reason.

Section 10.05 Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach waived and shall not be deemed to waive any other breach hereunder. In view of the assignment of the Issuer’s rights in and under this Agreement to the Trustee under the Indenture, the Issuer shall have no power to waive any Event of Default hereunder without the consent of the Trustee and the Owners of two-thirds in aggregate principal amount of the Bonds Outstanding. Notwithstanding the foregoing, unless otherwise required by the Owners of two-thirds in aggregate principal amount of all Bonds Outstanding, a waiver of an Event of Default under the Indenture and a rescission and annulment of its consequences shall constitute a waiver of the corresponding Event of Default under this Agreement and a rescission and annulment of its consequences; provided, that no such waiver or rescission shall extend to or affect any subsequent or other default hereunder or impair any right consequent thereon.

39 Section 10.06 Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Issuer or the Borrower or any other obligor upon the Bonds or the property of the Issuer, the Trustee (irrespective of whether the principal of the Bonds shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Issuer and/or the Borrower for the payment of overdue principal or interest) shall be entitled and empowered, by intervention of such proceeding or otherwise, to file and prove a claim for the whole amount of principal, premium, if any, and interest owing and unpaid in respect of the Bonds then Outstanding and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Owners allowed in such judicial proceeding; and to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any receiver, assignee, trustee, liquidator, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Owner to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Owners, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agent and counsel.

So long as Bonds are outstanding the Trustee is appointed under the terms of the Indenture, and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee, the true and lawful attorney in fact of the respective Owners of the Bonds, with authority to make or file, in the respective names of the Owners of the Bonds or on behalf of all Owners of the Bonds, as a class, any proof of debt, amendment to proof of debt, petition or other documents and to execute any other papers and documents and to do and perform any and all acts and things for and on behalf of all Owners of the Bonds as a class, as may be necessary or advisable in the opinion of the Trustee, in order to have the respective claim of the Owners of the Bonds against the Issuer, the Borrower or any other obligor allowed in receivership, insolvency, liquidation, bankruptcy or other proceeding, to which the Issuer, the Borrower or any other obligor, as the case may be, shall be a party. The Trustee shall have full power of substitution and delegation in respect of any such powers.

Section 10.07 Treatment of Funds in Bankruptcy. The Borrower acknowledges and agrees that in the event Borrower commences a case under the United States Bankruptcy Code located at 11 U.S.C. §§ 101 et. seq. (the “Bankruptcy Code”) or is the subject of an involuntary case that results in an order for relief under the Bankruptcy Code: (i) amounts on deposit in any of the Funds are not, nor shall they be deemed to be, property of Borrower’s bankruptcy estate as defined by § 541 of the Bankruptcy Code; (ii) that in no event shall Borrower assert, claim or contend that amounts on deposit in any of the Funds are property of Borrower’s bankruptcy estate; and (iii) that amounts on deposit in any of the Funds are held in trust solely for the benefit of the Registered Owners and the Beneficial Owners, shall be applied only in accordance with the provisions of the Indenture and the Borrower has no legal, equitable nor reversionary interest in, or right to, such amounts.

ARTICLE XI

PREPAYMENT OF THE LOAN

Section 11.01 General Option to Prepay the Loan.

(a) So long as no Event of Default pursuant to Section 10.01 hereunder exists, the Borrower shall have and is hereby granted the option exercisable at any time to prepay all or any portion of the Loan evidenced by the 2016 Note by depositing with the Trustee an amount of money or securities to the extent permitted by Section 7.01 of the Indenture representing the principal amount, the premium,

40 if any, and interest on the Loan to be prepaid to the date a corresponding amount of 2016 Bonds are redeemed. The exercise of the option granted by this Section shall not be cause for redemption of 2016 Bonds unless such redemption is permitted at that time under the provisions of the Indenture and the Borrower specifies the date for such redemption.

(b) Prior to October 1, 2026, the 2016 Note is prepayable at any time in an amount sufficient to defease a related amount of 2016 Bonds in accordance with Article VII of the Indenture. If the Borrower chooses to prepay amounts due on the 2016 Note, in whole or in part, on or after October 1, 2026, during a period in which the redemption of 2016 Bonds requires payment of a premium, then, a corresponding premium shall also be required to prepay such portion of the 2016 Note. In the event the Borrower prepays all of the Loan evidenced by the 2016 Note pursuant to this Section, pays all reasonable and necessary fees and expenses of the Trustee accrued and to accrue through final payment of the 2016 Bonds as a result of such prepayment, and all of its liabilities accrued and to accrue hereunder to the Issuer through final payment of the 2016 Bonds as a result of such prepayment, and all other amounts payable by the Borrower hereunder, this Agreement shall terminate except as otherwise provided herein.

Section 11.02 Notice of Prepayment. In order to exercise the option granted by this Article, the Borrower shall give written notice to the Trustee at least 45 days prior to the prepayment date, which notice shall specify therein the prepayment date and the prepayment amount. In the case of any prepayment pursuant to this Article, the Borrower shall make arrangements with the Trustee for giving notice of redemption as required by the Indenture, if any, with respect to any Bonds to be redeemed shall, if applicable, provide evidence of the Borrower’s ability to deliver sufficient Protected Funds to redeem all Bonds called for redemption at least 35 days prior to the redemption date and, if applicable, shall pay to the Trustee an amount of money which constitutes Protected Funds sufficient to redeem all of the Bonds to be called for redemption at the appropriate price no later than the redemption date.

Section 11.03 Use of Prepayment Moneys. By virtue of the assignment of the rights of the Issuer under this Agreement to the Trustee, the Borrower agrees to and shall pay any amount required to be paid by it under this Article directly to the Trustee (other than amounts to be paid to the Issuer for its own account). The Trustee shall use the moneys so paid to it by the Borrower (other than amounts to be paid to the Trustee for its own account) as provided in this Agreement and in the Indenture.

ARTICLE XII

MISCELLANEOUS

Section 12.01 Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by certified mail, return receipt requested, postage prepaid, facsimile (receipt confirmed), electronic means (receipt confirmed) or overnight courier, addressed as follows:

41 If to the Borrower: Kent County Regional Sports Complex Corporation 59 Roosevelt Drive Dover, DE 19901 Attention: Executive Director Telephone: (302) 734-2513 Facsimile: (302) 734-4630 Email: [email protected]

With a copy to: Michael W. Whittaker, Esquire Potter Anderson & Corroon LLP Hercules Plaza 1313 North Market Street, 6th Floor P.O. Box 951 Wilmington, DE 19801 Telephone: (302) 984-6104 Facsimile: (302) 658-1192 Email: [email protected]

If to the Trustee: Wilmington Trust, National Association Rodney Square North 1100 North Market Street Wilmington, DE 19890 Attention: Corporate Trust Telephone: (302) 636-6395 Email: [email protected]

A duplicate copy of each notice, certificate or other communication given hereunder by the Issuer or the Borrower shall also be given to the Trustee. The Issuer, the Borrower and the Trustee may, by notice hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.

Section 12.02 Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Issuer and the Borrower, and their respective successors and assigns, subject, however, to the limitations contained in Sections 8.02, 9.01, 9.02 and 12.10 hereof.

Section 12.03 Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 12.04 Third Party Beneficiaries. Each of the Issuer Indemnified Parties, (other than the Issuer) and the Trustee Indemnified Parties are intended “Third Party Beneficiaries” of this Agreement. Nothing in this Agreement shall confer any right upon any person other than parties hereto, and those specifically designated as Third Party Beneficiaries of this Agreement.

Section 12.05 Amounts Remaining in Funds. It is agreed by the parties hereto that any amounts remaining in the Funds upon termination of this Agreement, provided the Bonds have been fully retired and all amounts due hereunder have been paid in full, shall belong to and be paid to the Borrower by the Trustee, as provided in the Indenture.

Section 12.06 Amendments, Changes and Modifications. Except as otherwise provided in this Agreement or in the Indenture, this Agreement may not be effectively amended, changed, modified, altered or terminated without the written consent of the Issuer.

42 The Issuer has imposed certain requirements on the Trustee, the Borrower, the ownership or operation of the Project, or the Bonds which are more restrictive than those required by the Act, the Treasury Regulations, or the Code, which each party hereto agrees are reasonable. For that reason, any proposed amendment, modification or supplement of this Loan Agreement which provides for less restrictive covenants than required by the Issuer, but permitted by law, shall require the Issuer’s consent, which may not be unreasonably withheld.

Section 12.07 Execution in Counterparts. This 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.

Section 12.08 Governing Law. This Agreement shall be governed by and interpreted in accordance with the internal laws of the State without regard to conflicts of laws principles.

Section 12.09 Filing. The Borrower shall cause the security interests granted by the Leasehold Mortgage to be recorded with the Recorder of Deeds of Kent County, Delaware. In addition, the Borrower shall cause the security interest in the Funds and trust accounts referred to in Section 5.02 hereof granted to the Issuer, the assignment of such security interest to the Trustee and the security interest in the Leasehold Mortgage granted to the Trustee to be perfected by the filing of financing statements which shall fully comply with the Delaware Uniform Commercial Code in the office of the Delaware Division of Corporations and the office of the Recorder of Deeds of Kent County, Delaware, and in such other office as is at the time provided by law as the proper place for the filing thereof. The parties further agree that all necessary continuation statements shall be filed by the Trustee with the cooperation of the Borrower, if so required, within the time prescribed by the Delaware Uniform Commercial Code in order to continue such security interests. The Borrower acknowledges that if the Trustee files such continuation statements, the Trustee may engage counsel or other specialists for this purposes and any associated costs shall be borne by the Borrower.

Section 12.10 Cancellation at Expiration of Term of Agreement. Upon the termination of this Agreement, and provided the Bonds have been fully retired and all amounts due hereunder have been paid in full, the Issuer shall deliver to the Borrower any documents and take or cause the Trustee to take such actions as may be necessary to evidence the termination of this Agreement and the discharge of the Lien hereof.

Section 12.11 No Pecuniary Liability of Issuer. No provision, covenant, or agreement contained in this Agreement, or any obligations herein imposed upon the Issuer, or the breach thereof, shall constitute an indebtedness or liability of the Issuer within the meaning of any Delaware constitutional provision or statutory limitation or shall constitute or give rise to a pecuniary liability of the Issuer or any commissioner, officer or agent of the Issuer or a charge against the Issuer’s general credit. In making the agreements, provisions and covenants set forth in this Agreement, the Issuer has not obligated itself except with respect to the application of the revenues, as hereinabove provided.

Section 12.12 No Personal Liability of Officials of the Borrower, Issuer or the Trustee. None of the covenants, stipulations, promises, agreements and obligations of the Issuer or the Borrower contained herein shall be deemed to be covenants, stipulations, promises, agreements or obligations of any official, officer, agent or employee of the Issuer or the Borrower in his or her individual capacity, and no recourse shall be had for the payment of the principal of or premium, if any, or interest on the Bonds or for any claim based thereon or any claim hereunder against any official, officer, agent or employee of the Issuer or the Borrower or any officer, agent, servant or employee of the Trustee or any natural person executing any Bond, including any officer or employee of the Trustee.

43 Section 12.13 Special Limited Obligation of Issuer. This Agreement shall inure to the benefit of and shall be binding upon the Issuer, the Borrower and the Trustee for the benefit of the owners of the Bonds, and their respective successors and assigns, subject to the limitation that any obligations of the Issuer created by or arising out of this Agreement shall be special limited obligations of the Issuer, payable solely out of the revenues arising from the pledge and assignment of the Loan and the other funds held or set aside in trust under the Indenture and shall never constitute the debt or indebtedness of the Issuer, the State, or any political subdivision of the State within the meaning of any provision or limitation of the constitution or statutes of the State and shall not constitute nor (except for its fraud or intentional misrepresentation) give rise to a pecuniary liability of the Issuer, the State or any political subdivision of the State or a charge against the general credit or taxing powers, if any, of such entities. The Issuer has no taxing power.

Anything in this Agreement to the contrary notwithstanding, it is expressly understood and agreed by the parties hereto that the Issuer may rely conclusively on the truth and accuracy of any certificate, opinion, notice, or other instrument furnished to the Issuer by the Borrower as to the existence of any fact or state of affairs required hereunder to be noticed by the Issuer.

No recourse shall be had for the enforcement of any obligation, covenant, promise, or agreement of the Issuer contained in this Agreement, any other Issuer Documents, or in any Bond or for any claim based hereon or otherwise in respect hereof or upon any obligation, covenant, promise, or agreement of the Issuer contained in any agreement, instrument, or certificate executed in connection with the Project or the issuance and sale of the Bonds, against any Issuer Indemnified Parties, whether by virtue of any Constitutional provision, statute, or rule of the law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that no personal liability whatsoever shall attach to, or be incurred by, any Issuer Indemnified Party, either directly or by reason of any of the obligations, covenants, promises, or agreements entered into by the Issuer with the Borrower or the Trustee to be implied therefrom as being supplemental hereto or thereto, and that all personal liability of that character against each and every Issuer Indemnified Party is, by the execution of the Bonds, this Agreement, and the other Issuer Documents, and as a condition of, and as part of the consideration for, the execution of the Bonds, this Agreement, and the other Issuer Documents, is expressly waived and released.

No agreements or provisions contained herein, nor any agreement, covenant, or undertaking by the Issuer in connection with the Project or the issuance, sale, and/or delivery of the Bonds shall give rise to any pecuniary liability of the Issuer or a charge against its general credit, or shall obligate the Issuer financially in any way, except as may be payable from the revenues pledged hereby for the payment of the Bonds and their application as provided in the Indenture. No failure of the Issuer to comply with any term, covenant, or agreement contained in the Bonds, this Agreement, or the Indenture, or in any document executed by the Issuer in connection with the Project or the issuance and sale of the Bonds, shall subject the Issuer to liability for any claim for damages, costs, or other financial or pecuniary charge, except to the extent that the same can be paid or recovered from the revenues pledged for the payment of the Bonds or other revenues derived under this Agreement. Nothing herein shall preclude a proper party in interest from seeking and obtaining, to the extent permitted by law, specific performance against the Issuer for any failure to comply with any term, condition, covenant, or agreement herein; provided that no costs, expenses, or other monetary relief shall be recoverable from the Issuer, except as may be payable from the revenues pledged in the Indenture for the payment of the Bonds or other revenue derived under this Agreement. No provision, covenant, or agreement contained herein, or any obligations imposed upon the Issuer, or the breach thereof, shall constitute an indebtedness of the Issuer within the meaning of any State constitutional or statutory limitation or shall constitute or give rise to a charge against its general credit. In making the agreements, provisions, and covenants set forth in this Agreement, the Issuer has not obligated itself, except with respect to the application of the revenues pledged in the Indenture for the payment of the Bonds or other revenues derived under this Agreement or the Indenture.

44 The Issuer shall have no liability or obligation with respect to the payment of the purchase price of the Bonds. None of the provisions of this Agreement shall require the Issuer to expend or risk its own funds or to otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers hereunder, unless payable from the revenues pledged under the Indenture, or the Issuer shall first have been adequately indemnified to its satisfaction against the cost, expense, and liability which may be incurred thereby. The Issuer shall not be under any obligation hereunder to perform any record keeping or to provide any legal services, it being understood that such services shall be performed or provided as arranged by the Trustee or the Borrower. The Issuer covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions expressly contained in this Agreement, the Indenture, and in any and every Bond executed, authenticated, and delivered under the Indenture; provided, however, that (a) the Issuer shall not be obligated to take any action or execute any instrument pursuant to any provision hereof until it shall have been requested to do so by the Borrower or the Trustee, and (b) the Issuer shall have received the instrument to be executed.

Section 12.14 No Warranty by Issuer or Trustee. THE BORROWER RECOGNIZES THAT, BECAUSE THE COMPONENTS OF THE PROJECT HAVE BEEN AND ARE TO BE SELECTED BY IT, NEITHER THE ISSUER NOR THE TRUSTEE HAS MADE AN INSPECTION OF THE PROJECT, IF AND WHEN ACQUIRED, OR OF ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, AND EACH OF THE ISSUER AND THE TRUSTEE MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED OR OTHERWISE, WITH RESPECT TO THE SAME OR THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS FOR USE FOR ANY PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY THE BORROWER. IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN THE PROJECT OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER PATENT OR LATENT, EACH OF THE ISSUER AND TRUSTEE SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES OR REPRESENTATIONS BY EACH OF THE ISSUER AND THE TRUSTEE, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROJECT OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT.

Section 12.15 Prior Agreements Superseded. This Agreement, together with all agreements executed by the parties concurrently herewith or in conjunction with the initial issuance of the Bonds, shall completely and fully supersede all other prior understandings or agreements, both written and oral, between the Issuer and the Borrower relating to the Bonds, the lending of money and the Project.

Section 12.16 Covenant by the Borrower with Respect to Statements, Representations and Warranties. It is understood by the Borrower that all such statements, representations and warranties made in this Agreement shall be deemed to have been relied upon by the Issuer as an inducement to issue the Bonds, and that if any such statements, representations and warranties were false at the time they were made or (with respect to those representations and warranties which are to continue) are breached during the term hereof, such misrepresentation or breach shall constitute a breach of this Agreement which may give rise to an event of default hereunder.

Section 12.17 Captions. The captions and headings in this Agreement are for convenience only and in no way define, limit, or describe the scope or intent of any provisions or sections of this Agreement.

45 Section 12.18 Payments Due on Holidays. If the date for making any payment or the last date for performance of any act or the exercise of any right, as provided in this Agreement, is not a Business Day such payments may be made or act performed or right exercised on the next succeeding Business Day unless otherwise provided herein, with the same force and effect as if done on the nominal date provided in this Agreement.

Section 12.19 Provision of General Application. Any consent or approval of the Issuer required pursuant to this Agreement shall be in writing and shall not be unreasonably withheld. If such consent or approval is withheld, the Issuer shall state its reasons in writing.

Section 12.20 Survival. Notwithstanding the payment in full of the Bonds, the discharge of the Indenture, and the termination or expiration of the Promissory Notes and this Agreement, all provisions in this Agreement concerning (a) the tax-exempt status of the Tax-Exempt Bonds (including, but not limited to provisions concerning Rebate), (b) the interpretation of this Agreement, (c) the governing law, (d) the forum for resolving disputes, (e) the Issuer’s right to rely on facts or certificates, (f) the indemnity of the Issuer Indemnified Parties and the Trustee Indemnified Parties, and (g) the Issuer’s and Trustee’s lack of pecuniary liability shall survive and remain in full force and effect.

Section 12.21 Notice of Change in Fact. The Borrower will notify the Issuer and the Trustee promptly after the Borrower becomes aware of (i) any change in any material fact or circumstance represented or warranted by the Borrower in this Agreement or in connection with the issuance of the Bonds which would make any such representation or warranty false when made, (ii) any default or event which, with notice or lapse of time or both, could become an Event of Default under this Agreement, or the Indenture or any Borrower Document, specifying in each case the nature thereof and what action the Borrower has taken, is taking, and/or proposes to take with respect thereto, (iii) any Internal Revenue Service audit of the Borrower or the Bonds, (iv) any material litigation affecting the Bonds, the Borrower or the Facilities, and (v) any default in indebtedness of the Borrower.

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46 IN WITNESS WHEREOF, the Issuer and the Borrower have caused this Agreement to be executed in their respective corporate names by their duly authorized officers, all as of the date first above written.

(SEAL)

By:______By: Name: Loretta Wootten Name: P. Brooks Banta Title: Clerk of the Peace of the Title: President, Levy Court County of Kent County, DE

KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION

By: Name: William J. Strickland Title: Board President

TERMS ACKNOWLEDGED AND ACCEPTED:

WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee

By: Name: Title:

47 EXHIBIT A LEGAL DESCRIPTION

Owner: Kent County Leasee: Kent County Regional Sports Complex Tax Map No.: 5-00-14100-01-3200-00001 (portion of)

Lease Area No. 1 86.7782 AC.±

Beginning at a set iron rod with cap in line with the easterly right-of-way of the future S.R. 1 South Frederica interchange and a corner for this parcel and lands of Walter J. Zettlemoyer, Trustee; thence running with said future S.R. 1 South Frederica interchange right-of-way the following six courses and distances 1) North 42º14’21” West 582.33 feet to a point; thence 2) North 41º30’11” West 265.36 feet to a point, thence 3) North 49º23’42” West 553.57 feet to a point 4) along the arc of a circle curving to the left, having a radius of 361.00 feet and an arc length of 310.86 feet, chord bearing and distance of said arc being North 74º03’51” West 301.34 feet to a point; thence 5) South 81º16’01” West 179.79 feet to a point; thence 6) along the arc of a circle curving to the right, having a radius of 400.00 feet and an arc length of 452.90 feet, chord bearing and distance of said arc being North 66º17’48” West 429.09 feet to a point in line with the easterly right-of-way of Bay Road (S.R. 1); thence running with said Bay Road (S.R. 1) right-of-way the following four courses and distances 7) along the arc of a circle curving to the right, having a radius of 3,699.72 feet and an arc length of 1,133.15 feet, chord bearing and distance of said arc being North 25º05’10” West 1,128.73 feet to a point; thence 8) North 16º18’42” West 177.38 feet to a set concrete monument; thence 9) North 49º16’00” West 36.77 feet to a found concrete monument; thence 10) North 16º18’42” West 717.23 feet to a found iron pipe at a corner for this parcel and other lands of Kent County (Parcel 06.00); thence with said lands of Kent County (Parcel 06.00) 11) North 73º43’51” East 614.20 feet to a found iron pipe; thence lease line leaves said property line and runs across the lands of Kent County (Parcel 32.00) the following eight courses and distances 12) South 40º37’36” West 61.40 feet to a point; 13) South 51º27’10” East 2,650.00 feet to a point; thence 14) South 38º32’50” West 365.00 feet to a point; thence 15) South 51º27’10” East 215.00 feet to a point; thence 16) South 38º32’50” West 300.00 feet to a point; thence 17) South 51º27’10” East 500.00 feet to a point 18) South 38º32’50” West 225.00 feet to a point; thence 19) South 51º27’10” East 281.82 feet to a point in line with the lands of Walter J. Zettlemoyer, Trustee, thence running with said lands of Zettlemoyer the following two courses and distances 20) South 25º26’48” West 305.35 feet to a found iron pipe at a corner this parcel and lands of said Zettlemoyer; thence continuing with said lands of Zettlemoyer 21) South 87º53’57” West 110.44 feet to the point and place of beginning and containing 88.7782 acres of land, be the same more or less.

Tax Map No.: 5-00-14100-01-3201-00001 (all of)

Lease Area No. 2 5.0687 AC.± Beginning at a point at a corner for the lands of Kent County (Parcel 32.01) and the westerly right-of-way of the future S.R. 1 South Frederica interchange; thence running with said future S.R. 1 South Frederica interchange right-of-way 1) South 15º37’44” West 103.13 feet to a point in line with the northerly right of way line of Milford Neck Road; thence with said Milford Neck Road right of way 2) North 74º22’16” West 278.61 feet to a point at a corner of the intersection of Milford Neck Road northerly right of way with the easterly right of way line of State Route 1; thence with said State Route 1 right of way 3) North 49º23’42” West 675.90 feet to a point at a corner of the intersection of State Route 1 easterly right of way with future S.R. 1 South Frederica interchange westerly right of way; thence with said future S.R. 1 South

B-1

Frederica interchange right of way the following six courses and distances; 4) North 04º23’42” West 28.28 feet to a point; thence 5) North 40º36’18” East 220.06 feet to a point; thence 6) North 85º36’18” East 35.36 feet to a point; thence 7) South 49º23’42” East 172.81 feet; thence 8) South 50º40’46” East 235.49 feet; thence 9) South 42º14’21” East 475.37 feet to the point and place of beginning and containing 5.0687 acres of land, be the same more or less.

200817405en-desc-lease.doc

B-2 EXHIBIT B FORM OF PROMISSORY NOTE

$20,760,000 June 30, 2016

For value received, the undersigned, KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION, a Delaware nonstock corporation (the “Borrower”), hereby promises to pay to the order of KENT COUNTY, DELAWARE (the “Lender”) in its capacity as Issuer under the Trust Indenture dated as of June 1, 2016, between Wilmington Trust, National Association, as trustee (“Trustee”) and Lender, at Trustee’s designated office in Wilmington, Delaware, or at any other place designated at any time by the holder hereof, in lawful money of the United States of America and in immediately available funds, the principal sum of TWENTY MILLION SEVEN HUNDRED SIXTY THOUSAND DOLLARS ($20,760,000), together with interest on the principal amount hereunder remaining unpaid from time to time, computed on the basis of a 360-day year consisting of twelve 30-day months, from the date hereof until this Note is fully paid. Such principal amount and interest is payable in such amounts and at such times and at the rate or rates from time to time in effect under the Loan and Security Agreement dated as of June 1, 2016 (the “Loan Agreement”) by and between Lender and Borrower. The principal hereof and interest accruing thereon shall be due and payable as provided in the Loan Agreement. This Note may be prepaid only in accordance with the Loan Agreement.

This Note is issued pursuant, and is subject, to the Loan Agreement. This Note is the 2016 Note referred to in the Loan Agreement.

This Note is secured, among other things, by the Leasehold Mortgage and Security Agreement, dated as of June 1, 2016 (the “Mortgage”), and may now or hereafter be secured by one or more other security agreements, mortgages, deeds of trust, assignments or other instruments or agreements.

Borrower hereby agrees to pay all costs of collection, including attorneys' fees and legal expenses in the event this Note is not paid when due, whether or not legal proceedings are commenced.

Borrower agrees that the interest rate contracted for includes the interest rate set forth herein plus any other charges or fees set forth herein or therein and costs and expenses incident to this transaction paid by the Borrower to the extent the same are deemed interest under applicable law.

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B-3 Presentment or other demand for payment, notice of dishonor and protest are expressly waived.

KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION, a Delaware nonstock corporation

By: Name: William J. Strickland Title: Board President

B-4 ENDORSEMENT

Pay to the order of Wilmington Trust, National Association, without recourse, as Trustee under the Indenture referred to in the within mentioned Note, as security for such 2016 Bonds issued under such Indenture. This endorsement is given without any warranty as to the authority or genuineness of the signature of the maker of the Note.

DATED: June 30, 2016 KENT COUNTY, DELAWARE

By: Name: P. Brooks Banta Title: President, Levy Court

(SEAL)

By: Name: Loretta Wootten Title: Clerk of the Peace of the County of Kent County, DE

Map # 5-00-14100-01-3200- 00001 (86.774 Acres+/- portion under Ground Lease to KCRSC)

Map# 5-00-14100-01-3201- 00001 (5.069 Acres +/- under Ground Lease to KCRSC)

Prepared by: Emilie R. Ninan Ballard Spahr LLP 919 N. Market Street, 11th Floor Wilmington, DE 19801

LEASEHOLD MORTGAGE AND SECURITY AGREEMENT

KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION

in favor of

WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE

securing the

$20,760,000 Kent County, Delaware Revenue Bonds (Kent County Regional Sports Complex Project) Series 2016

Dated as of June 1, 2016

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

TABLE OF CONTENTS Page

Section 1. Representations and Warranties ...... 6 Section 2. Covenants ...... 7 Section 3. Zoning and Environmental Laws ...... 8 Section 4. Taxes and Liens ...... 9 Section 5. Insurance; Risk of Loss ...... 10 Section 6. Casualty Loss; Condemnation ...... 10 Section 7. Care of the Mortgaged Property ...... 11 Section 8. Transfer of the Mortgaged Property ...... 12 Section 9. Further Assurances...... 12 Section 10. After Acquired Property ...... 12 Section 11. Expenses ...... 12 Section 12. Trustee’s Performance of Defaults ...... 13 Section 13. Estoppel Affidavits ...... 13 Section 14. Events of Default ...... 13 Section 15. 13 Section 16. Trustee’s Power of Enforcement ...... 14 Section 17. Trustee’s Right to Enter and Take Possession, Operate, and Apply Income ...... 14 Section 18. Reserved ...... 15 Section 19. Purchase by the Trustee ...... 15 Section 20. Application of Secured Obligations Toward Purchase Price ...... 15 Section 21. Appointment of a Receiver ...... 15 Section 22. Suits to Protect the Mortgaged Property ...... 15 Section 23. Proofs of Claim ...... 15 Section 24. Company to Pay the Secured Obligations on Any Default in Payment; Application of Monies ...... 16 Section 25. Course of Dealing Not a Waiver ...... 16 Section 26. No Waiver of One Default to Affect Another ...... 17 Section 27. Discontinuance of Proceedings; Position of Parties Restored ...... 17 Section 28. Remedies Cumulative ...... 17 Section 29. Partial Foreclosure ...... 17 Section 30. Future Advances ...... 18 Section 31. Parties Included ...... 18 Section 32. Addresses for Notices, etc ...... 18 Section 33. Headings ...... 19 Section 34. Invalid Provisions to Affect No Others ...... 19 Section 35. Changes, etc ...... 19 Section 36. Entire Agreement ...... 19 Section 37. Counterparts ...... 20 Section 38. Additional Provisions Regarding the Ground Lease ...... 20 Section 39. Amendments, Change, and Modifications ...... 25 Section 40. Exculpation; Limited Recourse ...... 25 Section 41. Utility Services ...... 26 Section 42. WAIVER OF EXTENSION AND REDEMPTION LAWS; WAIVER OF MARSHALLING ...... 27

Section 43. WAIVER OF STAY ...... 27 Section 44. Miscellaneous ...... 27

EXHIBIT “A” DESCRIPTION OF THE LAND

LEASEHOLD MORTGAGE AND SECURITY AGREEMENT

This LEASEHOLD MORTGAGE AND SECURITY AGREEMENT (this “Mortgage”), made and entered into as of the 1st day of June, 2016 by KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION, a corporation organized and existing under the laws of the State of Delaware and a not-for-profit organization exempt from federal income tax as an organization described in Section 501(c)(3) of the Code (the “Company”), in favor of WILMINGTON TRUST, NATIONAL ASSOCIATION (the “Trustee”), a national banking association organized and existing under the laws of the United States of America.

WITNESSETH:

WHEREAS, Kent County, Delaware, a political subdivision of the State of Delaware (the “Issuer”), is authorized pursuant to the provisions of the Constitution and laws of the State of Delaware (the “State”), specifically Chapter 41 of Title IX of the Delaware Code, and Ordinance 86-5, as amended (the “General Ordinance”) and Ordinance 15-12 as amended and restated by Ordinance 16-08 (the “Project Ordinance” and together with the General Ordinance, the “Ordinance”), and has determined to issue its $20,760,000 Kent County, Delaware Revenue Bonds (Kent County Regional Sports Complex Project), Series 2016 (the “Bonds”) for the following purposes: (i) the development of Kent County Regional Sports Complex (a/k/a DE Turf Sports Complex) on an approximately 92 acre site located at 4000 Bay Road, Frederica, Delaware, 19946 including to (a) prepare the site and construct 13 turf or grass fields equipped with sports lighting, scoreboards and portable bleachers and (b) construct parking spaces, fixed seating for spectators and amenities such as paved walkways, shaded tent structures, restrooms, concessions, and administrative/maintenance buildings; (ii) pay capitalized interest on the 2016 Bonds; (iii) fund reserve funds, if any; and (iv) pay the costs of issuance of the 2016 Bonds (collectively, the “Project”);

WHEREAS, the Project Site has been leased by the Issuer to the Company pursuant to a Ground Lease dated as of March 12, 2013, as amended by Amendment to the Ground Lease dated as of May 26, 2015, between Kent County Levy Court, the governing body of the Issuer (the “Ground Lessor”) and the Company (collectively, the “Ground Lease”), and the Company shall cause the Project Facilities to be constructed and operated upon said Project Site;

WHEREAS, the Bonds are to be issued pursuant to a Trust Indenture, dated as of June 1, 2016 (the “Indenture”), between the Issuer and the Trustee, as amended, modified or supplemented from time to time in accordance with its terms;

WHEREAS, the Issuer has, pursuant to the Indenture and a Loan and Security Agreement (as now or hereafter, amended, supplemented, modified, and/or restated, the “Loan Agreement” and, together with the Indenture and the Mortgage, collectively, the “Security Documents”) of even date herewith between the Issuer and the Company, applied the proceeds of the Bonds to make a loan to the Company to finance the Project and the Company has agreed to pay to the Issuer such loan payments at such times and in such amounts as will be required to pay the principal of, premium, if any, and interest on the Bonds as and when the same become due; and

WHEREAS, the payment of the Bonds together with all those obligations of the Company as set forth in the Security Documents (the “Secured Obligations”), will be additionally secured by the pledge and assignment of substantially all of the Company’s right, title and interest in and to the Ground Lease and the lien on and security interest in the Project Facilities and the Land (as hereinafter defined), pursuant to this Mortgage, from the Company to the Trustee for the benefit of the Trustee to the extent of the Company’s Secured Obligations; and

WHEREAS, anything else in this Mortgage or the other Security Documents to the contrary notwithstanding, the Trustee covenants, acknowledges and agrees that this Mortgage is not a fee mortgage on the Project Site or Land owned by the Issuer, that the only estate that the Company as mortgagor has in the Project Site or Land is a leasehold estate pursuant to the Ground Lease, and that if the Issuer ever succeeds to the interests of the Company under this Mortgage such succession will not cause the Issuer’s fee estate to be subject to the lien of this Mortgage, or otherwise effect a merger of the Issuer’s fee estate with the Company’s leasehold estate mortgaged hereby, without the prior written consent thereto of the Issuer and the Trustee, except that this Mortgage shall remain as a lien on the Issuer’s leasehold interest remaining after any such succession.

NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants in this Mortgage contained, the Company and the Trustee, intending to be legally bound, agree as follows: for and in consideration of the sum of One and No/100 Dollars ($1.00) paid by the Trustee to the Company this date, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company does hereby grant, bargain, sell, alien, remise, release, convey, assign, transfer, mortgage, hypothecate, pledge, deliver, set over, warrant, and confirm unto the Trustee forever all of the Company’s right, title, and interest in and to:

The Ground Lease; and

The land (the “Land”) described in Exhibit “A” attached hereto and made a part hereof, and all buildings, structures, and improvements of every nature whatsoever now or hereafter situated on the Land (the “Improvements”), and all easements, rights of way, gores of land, streets, ways, alleys, passages, sewer rights, waters, water courses, water rights, and powers, and all estates, rights, titles, interests, privileges, liberties, tenements, hereditaments, and appurtenances whatsoever, in any way belonging, relating, or otherwise appertaining to any of the property hereinabove in this clause described, or which hereafter shall in any way belong, relate, or be appurtenant thereto, whether now owned or hereafter acquired by the Company, and the reversion and reversions and the remainder and remainders; and

III

All building materials, equipment, fixtures, and fittings of every kind or character now owned or hereafter acquired by the Company for the purpose of being used or useful in

connection with the construction and equipping of the Land and the Improvements, whether or not such materials, equipment, fixtures, and fittings are actually located on or adjacent to the Land or the Improvements, and whether in storage or otherwise, wheresoever the same may be located, including, but not limited to, all lumber and lumber products, all steel and steel products, bricks, building stones and building blocks, sand and cement, roofing materials, paint, doors, and windows, hardware, nails, wires, and wiring, plumbing and plumbing fixtures, heating and air- conditioning equipment and appliances, electrical and gas equipment and appliances, pipes and piping, elevators, escalators, ornamental and decorative fixtures, and in general all building materials and equipment of every kind and character used or useful in connection with the construction and equipping of the Improvements (which building materials, equipment, fixtures, and fittings are hereinafter collectively referred to as the “Building Materials”), and all right, title, and interest of the Company in and to any Building Materials which may be subject to any security agreements superior in lien to the lien of this Mortgage; it being understood and agreed that all Building Materials are part and parcel of the Land, the Improvements, and the Fixtures (hereinafter defined) (collectively, the “Real Property”) and appropriated to the use thereof and, whether affixed or annexed to the Real Property or not, shall, for the purposes of this Mortgage, be deemed conclusively to be real estate and mortgaged hereby; and

Any contracts relating to the development, construction, management or operation of the Project Facilities; and

All accounts, books, records, and other property relating or referring to any of the foregoing; and

All proceeds of any and all of the foregoing and, to the extent not otherwise included, all payments under insurance (whether or not the Trustee is the loss payee thereof), or any indemnity, warranty, or guaranty, payable by reason of damage to, loss with respect to, or otherwise with respect to, any of the foregoing.

The Company does further hereby grant, bargain, sell, alien, remise, release, convey, assign, transfer, mortgage, hypothecate, pledge, deliver, set over, warrant, and confirm unto the Trustee forever a security interest in all personal property and fixtures (the “Fixtures”) now owned or hereafter acquired and affixed to or located on the Land which, to the fullest extent permitted by law shall be deemed fixtures and a part of the Land. This Mortgage is intended to be a self-operative security agreement with respect to the Fixtures, but the Company agrees to execute and deliver on demand such other security agreements, financing statements, and other instruments as the Trustee may reasonably request in order to perfect its security interest or to impose the lien hereof more specifically upon any of the Fixtures. On demand, the Company will promptly pay all reasonable costs and expenses of filing financing statements, continuation statements, partial releases, and termination statements reasonably deemed necessary or appropriate by the Trustee to establish and maintain the validity and priority of the security

interest of the Trustee, or any modification thereof, and all reasonable costs and expenses of any searches reasonably required by the Trustee. The Trustee may exercise any or all of the remedies of a secured party available to it under the Uniform Commercial Code of the State of Delaware (the “UCC”) with respect to the Fixtures, and it is expressly agreed in accordance with the provisions of the UCC, that five (5) Business Days’ notice by the Trustee to the Company shall be deemed to be reasonable notice under any provision of the UCC requiring such notice; provided, however, that the Trustee may at its option dispose of the collateral in accordance with the Trustee’s rights and remedies in respect to the real property pursuant to the provisions of this Mortgage, in lieu of proceeding under the UCC.

All of the property described in clauses I through VI above and in the immediately preceding paragraph is referred to herein as the “Mortgaged Property.”

Some of the items of property described herein are goods that are or are to become fixtures related to the real estate described herein, and it is intended that, as to those goods, this Mortgage shall be effective as a financing statement filed as a fixture filing from the date of its filing for record in the real estate records of the county in which the Land is located. Information concerning the security interest created by this instrument may be obtained from the Trustee, as Secured Party, or the Company, as Debtor, at the addresses described in Section 32 hereof.

PROVIDED, HOWEVER, THE MORTGAGED PROPERTY SHALL NOT INCLUDE ANY PROPERTY WHICH SHALL CONSTITUTE HAZARDOUS MATERIAL.

For purposes of this Mortgage, the term “Hazardous Material” means any substance, material, or waste which is (i) defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,” or other similar term or phrase under any Environmental Law, (ii) petroleum or any fraction or by-product thereof, asbestos, any polychlorinated biphenyl, urea formaldehyde foam insulation, radon or any other radioactive or explosive substance, methane, volatile hydrocarbons, or an industrial solvent, (iii) designated as a “hazardous substance” pursuant to §311 of the Clean Water Act, as amended (33 U.S.C. §§1251 et seq.) (the “Clean Water Act”) or listed pursuant to §307 of the Clean Water Act, (iv) defined as a “hazardous waste” pursuant to §1004 of the Resource Conservation and Recovery Act, as amended (42 U.S.C. §§6901 et seq.) (“RCRA”), and (v) defined as a “hazardous substance” pursuant to §1012 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§9601 et seq.), as amended by the Superfund Amendments and Reauthorization Act of 1986, and as now or hereafter otherwise amended (“CERCLA”) located on, in, or under the Land or used in connection therewith, other than as the Company or its agents have fully disclosed to the Trustee in writing prior to the date hereof or of which the Trustee independently has actual knowledge, and the term “Environmental Law” means any federal, state, or local law, statute, ordinance, and regulation, now or hereafter in effect, and in each case as amended or supplemented from time to time, and any applicable judicial or administrative interpretation thereof, including, without limitation, any applicable judicial or administrative order, consent decree, or judgment applicable to the Land relating to the regulation and protection of human health and safety and/or the environment and natural resources (including, without limitation, ambient air, surface water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species, and/or vegetation). Environmental Laws include, but are not limited to, the National Environmental Policy Act of

1969, as amended (42 U.S.C. §§4321 et seq.); the Solid Waste Disposal Act (42 U.S.C. §§6901 et seq.); CERCLA; the Hazardous Material Transportation Act, as amended (49 U.S.C. §§1801 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. §§136 et seq.); RCRA; the Toxic Substance Control Act, as amended (15 U.S.C. §§2601 et seq.); the Clean Water Act; the Clean Air Act, as amended (42 U.S.C. §§7401 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C. §§1251 et seq.); the Federal Coastal Zone Management Act, as amended (16 U.S.C. §§1451 et seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. §§651 et seq.); the Safe Drinking Water Act, as amended (42 U.S.C. §§300(f) et seq.), and any and all regulations promulgated thereunder, and all analogous local counterparts or equivalents, and any transfer of ownership notification or approval statues.

SUBJECT, HOWEVER, to “Permitted Liens,” as herein defined;

TO HAVE AND TO HOLD, all and singular the Mortgaged Property and all parts thereof unto the Trustee its successors, endorsees, and assigns, to its own proper use and benefit forever, subject, however, to the terms and conditions herein:

PROVIDED, HOWEVER, that if the Company shall promptly pay or cause to be paid to the Trustee the principal of, interest on, and all other amounts payable with respect to the Secured Obligations, at the times and in the manner stipulated in the Loan Agreement and in this Mortgage, and in all other Security Documents, all without any deduction or credit for taxes or other similar charges paid by the Company, and shall keep, perform, and observe all the covenants and promises in the Security Documents, to be kept, performed, or observed by the Company of the payment of any of the Secured Obligations, then this Mortgage, and all the properties, interests, and rights hereby granted, conveyed, and assigned shall cease, determine, and be void, but shall otherwise remain in full force and effect.

AND THE COMPANY does hereby expressly covenant, warrant, and represent as follows:

DEFINED TERMS. Defined terms used in the Indenture or Loan Agreement shall have the same meanings when used herein. The following additional terms when used herein shall have the meanings specified below:

“Permitted Liens” means

(1) Liens created pursuant to the Bond Documents;

(2) Liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due and payable or that are being contested in good faith and with due diligence in appropriate proceedings and for which bonds have been posted provided such bonds are in amounts sufficient to pay off the liens during the pendency of any controversies relating to them.

(3) Liens incurred in the ordinary course of business in connection with worker’s compensation, unemployment insurance or other forms of governmental insurance or benefits, or liens to secure the performance of letters of credit, bids, tenders, statutory obligations, leases and

contracts (other than for borrowed funds) entered into the ordinary course of business or to secure obligations on surety or appeal bonds;

(4) Liens created pursuant to any Purchase Money Debt;

(5) Security interests created under a conditional sale of goods, whether by an installment sale or a capital lease;

(6) Liens for current taxes, assessments or other governmental charges that are not delinquent or remain payable without any penalty or that are being contested in good faith and with due diligence by appropriate proceedings; and

(7) Liens securing indebtedness permitted by this Mortgage or the Loan Agreement.

“Purchase Money Debt” means

(1) Debt of the Company that, within 30 days of such purchase is secured to finance part or all of (but not more than) the purchase price of tangible assets (not including real property or any interest in real property) in which the Company did not have at any time prior to such purchase any interest other than a security interest, and such debt is not secured by any assets other than the assets acquired; and/or

(2) Debt (A) that constitutes a renewal, extension or refunding of, but not an increase in the principal amount of, Purchase Money Debt that is such by virtue of clause (1), (B) is binding only on the obligor or obligors under the Purchase Money Debt being renewed, extended or refunded, and (C) bears interest at a rate per annum that is commercially reasonable at the time.

Section 1. Representations and Warranties. (a) The Company represents and warrants that (i) it possesses a leasehold estate in the Land and has good right, full power, and lawful authority to convey, mortgage, and encumber the same and the remaining Mortgaged Property as provided herein; (ii) the Mortgaged Property is, and will remain, free and clear of all liens, security interests, charges, and/or encumbrances whatsoever, except for Permitted Liens; (iii) the Company has not executed any prior assignment of the Ground Lease; (iv) the Company has not performed any act or executed any other instrument which might prevent the Trustee from enjoying and exercising any of its rights and privileges evidenced hereby; (v) the Company has not executed or granted any modifications to any existing Lease except as previously disclosed to the Trustee; (vi) as of the date hereof, there are no offsets or defenses to this Mortgage or to the Secured Obligations; (vii) the Mortgaged Property is free from damage caused by fire or other casualty; and (viii) there are no condemnation or similar proceeding pending, or to the best of the Company’s knowledge threatened, which affect the Mortgaged Property.

(b) The Company shall and will make such further assurances to perfect the Ground Lessor’s fee simple title to the Land as may reasonably be required.

(c) All of the Mortgaged Property that consists of tangible personal property is now, or will be, when purchased or acquired, located at or upon the Land.

(d) All information supplied and statements made by the Company in any financial, credit, or accounting statement or application for credit prior to, contemporaneously with, or subsequent to the execution of this Mortgage are and shall be true, correct, valid, and genuine in all material respects.

Section 2. Covenants. The Company covenants and agrees with the Trustee that:

(a) The Company will pay, or cause to be paid, to the Trustee the sum or sums evidenced by, and in accordance with, the terms of all of the Secured Obligations.

(b) The Company will execute all documents, perform all acts, do all things, and pay all sums on the Company’s part to be executed, performed, done, and paid pursuant to the terms and provisions of the Loan Agreement and this Mortgage.

(c) The Company will defend the Mortgaged Property against all claims, demands, actions, or proceedings made or instituted by all persons at any time claiming the same or any interest therein adverse to the Trustee.

(d) The Company will not take any actions, nor knowingly allow any actions to be taken, which would prevent this Mortgage from remaining a valid and enforceable first lien on the Mortgaged Property, subject only to Permitted Liens.

(e) The Company will keep the Mortgaged Property in good condition and free from liens and other security interests, except for Permitted Liens, and will not create or suffer to exist any lien or security interest in the Mortgaged Property, except for Permitted Liens. The Company will pay all costs reasonably necessary to obtain, preserve, defend, and enforce the security interest created hereby and preserve, defend, and enforce the lien and security interest herein created, including, but not as a limitation upon any of the foregoing, the payment of taxes, assessments, insurance premiums, repairs, attorneys’ fees and legal expenses, rent, storage costs, and expenses of sales.

(f) The Company will, at all times, maintain true and accurate accounts, books, and records covering any portion of the Mortgaged Property consisting of personal property (the “Personal Property”) either at the Land or at its offices located at 59 Roosevelt Drive, Dover, DE 19901; will furnish the Trustee with any financial statements or reports and any information with respect to the Personal Property; will allow the Trustee to inspect the Personal Property; and will allow the Trustee to inspect all records relating to the Personal Property, all in accordance with the Loan Agreement and this Mortgage.

(g) Except as set forth in the Loan Agreement, or as otherwise reasonably necessary in connection with the operation of the Project Facilities, the Company will not move the Personal Property from the Land without giving the Trustee at least thirty (30) days’ prior written notice.

(h) The Company will execute any agreements or documents furnished by the Trustee which are reasonably necessary to obtain, maintain, and perfect the Trustee’s security interest in the Personal Property.

(i) The Mortgaged Property will not be used in violation of any statute, ordinance, rule, or regulation of any federal, state, or local authority having jurisdiction over the Mortgaged Property.

(j) Reserved

(k) The Company shall protect, indemnify, and save harmless the Trustee from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs, and expenses (including, without limitation, reasonable attorneys’ fees and expenses) imposed upon or incurred by the Trustee by reason of this Mortgage, and any claim or demand whatsoever which may be asserted against the Trustee by reason of any alleged obligation or undertaking to be performed or discharged by the Trustee under this Mortgage except for the willful, negligent or bad faith acts or omissions of the Trustee and/or the Trustee’s employees, agents or contractors, it being expressly understood and agreed that this Mortgage shall impose no obligations whatsoever on the Trustee that are not expressly set forth herein. In the event the Trustee incurs any liability, loss, or damage by reason of this Mortgage, or in the defense of any claims or demands arising out of or in connection with this Mortgage (excepting, as aforesaid, any liability, loss or damage resulting from the willful, negligent or bad faith acts or omissions of the Trustee and/or the Trustee’s employees, agents or contractors), the amount of such liability, loss, or damage shall be added to the Secured Obligations, shall bear interest at the highest interest rate specified therefor in the Loan Agreement from the date incurred until paid, and shall be payable on demand.

Section 3. Zoning and Environmental Laws. (a) The Company warrants and represents that all applicable zoning laws, ordinances, and regulations affecting the Mortgaged Property, as of the date hereof, permit the use and occupancy of the Improvements and further covenants and warrants to comply with all such laws, ordinances, and regulations, including, but not limited to, all Environmental Laws, ordinances, regulations, and court rulings affecting the Mortgaged Property or the use thereof.

(b) Without limiting the generality of the foregoing, the Company warrants and represents to the Trustee after thorough investigation that: (i) the Mortgaged Property is now and at all times hereafter will continue to be in full compliance with all Environmental Laws; (ii) as of the date hereof, there are no Hazardous Materials located on, in, or under the Real Property or used in connection therewith, other than as the Company has fully disclosed to the Trustee in writing prior to the date hereof; and (iii) the Company has obtained and will maintain all licenses, permits, and approvals required with respect to all Environmental Laws, and is in full compliance with all of the terms, conditions, and requirements of such licenses, permits, and approvals heretofore obtained.

(c) The Company further covenants that it will promptly notify the Trustee upon learning of any material change in the status of any of the warranties or representations contained in subsection (b) hereof or in the nature or extent of any Hazardous Materials maintained on, in, or under the Real Property or used in connection therewith, and will transmit to the Trustee copies of any citations, orders, notices, or other material governmental or other communication received by the Company with respect to any Hazardous Materials or other environmentally regulated substances affecting the Mortgaged Property.

(d) The Company shall indemnify and hold the Trustee harmless from and against any and all damages, penalties, fines, claims, liens, suits, liabilities, costs (including clean-up costs), judgments, and expenses (including reasonable attorneys’, consultants’, or experts’ fees and expenses) of every kind and nature suffered by or asserted against the Trustee (excepting, those damages, costs and expenses as aforesaid, resulting from the willful, negligent or bad faith acts or omissions of the Trustee and/or the Trustee’s employees, agents or contractors (and including, if applicable, if the Trustee becomes a mortgagee-in-possession with respect to the Land for any willful, negligent or bad faith acts or omissions of the Trustee and/or the Trustee’s employees, agents or contractors)) as a direct or indirect result of any warranty or representation made by the Company in this Section being false or untrue or any requirement under any Environmental Law which requires the elimination or removal of any Hazardous Materials or other environmentally regulated substances by the Trustee, the Company, or any transferee of the Trustee or the Company.

(e) The Company’s obligations hereunder shall not be limited to any extent by the term of any of the Secured Obligations and, as to any act or occurrence prior to payment in full and satisfaction of the Secured Obligations which gives rise to liability hereunder, shall continue, survive, and remain in full force and effect notwithstanding payment in full and satisfaction of the Secured Obligations and this Mortgage.

(f) The Company hereby agrees that the Trustee shall have the right, at any time during the term of this Mortgage, to conduct, at the Trustee’s expense, an environmental investigation of the Real Property, either itself or by or through designated agents and may exercise such rights from time to time, and in furtherance of such rights, the Company hereby grants to the Trustee a non-exclusive limited easement over and across the Land and its subsurface for access to the Real Property during reasonable business hours, with as minimal disruption to the operation of the Project Facilities, and upon reasonable notice and for the purpose of conducting an environmental investigation of the Real Property. The Trustee shall have the obligation to promptly restore (at its expense if a violation of Environmental Law is discovered as a result of a willful, negligent or bad faith act or omission by the Trustee and/or the Trustee’s agents, employees or contractors) the Real Property to its original condition prior to the investigation, but shall have no obligation to cure any environmental problem or defect not caused by the Trustee and/or Trustee’s agents, employees or contractors. The satisfaction hereof or the release of a portion of the Real Property from the lien hereof shall evidence a termination of the easement granted herein in full, or as to the Real Property released, as the case may be. This easement is irrevocable so long as this Mortgage is outstanding.

Section 4. Taxes and Liens. (a) The Company shall pay or bond promptly, when and as due, and shall promptly exhibit to the Trustee receipts for the payment of all taxes, assessments, user fees, rates, dues, charges, fees, levies, fines, impositions, liabilities, obligations, and encumbrances of every kind whatsoever now or hereafter imposed, levied, or assessed upon or against the Mortgaged Property or any part thereof, or upon or against this Mortgage or any of the Secured Obligations, or upon or against the interest of the Trustee in the Mortgaged Property, as well as all income taxes, assessments, and other governmental charges levied and imposed by the United States of America, the State of Delaware (the “State”) or any county, municipality, borough, or other taxing authority upon or against the Company or with respect to the Mortgaged Property or any part thereof, and any charge which, if unpaid, would

become a lien or charge upon the Mortgaged Property prior to or equal to the lien of this Mortgage before they become delinquent and before any interest attaches or any penalty is incurred.

(b) The Company shall not permit or suffer for a period of more than thirty (30) days any mechanics’, laborers’, materialmen’s, statutory, or other lien upon any portion of the Mortgaged Property.

Section 5. Insurance; Risk of Loss. (a) The Company shall at its sole expense obtain for, deliver to and maintain for the benefit of the Trustee, during the life of this Mortgage, insurance policies (or certificates thereof) which conform to the requirements of the Loan Agreement. All risk of loss of, damage to, or destruction of the Mortgaged Property shall at all times be on the Company or, if applicable, the Company’s successors or assigns. The Trustee’s acceptance of policies in lesser amounts or risks shall not be a waiver of the Company’s foregoing obligations.

(b) If the Mortgaged Property shall be wholly or partially destroyed or damaged by fire or other casualty covered by insurance or if the Mortgaged Property shall be wholly or partially condemned, taken or damaged by any person, including any person possessing the right to exercise the power of or a power in the nature of eminent domain or transferred to such a person, by way of a conveyance in lieu of the exercise of such power by such person, or if only part of the Mortgaged Property shall be lost because of failure of title, the Company covenants that it will take all actions and will do all things which may be necessary to enable recovery to be made upon such conveyance, damage, injury or loss of title in order that moneys due on account of losses suffered may be collected and applied as provided herein. Any appraisement or adjustment of loss or damage and any settlement or payment therefor, which may be agreed upon by the Company and the appropriate insurer or condemnor or person, shall be evidenced to the Trustee by a certificate of the Company. The Trustee may rely conclusively upon such certificate.

Section 6. Casualty Loss; Condemnation. (a) Immediately after occurrence of casualty loss or damage covered by insurance, the Company shall notify the Trustee thereof. The Company shall promptly determine and advise the Trustee, in writing, (1) whether it is practicable to repair, reconstruct or replace such damaged or destroyed or lost property, (2) the estimated time and funds required for such repair, reconstruction or replacement.

(b) If the Company determines that such repair, reconstruction or replacement is practicable, and if it certifies to the Trustee that, based upon the Company’s best judgment of the net insurance proceeds anticipated, the Company will have sufficient funds from the net proceeds of insurance (including business interruption insurance and other available funds), and any other funds the Company may make available, to make the payments required of the Company under the Loan Agreement, to pay the cost of repairing, restoring or replacing the portion of the Mortgaged Property affected by such loss or damage and to pay all operating expenses until completion of the repair, reconstruction or replacement of such part of the Mortgaged Property which is affected by such loss or damage and for the first full Fiscal Year after such completion, the Company shall proceed with due diligence to repair or restore the damaged or lost property. Any insurance proceeds remaining after the completion of such repair,

replacement or reconstruction shall promptly at the direction of the Company be applied to the purchase, redemption or retirement of Bonds.

(c) If the Company determines that such repair, reconstruction or replacement is not practicable, or that there are not sufficient funds available to accomplish the repair or restoration, the insurance proceeds shall be paid to the Trustee and applied to the purchase, redemption or retirement of Bonds provided that, in the case of damage to or destruction of all or substantially all of the Mortgaged Property the Company shall pay to the Trustee an amount sufficient, together with the insurance proceeds, to redeem all Bonds Outstanding.

(d) Immediately after the commencement of any condemnation or similar proceedings by a third party in the exercise of a power of eminent domain, or a power in the nature of eminent domain affecting the Mortgaged Property, the Company shall notify the Trustee in writing. The Company shall promptly determine and advise the Trustee, in writing, (1) whether it is practicable to replace or restore the portion of the Mortgaged Property affected by such taking or condemnation and (2) the estimated time and funds required for such reconstruction or replacement.

(e) If the Company determines that such reconstruction or replacement is practicable, and if it certifies to the Trustee that, based upon the Company’s best judgment of the net condemnation proceeds anticipated, the Company will have sufficient funds from such proceeds (including business interruption insurance and other available funds), and any other funds the Company may make available, to make the payments required of the Company under the Loan Agreement, to pay the cost of restoring or replacing the affected portion of the Mortgaged Property and to pay all operating expenses until completion of the reconstruction or replacement of the affected part of the Mortgaged Property and for the first full Fiscal Year after such completion, the Company shall proceed with due diligence to restore or replace the affected property. Any condemnation proceeds remaining after the completion of such replacement or reconstruction shall promptly at the direction of the Company be applied to the purchase, redemption or retirement of Bonds.

(f) If the Company determines that such reconstruction or replacement is not practicable, or that there are not sufficient funds available to accomplish the restoration or replacement, the insurance proceeds shall be paid to the Trustee and applied to the purchase, redemption or retirement of Bonds provided that in the case of a taking or condemnation of all or substantially all of the Mortgaged Property the Company shall pay to the Trustee an amount sufficient, together with the condemnation proceeds, to redeem all Bonds Outstanding.

Section 7. Care of the Mortgaged Property. (a) The Company shall preserve and maintain the Mortgaged Property in good condition and repair; shall not remove, demolish, materially alter, or materially change the use of any of the Improvements (other than the disposition of obsolete or worn out property or the disposition and replacement of property in the ordinary course of business); shall not permit, commit, or suffer any waste, impairment, or deterioration of the Mortgaged Property or of any part thereof; and shall not take any action which increases the risk of fire or other hazard to the Mortgaged Property or to any part thereof.

(b) Except as otherwise provided in this Mortgage or in the Loan Agreement, no fixture or other part of the Mortgaged Property shall be removed, demolished, altered, sold or otherwise disposed of.

(c) Upon reasonable advance notice to the Company, the Trustee may enter upon and inspect the Real Property at any reasonable time during the term of this Mortgage.

(d) The Company shall promptly comply with all present and future laws, ordinances, rules, and regulations of any governmental authority affecting the Mortgaged Property or any part thereof.

Section 8. Transfer of the Mortgaged Property. The Company shall not sell, convey, transfer, mortgage, lease (except for leases in the ordinary course of business), or otherwise further encumber any interest in or any part of the Mortgaged Property (except for Permitted Liens). If any person should obtain any interest in all or any part of the Ground Lease or the Fixtures pursuant to the execution or enforcement of any lien, security interest, or other right, whether superior, equal, or subordinate to this Mortgage or the lien hereof, such event shall be deemed to be a transfer by the Company.

Section 9. Further Assurances. At any time and from time to time, upon the Trustee’s written request, the Company shall make, execute, and deliver or cause to be made, executed, and delivered to the Trustee and, where appropriate, shall cause to be recorded or filed and from time to time thereafter to be rerecorded or refiled at such time and in such offices and places as shall be deemed desirable by the Trustee any and all such further mortgages, instruments of further assurance, certificates, and other documents as the Trustee may reasonably consider necessary or desirable in order to effectuate, complete, or perfect, or to continue and preserve the obligations of the Company under this Mortgage, and the other Security Documents (as the Trustee deems necessary), and the lien of this Mortgage as a first and prior lien upon all of the Mortgaged Property, whether now owned or hereafter acquired by the Company. Upon any failure by the Company to do so, the Trustee may make, execute, record, file, re-record, or refile any and all such mortgages, instruments, financing statements, certificates, and documents for and in the name of the Company, and the Company hereby irrevocably appoints the Trustee the agent and attorney-in-fact of the Company to do so and the Trustee shall promptly thereafter provide a copy of such filing or document to the Company.

Section 10. After Acquired Property. The lien of this Mortgage shall automatically attach, without further act, to all after acquired real property located in or on which is to be used or intended to be used (including, but not limited to, real property necessary to the access or development of the Project Facilities) in connection with, or with the operation of, the Mortgaged Property or any part thereof.

Section 11. Expenses. The Company shall pay or reimburse the Trustee for all reasonable costs, charges, and expenses, including reasonable attorneys’ fees and disbursements, incurred or paid by the Trustee in any action which is threatened, pending, or completed or proceeding or in dispute in which the Trustee is made a party or appears as a parry plaintiff or party defendant and which affects or might affect any of the Secured Obligations or the Mortgaged Property, or any part of either thereof, or the interests of the Company or the Trustee

therein, including but not limited to the foreclosure of this Mortgage, condemnation involving all or a part of the Mortgaged Property, or any action to protect the security hereof. All such reasonable costs, charges, and expenses so incurred or paid by the Trustee shall become due and payable immediately within 20 days after written demand therefor. The amounts so incurred or paid by the Trustee, together with interest thereon at the prime rate charged corporate borrowers by the commercial lending department of the Trustee, if any, or in the absence of such commercial lending department or rate, the rate designated the “Prime Rate” as published each Business Day in the Wall Street Journal (the “Prime Rate”) from the date when due from the Company, shall be added to the indebtedness secured by the lien of this Mortgage.

Section 12. Trustee’s Performance of Defaults. If the Company defaults in the payment of any tax, user fee, assessment, encumbrance, or other imposition, in its obligation to furnish insurance hereunder, or in the performance or observance of any other covenant, condition, or term in any of the Security Documents, the Trustee may, at its option, perform or observe the same, and all payments made (whether such payments are regular or accelerated payments) and reasonable costs and expenses incurred or paid by the Trustee in connection therewith shall become due and payable by the Company within 20 days after written demand therefor. The amounts so incurred or paid by the Trustee, together with interest thereon at the Prime Rate from the date when due from the Company, shall be added to the indebtedness secured by the lien of this Mortgage. Nothing contained herein shall be construed as requiring the Trustee to advance or expend monies for any purposes mentioned in this Section, or for any other purpose, and any such payment by the Trustee shall not constitute a waiver of any right arising from a breach of any of the covenants set forth herein. The Trustee is hereby empowered to enter and to authorize others to enter upon the Real Property or any part thereof for the purpose of performing or observing any such defaulted covenant, condition, or term, without thereby becoming liable to the Company or any person in possession holding under the Company.

Section 13. Estoppel Affidavits. The Company, within ten (10) days after receipt of a written request from the Trustee, shall furnish a written statement, duly acknowledged, setting forth the unpaid principal of, and interest on, any or all of the Secured Obligations, and whether or not any offsets or defenses exist against such principal and interest or other sums.

Section 14. Events of Default. The term “Event of Default,” wherever used in this Mortgage, shall mean any one or more of the following events:

(a) failure by the Company to duly keep, perform, or observe any other covenant, agreement, or condition hereof, not cured within thirty (30) days after written notice thereof by the Trustee to the Company; or

(b) the occurrence of an Event of Default under any of the Security Documents, with respect to the Company’s duties, obligations and covenants thereunder.

. If an Event of Default shall have occurred and be continuing, the Trustee may exercise the remedies for Events of Default set forth in the Indenture.

Section 16. Trustee’s Power of Enforcement. If an Event of Default shall have occurred and be continuing, the Trustee may, either with or without entry or taking possession as hereinabove provided or otherwise, proceed by suit or suits at law or in equity or by any other appropriate proceeding or remedy (a) to enforce payment of the Secured Obligations or the performance of any term of any of the Loan Agreement or this Mortgage or any other right; (b) to foreclose this Mortgage and to sell the Mortgaged Property under the judgment or decree of a court or courts of competent jurisdiction; and (c) to pursue any other remedy available to it. The Trustee may take action either by such proceedings or by the exercise of its powers with respect to entry or taking possession, or both, as the Trustee may determine.

Section 17. Trustee’s Right to Enter and Take Possession, Operate, and Apply Income. (a) If an Event of Default shall have occurred and be continuing, the Company, upon demand of the Trustee, shall forthwith surrender to the Trustee the actual possession, and if and to the extent permitted by law, the Trustee itself, or by such officers or agents as it may appoint, may enter and take possession of, all the Mortgaged Property, and may exclude the Company and its agents and employees wholly therefrom, and may have joint access with the Company to the books, papers, and accounts of the Company with respect to the Mortgaged Property.

(b) If an Event of Default shall have occurred and be continuing, the Company shall for any reason fail to surrender or deliver the Mortgaged Property or any part thereof after the Trustee’s demand, the Trustee may obtain a judgment or decree conferring on the Trustee the right to immediate possession or requiring the Company to deliver immediate possession of all or part of the Mortgaged Property to the Trustee, to the entry of which judgment or decree the Company hereby specifically consents. The Company shall pay to the Trustee, upon demand, all reasonable costs and expenses of obtaining such judgment or decree and reasonable compensation to the Trustee, its attorneys, and its agents, and all such costs, expenses, and compensation shall, until paid, be secured by the lien of this Mortgage.

(c) Upon every such entering upon or taking of possession, the Trustee may hold, store, use, operate, manage, and control the Mortgaged Property and conduct the business thereof and to accurately account therefor, and, from time to time:

(i) make all necessary and proper maintenance, repairs, renewals, replacements, additions, betterments, and improvements thereto and thereon and purchase or otherwise acquire additional fixtures, personalty, and other property;

(ii) insure or keep the Mortgaged Property insured;

(iii) manage and operate the Mortgaged Property and exercise all the rights and powers of the Company in its name or otherwise, with respect to the same; and

(iv) enter into agreements with others to exercise the powers herein granted to the Trustee,

all as the Trustee in its reasonable judgment from time to time may determine.

Section 18. Reserved.

Section 19. Purchase by the Trustee. Upon any such foreclosure sale, the Trustee may bid for and purchase the Mortgaged Property and, upon compliance with the terms of sale, may hold, retain and possess, and dispose of the Mortgaged Property in its own absolute right without further accountability, but subject to applicable laws and/or equitable principals.

Section 20. Application of Secured Obligations Toward Purchase Price. Upon any foreclosure sale of the Mortgaged Property, the Trustee may, if permitted by law, after allowing for the proportion of the total purchase price required to be paid in cash and for the costs and expenses of the sale, compensation, and other charges, in paying the purchase price, apply, in such mariner as the Trustee shall, in its reasonable discretion, determine, any portion of or all sums due to the Trustee under any of any of the Secured Obligations and this Mortgage in lieu of cash, to the amount which shall, upon distribution of the net proceeds of such sale, be payable thereon.

Section 21. Appointment of a Receiver. If an Event of Default shall have occurred and be continuing, the Trustee, to the extent permitted by law and without regard to the value or occupancy of the Mortgaged Property, shall be entitled as a matter of right if it so elects to the appointment of a receiver to enter upon and take possession of the Real Property. The receiver shall have all rights and powers permitted under the laws of the State and such other powers as the court making such appointment shall confer. The reasonable expenses, including receiver’s fees, attorneys’ fees and expenses, and agent’s compensation, incurred pursuant to the powers herein contained shall be secured by this Mortgage. The right to enter and take possession of and to manage and operate the Real Property shall be cumulative to any other right or remedy hereunder or afforded by law, and may be exercised concurrently therewith or independently thereof. Notwithstanding the appointment of any receiver or other custodian with respect to the Real Property, the Trustee shall be entitled as a secured party hereunder to the possession and control of any cash, deposits, or instruments at the time held by, or payable or deliverable under the terms of this Mortgage to, the Trustee.

Section 22. Suits to Protect the Mortgaged Property. The Trustee shall have the power and authority, and with notice to the Company, to institute and maintain any suits and proceedings as the Trustee may reasonably deem advisable (a) to prevent any impairment of the Mortgaged Property by any acts which may be unlawful or any violation of this Mortgage; (b) to preserve or protect its interest in the Mortgaged Property; and (c) to restrain the enforcement of or compliance with any legislation or other governmental enactment, rule, or order that may be unconstitutional or otherwise invalid, if the enforcement of or compliance with such enactment, rule, or order might impair the security hereunder or be prejudicial to the Trustee’s interest.

Section 23. Proofs of Claim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition, or other judicial proceedings affecting the Company, any person, partnership, corporation, limited liability company, or other entity guaranteeing or endorsing any of the Secured Obligations; his, her, or its creditors; or his, her, or its property, the Trustee, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have its claims allowed in such proceedings for the entire amount due and payable by the Company under the Loan

Agreement or this Mortgage at the date of the institution of such proceedings, and for any additional amounts which may become due and payable by the Company after such date.

Section 24. Company to Pay the Secured Obligations on Any Default in Payment; Application of Monies. (a) If an Event of Default shall have occurred and be continuing, then, upon the Trustee’s demand, the Company shall pay to the Trustee the whole amount due and payable under the Loan Agreement; and if the Company shall fail to pay the same forthwith upon such demand, the Trustee shall be entitled to sue for and to recover judgment for the whole amount so due and unpaid together with reasonable costs and expenses including the reasonable compensation, expenses, and disbursements of the Trustee’s agents and attorneys incurred in connection with such suit and any appeal in connection therewith. The Trustee shall be entitled to sue and recover judgment as aforesaid either before, after, or during the pendency of any proceedings for the enforcement of this Mortgage, and the right of the Trustee to recover such judgment shall not be affected by any taking, possession, or foreclosure sale hereunder, or by the exercise of any other right, power, or remedy for the enforcement of the terms of this Mortgage, or the foreclosure of the lien hereof.

(b) In case of a foreclosure sale of all or any part of the Mortgaged Property and of the application of the proceeds of sale to the payment of the Secured Obligations, the Trustee shall be entitled to enforce payment of and to receive all amounts then remaining due and unpaid and to recover judgment for any portion thereof remaining unpaid, with interest, to the extent permitted by law or equity.

(c) The Company hereby agrees, to the extent permitted by law or equity, that no recovery of any such judgment by the Trustee and no attachment or levy of any execution upon any of the Mortgaged Property or any other property shall in any way affect the lien of this Mortgage upon the Mortgaged Property or any part thereof or any lien, rights, powers, or remedies of the Trustee hereunder, but such lien, rights, powers, and remedies shall continue unimpaired as before.

(d) Any monies collected or received by the Trustee under this Section shall be promptly applied as follows:

(i) First, to the payment of reasonable compensation, expenses, and disbursements of the Trustee’s agents and attorneys; and

(ii) Second, to the payment of amounts due and unpaid under this Mortgage, the Loan Agreement and all other Security Documents in such manner as is determined by the provisions of the Indenture.

Section 25. Course of Dealing Not a Waiver. No course of dealing between the Company and the Trustee, nor any failure to exercise, nor any delay in exercising, any right, power, remedy, or privilege of the Trustee hereunder shall operate as a waiver thereof or constitute acquiescence therein; nor shall any single or partial exercise of any right, power, or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. Every right, power, and remedy given to the Trustee may be

exercised from time to time and as often as may be deemed expedient by the Trustee and as otherwise provided in this Mortgage and/or the other Security Documents.

Section 26. No Waiver of One Default to Affect Another. No waiver of any Event of Default hereunder shall extend to or affect any subsequent or any other Event of Default then existing or impair any rights, powers, or remedies consequent thereon. If the Trustee (a) grants forbearance or an extension of time for the payment of any of the Secured Obligations; (b) takes other or additional security for the payment thereof; (c) waives or does not exercise any right granted in the Loan Agreement, this Mortgage, or any other Security Document; (d) releases any part of the Mortgaged Property from the lien of this Mortgage; (e) consents to the filing of any map, plat, or replat of the Land; (f) consents to the granting of any easement on or over the Real Property; or (g) makes or consents to any agreement changing the terms of this Mortgage or subordinating the lien or any charge hereof, no such act or omission shall release, discharge, modify, change, or affect the original liability under the Loan Agreement or this Mortgage, or otherwise of the Company, any subsequent purchaser of the Mortgaged Property or any part thereof, or any maker, cosigner, endorser, surety, or guarantor. No such act or omission shall preclude the Trustee from exercising any right, power, or privilege herein granted or intended to be granted in case of any Event of Default then existing or of any subsequent Event of Default nor, except as otherwise expressly provided in an instrument or instruments executed by the Trustee, shall the lien of this Mortgage be altered thereby. In the event of the sale or transfer by operation of law or otherwise of all or any part of the Mortgaged Property, the Trustee, without notice to any person, firm, partnership, corporation, limited liability company, or other entity, is hereby authorized and empowered to deal with any such vendee or transferee with reference to the Mortgaged Property or the Secured Obligations, or with reference to any of the terms or conditions hereof, as fully and to the same extent as it might deal with the Company and without in any way releasing or discharging any of the liabilities or undertakings hereunder.

Section 27. Discontinuance of Proceedings; Position of Parties Restored. If the Trustee shall have proceeded to enforce any right or remedy under this Mortgage by foreclosure, entry, or otherwise, and such proceeding shall have been discontinued or abandoned without an adjudication on the merits for any reason then, and in every such case, the Company and the Trustee shall be restored to their former positions and rights hereunder, and all rights, powers, and remedies of the Trustee shall continue as if no such proceeding had occurred or had been taken.

Section 28. Remedies Cumulative. No right, power, or remedy conferred upon or reserved to the Trustee by the Loan Agreement, this Mortgage, or any other Security Document is exclusive of any other right, power, or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power, and remedy given hereunder or under any of the Secured Obligations, the Loan Agreement, or any other Security Document, or now or hereafter existing at law, in equity, or by statute.

Section 29. Partial Foreclosure. The Company hereby waives any right to require the Trustee to foreclose or exercise any of its other remedies against all of the Mortgaged Property as a whole or to require the Trustee to foreclose or exercise such remedies against any one portion of the Mortgaged Property prior to the foreclosure or exercise of said remedies against other portions of the Mortgaged Property.

Section 30. Future Advances. The Trustee, at its option, may make future advances to the Company, provided, however, that nothing contained herein shall constitute an obligation to do so. Such future advances, with interest at the Prime Rate, shall be secured by this Mortgage when evidenced by an instrument indicating that such advances are secured by this Mortgage or when advanced under the terms of this Mortgage. The Trustee may make such future advances (a) at the request of the Company, whether or not there is any obligation to make future advances, or (b) to pay, with or without the consent or request of the Company, any amounts which may be due under this Mortgage or under any other mortgage or lien affecting the Mortgaged Property.

Section 31. Parties Included. Whenever one of the parties hereto is named or referred to herein, the heirs, representatives, successors, endorsees, and assigns of such party shall be included, and all covenants and agreements contained in this Mortgage, by or on behalf of the Company or the Trustee, shall bind and inure to the benefit of their respective heirs, representatives, successors, endorsees, and assigns, whether so expressed or not.

Section 32. Addresses for Notices, etc. Any notice, report, demand, or other instrument authorized or required to be given or furnished under this Mortgage to the Company or to the Trustee shall be deemed given or furnished when mailed by certified mail, postage prepaid, return receipt requested, or given when dispatched by facsimile transmission, with confirmation of receipt, or by personal delivery addressed as follows:

If to the Company, addressed to it at:

Kent County Regional Sports Complex Corporation 59 Roosevelt Drive Dover, DE 19901 Attention: Executive Director Telephone: (302) 734-2513 Facsimile: (302) 734-4630

With a copy to:

Michael W. Whittaker, Esquire Potter Anderson & Corroon LLP Hercules Plaza 1313 N. Market Street, 6th Floor P.O. Box 951 Wilmington, DE 19801 Telephone: (302) 984-6104 Facsimile: (302) 658-1192

If to the Trustee, addressed to it at:

Wilmington Trust, National Association, as Trustee 1100 North Market Street, 3rd Floor Wilmington, DE 19801 Telephone: (302) 636-6103

Receipt of notices, certificates, or other communications hereunder shall occur upon actual delivery (whether by mail, facsimile transmission, messenger, courier service, or otherwise) to any person who is an officer of the Company at any location where such person may be found, or to an officer, agent or employee of the Company or other party, at the address of such party set forth above, subject to change as provided hereinabove. An attempted delivery in accordance with the foregoing, acceptance of which is refused or rejected, shall be deemed to be and shall constitute receipt; and an attempted delivery in accordance with the foregoing by mail, messenger, or courier service (whichever is chosen by the sender) which is not completed because of changed address of which no notice was received by the sender in accordance with this provision prior to the sending of the notice, certificate, or other communication shall also be deemed to be and constitute receipt. A duplicate copy of each notice, certificate, or other communication given hereunder shall also be given to the Trustee at the address specified above. Any party named in this Section may, by notice given to each of the others, designate any additional or different addresses to which subsequent notices, certificates, or other communications shall be sent.

Section 33. Headings. The headings of the articles, sections, paragraphs, and subdivisions of this Mortgage are for convenience of reference only, are not to be considered a part hereof, and shall not limit or expand or otherwise affect any of the terms hereof.

Section 34. Invalid Provisions to Affect No Others. In the event that any of the covenants, agreements, terms, or provisions contained in any of the Secured Obligations, the Loan Agreement, this Mortgage, or any other Security Document shall be invalid, illegal, or unenforceable in any respect, the validity of the remaining covenants, agreements, terms, or provisions contained herein and therein shall be in no way affected, prejudiced, or disturbed thereby.

Section 35. Changes, etc. Neither this Mortgage nor any term hereof may be changed, waived, discharged, or terminated orally, or by any action or inaction, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge, or termination is sought subject to applicable provisions of law and equity. Any agreement hereafter made by the Company and the Trustee relating to this Mortgage shall be superior to the rights of the holder of any intervening lien or encumbrance.

Section 36. Entire Agreement. This Mortgage and the documents expressly referred to herein embody the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or otherwise, relating to the subject matter.

Section 37. Counterparts. This Mortgage may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute but one and the same instrument.

Section 38. Additional Provisions Regarding the Ground Lease. (a) The Company shall pay all rent and other charges required under the Ground Lease as and when the same are due and the Company shall keep, observe, and perform, or cause to be kept, observed, and performed, all of the other terms, covenants, provisions, and agreements of the Ground Lease on the part of the tenant thereunder to be kept, observed, and performed, and shall not in any manner, cancel, terminate, or surrender, or permit any cancellation, termination, or surrender of the Ground Lease, in whole or in part, or, without the written consent of the Trustee, either orally or in writing, modify, amend, or permit any modification or amendment of any of the terms thereof in any respect, and any attempt on the part of the Company to exercise any such right without such written consent of the Trustee shall be null and void ab initio and of no force or effect.

(b) The Company shall do, or cause to be done, all things necessary to preserve and keep unimpaired the rights of the Company as tenant under the Ground Lease and to prevent any default under the Ground Lease or any termination, surrender, cancellation, forfeiture, or impairment thereof, and in the event of the failure of the Company to make any payment required to be made by the Company pursuant to the provisions of the Ground Lease or to keep, observe, or perform, or cause to be kept, observed, or performed, any of the terms, covenants, provisions, or agreements of the Ground Lease, the Company agrees that the Trustee may (but shall not be obligated to), and, if possible, upon reasonable prior advance notice to the Company, take any action on behalf of the Company, to make or cause to be kept, observed, or performed any such terms, covenants, provisions, or agreements and to enter upon the Mortgaged Property and take all such action thereof as may be necessary therefor to the end that the rights of the Company in and to the leasehold estate created by the Ground Lease shall be kept unimpaired and free from default, and all money so reasonably expended by the Trustee, with interest thereon at the Prime Rate from the date of each such expenditure, shall be paid by the Company to the Trustee promptly upon demand by the Trustee and shall be added to the indebtedness and secured by this Mortgage, and the Trustee shall have, in addition to any other remedy thereof, the same rights and remedies in the event of non-payment of any such sum by the Company as in the case of a default by the Company in the payment of any sums due under the Loan Agreement.

(c) The Company shall enforce the obligations of the Ground Lessor under the Ground Lease to the end that the Company may enjoy all of the rights granted to it under the Ground Lease; promptly notify the Trustee in writing of any default by the Ground Lessor or by the Company in the performance or observance of any of the terms, covenants, or conditions on the part of the Ground Lessor or the Company, as the case may be, to be performed or observed under the Ground Lease; promptly advise the Trustee in writing of the occurrences of any of the events of default enumerated in the Ground Lease and of the giving of any notice by the Ground Lessor to the Company of any default by the Company in performance or observance of any of the terms, covenants, or conditions of the Ground Lease on the part of the Company to be performed or observed; and promptly deliver to the Trustee a true and complete copy of each such notice. If, pursuant to the Ground Lease, the Ground Lessor shall deliver to the Trustee a

copy of any notice of default given to the Company, such notice shall constitute full authority and protection to the Trustee for any action taken or omitted to be taken by the Trustee in good faith in reliance thereon.

(d) If any action or proceeding shall be instituted to evict the Company or to recover possession of the Mortgaged Property or for any other purpose affecting the Ground Lease or this Mortgage, the Company shall, immediately upon service thereof on or to the Company, deliver to the Trustee a true and complete copy of each petition, summons, complaint, notice of motion, order to show cause and of all other provisions, pleadings, and papers, however designated, served in any such action or proceeding.

(e) The Company covenants and agrees that unless the Trustee and the Ground Lessor shall otherwise expressly consent in writing, the fee title to the Land and the leasehold estate shall not merge, but shall always remain separate and distinct, notwithstanding the union of said estates either in the Ground Lessor, the Company, or a third party by purchase or otherwise; and in case the Company acquires the fee title or any other estate, title, or interest in the Mortgaged Property, this Mortgage shall attach to and, cover, and be a lien upon the fee title or such other estate so acquired, and such fee title or other estate shall, without further assignment, mortgage, or conveyance, become and be subject to the lien of and covered by this Mortgage.

(f) No release or forbearance of any of the Company’s obligations under the Ground Lease, pursuant to the Ground Lease or otherwise, shall release the Company from any of its obligations under this Mortgage, including its obligation with respect to the payment of rent as provided for in the Ground Lease and the performance of all of the terms, provisions, covenants, conditions, and agreements contained in the Ground Lease to be kept, performed, and complied with by the tenant therein.

(g) In case of any Event of Default under this Mortgage, all rights under the Ground Lease, together with the right of termination, cancellation, modification, change, supplement, alteration, or amendment of the Ground Lease, all of which have been assigned for collateral purposes to the Trustee, shall vest in and be exercisable solely by the Trustee.

(h) The Company shall give the Trustee prompt written notice of the commencement of any arbitration or appraisal proceeding under and pursuant to the provisions of the Ground Lease. The Trustee shall have the right to intervene and participate in any such proceeding, and the Company shall confer with the Trustee to the extent which the Trustee deems reasonably necessary for the protection of the Trustee. Upon the written request of the Trustee, the Company shall exercise all rights of arbitration conferred upon it by the Ground Lease. The Company shall select an arbitrator who is approved in writing by the Trustee, such approval not to be unreasonably withheld, conditioned or delayed; provided, however, that if at the time any such proceeding shall be commenced, there shall exist an Event of Default with respect to the performance or observance of any covenant, condition, or other requirement of the Ground Lease, or of this Mortgage, or any other Security Document on the part of the Company to be performed or observed, the Trustee shall have, and is hereby granted, the sole and exclusive right to designate and appoint on behalf of the Company the arbitrator or arbitrators, or appraiser or appraisers, in such proceeding.

(i) Not more than three hundred sixty (360) and not less than two hundred seventy (270) days before the right of the Company to exercise any option or right to renew or extend the term of the Ground Lease shall expire, the Company shall give the Trustee written notice specifying the date, term, and manner for which such option or renewal is to be exercised. Within ten (10) days of written demand by the Trustee, the Company shall exercise any such option or renewal which is necessary to extend the term of the Ground Lease beyond the term of this Mortgage or to comply with any law affecting the Company or the Trustee or which is necessary, in the reasonable judgment of the Trustee, to preserve the value of the Mortgaged Property intended to be afforded by this Mortgage. The Company shall promptly provide evidence of such exercise of such option or right to the reasonable satisfaction of the Trustee. In the event that the Company fails to so exercise any such option or right or upon the occurrence of an Event of Default, the Company hereby agrees and grants to the Trustee all right and authority to exercise such option in the name of the Company or in its own name. Nothing contained herein shall affect or limit any rights of the Trustee under the Ground Lease.

(j) If there shall be filed by or against the Company a petition under the United States Bankruptcy Code, Title 11 of the United States Code (the “Bankruptcy Code”), and the Company does not cause the withdrawal of dismissal of said petition within 30 days of notice thereof, then the lien of this Mortgage shall attach to the Company’s rights and remedies at any time arising under or pursuant to the Bankruptcy Code, including, but not limited to, §365 thereof. Upon the filing of any petition by or against the Company under the Bankruptcy Code, the Company shall immediately provide copies of all pleadings and notices related thereto to the Trustee. The Company unconditionally assigns to the Trustee all of the Company’s rights to remain in possession of the Mortgaged Property following the filing of any Bankruptcy petition by or against the Company, which is not withdrawn or dismissed within 30 days as aforesaid, and acknowledges that the Trustee may file any pleading in furtherance thereof. This assignment constitutes a present, irrevocable, and unconditional assignment only of the foregoing expressly enumerated claims, rights, and remedies of the Company, and shall continue in effect until all of the Secured Obligations shall have been satisfied and discharged in full. Furthermore, the Company hereby irrevocably constitutes and appoints the Trustee as the Company’s attorney-in- fact for the limited purpose of filing any pleading in the court in which the initial petition was filed or any court to which the action thereon may be removed, transferred, or assigned (the “Bankruptcy Court”) that the Trustee determines in its reasonable discretion to protect the Trustee’s interests in and to the Mortgaged Property, including but not limited to a motion to extend any applicable time period for the filing of any motion related to the assumption of the Ground Lease.

(i) The Company shall not, without the prior written consent of the Trustee, file any motion or other pleading to reject or otherwise elect to treat the Ground Lease as terminated under §365 of the Bankruptcy Code. Any such motion, pleading, or election made without such prior written consent shall be void ab initio, and this Mortgage may be pled in bar thereof. If the Company does file such a motion to reject the Ground Lease under §365 of the Bankruptcy Code, the Company hereby acknowledges and agrees that, unless the Trustee consents in writing to such rejection, the Company may not reject the Ground Lease unless the Company proves, by a preponderance of the evidence, that the Company was “insolvent,” within

the meaning of §101 of the Bankruptcy Code, on the petition filing date. If the Company, as tenant under the Ground Lease and as debtor under the Bankruptcy Code, shall desire to reject the Ground Lease pursuant to §365 of the Bankruptcy Code, the Company shall give the Trustee not less than thirty (30) days’ prior written notice of the date on which the Company intends to file a motion in or otherwise apply to the Bankruptcy Court for authority to reject the Ground Lease. In such event, the Trustee shall have the right, but not the obligation, to serve upon the Company within such thirty (30) day period a notice stating that the Trustee demands that the Company assume the Ground Lease and assign the Ground Lease to the Trustee or the Trustee’s designee pursuant to §365 of the Bankruptcy Code. If the Trustee shall serve upon the Company the notice described in the preceding sentence, the Company shall not seek to reject the Ground Lease and shall comply with the demand provided for in the preceding sentence.

(ii) If the Company shall desire to assume the Ground Lease, then the Company shall give the Trustee not less than thirty (30) days’ prior written notice of the date on which the Company intends to file a motion in, or otherwise apply to, the Bankruptcy Court for authority to assume the Ground Lease. The Company shall inform the Trustee as a part of such notice whether or not the Company intends to assign the Ground Lease following assumption thereof. The Trustee shall have the right, but not the obligation, to serve upon the Company within such thirty (30) day period a notice stating that the Trustee demands that the Company assume the Ground Lease and assign the Ground Lease to the Trustee or the Trustee’s designee pursuant to §365 of the Bankruptcy Code, and such election by the Trustee shall be binding upon the Company, Should the Company file a motion to assume the Ground Lease, the Trustee shall have the right to petition the Bankruptcy Court to determine what terms and conditions will provide the Trustee with “adequate assurance of future performance,” within the meaning of §365 of the Bankruptcy Code.

(k) If there shall be filed by or against the Ground Lessor or any fee owner of the Mortgaged Property a petition under the Bankruptcy Code, the Company shall, after obtaining knowledge thereof, promptly notify the Trustee thereof in writing. The Company shall promptly deliver to the Trustee, following receipt, complete and correct copies of any and all notices, motions, summonses, pleadings, claim forms, applications, and other documents received by the Company in connection with any such petition and any proceedings relating thereto. In the event of such a Bankruptcy filing, the Trustee shall have the option, exercisable upon notice from the Trustee to the Company, to conduct and control any such litigation with counsel chosen by the Trustee. The Trustee may proceed in its own name or in the name of the Company in connection with any such litigation, and the Company agrees to execute any and all powers, authorizations, consents, or other documents required by the Trustee in connection therewith. The Company shall, upon demand, pay to the Trustee all reasonable costs and expenses (including attorneys’ and paralegals’ fees and expenses) paid or incurred thereby in connection with the prosecution or conduct of any such proceedings. Any such costs or expenses

not paid by the Company as aforesaid shall be secured by the lien of this Mortgage and shall be added to the principal amount of the indebtedness secured hereby. The Company shall not commence any action, suit, proceeding, or case, or file any application or make any motion, in respect of the Ground Lease in any such case under the Bankruptcy Code without the prior written consent of the Trustee, which consent shall not be unreasonably withheld, conditioned or delayed. The Company hereby unconditionally assigns, transfers, and sets over to the Trustee all of the Company’s claims and rights to the payment of damages or any claim arising from any rejection of the Ground Lease by the Ground Lessor or any other fee owner of the Mortgaged Property, or the payment of any amount or claim associated with the Ground Lease in any proceeding under the Bankruptcy Code, but only to the extent of the then unpaid balance of the Secured Obligations, the Company expressly herein retaining any claim rights to the payment of damages in excess of said amount. The Trustee shall have the right to proceed in its own name and/or in the name of the Company in respect of any claim, suit, action, or proceeding relating to the assumption or rejection of the Ground Lease by the Ground Lessor, including, without limitation, the right to file and prosecute in the name of the Company, any proofs of claim, complaints, motions, applications, notices, and other documents, or to defend against any objection thereto, in any case in respect to the Ground Lessor or any fee owner of the Mortgaged Property. This assignment constitutes a present, irrevocable, and unconditional assignment of the foregoing claims, rights, and remedies, and shall continue in effect until all of the Secured Obligations shall have been satisfied and discharged in full. Any amounts received by the Trustee as damages arising out of the rejection of the Ground Lease as aforesaid shall be applied first to all reasonable costs and expenses of the Trustee (including, without limitation, attorneys’ and paralegals’ fees and expenses) incurred in connection with the exercise of any of its rights or remedies under this Section. The Company shall promptly make, execute, acknowledge, and deliver, in form and substance mutually satisfactory to the Trustee and the Company, a UCC Financing Statement (Form UCC-1), and all such additional instruments, agreements and other documents, as may at any time hereafter be required by the Trustee to effectuate and carry out the assignment made pursuant to this Section.

(l) If the Company shall seek to offset against the rent reserved in the Ground Lease the amount of any damages caused by the nonperformance by the Ground Lessor or any fee owner of the Mortgaged Property any of its obligations under the Ground Lease after the rejection by the Ground Lessor or any fee owner of the Mortgaged Property under the Bankruptcy Code, the Company shall, prior to effecting such offset, notify the Trustee of its intent to do so, setting forth the amounts proposed to be so offset and the basis therefor. The Trustee shall have the right to object to all or any part of such offset that, in the reasonable judgment of the Trustee, would constitute a breach of the Ground Lease, and in the event of such objection, the Company shall not effect any offset of the amounts so objected to by the Trustee. Neither the failure of the Trustee to object as aforesaid nor any objection relating to such offset shall constitute an approval of any such offset by the Trustee. The Company shall pay and protect the Trustee, and indemnify and save the Trustee harmless from and against, any and all claims, demands, actions, suits, proceedings, damages, losses, costs, and expenses of every nature whatsoever (including without limitation, reasonable attorneys’ and paralegals’ fees and expenses) arising from or relating to any off-set by the Company against the rent reserved in the Ground Lease, except such damages, costs and expenses that are the result of the willful, negligent or bad faith acts or omissions of the Trustee and/or Trustee’s agents, employees or contractors.

Section 39. Amendments, Change, and Modifications. This Mortgage may be amended, changed, or modified only in accordance with the provisions of Article X of the Indenture.

Section 40. Exculpation; Limited Recourse. (a) The obligations of the Company hereunder are absolute and unconditional, and the Company shall perform such obligations without abatement, diminution or deduction regardless of any cause or circumstance whatsoever including, without limitation, any defense, set off, recoupment or counterclaim which the Company may have against any Person.

(b) The Trustee agrees that it may not enforce the liability and obligation of the Company to perform and observe the obligations contained in this Mortgage, any of the other Bond Documents (as defined in the Loan Agreement), or any other instrument delivered in connection with the issuance of the Bonds, in any action or proceeding wherein a money judgment shall be sought against the Company, except that the Trustee may bring a foreclosure action, action for specific performance, or other appropriate action or proceeding to enable the Trustee to enforce and realize upon this Mortgage, and the interest in the Mortgaged Property; provided, however, that any judgment in any such action or proceeding shall be enforceable against the Company only to the extent of the Company’s interest in the Project Facilities and the Mortgaged Property. The Trustee agrees that it will not sue for, seek, or demand any deficiency against the Company in such action or proceeding under or by reason of or in connection with this Mortgage or any of the other Bond Documents. The provisions of this Section 40 shall not, however, (i) constitute a waiver, release, or impairment (except for the foregoing restriction on obtaining any deficiency judgment against the Company) of any obligation evidenced or secured by this Mortgage or any of the other Bond Documents (except as hereinafter set forth), (ii) impair the right of the Trustee to name the Company as a party defendant in any action or suit for enforcement of this Mortgage, (iii) impair the right of the Trustee to obtain the appointment of a receiver, (iv) impair the right of the Trustee to bring suit with respect to any fraud or intentional misrepresentation by the Company or any other person or entity in connection with the Bonds or the Bond Documents, (v) impair the right of the Trustee to obtain the rents and other revenues received by the Company after the occurrence of an Event of Default, (vi) impair the right of the Trustee to obtain insurance proceeds or condemnation awards due to the Trustee, or (vii) impair the right of the Trustee and the Trustee to enforce the indemnity provisions of this Mortgage or any other Bond Documents provided that the obligations of the Company to perform and observe the obligations contained in the Loan Agreement, this Mortgage, or any other document executed by the Company in connection with the issuance of the Bonds are enforceable against the Company only to the extent of the Company’s interest in the Project Facilities and in any other security for the Bonds.

(c) The obligations of the Company to pay the fees and expenses of the Trustee pursuant to the Loan Agreement and to indemnify the Trustee pursuant to this Mortgage or any other Bond Documents, are obligations of the Company and are not limited by the provisions of this Section 40 provided that the obligations of the Company to perform and observe the other obligations contained in the Loan Agreement, this Mortgage, or any other document executed by the Company in connection with the issuance of the Bonds are enforceable against the Company only to the extent of the Company’s interest in the Project Facilities and in any other security for the Bonds.

(d) Notwithstanding the foregoing, the Company shall be liable for (i) any (A) fraud by the Company or any of its officers, (B) misrepresentation of a material fact by the Company or any of its officers, or (C) failure by the Company or any of its officers to state a material fact in connection with the issuance and delivery of Bonds, to the extent of losses or damages actually suffered by the Trustee, the Trustee, or the owners of such Bonds as a result of such fraud, misrepresentation, or failure to state a material fact; and (ii) misapplication after the date hereof of (A) proceeds of any insurance covering any portion of the Collateral, (B) proceeds from the sale or condemnation of any portion of the Collateral, or (C) rentals or other proceeds from the lease of any portion of the Collateral received by the Company.

(e) The Trustee and the Company covenant and agree that the exculpation provisions contained in this Section shall survive the satisfaction, release, extinguishment or other termination of this Mortgage.

Section 41. Utility Services. (a) If no Event of Default or Default Condition shall have occurred and be continuing, the Company may grant an easement, right-of-way, or license with respect to, or may convey, any portion of the Real Property to a railroad, a public utility, or a public body in order that railroad services, utility services, or roads may be provided, maintained and/or upgraded for the Project Facilities. Upon receipt by the Trustee of all of the following, the Trustee shall subordinate the lien of this Mortgage to any such easement, right-of-way, or license or release such unimproved portion of the Real Property from the lien of this Mortgage:

(i) a copy of the proposed instruments (A) granting such easement, right-of- way, or license and subordinating the lien of this Mortgage, or (B) conveying such unimproved Real Property and releasing such unimproved Real Property from the lien of this Mortgage;

(ii) a certificate of the Company stating (A) that no Event of Default or a Default Condition has occurred and is then continuing, and (B) such grant and subordination or such sale and release is necessary to obtain or provide, maintain and/or upgrade railroad services, utility services, or roads for the Project Facilities; and

(iii) a certificate of an architect or architectural firm or engineer or engineering firm, who or which is independent and has a favorable reputation for skill and experience in architectural and/or engineering work selected by the Company (an “Independent Architect”), dated not more than sixty (60) calendar days prior to the date of the proposed grant or conveyance, stating that in the opinion of such Independent Architect, (A) the Real Property as to which such proposed grant or conveyance relates is not reasonably necessary for the operation of the Project Facilities, and (B) the proposed grant or conveyance will not materially adversely affect the efficient operation of the Project Facilities for the purpose herein contemplated or the means of ingress thereto or egress therefrom.

(b) No grant or conveyance effected under the provisions of this Section shall entitle the Company to any postponement, abatement, or diminution of the Secured Obligations

or any other sums payable hereunder or under the Loan Agreement and all costs and expenses (including attorneys’ fees, filing fees, and taxes) reasonably incurred by the Trustee in connection with such grant and subordination or sale and release shall be paid by the Company as such costs and expenses accrue.

Section 42. WAIVER OF EXTENSION AND REDEMPTION LAWS; WAIVER OF MARSHALLING. THE COMPANY AGREES TO THE FULLEST EXTENT PERMITTED BY LAW THAT UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, NEITHER THE COMPANY NOR ANYONE CLAIMING THROUGH OR UNDER IT SHALL OR WILL SET UP, CLAIM, OR SEEK TO TAKE ADVANTAGE OF ANY EXTENSION OR REDEMPTION LAWS NOW OR HEREAFTER IN FORCE, IN ORDER TO PREVENT OR HINDER THE ENFORCEMENT OR FORECLOSURE OF THIS MORTGAGE, THE ABSOLUTE SALE OF THE MORTGAGED PROPERTY, OR THE FINAL AND ABSOLUTE PUTTING INTO POSSESSION THEREOF, IMMEDIATELY AFTER SUCH SALE, OF THE PURCHASER OR PURCHASERS THEREAT, AND THE COMPANY, FOR ITSELF AND ALL WHO MAY AT ANY TIME CLAIM THROUGH OR UNDER IT, HEREBY WAIVES, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY SO DO, THE BENEFIT OF ALL SUCH LAWS, AND ANY AND ALL RIGHT TO HAVE THE ASSETS COMPRISING THE MORTGAGED PROPERTY MARSHALLED UPON ANY FORECLOSURE OF THE LIEN HEREOF AND AGREES THAT THE TRUSTEE OR ANY COURT HAVING JURISDICTION TO FORECLOSE SUCH LIEN MAY SELL THE MORTGAGED PROPERTY IN PART OR AS AN ENTIRETY.

Section 43. WAIVER OF STAY. IN THE EVENT OF A VOLUNTARY OR INVOLUNTARY LIQUIDATION OR REORGANIZATION CASE BY OR AGAINST THE COMPANY UNDER BANKRUPTCY, RECEIVERSHIP, OR OTHER INSOLVENCY LAW, THE COMPANY HEREBY AGREES THAT THE TRUSTEE SHALL BE FREE TO PURSUE FORECLOSURE AND OTHER REMEDIES WITH RESPECT TO THE MORTGAGED PROPERTY, WITHOUT OPPOSITION OR INTERFERENCE BY THE COMPANY, THAT THE TRUSTEE SHALL BE ENTITLED TO SEEK AND OBTAIN RELIEF FROM THE AUTOMATIC STAY UNDER §362 OF THE FEDERAL BANKRUPTCY CODE WITHOUT OBJECTION BY THE COMPANY, AND THAT ANY RIGHTS TO STAY, ENJOIN, OR OTHERWISE DELAY OR IMPEDE THE TRUSTEE’S REMEDIES AGAINST THE MORTGAGED PROPERTY, INCLUDING FORECLOSURE, WHICH MIGHT BE AVAILABLE TO THE COMPANY, INCLUDING ANY RIGHTS UNDER §§105 AND 362 OF THE BANKRUPTCY CODE, ARE HEREBY RELEASED AND WAIVED.

Section 44. Miscellaneous. In the event of any inconsistencies between the terms and conditions of this Section 44 and the terms and conditions of any other article of this Mortgage, the terms and conditions of this Section 44 shall control and be binding:

(i) Subject to the provisions of Section 40 hereof, the Trustee may (A) institute and maintain an action of foreclosure against any of the Mortgaged Property, through judicial or equitable proceedings pursuant to the applicable statutes, ordinances, or rules of civil procedure, (B) institute

and maintain an action on the obligations secured hereby, (C) sell or cause to be sold any of the Mortgaged Property at public sale, and convey the same to the purchaser in accordance with said statutes in a single parcel or in several parcels at the option of Trustee (as permitted by applicable law), or (E) take such other action at law or in equity for the enforcement of any document evidencing or securing the obligations secured hereby as the law may allow. Trustee may proceed in any such action to final judgment and execution thereon for all sums due under any Security Document, together with interest on such sums as provided in the Loan Agreement, all costs of suit and an attorneys’ commission for fees and expenses actually incurred; provided, however, that such costs do not exceed twenty percent (20%) of the amount decreed for principal and interest (which fees shall be allowed and paid as part of the decree of judgment). Interest at a rate equal to the Default Rate shall be due on any judgment obtained by Trustee from the date of judgment until actual payment is made of the full amount of the judgment by the Sheriff or otherwise;

(ii) To the extent permitted by law, Trustee may, without releasing Company from any obligation under any Security Document or under any lease or waiving any default, and upon notice to the Company, enter upon and take possession of any of the Mortgaged Property, or have a receiver appointed without proof of depreciation or inadequacy of the value of the Mortgaged Property or other security or proof of the insolvency of Company. Trustee or said receiver may manage and operate any of the Mortgaged Property; make, cancel, enforce or modify leases; obtain and evict tenants; establish or change the amount of any rents; and perform any acts which Trustee deems reasonable and proper to protect the security of this Mortgage. After deduction of all reasonable costs and expenses of operation and management of the Mortgaged Property and of collection of the rents (including reasonable attorneys’ fees, administration expenses, management fees and brokers’ commissions), the Trustee shall promptly and reasonably apply the rents received by Trustee to the payment of any or all of the following, in such order and amounts as Trustee, in its reasonable discretion, may elect: liens on any of the Mortgaged Property, taxes, claims, insurance premiums, other carrying charges, invoices of persons who have supplied goods or services to or for the benefit of any of the Mortgaged Property, costs and expenses of maintenance, repair, restoration, alteration or improvement of any of the Mortgaged Property, or any amount outstanding on the obligations secured hereby. Trustee may, in its reasonable discretion, determine the method by which, and extent to which, the rents will be collected and obligations of tenants enforced; and Trustee may waive or fail to enforce any right or remedy of the landlord under a lease. Trustee shall not be accountable for any rents or other sums it does not actually receive, absent any willful, negligent or bad faith acts or omissions of the Trustee and/or the Trustee’s agents, employees or contractors. Company hereby appoints Trustee as its

attorney-in-fact to perform, upon an Event of Default, all acts which Company is required or permitted to perform under any and all leases.

(iii) UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, COMPANY HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR ATTORNEYS OF ANY COURT OF THE STATE OF DELAWARE TO APPEAR FOR COMPANY AND, AS ATTORNEY FOR COMPANY, TO CONFESS JUDGMENT THEREIN AGAINST COMPANY IN FAVOR OF THE TRUSTEE;

(iv) Trustee may obtain a receiver to manage the Mortgaged Property and collect the rents, issues, profits and income therefrom;

(v) Trustee may take possession of any of the Mortgaged Property and may sell such property pursuant to the provisions of the applicable Uniform Commercial Code and exercise such other rights and remedies with respect to such property as may be provided by said Code;

(vi) Trustee may apply on account of the obligations secured hereby the balance of the accumulated installment payments made by Company for taxes, water and sewer rents and insurance premiums, and all other items for which Trustee has made payment, as set forth herein;

(vii) Upon the acceleration of the maturity of the obligations secured hereby as herein provided during any period of time that any prepayment premium would otherwise apply, a tender of payment of the amount necessary to satisfy its Secured Obligations at any time prior to foreclosure sale by Company, its successors or assigns, shall, to the extent permitted by law, constitute an evasion of the prepayment terms of the obligations secured hereby and be deemed to be a voluntary prepayment thereunder, and Trustee shall not be obligated to accept any such tender of payment unless such tender of payment includes the additional prepayment premium required under the terms of the prepayment privilege, if any, contained in the Indenture; or

(viii) Pursue such other remedies as Trustee may have under applicable law.

This Mortgage is intended to be executed and delivered by Company, and accepted by Trustee, as a sealed instrument.

29 IN WITNESS WHEREOF, the Company has caused these presents to be executed as an instrument under seal as of the day and year first hereinabove written.

KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION

By: (SEAL) Name: Title:

Sealed and delivered in the presence of:

Name:

STATE OF DELAWARE

COUNTY OF KENT

This instrument was acknowledged before me on this ___ day of June, 2016 by ______as ______of Kent County Regional Sports Complex Corporation.

(signature of notarial officer)

Notary Public [Notarial Seal]

Print Name: My commission expires: EXHIBIT “A”

LEGAL DESCRIPTION OF THE LAND

Owner: Kent County Leasee: Kent County Regional Sports Complex Tax Map No.: 5-00-14100-01-3200-00001 (portion of)

Lease Area No. 1 86.7782 AC.±

Tax Map No.: 5-00-14100-01-3201-00001 (all of)

A-1 with future S.R. 1 South Frederica interchange westerly right of way; thence with said future S.R. 1 South Frederica interchange right of way the following six courses and distances; 4) North 04º23’42” West 28.28 feet to a point; thence 5) North 40º36’18” East 220.06 feet to a point; thence 6) North 85º36’18” East 35.36 feet to a point; thence 7) South 49º23’42” East 172.81 feet; thence 8) South 50º40’46” East 235.49 feet; thence 9) South 42º14’21” East 475.37 feet to the point and place of beginning and containing 5.0687 acres of land, be the same more or less.

A-2

EXHIBIT D

PROPOSED FORM OF OPINION OF BOND COUNSEL

[ THIS PAGE INTENTIONALLY LEFT BLANK ] June 30, 2016

Kent County, Delaware Kent County Regional Sports Complex Corporation 555 Bay Road 59 Roosevelt Drive Dover, DE 19901 Dover, DE 19901

Wilmington Trust, National Association, as M&T Securities, Inc. trustee 25 South Charles Street, 12th Floor 1100 North Market Street, 3rd Floor Baltimore, MD 21201 Wilmington, DE 19801

Re: $20,760,000 Kent County, Delaware Revenue Bonds (Kent County Regional Sports Complex Project) Series 2016

Ladies and Gentlemen:

We have acted as Bond Counsel to Kent County, Delaware (the “Issuer”) in connection with the issuance of its Revenue Bonds (Kent County Regional Sports Complex Project) Series 2016 in the aggregate principal amount of $20,760,000 (the “Bonds”).

The Bonds are issued pursuant to the provisions of (i) Chapter 41, Title 9 of the Delaware Code, (ii) Ordinance No. 86-5, adopted by Levy Court on October 21, 1986, as amended (the “General Ordinance”), (iii) Ordinance No. 15-12 enacted by Levy Court on November 24, 2015, as amended and restated by Ordinance No. 16-08, enacted by Levy Court on May 24, 2016 (the “Project Ordinance”) and (iv) a Trust Indenture dated as of June 1, 2016, (the “Indenture”) between the Issuer and Wilmington Trust, National Association, as trustee (the “Trustee”). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture.

The proceeds received by the Issuer from the sale of the Bonds are to be applied to make a loan to Kent County Regional Sports Complex Corporation, a Delaware corporation (the “Borrower”), pursuant to a Loan Agreement dated as of June 1, 2016 (the “Loan Agreement”) between the Issuer and the Borrower, and used for the following purposes: (i) to develop the Kent County Regional Sports Complex, also known as DE Turf Sports Complex, on an approximately 92 acre site located at 4000 Bay Road, Frederica, Delaware, 19946, including proceeds to (a) prepare the site and construct 13 turf or grass fields equipped with sports lighting, scoreboards and portable bleachers and (b) construct parking spaces, fixed seating for spectators and amenities such as paved walkways, shaded tent structures, restrooms, concessions, and administrative/maintenance buildings; (ii) pay capitalized interest on the Bonds; (iii) fund certain reserve funds; and (iv) pay the costs of issuance of the Bonds (collectively, the “Project”).

The Borrower 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, except for unrelated business income subject to taxation under Section 511 of the Code. The Borrower has covenanted that, throughout the term of the Loan Agreement, it will not carry on or permit to be carried on in any property now or hereafter owned by it any trade or business, nor will it 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, if the conduct of such trade or business or such other action or circumstance would cause the interest paid by the Issuer on the Bonds to be subject to federal income tax in the hands of the holders thereof. The Borrower has further covenanted that it will not make or instruct the Trustee to make any investment or other use of the Bonds, or take or omit to take any other action, which would cause the Bonds to be arbitrage bonds under Section 148 of the Code. Failure by the Borrower to comply with the requirements of the Code could result in the interest on the Bonds being included in gross income for federal income tax purposes retroactive to their date of issuance.

Under the Indenture and the Loan Agreement, the Issuer and the Borrower have covenanted that they will comply with the requirements of Section 148 of the Code pertaining to arbitrage bonds. In addition, the Issuer, by an officer of the Issuer responsible for issuing the Bonds, and an authorized officer of the Borrower have each executed a certificate stating the reasonable expectations of the Issuer and the Borrower on the date of issue of the Bonds as to future events that are material for the purposes of such requirements of the Code.

As to questions of fact material to our opinions, we have assumed due compliance with the provisions of, the proceedings and other documents and have relied upon certifications, warranties and representations furnished to us by authorized officers of the Issuer, the Borrower and others relating to the Bonds without undertaking to verify the same by independent investigation, including, without limitation, the uses to be made of the proceeds of the Bonds and the property financed thereby. Furthermore, we have assumed and have not verified (i) the genuineness of the signatures on all documents, the authenticity of documents submitted as originals and the conformity to the originals of documents submitted as copies, (ii) the legal capacity of each individual signing the documents and the Bonds, and (iii) that the Indenture and the Loan Agreement accurately reflect the mutual understandings of the parties thereto and there are no oral or written statements that modify, amend, or vary, or purport to modify, amend, or vary, any of the terms of the Indenture, the Loan Agreement or the Bonds. We have undertaken no responsibility for the accuracy, completeness or fairness of the Official Statement or other offering materials relating to the Bonds and express no opinion relating thereto.

In addition, we have relied on the opinion of even date herewith of Potter Anderson & Corroon, LLP, counsel to the Borrower, to the effect, among other things, that the Loan Agreement and the other agreements and instruments entered into or to be entered into by the Borrower in connection with the issuance of the Bonds have been duly authorized, executed and delivered by the Borrower and are valid and legally binding obligations of the Borrower enforceable in accordance with their respective terms and that the Borrower qualifies as an organization described in Section 501(c)(3) of the Code.

Based on the foregoing, we are of the opinion that:

1. The Issuer is a county and political subdivision of the State of Delaware with the power to enter into and perform its obligations under the Indenture and the Loan Agreement and to issue the Bonds. Kent County, Delaware Kent County Regional Sports Complex Corporation Wilmington Trust, National Association M&T Securities, Inc. June 30, 2016 Page 3

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, are valid and binding obligations of the Issuer. The Indenture creates a valid lien on the rights of the Issuer under the Loan Agreement (except for certain unassigned rights).

3. The Bonds are valid and binding special obligations of the Issuer payable solely from the revenues and other assets pledged therefor under the Indenture and from the enforcement of the security provided therefor and do not constitute a debt or liability of the Issuer, the State of Delaware or any political subdivision thereof.

4. Interest on the 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 Bonds, assuming the accuracy of the certifications of the Issuer and the Borrower and continuing compliance by the Issuer and the Borrower with the requirements of the Code. Interest on the Bonds is not an item of tax preference for purposes of either individual or corporate federal alternative minimum tax; however, interest on the Bonds held by a corporation (other than an S corporation, regulated investment company, or real estate investment trust) may be indirectly subject to federal alternative minimum tax because of its inclusion in the adjusted current earnings of a corporate holder.

5. Under existing law, so long as interest on the Bonds is excludable from gross income for federal income tax purposes, it will also be excluded from taxable income for the purposes of personal and corporate income taxes imposed by The State of Delaware; provided, however, we express no opinion regarding franchise tax.

We express no opinion regarding other federal, state or local tax consequences relating to ownership or disposition of, or the accrual or receipt of interest on, the Bonds.

The opinions expressed in this letter are based upon the law in effect on the date hereof, and may be affected by actions taken or omitted or events occurring after the date hereof, including subsequent interpretations of the applicable law by competent judicial, regulatory and administrative authorities that modify, revoke, supplement, reverse, overrule or otherwise change applicable law and current interpretations thereof. We assume no obligation to revise or supplement this opinion should such law be changed by legislative action, judicial decision, or otherwise, or to determine or to inform any person whether any such actions are taken or omitted or any such events occur.

The rights and remedies of the Trustee and the owners of the Bonds, including without limitation the rights and remedies provided pursuant to the Indenture and the Loan Agreement, may be limited or otherwise affected by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws and general equitable principles relating to or affecting the rights of creditors generally, whether now or hereafter in existence, and public policy concerning, affecting or limiting the enforcement of rights or remedies against entities such as the Issuer and the Borrower.

This opinion is intended solely for the benefit of the addressee and may not be relied upon by any other person or entity without, in each such case, our express written consent.

Very truly yours, [ THIS PAGE INTENTIONALLY LEFT BLANK ] EXHIBIT E

FORM OF CONTINUING DISCLOSURE AGREEMENT [ THIS PAGE INTENTIONALLY LEFT BLANK ]

CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement dated as of June 1, 2016 (the “Disclosure Agreement”) is executed and delivered by Kent County Regional Sports Complex Corporation (as further defined below, the “Borrower”) and Wilmington Trust, National Association, as Dissemination Agent (as further defined below, the “Dissemination Agent”) in connection with the issuance by Kent County, Delaware of its $20,760,000 Revenue Bonds (Kent County Regional Sports Complex Project), Series 2016 (the “2016 Bonds”). The Borrower and the Dissemination Agent, intending to be legally bound, hereby covenant and agree as follows:

SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Borrower and the Dissemination Agent for the benefit of the Bondholders from time-to-time of the Bonds and in order to assist the Participating Underwriters in complying with SEC Rule 15c2-12(b)(5).

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

“Additional Bonds” shall mean any indebtedness of the Issuer relating to the Borrower issued subsequent to the Bonds which the Borrower has declared in writing to be covered by this Disclosure Agreement.

“Annual Report” shall mean any Annual Report provided by the Borrower pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.

“Bondholder” or “Holder” shall mean any registered holder of Bonds, provided however that with respect to any Bond registered in “street name” or the name of a nominee such as The Depository Trust Company, such terms shall mean the beneficial owner of that Bond as defined in SEC Rule 13d-3.

“Bonds” shall mean the 2016 Bonds and any Additional Bonds.

“Borrower” shall mean Kent County Regional Sports Complex Corporation or any successor Obligated Person that assumes either by operation by law or by contract or both (i) the obligation to provide amounts to pay debt service on the Bonds when due and (ii) the obligations of the Borrower under this Disclosure Agreement.

“Dissemination Agent” shall mean any agent of the Borrower designated in writing by the Borrower which has filed with the Borrower a written acceptance of such designation and initially, shall mean Wilmington Trust, National Association.

“EMMA” shall mean the Electronic Municipal Market Access System maintained by the MSRB.

“Fiscal Year” shall mean the fiscal year of the Borrower.

“Indenture” shall mean the Trust Indenture by and between the Issuer and the Trustee, dated as of June 1, 2016, relating to the Bonds, as the same may be amended and supplemented.

“Issuer” shall mean Kent County, Delaware.

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

“Loan Agreement” shall mean the Loan and Security Agreement by and between the Issuer and the Borrower, relating to the Bonds, dated as of June 1, 2016, as the same may be amended and supplemented.

“MSRB” shall mean the Municipal Securities Rulemaking Board, or any successor organization.

“Obligated Person” shall have the meaning set forth in the Rule, provided that the sole objective criteria used to select the Obligated Person shall be the entity obligated to repay all debt service with respect to the relevant Bonds.

“Official Statement” shall mean the Official Statement with respect to the 2016 Bonds dated June 22, 2016.

“Participating Underwriter” shall mean the 2016 Underwriter and any of the original underwriters of any Additional Bonds required to comply with the Rule in connection with offering of such Additional Bonds.

“Repository” shall mean each nationally recognized municipal securities information repository under the Rule. As of the date hereof, the Securities and Exchange Commission has appointed EMMA to act as the sole Repository. Any information filed in connection with this Disclosure Agreement shall be filed with EMMA at http://emma.msrb.org/, in the format prescribed by EMMA for such filings, and any future Repository as may be required under the Rule.

“Rule” shall mean Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as heretofore amended, and as such Rule may be hereafter amended from time-to-time.

“Trustee” shall mean Wilmington Trust, National Association, in its capacity as Trustee under the Indenture.

“2016 Underwriter” shall mean M&T Securities, Inc.

SECTION 3. Provision of Reports.

(a) The Borrower shall, or shall cause the Dissemination Agent to, not later than two hundred seventy-five (275) days after the last day of each Fiscal Year, provide to the

Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report 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. If the Borrower files the information directly, it shall send a written notice to the Dissemination Agent that the Annual Report has been filed.

(b) If the Borrower is unable to provide any Annual Report to the Repository by the date required in subsection (a), the Borrower shall provide, or shall cause the Dissemination Agent to provide, notice of such failure to the Repository electronically within ten (10) Business Days of the required date of such Annual Report. If the Borrower files such notice directly, it shall send a written notice to the Dissemination Agent that the failure notice has been filed.

(c) The Dissemination Agent shall file a report with the Borrower on an annual basis not later than nine (9) Business Days after the required date specified in subsection (a) above, certifying that the Annual Report has been provided pursuant to this Disclosure Agreement and stating the date it was provided. If, at the time such report is due from the Dissemination Agent, the Dissemination Agent cannot certify that the Annual Report has been filed and cannot certify that a failure notice has been filed pursuant to (b) above, it shall cause notice of the failure to file the Annual Report to be provided to the Repository within one (1) Business Day.

(d) In the event that audited financial statements are not available by the required date for any Annual Report, the Borrower shall provide, or shall cause the Dissemination Agent to provide, to the Repository in lieu thereof, unaudited financial statements. Audited financial statements of the Borrower not submitted as part of the Annual Report shall be provided to the Repository, if and when available to the Borrower, and in any event not more than thirty (30) days after receipt thereof from the Borrower’s auditors.

(e) The Borrower shall promptly provide, or cause the Dissemination Agent to provide, written notice of any change in its Fiscal Year to the Repository.

(f) In addition to all other items required herein, the Dissemination Agent shall promptly provide to the Repository, not in excess of ten (10) Business Days after receipt from the Borrower, all information provided to the Dissemination Agent by the Borrower pursuant to Section 8.05(b) of the Loan Agreement.

SECTION 4. Content of Reports.

(a) The Borrower’s Annual Report shall contain or incorporate by reference the following information with respect to the relevant Fiscal Year:

(i) audited financial statements containing the financial information of the Borrower for the prior Fiscal Year. Audited financial statements shall also include at a minimum the independent auditor’s report and notes. The financial statements shall, subject to Section 3(d) hereof, be audited by either a certified public accountant or an independent public accountant.

(ii) a revised version of the table appearing under the caption “ESTIMATED NET OPERATING INCOME AND DEBT SERVICE COVERAGE” in the Official Statement, revised to show actual results for the prior Fiscal Year and the preceding five (5) Fiscal Years from the date of issuance of the 2016 Bonds.

(b) Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues on behalf of the Borrower, which have been submitted to the Repository or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available on the Repository. The Borrower shall clearly identify each such other document so incorporated by reference.

(c) If any information described in Section 4(a) above can no longer be generated because the operations to which such information relates have been materially changed or discontinued, a statement to that effect shall satisfy the obligations of the Borrower under this Section 4, provided however that the Borrower shall, to the greatest extent feasible, provide in lieu thereof similar information with respect to any substitute or replacement operations.

SECTION 5. Reporting of Significant Events.

(a) This Section 5 shall govern the giving of notices of the occurrence of any of the following events with respect to the Bonds:

1. Principal and interest payment delinquencies;

2. Non payment-related defaults, if material;

3. Unscheduled draws on debt service reserves reflecting financial difficulties;

4. Unscheduled draws on credit enhancements reflecting financial difficulties;

5. Substitution of credit or liquidity providers, or their failure to perform;

6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bond, or other material events affecting the tax status of the Bonds;

7. Modifications to rights of Holders, if material;

8. Bond calls (other than mandatory sinking fund redemptions), if material, and tender offers;

9. Defeasances;

10. Release, substitution, or sale of property securing repayment of any Bonds, if material;

11. Rating changes;

12. Bankruptcy, insolvency, receivership or similar event of the Borrower (for the purposes of the event identified in subsection 5(a)(12), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Borrower 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 Borrower, 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 Borrower);

13. The consummation of a merger, consolidation, or acquisition involving the Borrower or the sale of all or substantially all of the assets of the Borrower, 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; and

14. Appointment of a successor or additional Trustee or the change of name of a Trustee, if material.

(b) For any of the Listed Events that require the evaluation of a materiality standard, the Borrower shall make such determination in accordance with securities laws in effect at the time of such Listed Event.

(c) Upon the occurrence of a Listed Event, the Borrower shall file, or cause the Dissemination Agent to file, a notice of such occurrence with the Repository in a timely manner not in excess of ten (10) Business Days after the Borrower or the Dissemination Agent obtains actual knowledge of the occurrence of the Listed Event.

SECTION 6. Accounting Standards. The financial statements described in Section 4(a)(i) above shall be audited in accordance with both (a) generally accepted accounting principles applicable in the preparation of financial statements as such principles are from time-to-time promulgated by the Financial Accounting Standards Board, or such other body recognized as authoritative by the American Institute of Certified Public Accountants or any successor body (“GAAP”), and (b) applicable federal and state auditing statutes, regulations, standards and/or guidelines; provided however that the Borrower may from time-to-time modify

its accounting principles to the extent necessary or desirable to comply with changes in either GAAP or applicable federal and state statutes, regulations, standards and/or guidelines. Any such modification of accounting standards to conform to changes in either GAAP or applicable federal or state auditing statutes, regulations, standards or guidelines shall not constitute an amendment to this Disclosure Agreement within the meaning of Section 9 hereof, provided that such modifications are disclosed in the first Annual Report to be provided subsequent to such modifications.

SECTION 7. Termination of Reporting Obligation. The Borrower’s obligations under this Disclosure Agreement shall terminate upon (a) the legal defeasance, prior redemption or payment in full of all of the Bonds or (b) the assumption by a successor Obligated Person of all of the obligations of the prior Obligated Person both hereunder and under the Bonds.

SECTION 8. Dissemination Agent. The Borrower 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 agent, with or without appointing a successor Dissemination Agent. The Borrower has appointed Wilmington Trust, National Association, as initial Dissemination Agent hereunder, and Wilmington Trust, National Association, has accepted that appointment by its execution hereof. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and no implied duties or obligations shall be implied against the Dissemination Agent under this Agreement or any other document. The Dissemination Agent shall be entitled to conclusively rely on any information, calculations or reports provided by the Borrower. The Borrower agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, cost, expense, claim, action, suit and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees and attorneys’ fees and expenses in connection with enforcement of its rights hereunder) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s gross negligence or willful misconduct. The obligations of the Borrower under this Section 8 shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

SECTION 9. Amendments. (a) Notwithstanding any other provision of this Disclosure Agreement, the Borrower may modify or amend this Disclosure Agreement upon receipt of a written opinion of nationally recognized bond counsel to the effect that the amendment is permitted under the Rule; provided that any modification or amendment affecting the rights, duties, immunities or liabilities of the Dissemination Agent shall require the Dissemination Agent’s written consent. The Borrower shall provide written notice of any modification or amendment to this Disclosure Agreement to the Dissemination Agent within two (2) Business Days of its execution. The Borrower acknowledges and agrees that the current SEC interpretation of the Rule requires satisfaction of the following preconditions for any amendment:

(i) the modification or amendment is being made in connection with a change of circumstances that arises from a change in legal requirements, change in law, change in the identity, nature or status of the Borrower, or change in the type of business conducted by the Borrower;

(ii) this Disclosure Agreement, as amended, would have complied with the requirements of the Rule as of the date of issuance of the relevant Bonds, after taking into account any amendment or interpretations of the Rule, as well as any change in circumstances; and

(iii) the modification or amendment does not materially adversely affect the interests of Bondholders, as determined either by a party unaffiliated with the Borrower (such as the Trustee or nationally recognized bond counsel) or by an approving vote of a majority of Bondholders.

(b) The Borrower shall report any modification or amendment of this Disclosure Agreement as required by the Rule. To the extent required by the Rule, the Borrower shall include as a component of the first Annual Report to be provided subsequent to the relevant amendment a copy of the amendment, together with a notice explaining in narrative form both (i) the reasons for the amendment and (ii) the impact of the change in the type of operating data or financial information being provided. To the extent required by the Rule, if the amendment relates to changes in accounting principles to be followed in preparing financial statements, the first Annual Report to be provided subsequent to the relevant amendment shall also include a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles and a qualitative (and to the extent reasonably feasible, quantitative) discussion of the differences in the accounting principles and the impact of the change in the accounting principles upon the presentation of the financial information. Written notice of any such change in accounting principles shall be provided in a timely fashion to the Repository.

SECTION 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Borrower from disseminating any other information, 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 Report, notice of occurrence of a Listed Event or other notice, in addition to that which is required by this Disclosure Agreement. If the Borrower chooses to include any information in any Annual Report, notice of occurrence of a Listed Event or other notice, in addition to that which is specifically required by this Disclosure Agreement, the Borrower shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report, notice of occurrence of a Listed Event or other notice.

SECTION 11. Default. In the event of a failure of the Borrower to comply with any provision of this Disclosure Agreement, the Trustee, any Participating Underwriter or any Bondholder may take such actions as may be necessary and appropriate, including seeking a writ of mandamus or specific performance by court order to cause the Borrower 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, and the sole remedy under this Disclosure Agreement in the event of any failure of the Borrower to comply with this Disclosure Agreement shall be an action to compel performance; provided however that nothing herein shall limit any Bondholder’s rights under applicable federal securities law.

SECTION 12. Severability. In case any section or provision of this Disclosure Agreement or any covenant, stipulation, obligation, agreement, or action, or any part thereof, made, assumed, entered into or taken under this Disclosure Agreement, or any application thereof, is for any reason held to be illegal or invalid or is at any time inoperable, such illegality, invalidity or inoperability shall not affect the remainder thereof or any other section or provision or the Disclosure Agreement, or any other covenant, stipulation, obligation, agreement, act or action, or part thereof, made, assumed, entered into or taken under this Disclosure Agreement, which shall at the time by construed and enforced as if such illegal or invalid or inoperable portion were not contained therein.

SECTION 13. Entire Agreement. This Disclosure Agreement contains the entire agreement of the Borrower and the Dissemination Agent with respect to the subject matter hereof and supersedes all prior arrangements and understandings with respect thereto, provided however that this Disclosure Agreement shall be interpreted and construed with reference to and in pari materia with the Rule.

SECTION 14. Captions. The captions or headings herein shall be solely for convenience of reference and shall in no way define, limit or describe the scope or intent of any provisions or sections hereof.

SECTION 15. Beneficiaries. This Disclosure Agreement is being entered into solely for the benefit of the Dissemination Agent, the Trustee, the Participating Underwriters and Bondholders from time-to-time of the Bonds, and nothing in this Disclosure Agreement expressed or implied is intended to or shall be construed to give to any other person or entity any legal or equitable right, remedy or claim under or in respect of this Disclosure Agreement or any covenants, conditions or provisions contained herein.

SECTION 16. Governing Law. This Disclosure Agreement shall be deemed to be a contract made under the laws of the State of Delaware, and all provisions hereof shall be governed and construed in accordance with the laws of the State of Delaware, without reference to the choice of law principles thereof, and, to the extent necessary, in accordance with the Rule and federal securities laws.

IN WITNESS WHEREOF, the Borrower and the Dissemination Agent have caused this Disclosure Agreement to be duly executed as of the day and year first above written.

KENT COUNTY REGIONAL SPORTS COMPLEX CORPORATION

By: Name: William Strickland Title: Board President

WILMINGTON TRUST, NATIONAL ASSOCIATION, as Dissemination Agent

By: Authorized Officer

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