public finance authority

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$268,500,000* Public Finance Authority

Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center)

The following information, dated August 8, 2018 (the “Supplement”), supplements the

Preliminary Official Statement, dated July 19, 2018 (the “Preliminary Official Statement”), relating to the Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center) (the “Series 2018A-1 Bonds”). Any capitalized terms used in this Supplement and not defined have the meanings assigned to them in the Preliminary Official Statement.

The Preliminary Official Statement is hereby supplemented, revised and amended as

follows:

1. Varian Operations and Maintenance Agreement. The following information is added to the end of the paragraph on page 32 of the Preliminary Official Statement under the subheading “PRINCIPAL PROJECT AGREEMENTS – Operations and Maintenance Agreement (Varian) – Guaranteed Proton System Availability: Error Resolution & Credits”:

In addition to the Minimum Availability credit noted above (the “Guaranteed Treatment Room Availability Service Level Credit”), if all of the five (5) treatment rooms are unavailable for use by the Operator to treat patients for five (5) consecutive Operating Days (as defined in the O&M Agreement), for each additional consecutive Operating Day all five (5) treatment rooms remain unavailable for use by the Operator to treat patients Varian shall pay the Operator a down system credit equal to $4,000 (the “Down System Credit”). The maximum aggregate Guaranteed Treatment Room Availability Service Level Credit and Down System Credit for any contract year shall not exceed twenty percent (20%) of the Support Services Fee paid by the Operator for such year.

2. Senior Debt Service Reserve Fund Replenishment. The following sentence replaces the second to last paragraph on page 54 of the Preliminary Official Statement under the subheading “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2018 BONDS - Senior Debt Service Reserve Fund”:

In the event of a draw on the Senior Debt Service Reserve Fund, the Trustee will, to the extent of amounts received from the Authority, restore the amount on deposit to equal the Senior Reserve Fund Requirement within 12 months in 12 equal installments. If

* Preliminary, subject to change

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any such installment payment is missed, it shall be an Event of Default under the Indenture.

The following language replaces Section 5.07(c) on page 41 of APPENDIX E – PROPOSED FORM OF THE INDENTURE:

(c) In the event of a draw on the Senior Debt Service Reserve Fund, the Trustee shall, to the extent of amounts received from the Authority, restore the amount on deposit to equal the Senior Reserve Fund Requirement within 12 months in 12 equal installments. If any such installment payment is missed, it shall be an Event of Default under Section 9.02 of this Indenture.

3. Payer Mix. The following table is added in APPENDIX A – THE PROJECT AND THE OPERATOR – THE PROJECT under the subheading “Payer Mix” after the first paragraph:

The following table provides a breakdown of the collections per fraction and per patient by payer mix:

Payor Group* Collections / Fraction

Collections / Patient

Medicare/Medicaid $1,007 $24,892 Commercial incl. Tricare and VA 2,684 71,810 Self-Pay 2,974 87,849

*Many of MPTC’s patients are covered by more than a single payor; the collections above focus on the 320 of 1,076 patients covered by a single payor.

4. Patient Referrals to date. The following paragraph and table is added to APPENDIX

A – THE PROJECT AND THE OPERATOR – THE PROJECT replacing the final paragraph under the subheading “Strategic Affiliations”:

The following chart provides a breakdown of the patient referrals received for years 2016, 2017 and the first half of 2018:

Referral Source** 2016 2017 1H2018* UM 142 180 95 Affiliates 81 91 45 Other Radiation Oncology Partners 106 126 72 Expanded Network (including Self-Referrals) 78 104 50 Total 407 501 262 *2018 January through June

** Note the numbers in the chart exclude consults which take place outside of MPTC, either at a UM hospital or affiliate partner medical center. Also, these numbers typically exclude international patients.

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The Operator anticipates that aggregate referred proton candidates will grow from approximately 500 in 2017 to approximately 1,700 by 2021, with proton candidate referrals from the University of Maryland growing from 180 in 2017 to 762 by 2021, and proton candidate referrals from affiliated partnerships growing from 91 in 2017 to 261 by 2021. See “Appendix B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

The following language is added as a footnote to Exhibit 34: Projected Trends in Proton-Eligible Referred Candidates to MPTC by Source (2017-2021) in APPENDIX B MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY:

This Exhibit 34 is based on projections, not actuals, compiled in September 2017.

5. Treatments per Year. The following table is added to APPENDIX A – THE PROJECT AND THE OPERATOR – THE PROJECT at the end of the subheading “Historical Performance”:

The chart below presents the Project’s treatments per year for the current fiscal year to date and the past two fiscal years:

Year Treatments FY2016 6,286 FY2017 16,260 1H2018 9,306 Total 31,852 2018 YTD through June 2018

6. Existing Indebtedness. The following information is added to APPENDIX A – THE

PROJECT AND THE OPERATOR – THE OPERATOR after the third sentence under the heading “Existing Indebtedness – Promissory Notes – Advanced Particle Therapy, LLC”: APT has entered into a Settlement and Release Agreement with MPTC and MPTH with respect to $5,000,000 of the disputed note payable to APT pursuant to which APT will release MPTC and MPTH from all claims due APT under the disputed note upon the closing of the Series 2018A-1 Bonds. Signet Development, LLC (“Signet”) has a claim against MPTC and MPTH derived through APT in the amount of approximately $660,000, which is part of the $5,561,389 disputed APT note amount. It is a condition to the closing of the Series 2018A-1 Bonds that such Signet claim is released.

The following table is added to APPENDIX A – THE PROJECT AND THE OPERATOR – THE OPERATOR at the end of the subheading “Existing Indebtedness”:

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The following chart provides a breakdown of the expected consideration to be received by each creditor type as a result of the transaction with the Authority described herein:

*The chart does not include the expected consideration to be paid to Kelcy Warren, a Revenue Share Holder. See “THE PROJECT AND THE OPERATOR – THE OPERATOR – Litigation” for a discussion of litigation brought by Mr. Warren.

7. Dallas Bankruptcy. The following sentence is added in APPENDIX A – THE PROJECT AND THE OPERATOR – THE OPERATOR as the penultimate sentence in the second paragraph under the subheading “Litigation”:

A hearing is scheduled in the Dallas Bankruptcy matter for August 9, 2018 to approve the settlement.

8. Litigation. The following paragraph is added in APPENDIX A – THE PROJECT AND THE OPERATOR – THE OPERATOR at the end of the subheading “Litigation”:

On July 26, 2018, Kelcy Warren filed suit against MPTC and three Senior Lender entities in the Superior Court for the State of Delaware, County of New Castle (Case No. N18C-07-254). Mr. Warren alleges in his Complaint that MPTC has breached its obligation to pay him under an Assignment and Grant of Revenue Interest dated February 7, 2014. Mr. Warren seeks damages from MPTC in excess of $550,000, plus interest, costs and attorneys’ fees. Mr. Warren also seeks an accounting from MPTC of certain expenditures that he claims are relevant to the determination of the amount owed under the Assignment and Grant of Revenue Interest. Mr. Warren has asserted a claim against the Senior Lender entities for tortious interference with the contract. He seeks damages from the Senior Lender entities in excess of $550,000, plus interest and costs. The damages requested by Mr. Warren in his tortious interference claim against Senior Lender entities appear duplicative of the damages requested by Mr. Warren in his breach of contract claim against MPTC, but the Complaint is not clear on this matter. It is a condition to the closing of the Series 2018A-1 Bonds that Mr. Warren’s complaint is dismissed with prejudice.

9. UMB Health Sciences Research Park Corporation Payment. The following sentence replaces the last sentence in the paragraph on page 25, under the heading

Senior Loan / Equipment Deferral $236,717,392 $199,000,000 $25,000,000 $224,000,000 5%

Subordinated Obligations $138,663,235 - $56,300,000 $56,300,000 59%Equity $58,277,033 - $2,700,000 $2,700,000 95%Total $433,657,660 $199,000,000 $84,000,000 $283,000,000 35%

Claim / Investment Amount Outstanding

Total Consideration

Discount %

Cash Proceeds of Series 2018A Bonds

& MPTCSeries B/C Bonds

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“UMB Health Sciences Research Park Corporation (“RPC”) in APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY:

Common area maintenance charges commenced March 1, 2016 at $400,000 per year, increasing 2.0% each January 1st. The current annual cost is $416,160.

10. Patient Throughput Time. The following information replaces the second paragraph on page 58, Exhibit 19: Results from 100 Days of Simulated MPTC Operation at the top of page 59 and the paragraph immediately following the chart in APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY:

Researchers concluded that in a scenario with 4 gantries and 5 imaging rooms in operation, decreasing the arrival rate of patients from 12 per hour to approximately 11 reduced the total time spent per patient by 55%. The scenario of 5 operating gantry rooms and imaging room had a longer total time spent per patient but the highest numbers of patients treated per day.

Exhibit 19: Results from 100 Days of Simulated MPTC Operation

Number of rooms Number of patients Gantry Imaging Per hour Per day

4 4 11.25 157.50 4 5 11.25 157.50 4 5 12.00 168.00 5 5 12.00 168.00 5 5 13.33 186.67

The study illustrated how efficiency in treatment room use affects patient wait times and the number of patients the Center can treat. While useful, the results from the study are gleaned from simulation, and MPTC has now been in operation for almost two years, and therefore real-world data is increasingly available.

11. Revised Projected Financial Performance – Cash Basis. The following table replaces the table in APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY – Exhibit 40: Projected Financial Performance – Cash Basis (2018-2047):

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Exhibit 40: Projected Financial Performance – Cash Basis (2018-2047)*

Stub 2018 2019 2020 2021 2022 2023RevenueAnnual Patients Treated 319 842 917 982 1,041 1,099Treatments 9,558 25,262 27,510 29,449 31,239 32,985Collection per Patient $69,120 $68,369 $69,240 $69,727 $70,351 $70,520 Cash Collections $22,049,157 $57,566,907 $63,492,732 $68,471,810 $73,235,132 $77,501,034 Operating Expenses $14,749,346 $36,121,240 $37,614,375 $39,288,771 $40,835,154 $42,907,806 Net Income $7,299,811 $21,445,667 $25,878,357 $29,183,038 $32,399,979 $34,593,228 Senior Debt Service $0 $2,306,708 $18,052,500 $18,052,500 $18,052,500 $19,157,500 Senior Debt Service Coverage 9.30x 1.43x 1.62x 1.79x 1.81xBreakeven Patients Treated 554 802 824 842 888Breakeven Treatments 16,614 24,065 24,723 25,259 26,634

2024 2025 2026 2027 2028 2029RevenueAnnual Patients Treated 1,145 1,171 1,197 1,222 1,243 1,273Treatments 34,363 35,131 35,897 36,663 37,278 38,189Collection per Patient $70,309 $70,184 $70,348 $70,440 $71,175 $70,722 Cash Collections $80,503,426 $82,185,318 $84,206,146 $86,077,403 $88,470,055 $90,028,475 Operating Expenses $44,412,355 $45,071,584 $45,997,446 $46,952,645 $48,089,568 $48,935,988 Net Income $36,091,071 $37,113,734 $38,208,700 $39,124,758 $40,380,488 $41,092,487 Senior Debt Service $20,036,200 $20,638,200 $21,271,700 $21,797,200 $22,514,200 $22,914,050 Senior Debt Service Coverage 1.80x 1.80x 1.80x 1.79x 1.79x 1.79xBreakeven Patients Treated 922 940 961 982 1,007 1,024Breakeven Treatments 27,659 28,191 28,841 29,453 30,224 30,726

2030 2031 2032 2033 2034 2035RevenueAnnual Patients Treated 1,298 1,324 1,355 1,356 1,356 1,361Treatments 38,955 39,721 40,645 40,676 40,676 40,836Collection per Patient $70,684 $70,727 $70,647 $71,441 $71,527 $71,346 Cash Collections $91,747,451 $93,642,817 $95,726,073 $96,873,477 $96,990,814 $97,101,694 Operating Expenses $49,730,594 $50,259,663 $50,964,367 $51,433,653 $51,991,605 $52,430,886 Net Income $42,016,856 $43,383,155 $44,761,706 $45,439,824 $44,999,209 $44,670,808 Senior Debt Service $23,440,475 $24,222,100 $25,003,450 $25,394,325 $25,139,550 $24,951,825 Senior Debt Service Coverage 1.79x 1.79x 1.79x 1.79x 1.79x 1.79xBreakeven Patients Treated 1,042 1,060 1,080 1,091 1,094 1,096Breakeven Treatments 31,261 31,790 32,395 32,728 32,821 32,891

2036 2037 2038 2039 2040 2041RevenueAnnual Patients Treated 1,367 1,361 1,361 1,356 1,361 1,361Treatments 40,997 40,836 40,836 40,676 40,836 40,836Collection per Patient $71,113 $71,369 $71,450 $71,934 $72,030 $71,693 Cash Collections $97,212,140 $97,133,071 $97,243,085 $97,542,614 $98,032,959 $97,574,425 Operating Expenses $52,516,482 $52,687,399 $52,993,934 $53,330,121 $53,928,783 $54,507,589 Net Income $44,695,659 $44,445,673 $44,249,151 $44,212,493 $44,104,176 $43,066,836 Senior Debt Service $24,969,975 $24,823,400 $24,709,575 $24,693,625 $24,631,125 $24,036,425 Senior Debt Service Coverage 1.79x 1.79x 1.79x 1.79x 1.79x 1.79xBreakeven Patients Treated 1,097 1,096 1,097 1,101 1,107 1,105Breakeven Treatments 32,898 32,871 32,916 33,015 33,207 33,162

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2042 2043 2044 2045 2046 2047RevenueAnnual Patients Treated 1,361 1,361 1,361 1,356 1,361 1,361Treatments 40,836 40,836 40,836 40,676 40,836 40,836Collection per Patient $71,774 $71,855 $72,216 $72,423 $72,239 $71,897 Cash Collections $97,684,439 $97,794,452 $98,285,663 $98,205,728 $98,316,607 $97,852,351 Operating Expenses $55,113,813 $55,711,751 $56,337,066 $56,945,407 $57,596,858 $58,234,614 Net Income $42,570,625 $42,082,701 $41,948,597 $41,260,321 $40,719,749 $65,012,062 Senior Debt Service $23,755,400 $23,475,950 $23,404,825 $23,005,125 $22,703,750 $20,905,950 Senior Debt Service Coverage 1.79x 1.79x 1.79x 1.79x 1.79x 3.11xBreakeven Patients Treated 1,109 1,112 1,119 1,120 1,124 394Breakeven Treatments 33,263 33,361 33,559 33,609 33,720 11,820

*Cash Collections includes earnings from reserve funds and in year 2047 Net Income includes the release of the funds in the Senior Debt Service Reserve Fund. 2018 stub period starts on August 1, 2018 and ends on December 31, 2018.

12. Projected Revenue and Expenses for Years 2018-2022. The following table is inserted in APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY immediately following Exhibit 40 – Projected Financial Performance – Cash Basis (2018-2047):

Projected Revenue and Expenses – (2018-2022)

2018 Stub1 2019 2020 2021 2022 Revenue

Avg. Treatments Per Day 91 99 107 115 123Treatments 9,558 25,262 27,510 29,449 31,239Patients Treated 319 842 917 982 1,041Cash Collections2 $22,049,157 $57,566,907 $63,492,732 $68,471,810 $73,235,132

Collection per Patient $69,120 $68,369 $69,240 $69,727 $70,351 Collection per Treatment $2,249 $2,253 $2,276 $2,293 $2,311

Operating ExpensesWages and Benefits $9,034,565 $22,473,196 $23,295,203 $24,563,212 $25,462,578 Patient Supplies $191,160 $515,336 $572,205 $624,313 $674,764 Marketing $500,000 $1,224,000 $1,248,480 $1,273,450 $1,298,919 Programs (HIT)3 $270,833 $580,000 $584,000 $588,080 $592,242 Professional Fees4 $1,239,846 $2,537,196 $2,570,604 $2,582,016 $2,593,657 Facility / O&M5 $3,029,608 $7,610,313 $8,144,119 $8,439,001 $8,974,981 Other Opex and G&A6 $483,333 $1,181,200 $1,199,764 $1,218,699 $1,238,013

Operating Expenses $14,749,346 $36,121,240 $37,614,375 $39,288,771 $40,835,154

Net Income $7,299,811 $21,445,667 $25,878,357 $29,183,038 $32,399,979

1) 2018 stub period starts on August 1, 2018 and ends on December 31, 20182) Inclusive of earnings from reserve funds3) Initially consisting of hyperthermia thermal therapy, integrative medicine and transportation4) Billing, collections, legal, accounting/audit, tax filing5) Proton O&M, consumables, facility expenses, electricity and other utilities6) IT, insurance, asset ower / trustee fee, licenses, training, clinical conferences, concierge services, board travel and meetings

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13. Changes to Continuing Disclosure. The form of Continuing Disclosure Undertaking set forth in APPENDIX I – CONTINUING DISCLOSURE UNDERTAKING will be amended to reflect the following:

a. The Operator will have a conference call with investors quarterly, provided, that, if the Series 2018A-1 Bonds receive and maintain an investment grade rating, then the conference call shall be held annually;

b. In addition, if the Debt Service Coverage Ratio or Days Cash on Hand covenant with respect to the Center is not met or if an Event of Default has occurred and is continuing, such conference calls shall be held at least monthly;

c. Each quarterly report will also include a break-down of payments by insurance type and information about fractions per day;

d. If Days Cash on Hand for the last two consecutive fiscal quarters is less than 90, then the quarterly reports will be required to be delivered monthly until such time as the Days Cash on Hand of the Center is at least 90; and

e. The following events will be added as events in Section 4(e) of the Continuing Disclosure Undertaking: (1) any withdrawal from a reserve fund established under the Indenture in order to pay debt service; (2) any borrowing by the Authority for the Project of $1,000,000 or more; and (3) if the Operator loses a relationship with a doctor or practice that referred more than 5% of the prior year’s patients.

14. Investor Letter. The attached Exhibit A replaces in its entirety the form of investor

letter set forth in APPENDIX J – PROPOSED FORM OF INITIAL INVESTOR LETTER”:

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EXHIBIT A

FORM OF INVESTOR REPRESENTATION LETTER FOR THE SERIES 2018A-1 BONDS

__, 2018

[Dated Date of Purchase]

Public Finance Authority Madison, Wisconsin U.S. Bank National Association, Trustee Atlanta, Georgia Re: Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center) (the “Bonds”)

Ladies and Gentlemen:

The undersigned, on behalf of [NAME OF PURCHASER] as purchaser of that portion of the above-captioned Bonds as set forth opposite its signature hereto (the “Purchaser”), in connection with the sale of the Bonds to the Purchaser, hereby makes the following representations and warranties upon which you are authorized to rely:

1. The Purchaser has been informed that the Public Finance Authority (the “Authority”) will not sell or permit any Bonds to be sold to the Purchaser unless the Purchaser makes the representations, warranties and covenants herein and authorizes the Authority and the Trustee to rely thereon and such representations, warranties and covenants are made by the Purchaser AS AN INDUCEMENT to the sale of the Bonds to the Purchaser.

2. The Purchaser understands that the Bonds have not been registered under the Securities Act of 1933, as amended (the “1933 Act”), or the securities laws of any state, and will be sold to the Purchaser in reliance upon certain exemptions from registration and in reliance upon the representations and warranties of the Purchaser as set forth herein. Capitalized terms used herein shall have the meanings given to them in the Trust Indenture dated as of August 1, 2018 (the “Indenture”) between the Authority and U.S. Bank National Association (the “Trustee”) relating to the Bonds.

3. The Purchaser has sufficient knowledge and experience in business and financial matters in general, and the purchase of bonds such as the Bonds in particular, and is capable of

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evaluating the merits and risks involved in a purchase of the Bonds. The Purchaser is able to bear the economic risk of, and an entire loss of, a purchase of the Bonds and understands that it may be required to bear the risks of an investment in the Bonds for an indefinite time, since any sale prior to maturity may not be possible. The Purchaser is acquiring the Bonds for its own account for investment purposes and not with a view to the resale or other distribution thereof; provided, however, the Purchaser retains the right to sell the Bonds at its discretion.

4. The Purchaser acknowledges that it has been provided a copy of the Official Statement dated August __, 2018 (the “Official Statement”) with respect to the Bonds, and that it has either been supplied with or been given access to information, including financial statements and other financial information, to which a reasonable investor would attach significance in making investment decisions, and the Purchaser has had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the Project, the Bonds and the security therefor so that, as a reasonable investor, the Purchaser has been able to make its decision to purchase the Bonds. Purchaser acknowledges that it has not relied upon the Authority for any information in connection with the Purchaser’s purchase of the Bonds.

5. The Purchaser acknowledges and understands that a purchase of the Bonds involves a high degree of risk regarding, among other things, the payment of current interest and the payment of principal on the Bonds. The Purchaser has made its own inquiry and analysis with respect to the Bonds and the security therefor, and other material factors affecting the security and payment of the Bonds.

6. The Purchaser has authority to purchase the Bonds and to execute this letter and any other instruments and documents required to be executed by the Purchaser in connection with the purchase of the Bonds.

7. The Purchaser understands and acknowledges that (i) under no circumstances shall the Bonds and the interest thereon be or become an indebtedness or obligation of the State of Wisconsin (the “State”), within the purview of any constitutional or statutory limitation or provision, or a charge against the credit of, or a pledge of the taxing power of, the State or any political subdivision thereof, (ii) the Bonds shall be special limited obligations of the Authority, and no taxes are required to be levied for the payment of principal of, premium, if any, and interest on the Bonds; such principal of, premium, if any, and interest on the Bonds being payable solely out of moneys to be received by the Authority as proceeds from the sale of the Bonds or from certain amounts on deposit with the Trustee pursuant to the Indenture and from certain income, if any, from the temporary investment of any of the foregoing and (iii) the Authority does not have the power to levy taxes for any purpose whatsoever, including, but not limited to, payment of principal of, premium, if any, and interest on the Bonds. The Purchaser also acknowledges that the Bonds do not represent general obligations of the Authority, the State or any political subdivision or agency thereof. The Purchaser understands that the Bonds are not payable from taxes or any moneys provided by or to the Authority, other than those described in the Indenture.

8. The Purchaser acknowledges and understands that the Bonds: (i) have not been and will not be registered or otherwise qualified for sale under the “Blue Sky” laws and regulations of any jurisdiction, (ii) will not be listed on any stock or other securities exchange, (iii) will carry no rating from any rating service, and (iv) will not be readily marketable.

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9. The Purchaser is purchasing the Bonds solely for its own account (or an account of an affiliate) for investment purposes and has no present intention to resell or distribute all or any portion of, or interest in, the Bonds other than to an affiliate of the Purchaser; provided that the Purchaser reserves the right to transfer or dispose of the Bonds at any time, and from time to time, in its complete and sole discretion, subject, however, to the restrictions described in paragraphs 10 and 11 of this letter. Under no circumstances will the Bonds (or any portion thereof) become part of a securitization whereby beneficial interests in the Bonds are offered and sold to downstream investors as a separate security.

10. The Purchaser agrees that it will only offer, sell, pledge, transfer or exchange the Bonds (or any legal or beneficial interest therein) in Authorized Denominations, and then only (i) in accordance with an applicable exemption from the registration requirements of Section 5 of the 1933 Act, and (ii) in accordance with any applicable state securities laws.

11. The Purchaser is a “qualified institutional buyer” within the meaning of Rule 144A of the Securities and Exchange Commission under the 1933 Act, and the Purchaser agrees that it will only offer, sell, pledge, transfer or exchange the Bonds (or any legal or beneficial interest therein) only (i) to another “qualified institutional buyer” and (ii) in compliance with the Indenture. Notwithstanding the foregoing, any affiliate of the Purchaser which holds the Bonds shall comply with the terms of Paragraph 10 and this Paragraph 11 in connection with any subsequent transfer of the Bonds.

12. No party other than the addressees hereto is entitled to rely on the representations and acknowledgements contained in this letter. Without limiting the generality of the foregoing, nothing in this letter will be deemed to relieve any party of its obligations under any federal or state securities laws.

Sincerely,

Principal Amount: $_______________ [NAME OF PURCHASER]

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n.PRELIMINARY OFFICIAL STATEMENT DATED JULY 19, 2018

UNRATEDNEW ISSUE BOOK-ENTRY ONLY

In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Series 2018A-1 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”). In the further opinion of Bond Counsel, interest on the Series 2018A-1 Bonds is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Series 2018A-1 Bonds. See “Tax Matters”.

$268,500,000*PUBLIC FINANCE AUTHORITY

Senior Revenue Bonds, Series 2018A-1(Maryland Proton Treatment Center)

Dated: Date of delivery Due: As shown on the inside cover page

The Public Finance Authority (the “Authority”) is issuing its Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center) (the “Series 2018A-1 Bonds”), pursuant to a Trust Indenture, dated as of August 1, 2018 (the “Indenture”), by and between the Authority and U.S. Bank National Association, as trustee (the “Trustee”).

Interest on the Series 2018A-1 Bonds from their date of delivery is payable on each January 1 and July 1 (each an “Interest Payment Date”), commencing on January 1, 2019. The Series 2018A-1 Bonds are subject to optional, mandatory, extraordinary and turbo redemption prior to their scheduled maturities, as described herein. When issued, the Series 2018A-1 Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Series 2018A-1 Bonds. Purchases of beneficial interests in the Series 2018A-1 Bonds will be made in book entry form, in denominations of $25,000 or any integral multiples of $5,000 in excess of $25,000 within a maturity. Purchasers will not receive certificates representing their interests in the Series 2018A-1 Bonds, except as described herein. So long as DTC or its nominee is the registered owner of the Series 2018A-1 Bonds, payments of principal of and interest on the Series 2018A-1 Bonds will be made directly to DTC or to such nominee. Disbursements of such payments to DTC’s Direct Participants are the responsibility of DTC, and disbursements of such payments to the Beneficial Owners are the responsibility of the Direct Participants and the Indirect Participants as more fully described herein.

The Authority is simultaneously issuing its (i) $10,000,000* Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Treatment Center) (the “Series 2018A-2 Bonds”; and, together with the Series 2018A-1 Bonds, the “Series 2018A Bonds”), (ii) $21,998,069.50* Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Treatment Center) (the “Series 2018B-1 Bonds”), (iii) $56,401,606.35* Subordinate Revenue Bonds, Series 2018B-2 (Maryland Proton Treatment Center) (the “Series 2018B-2 Bonds”; and, together with the Series 2018B-1 Bonds, the “Series 2018B Bonds”), (iv) $2,800,020.03* Junior Revenue Bonds, Series 2018C-1 (Maryland Proton Treatment Center) (the “Series 2018C-1 Bonds”), and (v) $2,800,020.03* Junior Revenue Bonds, Series 2018C-2 (Maryland Proton Treatment Center) (the “Series 2018C-2 Bonds”; and, together with the Series 2018C-1 Bonds, the “Series 2018C Bonds”) under the Indenture. The Series 2018A Bonds, the Series 2018B Bonds and the Series 2018C Bonds are collectively referred to herein as the “Series 2018 Bonds.” The Series 2018A-2 Bonds are also being issued as Senior Bonds (as defined in the Indenture) and rank on a parity with the Series 2018A-1 Bonds. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the Series 2018A-2 Bonds, Series 2018B Bonds or the Series 2018C Bonds nor shall there be any sale of the Series 2018A-2 Bonds, Series 2018B Bonds or the Series 2018C Bonds pursuant to this Official Statement.

The proceeds of the Series 2018 Bonds will be used by the Authority to (i) finance the acquisition of the radiation therapy cancer treatment center located at 850 West Baltimore Street, Baltimore, Maryland known as “The Maryland Proton Treatment Center” (the “Project”), (ii) fund capitalized interest, (iii) fund a debt service reserve fund, (iv) fund an extraordinary expense fund, (v) fund a liquidity reserve, (vi) fund a repair and replacement fund, (vii) fund working capital, and (viii) pay certain costs of issuance of the hereinafter defined Series 2018 Bonds, all as herein described. The Series 2018A-1 Bonds are special limited obligations of the Authority payable from and secured exclusively by the revenues and assets pledged therefor under the Indenture as described herein. The Project will be operated by Maryland Proton Treatment Center, LLC (the “Operator”) pursuant to a Facility Operating Agreement, dated the date of issuance of the Series 2018A-1 Bonds, between the Authority and the Operator.

The Series 2018A-1 Bonds are special limited obligations of the Authority payable solely from Gross Operating Revenues (as herein defined) and other funds pledged for their payment pursuant to the Indenture, and, except from such source, none of the Authority, any Member (as herein defined), any Sponsor (as herein defined), the State of Wisconsin, or any political subdivision or agency thereof shall be obligated to pay the principal of, premium, if any, or interest thereon or any costs incidental thereto. The Series 2018A-1 Bonds do not, directly, indirectly or contingently, obligate, in any manner, any Member, the State of Wisconsin or any political subdivision or agency thereof to levy any tax or to make any appropriation for payment of the principal of, premium, if any, or interest on, the Series 2018A-1 Bonds or any costs incidental thereto. Neither the faith and credit nor the taxing power of any Member, any Sponsor, the State of Wisconsin or any political subdivision or agency thereof, nor the faith and credit of the Authority or of any Sponsor or Authority Indemnified Person (as herein defined), shall be pledged to the payment of the principal of, premium, if any, or interest on, the Series 2018A-1 Bonds or any costs incidental thereto. The Authority has no taxing power.

The Series 2018A-1 Bonds do not, directly, indirectly or contingently, obligate, in any manner, the State of Maryland or any political subdivision or agency thereof to levy any tax or to make any appropriation for payment of the principal of, premium, if any, or interest on, the Series 2018A-1 Bonds. Neither the faith and credit nor the taxing power of the State of Maryland or any political subdivision or agency thereof shall be pledged to the payment of the principal of, premium, if any, or interest on, the Series 2018A-1 Bonds.

Investment in the Series 2018A-1 Bonds involves a significant degree of risk. See “RISK FACTORS” herein.

The Series 2018A-1 Bonds and beneficial ownership interests therein are offered hereby only to “Qualified Institutional Buyers” as that term is defined under Rule 144A of the Securities and Exchange Commission, as promulgated under the Securities Act of 1933, as amended. Subsequent transfers of the Series 2018A-1 Bonds are subject to restrictions as described herein. See “THE SERIES 2018 BONDS – Transfer and Exchange.” Each initial purchaser must execute a letter in the form set forth in “Appendix J – PROPOSED FORM OF INITIAL INVESTOR LETTER” in connection with its respective purchase of the Series 2018A-1 Bonds.

The Series 2018A-1 Bonds are offered when, as and if issued, subject to receipt of the approving legal opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority. Certain legal matters will be passed upon for the Authority by von Briesen & Roper, s.c., for the Operator by Miles & Stockbridge P.C. and for the Underwriters by Nixon Peabody LLP. It is expected that the Series 2018A-1 Bonds in definitive form will be available for delivery through the facilities of DTC on or about ______, 2018.

Citigroup Raymond James Date of Official Statement: _________, 2018

* Preliminary, subject to change.



$_______ ______% Term Bond due _________ 1, 20__ Yield: ____% Price: ____%

CUSIP Number† ___________ Expected Final Turbo Redemption Payment Date‡: _______

Projected Average Life†: _______

$_______ ______% Term Bond due _________ 1, 20__ Yield: ____% Price: ____% CUSIP Number† ________

Expected Final Turbo Redemption Payment Date‡: _______ Projected Average Life‡: ______ years

$_______ ______% Term Bond due _________ 1, 20__ Yield: ____% Price: ____%

CUSIP Number† ________ Expected Final Turbo Redemption Payment Date‡: _______

Projected Average Life‡: ______ years

* Preliminary, subject to change. † CUSIP® is a registered trademark of the American Bankers Association. The CUSIP (Committee on Uniform Securities Identification

Procedures) numbers on the inside cover page of this Official Statement have been assigned by an organization not affiliated with the Authority, the Operator, the Underwriters or the Trustee, and such parties are not responsible for the selection or use of the CUSIP numbers. The CUSIP numbers are included solely for the convenience of holders and no representation is made as to the correctness of the CUSIP numbers printed above. CUSIP numbers assigned to the Series 2018A-1 Bonds may be changed during the term of the Series 2018A-1 Bonds based on a number of factors, including, but not limited to, the refunding or defeasance of Series 2018A-1 Bonds or the use of secondary market financial products. None of the Authority, the Operator, the Underwriters or the Trustee has agreed to, nor is there any duty or obligation to, update this Official Statement to reflect any change or correction in the CUSIP numbers printed above.

‡ Assumes all turbo redemptions are made based on the receipt of Gross Operating Revenues projected by the Operator utilizing the Base Case Scenario (as described herein). No assurance can be given that these assumptions will be realized. See “BOND STRUCTURING ASSUMPTIONS,” “PROJECTED FINANCIAL INFORMATION” and APPENDIX B.

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TABLE OF CONTENTS Page Page

INTRODUCTION ..................................................... 1 THE SERIES 2018 BONDS ...................................... 2

General .................................................................... 2 Optional Redemption .............................................. 4 Turbo Redemption ................................................... 5 Mandatory Redemption ........................................... 6 Extraordinary Mandatory Redemption .................... 9 Mandatory Redemption Following a

Determination of Taxability ................................. 9 Selection of Series 2018 Bonds to be

Redeemed ........................................................... 10 Notice of Redemption ........................................... 10 Payment of Redeemed Series 2018 Bonds ............ 11 Book-Entry-Only System ...................................... 11 Transfer and Exchange .......................................... 13

PROJECT PARTICIPANTS ................................... 13 The Authority ........................................................ 13 The Operator ......................................................... 15 University of Maryland Radiation Oncology

Associates, P.A. .................................................. 15 University of Maryland Medical System

Corporation ........................................................ 16 Physician Affiliation Agreements ......................... 16 Varian Medical Systems, Inc. ................................ 16 Billing Management Consultant ............................ 16 Feasibility Consultant ............................................ 17

PROTON THERAPY OVERVIEW ........................ 17 THE PROJECT ....................................................... 19 PRINCIPAL PROJECT AGREEMENTS ............... 19

Ground Lease ........................................................ 19 Facility Operating Agreement ............................... 21 Professional Services Agreement .......................... 27 Clinical Management and Administrative

Services Agreement ............................................ 29 Operations and Maintenance Agreement

(Varian) .............................................................. 31 Billing Management and Consultant Services

Agreement .......................................................... 33 Employee Leasing Agreement .............................. 35 Additional UMMS Agreements ............................ 36 Physician Affiliation Agreements ......................... 36 Asset Purchase Agreement .................................... 38

FEASIBILITY STUDY ........................................... 39 FUNDING PLAN .................................................... 40

Estimated Sources and Uses of Funds ................... 41 PROJECTED FINANCIAL INFORMATION ........ 42 SUMMARY OF BOND STRUCTURING

ASSUMPTIONS ................................................... 47 Introduction ........................................................... 47 Structuring Assumptions ....................................... 47 Projected Turbo Redemptions ............................... 48 Initial Projected Weighted Average Lives ............. 48

SECURITY AND SOURCES OF PAYMENT FOR SERIES 2018 BONDS ................................. 49 General .................................................................. 49 Indenture................................................................ 50 Leasehold Mortgage .............................................. 50

Facility Operating Agreement ............................... 50 Revenue Fund and Flow of Funds ......................... 51 Excess Revenue Fund ............................................ 53 Debt Service Fund ................................................. 53 Senior Debt Service Reserve Fund ........................ 54 Extraordinary Expense Fund ................................. 55 Repair and Replacement Fund ............................... 55 Operator Fee Fund ................................................. 55 Liquidity Reserve Fund ......................................... 55 Turbo Redemption Account of the Debt Service

Fund ................................................................... 56 Insurance and Condemnation Proceeds Fund ........ 56 Indenture Covenants .............................................. 56 Direct Agreements ................................................. 59

RISK FACTORS ..................................................... 59 Limitations on Recourse ........................................ 59 Limited Sources of Payment ................................. 60 Sufficiency of Revenues ........................................ 61 Enforceability of Remedies; Bankruptcy .............. 61 Operating Risk ....................................................... 62 Similar Facilities ................................................... 64 Internal Controls over Financial Reporting ........... 64 Related Entities ..................................................... 64 Reliance on Other Third Parties ............................ 64 Market for Proton Therapy Treatment ................... 65 Competition ........................................................... 65 Technology Risk.................................................... 65 Reliance on Projections and Underlying

Assumptions ....................................................... 65 Adequacy of Insurance .......................................... 66 Governmental Regulations and Permits ................ 66 Environmental Liability ........................................ 67 Tax Reform ........................................................... 68 Healthcare Regulation ........................................... 68 Payment for Health Care Services ......................... 76 Commercial Insurance and Other Third-Party

Plans ................................................................... 78 Medicaid ................................................................ 79 Antitrust ................................................................. 80 Cybersecurity ........................................................ 80 Debt Limit Increases ............................................. 81 Professional Liability Claims and Losses .............. 81 Specialty Nature of Project .................................... 81 Financial Reporting ............................................... 81 Potential for Determination of Taxability ............. 81 Possible Consequence of Tax Compliance

Audit ................................................................... 82 State Regulation of Project; No Certificate of

Need Required to Operate the Project ................ 82 Additional Indebtedness ........................................ 82 Absence of Market for the Series 2018A-1

Bonds; No Credit Rating .................................... 82 CONTINUING DISCLOSURE ............................... 82

Reports and Material Event Notices ...................... 82 Compliance With Prior Undertakings ................... 83 Authority Not Responsible .................................... 83

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TAX MATTERS ..................................................... 83 INDEPENDENT CERTIFIED PUBLIC

ACCOUNTANTS ................................................. 85 LITIGATION .......................................................... 85

The Authority ........................................................ 85

The Operator ......................................................... 85 UNDERWRITING .................................................. 85 LEGAL MATTERS ................................................ 86 MISCELLANEOUS ................................................ 86

APPENDIX A — THE PROJECT AND THE OPERATOR APPENDIX B — MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY APPENDIX C — CONSOLIDATED FINANCIAL STATEMENTS OF MARYLAND PROTON

TREATMENT HOLDINGS, LLC AND SUBSIDIARIES FOR THE FISCAL YEARS ENDED DECEMBER 31, 2017 AND 2016

APPENDIX D — PROPOSED FORM OF THE MASTER GLOSSARY OF TERMS APPENDIX E — PROPOSED FORM OF THE INDENTURE APPENDIX F — PROPOSED FORM OF THE LEASEHOLD MORTGAGE APPENDIX G — PROPOSED FORM OF THE FACILITY OPERATING AGREEMENT APPENDIX H — PROPOSED FORM OF BOND COUNSEL OPINION APPENDIX I — PROPOSED FORM OF CONTINUING DISCLOSURE UNDERTAKING APPENDIX J — PROPOSED FORM OF INITIAL INVESTOR LETTER

NOTICE TO INVESTORS

The statements and information contained under “PROJECT PARTICIPANTS—The Authority” and “LITIGATION—The Authority” have been obtained from the Authority. The other statements and information contained herein have been obtained from the Operator and other sources believed to be reliable. No person has been authorized to give any information or to make any representations other than those contained in this Official Statement in connection with the Series 2018A-1 Bonds and, if given or made, such information or representations must not be relied upon as having been authorized by the Authority, the Operator or the Underwriters. Neither the delivery of this Official Statement nor any sale hereunder will under any circumstances create any implication that there has been no change in the affairs of the Authority, the Operator or any other person described herein since the date hereof. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the Series 2018A-1 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is submitted in connection with the sale of the Series 2018A-1 Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.

The Authority’s approval of this Official Statement does not constitute approval of the information contained herein, other than such aforesaid information concerning the Authority, and the Authority does not guarantee or make any representation about the accuracy or completeness of such information.

This Official Statement is not to be construed as a contract with the purchasers of the Series 2018A-1 Bonds. This Official Statement, including the appendices hereto, contains statements relating to future results that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. When used in this Official Statement, the words “estimate,” “anticipate,” “forecast,” “project,” “intend,” “propose,” “plan,” “expect” and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material.

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

THE SERIES 2018A-1 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED THEREIN, AND HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. THE INDENTURE HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED THEREIN. THE SERIES 2018A-1 BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY COMMISSION. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2018A-1 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITERS MAY OFFER AND SELL THE SERIES 2018A-1 BONDS TO CERTAIN DEALERS AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE COVER PAGE OF THIS OFFICIAL STATEMENT, AND SUCH PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITERS.

THE SERIES 2018A-1 BONDS AND BENEFICIAL OWNERSHIP INTERESTS THEREIN ARE OFFERED HEREBY ONLY TO “QUALIFIED INSTITUTIONAL BUYERS” AS THAT TERM IS DEFINED UNDER RULE 144A OF THE SECURITIES AND EXCHANGE COMMISSION, AS PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUBSEQUENT TRANSFERS OF THE SERIES 2018A-1 BONDS

ARE SUBJECT TO RESTRICTIONS AS DESCRIBED HEREIN. SEE “THE SERIES 2018 BONDS – TRANSFER AND EXCHANGE.” EACH INITIAL PURCHASER MUST EXECUTE A LETTER IN THE FORM SET FORTH IN “APPENDIX J – PROPOSED FORM OF INITIAL INVESTOR LETTER” IN CONNECTION WITH ITS RESPECTIVE PURCHASE OF THE SERIES 2018A-1 BONDS.

OFFICIAL STATEMENT

RELATING TO



INTRODUCTION

The purpose of this Official Statement, which includes the cover page, inside cover page, table of contents and appendices, is to provide information concerning the issuance of the Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center) (the “Series 2018A-1 Bonds”) by Public Finance Authority (the “Authority”), a unit of government and a body corporate and politic of the State of Wisconsin, created under Sections 66.0301, 66.0303 and 66.0304 of the Wisconsin Statutes, commonly known as the “Joint Exercise of Powers Law” (the “Act”).

The Authority is issuing the Series 2018A-1 Bonds pursuant to the provisions of the Act and pursuant to a resolution of the Authority, adopted on May 31, 2018 (the “Resolution”). The Series 2018A-1 Bonds are being issued pursuant to a Trust Indenture (the “Indenture”) dated as of August 1, 2018 between the Authority and U.S. Bank National Association, as trustee (the “Trustee”). Capitalized terms used but not defined in this Official Statement have the meanings set forth in “APPENDIX D – PROPOSED FORM OF MASTER GLOSSARY OF TERMS.”

The Authority is simultaneously issuing its (i) $10,000,000* Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Treatment Center) (the “Series 2018A-2 Bonds” and, together with the Series 2018A-1 Bonds, the “Series 2018A Bonds”), (ii) $21,998,069.50* Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Treatment Center) (the “Series 2018B-1 Bonds”), (iii) $56,401,606.35* Subordinate Revenue Bonds, Series 2018B-2 (Maryland Proton Treatment Center) (the “Series 2018B-2 Bonds”; and, together with the Series 2018B-1 Bonds, the “Series 2018B Bonds”), (iv) $2,800,020.03* Junior Revenue Bonds, Series 2018C-1 (Maryland Proton Treatment Center) (the “Series 2018C-1 Bonds”), and (v) $2,800,020.03* Junior Revenue Bonds, Series 2018C-2 (Maryland Proton Treatment Center) (the “Series 2018C-2 Bonds”; and, together with the Series 2018C-1 Bonds, the “Series 2018C Bonds”) under the Indenture. The Series 2018A Bonds, the Series 2018B Bonds and the Series 2018C Bonds are referred to herein as the “Series 2018 Bonds.” The Series 2018A-2 Bonds are also being issued as Senior Bonds and rank on a parity with the Series 2018A-1 Bonds. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the Series 2018A-2 Bonds, the Series 2018B Bonds or the Series 2018C Bonds nor shall there be any sale of the Series 2018A-2 Bonds, the Series 2018B Bonds or the Series 2018C Bonds pursuant to this Official Statement.

The proceeds of the Series 2018 Bonds will be used by the Authority to (i) finance the acquisition of the radiation therapy cancer treatment center located at 850 West Baltimore Street, Baltimore, Maryland known as “The Maryland Proton Treatment Center” (the “Project”), (ii) fund capitalized interest, (iii) fund a debt service reserve fund, (iv) fund an extraordinary expense fund, (v) fund a liquidity reserve, (vi) fund a repair and replacement fund, (vii) fund working capital, and (viii) pay certain costs of issuance of the hereinafter defined Series 2018 Bonds, all as herein described. The Series 2018A-1 Bonds are special limited obligations of the Authority payable from and secured exclusively by the revenues and assets pledged therefor under the Indenture as described herein. Pursuant to the Indenture, the Series 2018 Bonds will also be secured in part by a mortgage lien on, and security interest in, the Authority’s interest in the Project in accordance with the terms of a certain Leasehold Deed of Trust and Security Agreement dated as of August 1, 2018 from the Authority, as mortgagor, in favor of the Trustee, as mortgagee (the “Leasehold Mortgage”), which Leasehold Mortgage shall secure a maximum principal amount of $221,000,000.


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The Project will be operated by Maryland Proton Treatment Center, LLC (the “Operator”) pursuant to a Facility Operating Agreement, dated the date of issuance of the Series 2018A-1 Bonds, between the Authority and the Operator.

The Operator is the current owner and operator of the Project. The Authority will utilize a portion of the proceeds of the Series 2018 Bonds to acquire (i) a leasehold interest in the portion of the Project constituting land, the improvements and the fixtures thereto pursuant to a ground lease with the Operator, and (ii) the portion of the Project constituting other equipment from the Operator.

Investment in the Series 2018A-1 Bonds involves a significant degree of risk. See “RISK FACTORS” herein.

THE SERIES 2018 BONDS

General

The Series 2018A-1 Bonds are current interest bonds and are to be dated as of and bear interest from their date of delivery. Interest on the Series 2018A-1 Bonds is payable semiannually on January 1, 2019 and on each January 1 and July 1 thereafter, at the rates set forth on the inside cover page of this Official Statement. The Series 2018A-1 Bonds are to mature, subject to prior redemption, in the amounts and on the dates set forth on the inside cover page of this Official Statement. Interest is to be calculated on the basis of a 360-day year consisting of twelve 30-day months.

The Series 2018A-2 Bonds are current interest bonds and are to be dated as of and bear interest from their date of delivery. Interest on the Series 2018A-2 Bonds is payable semiannually on January 1, 2019 and on each January 1 and July 1 thereafter, at an interest rate of __%. The Series 2018A-2 Bonds are to mature, subject to prior redemption, on January 1, 2028*. Interest is to be calculated on the basis of a 360-day year consisting of twelve 30-day months.

The Series 2018B-1 Bonds are Convertible Capital Appreciation Bonds and are to be dated as of their date of delivery. Interest on the Series 2018B-1 Bonds shall compound from their date of delivery on each January 1 and July 1, commencing January 1, 2019 (each a “Compounding Date”) as set forth in the schedule attached to such Series 2018B-1 Bonds and shall be treated as accruing in equal daily amounts between Compounding Dates, payable at maturity or earlier redemption. On July 1, 2021, the Series 2018B-1 Bonds will convert to current interest bonds with interest payable on January 1, 2022 and on each January 1 and July 1 thereafter. The Series 2018B-1 Bonds are to mature, subject to prior redemption, on January 1, 2048*. Interest is to be calculated on the basis of a 360-day year consisting of twelve 30-day months.

The Series 2018B-2 Bonds are Convertible Capital Appreciation Bonds and are to be dated as of their date of delivery. Interest on the Series 2018B-2 Bonds shall compound from their date of delivery on each Compounding Date as set forth in the schedule attached to such Series 2018B-2 Bonds and shall be treated as accruing in equal daily amounts between Compounding Dates, payable at maturity or earlier redemption. On January 1, 2022, the Series 2018B-2 Bonds will convert to current interest bonds with interest payable on July 1, 2022 and on each January 1 and July 1 thereafter. The Series 2018B-2 Bonds are to mature, subject to prior redemption, on January 1, 2049*. Interest is to be calculated on the basis of a 360-day year consisting of twelve 30-day months.

The Series 2018C-1 Bonds are Capital Appreciation Bonds and are to be dated as of their date of delivery. Interest on the Series 2018C-1 Bonds shall compound from their date of delivery on each Compounding Date as set forth in the schedule attached to such Series 2018C-1 Bonds and shall be treated as accruing in equal daily amounts between Compounding Dates, payable at maturity or earlier redemption. The Series 2018C-1 Bonds are to mature, subject to prior redemption, on January 1, 2054*.

The Series 2018C-2 Bonds are Capital Appreciation Bonds and are to be dated as of their date of delivery. Interest on the Series 2018C-2 Bonds shall compound from their date of delivery on each Compounding Date as set * Preliminary, subject to change.

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forth in the schedule attached to such Series 2018C-2 Bonds and shall be treated as accruing in equal daily amounts between Compounding Dates, payable at maturity or earlier redemption. The Series 2018C-2 Bonds are to mature, subject to prior redemption, on January 1, 2054*.

The Series 2018A-1 Bonds are being issued in fully registered form in denominations of $25,000 or any integral multiples of $5,000 in excess thereof (provided that if and after the Senior Bonds have received an investment grade rating by a nationally recognized ratings company, the authorized denominations for the Series 2018A-1 Bonds may, if so provided in a Supplemental Indenture, be converted to integral multiples of $5,000) within a maturity and when issued will be registered in the name of Cede & Co. (or such other name as may be requested by an authorized representative of The Depository Trust Company, New York, New York (“DTC”)), as registered owner and nominee of DTC.

The Series 2018A-2 Bonds are being issued in fully registered form in denominations of $25,000 or any integral multiples of $5,000 in excess thereof (provided that if and after the Senior Bonds have received an investment grade rating by a nationally recognized ratings company, the authorized denominations for the Series 2018A-2 Bonds may, if so provided in a Supplemental Indenture, be converted to integral multiples of $5,000) within a maturity and when issued will be registered in the name of Cede & Co. (or such other name as may be requested by an authorized representative of The Depository Trust Company, New York, New York (“DTC”)), as registered owner and nominee of DTC.

The Series 2018B-1 Bonds are being issued in the initial principal amount with the Accreted Value as of July 1, 2021 (such date, the “Series 2018B-1 Conversion Date”) of $27,190,000*, and when issued will be registered in the name of Cede & Co. (or such other name as may be requested by an authorized representative of DTC), as registered owner and nominee of DTC. The Series 2018B-1 Bonds are being issued in fully registered form, prior to the Series 2018B-1 Conversion Date, in denominations of current Accreted Value as to which the initial principal amount equals $25,000 or any integral multiple of $5,000 in thereof, and, from and after the Series 2018B-1 Conversion Date, $25,000 principal amount or any integral multiples of $5,000 in excess thereof.

The Series 2018B-2 Bonds are being issued in the initial principal amount with the Accreted Value as of January 1, 2022 (such date, the “Series 2018B-2 Conversion Date”) of $74,715,000*, and when issued will be registered in the name of Cede & Co. (or such other name as may be requested by an authorized representative of DTC), as registered owner and nominee of DTC. The Series 2018B-2 Bonds are being issued in fully registered form, prior to the Series 2018B-2 Conversion Date, in denominations of current Accreted Value as to which the initial principal amount equals $25,000 or any integral multiple of $5,000 in thereof, and, from and after the Series 2018B-2 Conversion Date, $25,000 principal amount or any integral multiples of $5,000 in excess thereof.

The Series 2018C-1 Bonds are being issued in the initial principal amount with the Accreted Value as of its maturity of $172,947,500*, and when issued will be registered in the name of Cede & Co. (or such other name as may be requested by an authorized representative of DTC), as registered owner and nominee of DTC. The Series 2018C-1 Bonds are being issued in fully registered form in denominations of current Accreted Value as to which the initial principal amount equals $25,000 or any integral multiple of $5,000 in thereof.

The Series 2018C-2 Bonds are being issued in the initial principal amount with the Accreted Value as of its maturity of $172,947,500*. The Series 2018C-2 Bonds are being issued in fully registered form in denominations of current Accreted Value as to which the initial principal amount equals $250 or any integral multiples of $0.01 in excess thereof. The Series 2018C-2 Bonds will be initially executed and delivered in paper certificated form in authorized denominations, but may be exchanged in whole (but not in part) for Series 2018C-2 Bonds registered in the name of Cede & Co., (or such other name as may be requested by an authorized representative of DTC), as registered owner and nominee of DTC (upon which the Series 2018C-2 Bonds will be treated as DTC Bonds (as hereinafter defined)) but only after so authorized by a Supplemental Indenture.

DTC will act as securities depository for the Series 2018A Bonds, the Series 2018B Bonds and the Series 2018C-1 Bonds (collectively, the “DTC Bonds”). Individual purchases of the DTC Bonds may be made only in Book-Entry Form. Purchasers will not receive certificates representing their interest in the DTC Bonds purchased. * Preliminary, subject to change.

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So long as Cede & Co. is the registered owner of the DTC Bonds, as nominee of DTC, references herein to “Owners,” “Bondholders” or “Registered Owners” mean Cede & Co. (or such other nominee) and not the Beneficial Owners of the DTC Bonds. In this Official Statement, the term “Beneficial Owner” means the person for whom its DTC Participant acquires an interest in the DTC Bonds.

So long as Cede & Co. is the registered owner of the DTC Bonds, the principal of and interest on the DTC Bonds are payable to Cede & Co., as nominee for DTC which, in turn, is to remit such amounts to the Direct Participants for subsequent disbursement to the Beneficial Owners. See “-Book-Entry-Only System” below and “APPENDIX E – PROPOSED FORM OF THE INDENTURE.”

Optional Redemption

Optional Redemption of Series 2018A-1 Bonds

Series 2018A-1 Bonds. The Series 2018A-1 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, 20__, from any legally available funds, at a Redemption Price equal to 100% of the principal amount of Series 2018A-1 Bonds called for redemption, without premium, plus accrued interest with respect thereto to the date fixed for redemption.

Optional Redemption of Series 2018A-2 Bonds, Series 2018B Bonds and Series 2018C Bonds, Not Offered Hereby

Series 2018A-2 Bonds. The Series 2018A-2 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, 20__, from any legally available funds, at a Redemption Price equal to 100% of the principal amount of Series 2018A-2 Bonds called for redemption, without premium, plus accrued interest with respect thereto to the date fixed for redemption.

Series 2018B-1 Bonds. The Series 2018B-1 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, 20__, from any legally available funds, at a Redemption Price equal to 100% of the Accreted Value or principal amount, as applicable, of Series 2018B-1 Bonds called for redemption, without premium, plus, from and after the Series 2018B-1 Conversion Date, accrued interest with respect thereto to the date fixed for redemption.

Series 2018B-2 Bonds. The Series 2018B-2 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, 20__, from any legally available funds, at a Redemption Price equal to 100% of the Accreted Value or principal amount, as applicable, of Series 2018B-2 Bonds called for redemption, without premium, plus, from and after the Series 2018B-2 Conversion Date, accrued interest with respect thereto to the date fixed for redemption.

Series 2018C-1 Bonds. The Series 2018C-1 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, 2028, from any legally available funds, at a Redemption Price equal to 100% of the Accreted Value of Series 2018C-1 Bonds called for redemption, without premium.

Series 2018C-2 Bonds. The Series 2018C-1 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, 2028, from any legally available funds, at a Redemption Price equal to 100% of the Accreted Value of Series 2018C-2 Bonds called for redemption, without premium.

In the case of any redemption of Series 2018 Bonds at the sole option of the Authority, an Authorized Authority Representative shall give written notice to the Trustee of the Authority’s Direction so to redeem, of the Redemption Date, of the Series, and of the principal amounts (or Accreted Value) of the Series 2018 Bonds of each maturity of such Series to be redeemed (which Series, maturities, and principal amounts thereof to be redeemed shall be determined by the Authority in its sole discretion, subject to any limitations with respect thereto as are contained in the Indenture). Such notice shall be given at least ten Business Days prior to the date on which notice of redemption is required to be given to the Owners of the Series 2018 Bonds to be redeemed or within such shorter

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period as shall be provided by Supplemental Indenture or consented to by the Trustee. On or prior to any Redemption Date, there shall be paid to the Trustee for deposit into the appropriate Redemption Account an amount which, in addition to other moneys, if any, available therefor held by the Trustee, will be sufficient to redeem on the Redemption Date at the Redemption Price, plus interest accrued and unpaid to the Redemption Date, all of the Series 2018 Bonds called for redemption.

Turbo Redemption

Provided that (i) there is no Event of Default, and (ii) the Debt Service Reserve Fund, the Extraordinary Expense Fund, the Liquidity Reserve Fund and the Repair and Replacement Fund are each funded at their respective required amounts, the Series 2018A-1 Bonds are subject to redemption prior to maturity, pro rata, to the extent funds are available in the Turbo Redemption Account, without further direction by the Authority, in whole or in part, annually on January 1 of each year, at a Redemption Price equal to 100% of the principal amount of the Series 2018A-1 Bonds to be redeemed in order of maturity and proportionately among Series 2018A-1 Bonds of the same maturity or sinking fund redemption (hereinafter referred to as the “Turbo Redemptions”). The Series 2018A-2 Bonds are not subject to Turbo Redemptions.

Following payment in full of the Series 2018A-1 Bonds, the Series 2018B-1 Bonds are subject to redemption prior to maturity, pro rata, to the extent funds are available in the Turbo Redemption Account, without further direction by the Authority, in whole or in part, annually on January 1 of each year, at a Redemption Price equal to 100% of the Accreted Value or principal amount, as applicable, of the Series 2018B-1 Bonds to be redeemed in order of maturity and proportionately among Series 2018B-1 Bonds of the same maturity or sinking fund redemption.

Following payment in full of the Series 2018A-1 Bonds and the Series 2018B-1 Bonds, the Series 2018B-2 Bonds are subject to redemption prior to maturity, pro rata, to the extent funds are available in the Turbo Redemption Account, without further direction by the Authority, in whole or in part, annually on January 1 of each year, at a Redemption Price equal to 100% of the Accreted Value or principal amount, as applicable, of the Series 2018B-2 Bonds to be redeemed in order of maturity and proportionately among Series 2018B-2 Bonds of the same maturity or sinking fund redemption.

Following payment in full of the Series 2018A-1 Bonds and the Series 2018B Bonds, the Series 2018C Bonds are subject to redemption prior to maturity, pro rata, to the extent funds are available in the Turbo Redemption Account, without further direction by the Authority, in whole or in part, annually on January 1 of each year, at a Redemption Price equal to 100% of the Accreted Value of the Series 2018C Bonds to be redeemed in order of maturity and proportionately among Series 2018C Bonds of the same maturity or sinking fund redemption.

Such turbo redemptions may be in amounts less than $25,000 maturity amounts, but following redemption in part, Series 2018 Bonds remaining Outstanding shall be in Authorized Denominations.

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Mandatory Redemption

Mandatory Redemption of Series 2018A-1 Bonds*

The Series 2018A-1 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018A-1 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the tables below, except that the Mandatory Sinking Fund Installments of Series 2018A-1 Bonds shall be reduced in chronological order by the principal amount of any Series 2018A-1 Bonds redeemed pursuant to any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:

Series 2018A-1 Bonds maturing on January 1, 2033

Year

Principal Amount

Year

Principal Amount

2028 $3,820,000 2031 $6,975,000 2029 5,310,000 2032 8,210,000 2030 6,055,000 2033† 9,525,000

________________

† Final Maturity


Year

Principal Amount

Year

Principal Amount

2034 $10,535,000 2037 $12,255,000 2035 10,965,000 2038† 12,905,000 2036 11,490,000

________________

† Final Maturity


Year

Principal Amount

Year

Principal Amount

2039 $13,630,000 2044 $17,325,000 2040 14,500,000 2045 18,380,000 2041 15,380,000 2046 19,175,000 2042 15,785,000 2047 20,120,000 2043 16,530,000 2048† 19,630,000

________________

† Final Maturity

Mandatory Redemption of Series 2018A-2 Bonds, Series 2018B Bonds and Series 2018C Bonds, Not Offered Hereby*

The Series 2018A-2 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018A-2 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the tables below, except that the Mandatory Sinking Fund Installments of Series 2018A-2 * Preliminary, subject to change.

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Bonds shall be reduced in chronological order by the principal amount of any Series 2018A-2 Bonds redeemed pursuant to any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:


Year

Principal Amount

Year

Principal Amount

2024 $1,105,000 2027 $3,575,000 2025 2,050,000 2028† 495,000 2026 2,775,000

________________

† Final Maturity

The Series 2018B-1 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018B-1 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the table below, except that the Mandatory Sinking Fund Installments of Series 2018B-1 Bonds shall be reduced in chronological order by the principal amount of any Series 2018B-1 Bonds redeemed pursuant to any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:

Series 2018B-1 Bonds*

Year

Principal Amount

Year

Principal Amount

2024 $745,000 2037 $830,000 2025 1,055,000 2038 860,000 2026 - 2039 1,045,000 2027 - 2040 1,115,000 2028 - 2041 1,000,000 2029 115,000 2042 970,000 2030 240,000 2043 995,000 2031 190,000 2044 1,205,000 2032 385,000 2045 1,290,000 2033 555,000 2046 1,175,000 2034 870,000 2047 1,215,000 2035 890,000 2048† 9,680,000 2036 765,000

________________

* Principal amounts reflect the Accreted Values of the Series 2018B-1 Bonds at conversion.

† Final Maturity

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The Series 2018B-2 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018B-2 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the table below, except that the Mandatory Sinking Fund Installments of Series 2018B-2 Bonds shall be reduced in chronological order by the principal amount of any Series 2018B-2 Bonds redeemed pursuant to any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:

Series 2018B-2 Bonds*

Year

Principal Amount

Year

Principal Amount

2024 $1,290,000 2037 $1,440,000 2025 1,845,000 2038 1,490,000 2026 - 2039 1,820,000 2027 - 2040 1,940,000 2028 - 2041 1,745,000 2029 195,000 2042 1,685,000 2030 420,000 2043 1,730,000 2031 330,000 2044 2,095,000 2032 670,000 2045 2,240,000 2033 960,000 2046 2,045,000 2034 1,515,000 2047 2,110,000 2035 1,545,000 2048 16,835,000 2036 1,335,000 2049† 27,435,000

________________

* Principal amounts reflect the Accreted Values of the Series 2018B-2 Bonds at conversion.

† Final Maturity

The Series 2018C-1 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018C-1 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the table below, except that the Mandatory Sinking Fund Installments of Series 2018C-1 Bonds shall be reduced in chronological order by the principal amount of any Series 2018C-1 Bonds redeemed pursuant to any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:

Series 2018C-1 Bonds*

Year

Principal Amount

Year

Principal Amount

2050 $24,755,000 2053 16,265,000 2051 21,427,500 2054† 91,760,000 2052 18,740,000

________________

* Principal amounts reflect the Accreted Values of the Series 2018C-1 Bonds at maturity. † Final Maturity

The Series 2018C-2 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018C-2 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the table below, except that the Mandatory Sinking Fund Installments of Series 2018C-2 Bonds shall be reduced in chronological order by the principal amount of any Series 2018C-2 Bonds redeemed pursuant to

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any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:

Series 2018C-2 Bonds*

Year

Principal Amount

Year

Principal Amount

2050 $24,755,000 2053 16,265,000 2051 21,427,500 2054† 91,760,000 2052 18,740,000

________________

* Principal amounts reflect the Accreted Values of the Series 2018C-2 Bonds at maturity. † Final Maturity

Extraordinary Mandatory Redemption

The Series 2018 Bonds shall be subject to extraordinary mandatory redemption at the Direction of the Authority with amounts in the Insurance and Condemnation Proceeds Account that are not to be applied to repair or replace the Project pursuant to the Indenture, in whole or in part on the earliest date following the date for which notice of redemption can be given as provided in the Indenture, at a Redemption Price equal to the principal amount or Accreted Value of Series 2018 Bonds to be redeemed plus interest accrued thereon. If applicable, to the date fixed for redemption, without premium, from proceeds of insurance (including any title insurance), or condemnation awards permitted or required to be applied to such redemption under the Indenture; provided, that no Series 2018B-1 Bonds shall be redeemed pursuant to this subsection until no Senior Bonds remain Outstanding, that no Series 2018B-2 Bonds shall be redeemed pursuant to this subsection until no Senior Bonds and Series 2018B-1 Bonds remain Outstanding, and no Junior Bonds shall be redeemed pursuant to this subsection until no Senior Bonds and Subordinate Bonds remain Outstanding.

Mandatory Redemption Following a Determination of Taxability

The Series 2018 Bonds are subject to mandatory redemption following a Determination of Taxability at a Redemption Price equal to the principal amount or Accreted Value of the Series 2018 Bonds to be redeemed or ___% of said principal amount or Accreted Value if the redemption is prior to January 1, 20__ plus interest accrued thereon, if applicable, to the date fixed for redemption. A “Determination of Taxability” with respect to the Series 2018 Bonds shall occur upon receipt by the Trustee of a statutory notice of deficiency by the Internal Revenue Service, a ruling from the National Office of the Internal Revenue Service, or a final decision of a court of competent jurisdiction which holds in effect that interest payment on the Series 2018 Bonds is includable for federal income tax purposes in the gross income of an owner of any Series 2018 Bond; provided, however, that the Authority shall have an opportunity for no more than 180 days after receipt by the Trustee to contest any such statutory notice, ruling or final decision and that no such statutory notice, ruling or final decision shall be deemed a “Determination of Taxability” if the Authority is contesting the same during such 180-day period in good faith until the earliest of (i) abandonment of such contest by the Authority, (ii) the date on which such statutory notice, ruling or final decision becomes final, or (iii) the 181st day after the initial receipt by the Trustee of such statutory notice, ruling or final decision; and provided further that no Determination of Taxability shall arise from the interest on the Series 2018 Bonds being included (1) as a specific “tax preference” item for individual or corporate taxpayers in computing the alternative minimum tax; (2) in income for purposes of calculating alternative minimum taxable income of any corporation pursuant to Section 55 of the Code; (3) in a corporation’s modified alternative minimum taxable income for calculating the taxes imposed under the Superfund Amendments and Regulations Act of 1986; (4) in earnings and profits of branches of foreign corporations for purposes of calculating the “branch profits” tax; (5) within gross income of certain recipients of social security and railroad retirement benefits; (6) as passive investment income to certain subchapter S corporations that have subchapter C earnings and profits; or (7) as a result of changes to income tax rates or limitation on the maximum income tax rate for exclusion of interest. The Authority shall give written notice to the Trustee of any Determination of Taxability of which it has actual knowledge but shall have no liability for its failure to deliver such notice in a timely manner.

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Within 30 days after the Trustee receives notice from the Authority of a Determination of Taxability, the Trustee shall give written notice to the Authority stating the date upon which all Outstanding Series 2018 Bonds will be redeemed, which date shall be not less than 45 days nor more than 60 days subsequent to the date of said notice by the Trustee, and the Trustee shall make all necessary arrangements for giving the notice of redemption requirement pursuant to Section 4.05 hereof.

Neither the Authority nor any owner of the Series 2018 Bonds shall be required to contest or appeal any notice of deficiency, ruling, decision or legislative enactment which may give rise to a Determination of Taxability, and the expenses of any such contest or appeal shall be paid by the party initiating the contest or appeal (except, in the case of the Authority’s expenses, to the extent that provision for payment thereof shall be made from the Extraordinary Expense Fund).

Selection of Series 2018 Bonds to be Redeemed

If less than all of the Series 2018 Bonds subject to optional redemption are called for redemption, such redemption shall be applied first to the principal amount of all Outstanding Series 2018A-1 Bonds, then to the principal amount of all Outstanding Series 2018A-2 Bonds, then to the principal amount of all Outstanding Series 2018B-1 Bonds, then to the principal amount of all Outstanding Series 2018B-2 Bonds, then to the principal amount of all Outstanding Series 2018C Bonds, without differentiation by maturity or within a maturity. If less than all of the Series 2018 Bonds of a single maturity within the same Series are to be redeemed, the Series 2018 Bonds of such Series to be redeemed will be selected by lot; provided, that the portion of any Series 2018 Bond of a Series of a denomination greater than the minimum Authorized Denomination for the Series 2018 Bonds of such Series to be redeemed shall be redeemed in part only in an Authorized Denomination and that, in selecting portions of Series 2018 Bonds of a Series for redemption, the Trustee shall treat each Series 2018 Bond of such Series as representing that number of Series 2018 Bonds of the minimum Authorized Denomination for such Series which is obtained by dividing the principal amount of such Series 2018 Bond to be redeemed in part by the minimum Authorized Denomination for such Series.

Notice of Redemption

Notice of mandatory and optional redemption of Series 2018 Bonds shall be given as follows. When the Trustee shall have received from the Authority a Direction to redeem Series 2018 Bonds, the Trustee shall give notice, in the name of the Authority, of the redemption of such Series 2018 Bonds, which notice shall specify the Series and maturities of the Series 2018 Bonds to be redeemed, the Redemption Date and the place or places where amounts due upon such Redemption Date will be payable and, if less than all of the Series 2018 Bonds of any like Series and maturity are to be redeemed, the letters and numbers or other distinguishing marks of such Series 2018 Bonds so to be redeemed, and, in the case of Series 2018 Bonds to be redeemed in part only, such notices shall also specify the respective portions of the principal amounts thereof to be redeemed. Such notice shall further state that on such Redemption Date there shall become due and payable upon each Series 2018 Bond to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portions of the principal thereof, in the case of Series 2018 Bonds to be redeemed in part only, together with interest accrued to the Redemption Date, and that from and after such date interest thereon shall cease to accrue and be payable. The Trustee shall mail a copy of such notice, first class mail postage prepaid, not less than 30 days nor more than 60 days before the Redemption Date (or such shorter period as shall be provided by Supplemental Indenture), and to the Owners of any registered Series 2018 Bonds, or portions of registered Series 2018 Bonds that are to be redeemed, at their last addresses, if any, appearing upon the Register.

In addition to the notice of redemption required pursuant to the preceding paragraph, upon the Request of the Authority received at least 40 days before the date fixed for redemption, the Trustee shall also give redemption notice at least 30 days before the date fixed for redemption, by (i) registered or certified mail, return receipt requested, postage prepaid, (ii) telephonically confirmed facsimile transmission, or (iii) overnight delivery service, to the Securities Depositories and/or Information Services specified by the Authority.

The Authority may, at its option at least 5 days prior to the date fixed for redemption in any notice of redemption, rescind and cancel such notice of redemption by Request to the Trustee and the Trustee shall distribute,

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in the same manner as the original notice, notice of such cancellation to the recipients of the notice of redemption being cancelled.

Failure to give the notices described above, or any defects therein, shall not in any manner affect the validity of any proceedings for redemption of any other Series 2018 Bonds for which such notice has been duly given, or for the rescission of such redemption notice. Neither the Authority nor the Trustee shall have any responsibility for any defect in the CUSIP number that appears on any Series 2018 Bonds or in any redemption notice with respect thereto, and any such redemption notice may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Authority nor the Trustee shall be liable for any inaccuracy in such numbers.

Payment of Redeemed Series 2018 Bonds

Notice having been given in the manner provided above, the Series 2018 Bonds or portions thereof so called for redemption shall become due and payable on the Redemption Date so designated at the Redemption Price, plus interest accrued and unpaid to the Redemption Date, and upon presentation and surrender thereof at the office specified in such notice. If there shall be called for redemption less than all of the principal of any Series 2018 Bond, the Authority shall execute and the Trustee shall authenticate, upon the surrender of such Series 2018 Bond, without charge to the Owner thereof, for the unredeemed balance of the principal amount of the Series 2018 Bond so surrendered, Series 2018 Bonds of like Series and maturity in any Authorized Denomination. If, on the Redemption Date, moneys for the redemption of all the Series 2018 Bonds or portions thereof of any like Series and maturity to be redeemed, together with interest to the Redemption Date, shall be held by the Trustee so as to be available therefor on said date and if notice of redemption shall have been given as aforesaid, then, from and after the Redemption Date interest on the Series 2018 Bonds or portions thereof of such Series and maturity so called for redemption shall cease to accrue and become payable. If such moneys shall not be so available on the Redemption Date, such Series 2018 Bonds or portions thereof shall continue to bear interest until paid at the same rate as they would have borne interest at had they not been called for redemption.

Book-Entry-Only System

The DTC Bonds will be delivered in book-entry-only form. DTC will act as securities depository for the DTC Bonds. The DTC Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or other such name as may be requested by an authorized representative of DTC. One fully registered bond certificate will be issued for each series and each maturity within such series of the DTC Bonds, in the aggregate principal amount of such maturity, and will be held by the Trustee in accordance with DTC’s Fast Automated Securities Transfer program.

DTC is a limited purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions, in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts, thereby eliminating 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 Securities 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 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”). The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission.

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

To facilitate subsequent transfers, all DTC 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 DTC Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the DTC Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such DTC 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 DTC Bonds are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

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

Payments of principal of and interest on the DTC 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 detailed information from the Authority or the Trustee on payable dates 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 DTC Bonds 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 Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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

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

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Authority, the Underwriters and the Operator believe to be reliable, but none of the Authority, the Underwriters or the Operator takes responsibility for the accuracy thereof.

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None of the Authority, the Operator or the Trustee will have any responsibility or obligation to Direct Participants, Indirect Participants, or any Beneficial Owner with respect to (a) the accuracy of any records maintained by DTC, any Direct Participant, or any Indirect Participant; (b) any notice that is permitted or required to be given to the Owners of DTC Bonds under the Indenture; (c) the payment by DTC or any Direct Participant or Indirect Participant of any amount with respect to the principal or interest due with respect to the Owner of the DTC Bonds; (d) any consent given or other action taken by DTC as the Owner of DTC Bonds; or (e) any other matter regarding DTC.

Transfer and Exchange

The Series 2018A-1 Bonds and beneficial ownership interests therein are offered hereby only to “Qualified Institutional Buyers” as that term is defined under Rule 144A of the Securities and Exchange Commission, as promulgated under the Securities Act of 1933, as amended.

Initial purchasers shall execute and deliver an investor letter in form and substance satisfactory to the Authority, in substantially the form shown in Appendix J.

Subsequent transfers of the Series 2018A-1 Bonds are restricted to investors who are Qualified Institutional Buyers. The Series 2018A-1 Bonds will bear a legend to such effect.

PROJECT PARTICIPANTS

The Authority

Formation and Governance

In early 2010, both houses of the Wisconsin Legislature passed 2009 Wisconsin Act 205 (“Act 205”), which was signed into law by the Governor of the State of Wisconsin (the “State”) on April 21, 2010. Act 205 added Section 66.0304 to the Wisconsin Statutes (the “Statute”) authorizing two or more political subdivisions to create a commission to issue bonds under the Statute. Before an agreement for the creation of such a commission could take effect, Act 205 requires that such agreement be submitted to the Attorney General of the State of Wisconsin to determine whether the agreement is in proper form and compatible with the laws of the State. The Authority was formed upon execution of a Joint Exercise of Powers Agreement Relating to the Public Finance Authority dated as of June 30, 2010, as amended by an Amended and Restated Joint Exercise of Powers Agreement Relating to the Public Finance Authority dated September 28, 2010 (as amended and as may be further amended from time to time, the “Joint Exercise Agreement”) among Adams County, Wisconsin, Bayfield County, Wisconsin, Marathon County, Wisconsin, Waupaca County, Wisconsin and the City of Lancaster, Wisconsin (each a “Member” and, collectively, the “Members, “ which term shall include any political subdivision designated in the future as a “Member” of the Authority pursuant to the Joint Exercise Agreement). The Joint Exercise Agreement was approved by the Attorney General on September 30, 2010. The Statute also provides that only one commission may be formed thereunder.

Pursuant to the Statute, the Authority is a unit of government and a body corporate and politic separate and distinct from, and independent of, the State of Wisconsin and the Members. The Authority was established by local governments, primarily for local governments, for the public purpose of providing local governments a means to efficiently and reliably finance projects that benefit local governments, and nonprofit organizations and other eligible private borrowers in the State of Wisconsin and throughout the country.

Powers

Under the Statute, the Authority has all of the powers necessary or convenient to any of the purposes of Act 205, including, among other things, the power to acquire, buy, sell, lease, encumber, mortgage, hypothecate, pledge, assign, or transfer any property or interest in property that is located within or outside of the State and the power to issue bonds, notes or other obligations or refunding obligations to finance or refinance a project, make loans to, lease property from or to enter into agreements with a participant or other entity in connection with financing a project. The proceeds of bonds issued by the Authority may be used for a project in the State or any other state or territory of the United States, or outside the United States if a participating borrower is incorporated and maintains its principal

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place of business in the United States or its territories. The Statute defines “project” as any capital improvement, purchase of receivables, property, assets, commodities, bonds or other revenue streams or related assets, working capital program, or liability or other insurance program, located within or outside of the State.

Governing Body

The Joint Exercise Agreement provides for a Board of Directors of the Authority (the “Board”) consisting of seven directors (each a “Director” and collectively, the “Directors”), a majority of whom are required to be public officials or current or former employees of a political subdivision located in the State. The Directors serve staggered three-year terms. The Directors are selected by majority vote of the Board based upon nomination by the organization that nominated the predecessor Director. Four Directors are nominated by the Wisconsin Counties Association, and one Director is nominated from each of the National League of Cities, the National Association of Counties and the League of Wisconsin Municipalities (said organizations being sometimes referred to herein, collectively, as the “Sponsors”). Each of the Sponsors may also nominate an alternate Director for each Director it nominates to serve on the Board in the place of and in the absence or disability of a Director. Directors and alternate Directors may be removed and replaced at any time by the Board upon recommendation of the Sponsor that nominated such Director.

The Directors as of the date of this Official Statement are identified in the table below. There is currently one vacant Board seat (representing the nominee of the National League of Cities) and one Alternate Director (nominated by the Wisconsin Counties Association).

Name Title Position William Kacvinsky Chair Former Board Chair - Bayfield County, Wisconsin Jerome Wehrle Vice Chair Former Mayor - City of Lancaster, Wisconsin Heidi Dombrowski Treasurer Finance Director - Waupaca County, Wisconsin Alan Buechel Secretary County Executive - Fond du Lac County, Wisconsin Del Twidt Director Former Board Chair - Buffalo County, Wisconsin Michael Gillespie Director Former Chair - Madison County, Alabama Board of

Commissioners John West Alternate

Director** Board Chair - Adams County, Wisconsin

** Mr. West is an alternate for Directors Buechel, Dombrowski and Twidt.

The Authority has no employees and contracts with a full-service program management firm, GPM Municipal Advisors, LLC, to manage the day-to-day operations of the Authority including but not limited to staff and administrative support and ongoing compliance matters. All of these services provided by GPM Municipal Advisors, LLC are subject to review and approval by the Board.

GPM Municipal Advisors, LLC will also serve as the Authority's “designated agent” under the Management Agreement and will be authorized to take certain actions and give certain approvals thereunder on behalf of the Authority.

Approval

The Board adopted a Resolution approving the issuance of the Series 2018 Bonds on May 31, 2018.

Special Limited Obligations

THE SERIES 2018 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM GROSS OPERATING REVENUES AND OTHER FUNDS PLEDGED FOR THEIR PAYMENT PURSUANT TO THE INDENTURE AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY MEMBER (AS DEFINED HEREIN), ANY SPONSOR (AS DEFINED HEREIN), ANY AUTHORITY INDEMNIFIED PERSON (AS DEFINED IN THE INDENTURE), THE STATE, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018 BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE SERIES

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2018 BONDS ARE NOT A DEBT OF THE STATE OR ANY MEMBER AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018 BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2018 BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, ANY SPONSOR, THE STATE OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018 BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY OR OF ANY SPONSOR OR AUTHORITY INDEMNIFIED PERSON, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2018 BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

Other Obligations

The Authority has issued, sold and delivered in the past, and expects to issue, sell and deliver in the future, obligations other than the Series 2018 Bonds, which other obligations are and will be secured by instruments separate and apart from the Indenture and the Series 2018 Bonds. The holders of such obligations of the Authority will have no claim on the security for the Series 2018 Bonds, and the owners of the Series 2018 Bonds will have no claim on the security for such other obligations issued by the Authority.

Limited Involvement of the Authority

The Authority has not participated in the preparation of or reviewed any appraisal or any feasibility study or other financial analysis of the Project and has not undertaken to review or approve expenditures for the Project, to supervise the construction of the Project, or to review the projections for the Project.

The Authority has not participated in the preparation of or reviewed this Official Statement and is not responsible for any information contained herein, except for the information in this subsection and under the caption “LITIGATION - The Authority”.

The Operator

The Operator is a limited liability company, formed under the laws of the State of Delaware on December 21, 2011, and authorized to transact business in the State of Maryland. The Operator is a wholly-owned subsidiary of Maryland Proton Treatment Holdings, LLC, a Delaware limited liability company (“MPTH”). The Operator has been operating the Project since its opening in February 2016. The Operator, as the prior owner of the Project, developed and constructed the Project. See “APPENDIX A – THE PROJECT AND THE OPERATOR.”

University of Maryland Radiation Oncology Associates, P.A.

On January 9, 2012, the Operator entered into a Professional Services Agreement (the “Professional Services Agreement”) and a Clinical Management and Administrative Services Agreement (the “Clinical Management Agreement”) with University of Maryland Radiation Oncology Associates, P.A. (“UMROA”). UMROA is the clinical practice group and member of the faculty practice plan of the Department of Radiation Oncology of the University of Maryland’s School of Medicine. UMROA has six locations: (i) University of Maryland Medical Center in Baltimore, Maryland; (ii) Central Maryland Radiation Oncology in Columbia, Maryland, (iii) Tate Cancer Center at Baltimore Washington Medical Center in Glen Burnie, Maryland; (iv) Upper Chesapeake Health Patricia D. and M. Scot Kaufman Cancer Center in Bel Air, Maryland; (v) The University of Maryland Radiation Oncology Center at Union Hospital; and (vi) the Project. Under the Professional Services Agreement, UMROA provides certain physician staffing, coverage and professional medical services at the Project. See “PRINCIPAL PROJECT AGREEMENTS – Professional Services Agreement and – Clinical Management and Administrative Services Agreement” below.

The University of Maryland, Baltimore (“UMB”), the University of Maryland Faculty Physicians, Inc., and its affiliated clinical practices including but not limited to UMROA, are not obligated to pay or obligated to contribute to the principal, redemption price, if any, or premium, if any, of, or interest on the

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Series 2018 Bonds, and the Series 2018 Bonds are not a debt, liability, or obligation of UMB, the University of Maryland Faculty Physicians, Inc., or its affiliated clinical practices including but not limited to UMROA. In addition, none of UMB, the University of Maryland Faculty Physicians, Inc., or its affiliated clinical practices including but not limited to UMROA has participated in the preparation of this Official Statement and undertakes no responsibility for the accuracy or completeness of information in this Official Statement.

University of Maryland Medical System Corporation

The Operator is party to several agreements with University of Maryland Medical System Corporation (“UMMS”) including with respect to employee leasing and IT services. UMMS is a private, not-for-profit corporation formed in 1984 to provide health care services to Maryland residents. Together with its subsidiaries, UMMS owns and operates a multi-hospital regional health care delivery system that provides a wide range of health care services, including primary, secondary, tertiary and quaternary care, as well as rehabilitation, chronic care, sub-acute care and skilled nursing care. UMMS (directly or indirectly) operates thirteen (13) academic, community and specialty hospitals which are located throughout Maryland. The flagship hospital of the UMMS medical system is the University of Maryland Medical Center (“UMMC”), a 767-bed academic medical center located in downtown Baltimore, Maryland. The UMMC facilities, consisting of University Hospital, The University of Maryland Marlene and Stewart Greenebaum Comprehensive Cancer Center, and the R Adams Cowley Shock Trauma Center, collectively serve as the teaching hospital of the University of Maryland School of Medicine of UMB, a constituent institution of the University System of Maryland (“USM”). Neither USM nor UMB are part of the UMMS medical system. See “PRINCIPAL PROJECT AGREEMENTS – Employee Leasing Agreement” and “– Additional UMMS Agreements” below.

UMMS is not obligated to pay or obligated to contribute to the principal, redemption price, if any, or premium, if any, of, or interest on the Series 2018 Bonds, and the Series 2018 Bonds are not a debt, liability, or obligation of UMMS. In addition, UMMS has not participated in the preparation of this Official Statement and undertakes no responsibility for the accuracy or completeness of information in this Official Statement.

Physician Affiliation Agreements

The Operator is party to affiliation agreements with various medical practices which provide for certain physician staffing, coverage and professional medical services at the Project, including Radiation Oncology Associates, PC, MedStar-Georgetown Medical Center, Inc. d/b/a MedStar Georgetown University Hospital, WellSpan Medical Group, Chesapeake Oncology Hematology Associates, P.A., and University of Maryland Anesthesia Associates, P.A. See “PRINCIPAL PROJECT AGREEMENTS – Physician Affiliation Agreements” below.

Varian Medical Systems, Inc.

Varian Medical Systems, Inc. (“Varian”) is a worldwide manufacturer of medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy. The Operator contracted with Varian to provide the equipment, hardware, firmware and software for the Varian “ProBeam®” Proton Therapy System and related components (collectively, the “Proton System”), and to perform installation services for the Proton System at the Project. The Operator has also entered into a Proton System Operations and Maintenance Agreement with Varian (as amended to date, the “O&M Agreement”) pursuant to which Varian agreed to provide certain ongoing operations, maintenance and support services for the Proton System. See “PRINCIPAL PROJECT AGREEMENTS – Operations and Maintenance Agreement (Varian)” below.

Billing Management Consultant

The Operator and MMBC, LLC (“MMBC”) entered into a Billing Management and Consultant Services Agreement pursuant to which MMBC has agreed to provide billing and collection management services related to patient authorization and compliance services to the Operator. See “PRINCIPAL PROJECT AGREEMENTS – Billing Management and Consultant Services Agreement” below. MMBC was founded in 2004 as a medical management company that specializes exclusively in the field of radiation oncology medical practice management and billing consultant services. MMBC is a leading provider for proton therapy billing. MMBC is familiar with all

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aspects of the radiation oncology revenue cycle and its scope of services includes training and overseeing all areas that impact charge capture. MMBC works with staff at proton therapy centers to accurately code proton therapy procedures and maximize reimbursement and revenue collection. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

Feasibility Consultant

IHS Global, Inc. (the “Feasibility Consultant”) has prepared the Maryland Proton Treatment Center Feasibility Study (the “Feasibility Study”). The Feasibility Consultant’s team members have experience conducting feasibility studies on behalf of acute care hospitals and other health care providers, including proton treatment centers. Examples of previous studies can be found in the Feasibility Study.

The Feasibility Study analyzes certain technical and economic aspects of the Project and includes projections of revenues, expenses and debt service coverage for the Project during the period the Series 2018A-1 Bonds are expected to be outstanding as well as a proton therapy industry overview. The Feasibility Study is included in this Official Statement as APPENDIX B. The full report should be read in its entirety in order to evaluate the Feasibility Consultant’s estimates, opinions and conclusions.

PROTON THERAPY OVERVIEW

The information under this heading is attributable to the Feasibility Consultant. For more information relating to the proton therapy industry, see “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

Radiation therapy utilizes ionizing radiation, which leaves behind energy in the cells it passes through. High doses of radiation energy damage the genetic material inside DNA, preventing cells from repairing themselves. Damaging a cell’s DNA impairs its ability to divide, and while both normal and malignant cells have repair processes that can mend damaged DNA, the reparative abilities of malignant cells are often weaker. Therefore, they are more susceptible to cell death following ionization, which allows radiation therapy to induce selective cell death.

Proton beam therapy represents one of the latest in a series of enhancements in radiation therapy. Proton

beam therapy has the following advantages over conventional radiation therapy:

1. The Bragg Peak: Protons have a unique energy distribution profile, known as the Bragg Peak, which makes them ideal for use in radiation therapy. They enter the body at extremely high speeds, which means that tissues at the site of entry and along the path to the target are exposed to minimal radiation, and most of the protons’ energy is expended at the terminus of its path. A small amount of radiation dose is delivered 1-2 mm beyond the stopping point of the proton particle, beyond which point there is essentially no radiation dose, limiting any potential radiation damage to the tissues and organs behind the tumor (as depicted on the next page in Exhibit 1).

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Exhibit 1: Bragg Peak Dose Distribution

Source: Feasibility Study.

2. Increased control: The properties of proton therapy allow clinicians to deliver much higher doses with greater precision, potentially improving local tumor control. Increased control and precision is achieved by varying the velocity at which protons are launched into the body, which modifies the Bragg Peak and allows clinicians to contour the beam to the tumor (as depicted below in Exhibit 2).

Exhibit 2: Variance of Bragg Peak Depth

Source: Feasibility Study.

Due to the implications of less damage inflicted on tissues and organs in general, and more importantly to structures in close proximity to the target site, proton therapy is noted as being particularly suited for cases where limiting this damage is of great importance. A prime example is pediatric cancer patients, where limiting the exposure of still developing tissues and organs to unnecessary radiation is one of the highest priorities. In the same vein, the treatment is also well suited for cancers located in parts of the body where even the potential of damage is

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unacceptable, such as the brain, eye, head, neck, central nervous system as well as the breast, given its proximity to the heart.

In recognition of the potential benefits that proton beam therapy can bring, and tied to the expected general increase in demand for radiation therapy, the number of proton therapy centers globally and nationally has grown significantly. There are currently approximately 21 operating centers in Europe, 17 in Asia, one in Africa and 28 in the United States. An additional 12 U.S. centers are under construction or in the planning stages.

THE PROJECT

The Project is located at 850 West Baltimore Street in Baltimore, Maryland on the campus of the University of Maryland BioPark (the “BioPark”). The BioPark is adjacent to the University of Maryland’s Baltimore campus, as well as the University of Maryland’s School of Medicine and the University of Maryland Medical Center. The Project is a 110,000 square foot, purpose-built building with 40,000 square feet of radiation shielded space. The Project features a five (5) treatment room configuration, including four (4) rotational gantries, one (1) fixed beam room, a full diagnostic suite with magnetic resonance imaging, computer tomography, physician offices as well as research and development space for clinical research. All treatment rooms are equipped with the Varian Pro-Beam® System, including Pencil Beam Scanning, Intensity Modulated Proton Therapy and volumetric Image Guided Radiation technology. The Operator, as the prior owner of the Project, developed and constructed and has been operating the Project. The Project broke ground in April 2012 and treated its first patients in February 2016. The Project has the capacity to administer approximately 45,000 proton treatments per year, which translates to an estimated 1,500 patients per year. The Project is staffed with physicians and medical support personnel provided by UMROA. See “PRINCIPAL PROJECT AGREEMENTS,” “APPENDIX A – THE PROJECT AND THE OPERATOR” and “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

PRINCIPAL PROJECT AGREEMENTS

Ground Lease

The following is a summary of certain provisions of the Ground Lease pursuant to which the real property underlying the Project has been leased to the Authority by the Operator. This summary is not a complete recital of the terms of the Ground Lease and reference is made to the Ground Lease in its entirety. The form of the Ground Lease is available upon request.

Ground Lease Terms. Pursuant to the Ground Lease, the Operator has leased to the Authority the real property on which the building comprising the Project is located. The term of the Ground Lease is 80 years. The Ground Lease contains provisions (a) permitting the Operator to terminate the Ground Lease at any time after the 60th lease year, and (b) permitting the Authority to terminate the Ground Lease at any time after (i) the Bonds have been fully repaid and the Indenture is discharged, and (ii) the Leasehold Mortgage has been released.

Rent. On the commencement date of the Ground Lease, the Authority shall pay to the Operator the amount of $221,000,000. For each of the second through 80th lease years of the Ground Lease, the Authority shall pay to the Operator fixed rent in the amount of $1.00 per lease year, payable on the first day of each lease year. In addition to fixed rent, the Authority is responsible for all costs pertaining to the property and its operation and use, including all real estate taxes. Installments of fixed rent or additional rent past due for more than 5 business days are subject to an interest rate in an amount equal to the Prime Rate plus 6%, plus an administrative charge equal to 10% of the amount due.

Permitted Use. The premises may be used for any lawful purpose, including, without limitation, for a radiation therapy cancer treatment center and uses incidental thereto. The Ground Lease states that the Authority may discontinue operation of the premises at any time. However, please see “RISK FACTORS - Specialty Nature of Project” for information on a restrictive easement affecting the use of the premises.

Defaults and Remedies. The occurrence of any of the following will constitute a default by the Authority under the Ground Lease (each an “Event of Default”):

(a) If a monetary default occurs and continues for 90 days after notice from the Operator.

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(b) Failure to commence and diligently prosecute appropriate action to clear a prohibited lien from title, as specified in the Ground Lease, which failure continues for 90 days after notice from the Operator.

(c) If the Authority ceases to pay its debts as they become due or becomes subject to any bankruptcy proceeding, or if a custodian or trustee is appointed to take possession of substantially all of Authority’s assets or Authority’s interest in the Ground Lease.

(d) Failure to perform or comply with any of the other terms, covenants or conditions contained in the Ground Lease (a “Nonmonetary Default”), which Nonmonetary Default continues for 90 days after notice from the Operator; provided that if such Nonmonetary Default cannot be cured within 90 days, the Authority shall have such additional reasonable time, not to exceed 90 days, necessary to cure so long as the Authority is diligently pursuing the cure.

If an Event of Default occurs, the Operator may, in addition to its remedies available at law or in equity, pursue one or more of the following remedies:

(a) Following an additional 30 days’ notice, terminate the Authority’s right to possess the premises, in which case the Ground Lease shall terminate.

(b) Re-enter and take possession of the premises, with or without terminating the Ground Lease.

(c) Sue for damages or to recover rent.

(d) Change the locks and other security devices providing admittance to the premises.

(e) Recover from the Authority all damages the Operator incurs by reason of the Event of Default, including reasonable costs of recovering possession and reletting the premises.

Rights of Leasehold Mortgagees. If the Authority enters into any leasehold mortgage, and notice of such leasehold mortgage has been given to the Operator, the Operator agrees for the benefit of each leasehold mortgagee that:

(a) If a default occurs and the Authority does not cure such default within the applicable cure period, the Operator will give notice to the leasehold mortgagee (the “Cure Period Expiration Notice”). The leasehold mortgagee shall have the right to perform any obligation of the Authority to cure the default and may enter the premises and take any actions necessary to effect its cure rights, as more particularly set forth below.

(b) If the leasehold mortgagee cures a default the Ground Lease shall continue in full force and effect. The leasehold mortgage’s exercise of its cure rights shall not be deemed an assumption of the Ground Lease by the leasehold mortgagee.

(c) The Operator shall not exercise any of its remedies upon a default so long as the leasehold mortgagee’s cure period has not expired.

(d) In the event of termination of the Ground Lease for any reason, including a rejection of the Ground Lease in a bankruptcy proceeding, the Operator shall, at the leasehold mortgagee’s option, exercised within 10 business days after notice from the Operator, enter into a new lease with the leasehold mortgagee or its nominee for the remainder of the term of the Ground Lease. The new lease shall contain all of the same terms and provisions of the original Ground Lease.

Leasehold Mortgagee’s Cure Rights. If any default under the Ground Lease occurs, then a leasehold mortgagee shall have the same cure period, if any, available to the Authority under the Ground Lease, plus the additional time provided for below:

(a) In the case of (1) a monetary default or (2) a Nonmonetary Default that the leasehold mortgagee can reasonably cure without obtaining possession of the premises, the leasehold mortgagee shall have 60 days after receiving the Cure Period Expiration Notice.

(b) In the case of (1) a Nonmonetary Default that the leasehold mortgagee cannot reasonably cure without obtaining possession of the premises, or (2) any Authority-specific default that the leasehold mortgagee cannot reasonably cure:

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(i) The leasehold mortgagee shall have 60 days after receiving the Cure Period Expiration Notice to initiate proceedings to obtain control of the premises; and

(ii) The leasehold mortgagee shall have 60 days after obtaining control of the premises to cure the default, or an additional reasonable amount of time if the default cannot be cured within 60 days.

Encumbering Title. By deed of even date as the Ground Lease, the Operator shall convey its fee estate, subject to the Authority’s leasehold estate, in the premises to UMB Health Sciences Research Park Corporation (“RPC”). Such entity shall succeed to the interests of the Operator under the Ground Lease.

The Operator has agreed with FPI (hereinafter defined) pursuant to the FPI Letter of Intent (hereinafter defined) to use its best efforts to have RPC’s reversionary interest in the premises conveyed to FPI. The Ground Lease provides that until all Bonds have been fully repaid, the Indenture discharged and the Leasehold Mortgage has been released, RPC may not convey its interest in the premises without the Authority’s consent. The Operator intends to request such consent by the Authority subsequent to the closing of the Series 2018 Bonds. As of the date of this Official Statement, no such request has been made, and the Authority has not agreed to provide such consent.

Facility Operating Agreement

The Project will be operated by Maryland Proton Treatment Center, LLC (the “Operator”) pursuant to a Facility Operating Agreement, dated the date of issuance of the Series 2018A-1 Bonds, between the Authority and the Operator (the “Facility Operating Agreement”).

Operations. Except as otherwise expressly provided in the Facility Operating Agreement, and subject to and in compliance with the Bond Documents, during the Term (as hereinafter defined):

(a) the Operator will have the sole and exclusive authority to act on behalf of the Authority with respect to the operation, maintenance and management of the Project and shall have full, complete and exclusive responsibility to operate, maintain, manage and control the Project;

(b) except as expressly set forth in the Facility Operating Agreement, the Operator will make all decisions affecting the operation, maintenance and management of the Project; and

(c) except as expressly set forth in the Facility Operating Agreement, and except for expenditures relating to the Project incurred or accrued prior to the date of the Facility Operating Agreement (which expenditures shall be the Operator’s sole responsibility), to the extent the duties of the Operator require expenditures of funds to be paid to third parties, the Operator shall not have any obligation under the Facility Operating Agreement except to the extent that the Authority makes funds available to it for the performance of such duties, and nothing in the Facility Operating Agreement shall be deemed to authorize or require the Operator, in its capacity as such, to expend its individual funds for payment to third parties or to undertake any individual liability or obligation on behalf of the Authority.

The Operator is not and will not be authorized, by the provisions of the Facility Operating Agreement or otherwise, to (i) enter into any contract or agreement that is or purports to be in the Authority’s name, or amend or modify any such contract or agreement, or grant any waiver or forbearance thereunder, except as contemplated and in full compliance with the requirements of the Facility Operating Agreement; (ii) amend or modify, or grant any waiver or forbearance under the Ground Lease or any of the Bond Documents; (iii) commence, institute, defend, litigate, or settle any legal proceeding to which the Authority is a party (except with respect to its own interests); (iv) take any other action that it believes in good faith is inconsistent with the scope of its duties and obligations under the Facility Operating Agreement; or (v) represent or hold itself out as having the authority to do any of the foregoing.

Term. The term of the Facility Operating Agreement will commence on the date of issuance of the Series 2018 Bonds (the “Effective Date”) and terminate upon the eighteenth (18th) anniversary thereof (the “Initial Term”). Unless prior notice of termination is given in accordance with the terms of the Facility Operating Agreement, thereafter, the Facility Operating Agreement will automatically renew for a fifteen (15) year renewal term (the “Renewal Term” and collectively with the Initial Term, the “Term”). Either Party may terminate the Facility Operating Agreement in accordance with the terms of the Facility Operating Agreement.

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Operational Services. The Operator will, in accordance with (i) Applicable Law (for purposes of the Facility Operating Agreement, the term “Applicable Law” shall include but not be limited to Healthcare Laws, as defined in the Facility Operating Agreement); (ii) Permits; (iii) Industry Practices; and (iv) the requirements and standards set forth in the Ground Lease, the Bond Documents and the Assigned Authority Documents; and (v) other terms and provisions of the Facility Operating Agreement (collectively, the “Operator Standard”), promote, provide or arrange for all usual and customary services needed to operate, repair and maintain the Project, including all required physician services, staffing, billing, collection, service and maintenance, and daily financial and administrative activities as set forth more particularly in the Facility Operating Agreement.

Operating and Capital Budgets. The Operator will:

(a) on or prior to the Effective Date, submit to Designated Agent the initial operating plan and budget (in a form and substance reasonably acceptable to the Designated Agent) (the “Initial Operating Plan and Budget”) describing in detail the plans for the promotion, operation, repair and maintenance of the Project for the remainder of the Operating Year during which the Effective Date occurs, which shall also take into account the sale of any equipment; provided, however, that the sale of any equipment that is part of the Project for an amount in excess of $1,000,000 shall require the consent of the Authority unless otherwise contemplated in the Approved Operating Plan and Budget (as hereinafter defined) or Approved Capital Budget (as hereinafter defined); and

(b) not less than sixty (60) days prior to the start of each subsequent Operating Year, the Operator shall develop, prepare and submit to Designated Agent an annual proposed operating plan and budget and describing in detail the plans for the promotion and operation of the Project for the upcoming Operating Year and an annual proposed capital plan and budget describing in detail the plans for the repair and maintenance of the Project for the upcoming Operating Year (collectively, the “Proposed Budget”). The Proposed Budget shall also take into account the sale of any equipment; provided, however, that the sale of any equipment that is part of the Project for an amount in excess of $1,000,000 shall require the consent of the Authority unless otherwise contemplated in the Approved Operating Plan and Budget or Approved Capital Budget. The Proposed Budget must result in a Debt Service Coverage Ratio that is greater than the Debt Service Coverage Requirement. If the Proposed Budget does not result in a Debt Service Coverage Ratio that is greater than the Debt Service Coverage Requirement, the Operator shall also include with the Proposed Budget a detailed written explanation as to why the Operator has not budgeted to attain such ratio. Upon receipt of the Proposed Budget, the Designated Agent shall have the right to independently review and notify the Operator, as soon as possible, but in any event no later than within thirty (30) days if the Designated Agent objects to any part of the Proposed Budget. If the Designated Agent objects to any part of the Proposed Budget, the Operator will make reasonable efforts to revise the proposed plan and budget as requested by the Designated Agent. If the parties to the Facility Operating Agreement have not agreed on the Proposed Budget, or any portion thereof, within thirty (30) days after presentation of the Proposed Budget to the Designated Agent, until such time as the Proposed Budget has been approved in its entirety, all items comprising the Proposed Budget which have theretofore been agreed upon by the Designated Agent and the Operator shall be deemed part of the Approved Operating Plan and Budget and, with respect to those items which have not yet been agreed upon the Operator shall continue to operate the Project in accordance with the standards of operation and operating policies in effect during the preceding Operating Year. The final Proposed Budget submitted to the Designated Agent and to which the Designated Agent confirms in writing that it has no objection is referred to herein as, the “Approved Operating Plan and Budget” and the “Approved Capital Budget,” respectively.

Approved Operating Plan and Budget; Deviations; Emergency Expenditures.

(a) The Operator is authorized to pay, or cause a Revenue Contractor to pay, all Budgeted Operating Expenses set forth in the Approved Operating Plan and Budget using funds from the applicable Operating Account. The Operator shall operate the Project in a manner consistent with each Approved Operating Plan and Budget. Operator shall not exceed the Budgeted Operating Expenses in the Approved Operating Plans and Budget by more than ten percent (10%) in the aggregate, unless Operator obtains the prior written consent of the Designated Agent.

(b) If there is a deviation from the Budgeted Operating Expenses by more than ten percent (10%) in the aggregate, then, as part of the Operator’s Monthly Financial Report (as defined in the Facility Operating Agreement) that is delivered pursuant to the Facility Operating Agreement, the Operator shall include the Operator’s recommendations as to curing any current variance between actual expense and budgeted expense and preventing

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future variances in same, and, if necessary after making a full analysis of the cause of the variance and possible remedies, submit to the Designated Agent for its approval in accordance with the timing and procedures set forth herein a revised operating plan and budget for the remainder of such Operating Year.

(c) Upon the Operator’s determination, in the Operator’s reasonable discretion, that there exists an emergency that requires an immediate expenditure in excess of the amounts provided for in the Approved Operating Plan and Budget, the Operator is authorized to contract for and pay from its Project Operating Account and/or to submit to the Trustee a Request, seeking payment from the Liquidity Reserve Fund of such operating expenditures on an emergency basis in excess of the amounts provided for in the Approved Operating Plan and Budget, if it is necessary, in the reasonable judgment of the Operator, to prevent or correct any violation of or failure to comply with Applicable Law; to prevent or correct any condition that has resulted or could result in a Material Adverse Effect, excluding, however, Capital Expenses. Any such Liquidity Reserve Fund Request shall describe the cause of such emergency, the actions needed in connection with such emergency, and the cost of taking such actions. If the Operator disburses funds from the Project Operating Account for the purposes described in this paragraph, the Operator will submit to Trustee a Request from the Liquidity Reserve Fund to reimburse the Project Operating Account for the amount so disbursed; provided, that the Designated Agent has approved such Request prior to submission to the Trustee.

Approved Capital Budget; Deviations; Emergency Expenditures.

(a) The Operator shall request the Authority to direct the Trustee to make payment from the Repair and Replacement Fund under the Indenture for Furniture, Fixtures and Equipment (“FF&E”) and Capital Expenses included in the Approved Capital Budget. The Trustee will disburse funds from the Repair and Replacement Fund in accordance with the Indenture. The Operator shall not substantially deviate by more than ten percent (10%) in the aggregate from the aggregate budgeted FF&E and Capital Expenses included in the Approved Capital Budget, unless the Operator obtains the prior written consent of the Designated Agent.

(b) Upon the Operator’s determination, in the Operator’s reasonable discretion, that there exists an emergency that requires an immediate expenditure in excess of the amounts provided for in the Approved Capital Budget, the Operator is authorized to make payment from the Project Operating Account and/or to submit to the Trustee, seeking payment from the Liquidity Reserve Fund of capital expenditures on an emergency basis for repairs in excess of the amounts provided for in the Approved Capital Budget, if it is necessary, in the reasonable judgment of the Operator, to prevent imminent danger of damage to property or injury to persons. Any such request will describe the cause of such emergency, the repairs needed in connection with such emergency, and the cost of making such repairs. If the Operator disburses funds from the Project Operating Account for the purposes described in this paragraph, the Operator will submit to Trustee a Request for a disbursement from the Liquidity Reserve Fund to reimburse the Project Operating Account for the amount so disbursed; provided that the Designated Agent has approved such Request prior to submission to the Trustee.

Collection of Gross Revenues. Pursuant to the terms and conditions of the Bond Documents and the Facility Operating Agreement, the Operator will, and will cause each Revenue Contractor (if any) to:

(a) Collection Accounts. Deposit all payments that include amounts that are Gross Operating Revenues into a Collection Account, promptly but in any event no later than two (2) Business Days after receipt thereof. The Operator will cause amounts held in any Government Pay Collection Account, regardless of amount, to be swept on each Business Day into a Private Pay Collection Account.

(b) Project Operating Account. Establish an Operating Account (the “Project Operating Account”) and cause all amounts in the Private Pay Collection Accounts to be swept on each Business Day into the Project Operating Account and withdraw funds in the Project Operating Account to pay Operating Expenses, Professional Fee Revenues, and Excluded Taxes and Other Charges related to the Project; provided, that notwithstanding the foregoing, the Operator shall not make any payments out of the Project Operating Account except for expenditures specifically contemplated by the Approved Operating Plan and Budget or as otherwise expressly permitted under the terms of the Facility Operating Agreement and the Indenture.

(c) Perfected Security Interest. Cause each Private Pay Collection Account and the Project Operating Account to be subject to an “account control agreement” that provides for “control” (within the meaning of Section 9-104 or 9-106 of the applicable Uniform Commercial Code) of such Private Pay Collection Account and/or the Project Operating Account by the Collateral Agent and that permits the

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Operator or the applicable Revenue Contractor, prior to the Collateral Agent providing a notice of exclusive control, to direct the transfer of funds from such Private Pay Collection Account and/or the Project Operating Account in accordance with the requirements of the Facility Operating Agreement, the Bond Documents, the Assigned Authority Documents and the underlying contract between Operator and any such Revenue Contractor.

(d) Transfers to Revenue Fund. On the first Business Day of each month, transfer all amounts in the Project Operating Account in excess of $4,700,000.00 (measured as of the last Business Day of the preceding month) to the Trustee for deposit in the Revenue Fund and application in accordance with the Indenture.

Restrictive Covenants; Exclusive Dealings. The Facility Operating Agreement contains the following restrictive covenants (clauses (a), (b), (c) and (d) below are collectively, the “Restrictive Covenants”):

(a) during the Restricted Period (as defined below), neither the Operator, nor any Affiliate, shall directly or indirectly through an Affiliate or otherwise, as sole proprietor, corporation, partner, member, employee, shareholder, principal, agent, consultant, operator, advisor, director, officer, control person, operator, or in any other capacity or manner whatsoever:

(1) engage in the business of developing or constructing (or assist another Person in the development or construction of) a Proton Beam Therapy Center (as defined below), in whole or in part, in the Restricted Territory (as defined below); or own (beneficially or of record), Control (as defined below) or have any interest whatsoever (including as an equity holder, lender or otherwise) in any enterprise that shall engage in the activities set forth in this clause (1); or

(2) own, manage, lease, operate, Control or participate in any manner in the ownership, management, leasing, operation or Control of, or have any financial interest in, or aid or assist anyone else in the conduct of (including through the provision of clinical or consulting services to) any Proton Beam Therapy Center, in the Restricted Territory; or own (beneficially or of record), Control or have any interest whatsoever (including as an equity holder, lender or otherwise) in any enterprise that shall engage in the activities set forth in this clause (2).

(b) during the Restricted Period, the Operator shall not recruit, hire or solicit the services of any employee, consultant, independent contractor, provider, or other individual or entity who or which renders services to the Authority, its successors and assigns, or any of the Authority’s Affiliates, related to the management, use or operation of the Project, for the Operator’s own benefit or for the benefit of any other person or entity.

(c) during the Restricted Period, the Operator shall not permit any physician to own (beneficially or of record), Control or have any equity interest whatsoever in the Operator unless the Operator is at such time a publicly-traded company and no Physician owns or Controls more than five percent (5%) of the equity of the Operator.

(d) without limiting the provisions of subparagraphs (a) – (c), above, during the Restricted Period, the Operator will limit its commercial dealings within the Restricted Territory with respect to any of activities described below exclusively through the Authority:

(1) engaging in the business of developing or constructing (or assisting another Person in the development or construction of) a Proton Beam Therapy Center, in whole or in part; or owning (beneficially or of record), Controlling or having any interest whatsoever (including as an equity holder, lender or otherwise) in any enterprise that shall engage in the activities set forth in this clause (1); or

(2) owning, managing, leasing, operating, Controlling or participating in any manner in the ownership, management, leasing, operation or Control of, or having any financial interest in, or aiding or assisting anyone else in the conduct of (including through the provision of clinical or consulting services to) any Proton Beam Therapy Center; or owning (beneficially or of record), Controlling or having any interest whatsoever (including as an equity holder, lender or otherwise) in any enterprise that shall engage in the activities set forth in this clause (2).

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In the event of any violation any of the Restrictive Covenants, the Authority is entitled to preliminary and permanent injunctive relief restraining any such violation of any or all of the Restrictive Covenants either directly or indirectly, from any court of competent jurisdiction, without proof of actual damages, and without the need to post any bond, and such right of the Authority will be cumulative and in addition to any other remedy which the Authority may desire or seek.

Restrictive Covenant Definitions:

(1) “Control” with respect to a Person, means, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.

(2) “Restricted Territory” means any location within a 40-mile radius of the Project.

(3) “Proton Beam Therapy Center” means a radiation treatment facility at which proton beam therapy is offered to patients, whether in the form of a multi-room, one-room or two-room facility, and whether in the form of a separate stand-alone building or included in existing infrastructure of a hospital or other healthcare facility.

(4) “Restricted Period” means the term of the Facility Operating Agreement plus three (3) years.

Operator’s Compensation. For services rendered in managing the Project in accordance with and subject to the terms of the Facility Operating Agreement, the Operator will be paid the scheduled fees set forth in the Facility Operating Agreement which such fees are subject to annual increases (such fees are collectively referred to herein as, the “Operator Fees”). Except as set forth in the Facility Operating Agreement with respect to the Operator’s incentive bonus, Operator Fees are an Operating Expense and are payable in monthly increments from funds available in the Project Operating Account, to the extent and in the manner specified in the Indenture. The Operator Fee is the exclusive basis for payments to the Operator, and the Operator will not be entitled to any additional or further payments for the services to be rendered by the Operator pursuant to the Facility Operating Agreement or to the reimbursement of any costs incurred by the Operator in performing any of its obligations under the Facility Operating Agreement except as expressly provided in the Facility Operating Agreement. The Operator will not be excused from the performance of any or all of the Operational Services under the Facility Operating Agreement to the extent that funds are not available for payment of the Operator Fees in accordance with the terms under the Facility Operating Agreement and under the Indenture; rather, in such event, Operator’s sole remedy shall be termination of the Facility Operating Agreement for cause as described below.

To the extent that funds are not available for payment of the Operator Fee in accordance with the terms under the Facility Operating Agreement and under the Indenture, the Operator Fee shall remain due and owing to the Operator and the due but unpaid Operator Fee shall bear interest at a rate of 17%, compounded annually (collectively, the “Unpaid Operator Fee”). Interest shall be payable by the Authority to the Operator annually in arrears on each January 1, in accordance with the payment provisions of the Indenture. The Authority shall pay any Unpaid Operator Fee (including the Subordinated Operator Fee as described in the Facility Operating Agreement), including accrued interest, no later than the fifth (5th) anniversary of the date originally due from the Liquidity Reserve Fund or the Operator Fee Fund to the extent and in the manner specified in the Indenture.

Termination for Cause.

By Authority. The Facility Operating Agreement may be terminated upon the occurrence of an Operator Termination Default (as defined below) at any time during the Term by the Authority by delivery of a written termination notice (an “8.01(a) Termination Notice”) to the Operator. The Operator shall notify the Authority, the Collateral Agent and the Trustee immediately upon discovering any Operator Termination Default or any Section 11.03 Default (as defined in the Facility Operating Agreement). The 8.01(a) Termination Notice will be effective on the third (3rd) Business Day following delivery of the 8.01(a) Termination Notice to the Operator (such effective date, or any other effective date of termination of the Facility Operating Agreement, is referred to herein as the “Termination Date”); provided, that such termination or a termination for convenience as described below will not become effective sooner than the date that the Operator and the Authority have complied with the requirements of Applicable Law and Permits necessary to transition a successor operator. “Operator Termination Default” means the occurrence of any of the following:

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(1) the Operator’s willful misconduct, fraud or criminal activity in the performance by the Operator of its duties and obligations under the Facility Operating Agreement or in the performance of any services provided by the Operator under the Facility Operating Agreement;

(2) the indictment of any of the Operator’s directors, managers, or executive officers for a criminal offense materially related to the Operator or its business and/or operations; or;

(3) the Operator’s failure to comply in all material respects with Applicable Law and Permits, unless the Operator is appealing such alleged violation in good faith and by appropriate proceedings;

(4) the Operator’s failure to comply with the provisions of the Facility Operating Agreement with respect to change of control;

(5) the Operator’s failure to cure any default by the Operator of any of its material obligations under the Facility Operating Agreement within forty (45) days after written notice of such default has been given by the Designated Agent to the Operator (and such notice of default must reasonably specify the alleged material breach); provided, however, that if a particular default cannot reasonably be cured within a forty-five(45) day cure period, the Operator shall have an additional thirty (30) days to cure any such default so long as the Operator begins to cure promptly after receiving notice of the default from the Authority;

(6) any representation, warranty, certification or statement made by the Operator in the Facility Operating Agreement or the Asset Purchase Agreement or which is contained in any report, certificate or other document furnished by it at any time under or in connection with the Facility Operating Agreement or the Asset Purchase Agreement shall prove to have been untrue, incorrect, or misleading in any material respect on or as of the date made; for avoidance of doubt, failure of the Project to attain operating performance described in any projections for the Project provided to the Authority by the Operator shall not be considered to be included in this clause (6);

(7) the Operator (i) makes a general assignment for the benefit of creditors or third parties; (ii) files in any court a petition in bankruptcy, or insolvency, or for a reorganization, or for the appointment of a receiver or trustee of all or a substantial part of its property; commences or consents to any case, proceeding, or other action (A) seeking reorganization, arrangement, adjustment, liquidation, dissolution, or composition of the Operator or the Operator’s debts under any Applicable Law relating to bankruptcy, insolvency, reorganization, or relief of debts, or (B) seeking appointment of a receiver, trustee, or similar official for the Operator or for all or any part of the Operator’s property;

(8) any case, proceeding, or other action against the Operator is commenced (i) seeking to have an order for relief entered against the Operator as debtor, (ii) seeking reorganization, arrangement, adjustment, liquidation, dissolution, or composition of the Operator or the Operator’s debts under any Applicable Law relating to bankruptcy, insolvency, reorganization, or relief of debtors, or (iii) seeking appointment of a receiver, trustee, or similar official for the Operator or for all or any part of the Operator’s property, and any such case, proceeding or other action shall not be dismissed within ninety (90) days after filing;

(9) the Authority receives notice from the Trustee under the Indenture setting forth its intention to exercise its default remedies under the Indenture in response to a material default under such Indenture that has occurred as a result of an act or omission by the Operator and the Operator fails to cure such default within any cure period set forth in the Indenture;

(10) any breach of or material inaccuracy in any representation or warranty made by the Operator in the Facility Operating Agreement or in any other document, instrument, certificate or agreement delivered or entered into in connection with the Facility Operating Agreement or the transactions referenced in the Facility Operating Agreement (regardless of whether the Authority is a party to or addressee thereto or thereof);

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(11) the Operator commits any act of negligence that, individually or in combination with any other act of negligence, has a Material Adverse Effect on the business or operations of the Project;

(12) termination of the Ground Lease; or

(13) an event of default or a breach of any material obligation of the Operator has occurred and is continuing (beyond any applicable grace period) under any Material Contract (as defined in the Facility Operating Agreement).

By Operator. The Facility Operating Agreement may be terminated upon the occurrence of an Owner Default (as defined below) at any time during the Term by the Operator by delivery of a written termination notice to the Authority and Trustee and the Authority’s or Trustee’s failure to cure such Owner Default within thirty (30) days from receipt of such notice. “Owner Default” means the occurrence and continuation of any of the following to the extent that funds under the priority of payments in the Indenture are available therefor: the Trustee, having received a written request therefor approved by the Designated Agent and made in accordance with the Facility Operating Agreement, fails to pay (i)(A) within ten (10) Business Days after the date such payment is to be made under the Indenture, any Operator Fee, or (B) on or before the later of ten (10) Business Days after the date such payment is to be made under the Indenture or the date on which any such payment is due to a third party, any Request submitted in accordance in accordance with the Indenture; or (ii) the Authority fails to comply in all material respects with its obligations under the Facility Operating Agreement.

Other; Automatic Termination. The Facility Operating Agreement will automatically be terminated upon the occurrence of any of the following:

(1) the Authority’s Transfer of the Project, except a Transfer (as defined in the Facility Operating Agreement) made at the direction of the Controlling Party;

(2) at the Direction of the Controlling Party, a payment default on the Bonds has occurred and is continuing, and the Controlling Party has identified a successor operator acceptable to the Authority; or

(3) a prepayment of the Bonds has occurred in accordance with the terms of the Bond Documents and the Ground Lease has terminated in accordance with its terms.

Termination for Convenience. Either the Operator or the Authority may, subject to the terms and conditions in the Facility Operating Agreement, terminate the Facility Operating Agreement upon written notice to the other at least three (3) months but not more than nine (9) months prior to the expiration of the then current Term, with such termination to be effective at the expiration of the then current Term.

See “APPENDIX G – PROPOSED FORM OF THE FACILITY OPERATING AGREEMENT.”

Professional Services Agreement

General. The Operator and UMROA are parties to that certain Professional Services Agreement dated as of January 9, 2012 (as amended by that certain Amendment to Professional Services Agreement effective on May 7, 2015 and as otherwise amended from time to time, the “Professional Services Agreement”), under which UMROA provides certain physician staffing, coverage and professional medical services at the Project.

Services & Staffing. UMROA shall provide physicians who are employed by, or otherwise affiliated with, UMROA to provide radiation oncology services using proton beam to the patients at the Project (the “Services”). UMROA shall provide the Services on all days except Sundays and certain holidays up to sixteen (16) hours per day, contingent on the volume of patients at the Project, based on staffing guidelines provided in the Professional Services Agreement. UMROA shall make available a sufficient number of physicians to ensure that all Services furnished by UMROA are provided promptly and efficiently. All faculty clinicians in the Department of Radiation Oncology who meet the licensing and other criteria outlined in the Professional Services Agreement will be deemed acceptable to provide Services under the Professional Services Agreement.

Compensation. Base Compensation to UMROA varies and is calculated based on factors including the number of physicians and number of patients treated each day at an agreed Per FTE Amount established annually for the twelve (12) month period beginning July 1 and ending on June 30 (each, a “Measurement Period”).

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UMROA shall submit an invoice to the Operator by the tenth (10th) day of each month for the Base Compensation of services provided during the previous month, which shall be payable not later than forty-five (45) days after receipt thereof. Any non-UMROA physicians providing Services at the Project shall be paid directly by the Operator. In addition to Base Compensation, UMROA shall be eligible to receive an Incentive Compensation payment for each Measurement Period, calculated as set forth in the Professional Services Agreement. Any such Incentive Compensation shall be paid within one hundred twenty (120) days following the end of each Measurement Period and shall be accompanied by a schedule reflecting the Operator’s calculation of the Incentive Compensation. Interest on all overdue payments shall accrue daily at a rate equal to the higher of either percent (8%) or the judgment rate in Maryland.

Exclusivity; Non-Solicitation and Non-Compete Covenants. UMROA has the exclusive right to provide physician staffing for proton beam therapy coverage to the Operator, provided that UMROA may determine, in its sole discretion if other qualified physicians shall also be allowed to provide Services at the Project. The Professional Services Agreement includes (i) a non-solicitation of patients covenant by UMROA in favor of the Project, (ii) a non-solicitation of physicians and certain other employees covenant by the Operator in favor of UMROA, (iii) a non-solicitation of managed care organizations covenant by both parties in favor of the other and (iv) non-compete covenants by both parties in the construction, operation, leasing, franchising, managing, investing or otherwise providing services at/to a proton beam therapy treatment center located in Maryland, Delaware or certain cities in Virginia.

Term. The Professional Services Agreement commenced on December 22, 2015 and continues for a term of twenty (20) years plus the balance of months to the end of the then-current academic year (June 30) (the “Initial Term”). Upon expiration of the Initial Term or any subsequent term, the Professional Services Agreement shall renew automatically for a successive additional five (5) year period unless the parties mutually agree in writing to terminate the Professional Services Agreement.

Termination. The Professional Services Agreement shall automatically terminate upon the termination of the CMASA (hereinafter defined), unless the parties otherwise agree in writing. Either party may terminate the Professional Services Agreement, subject to a thirty (30) day cure period after the defaulting party has been informed of such default in writing, if (i) the other party is adjudicated bankrupt, has an order for relief thereunder entered against it or is in receivership and such judgment is not vacated within thirty (30) days; (ii) the other party is liquidated or dissolved, begins proceedings towards liquidating or dissolution or has filed against it a petition for liquidation or dissolution and such proceeding is not dismissed within thirty (30) days; (iii) the other party permits the sale or divestiture of substantially all of its assets; (iv) the other party fails to observe or perform any material term, covenant, agreement or condition of the Professional Services Agreement; (v) the other party assigns or attempts to assign, subcontract, delegate or transfer its rights and obligations under the CMASA without the prior written agreement of the other party; (vi) there occurs the non-appealable completion of any formal criminal proceedings or civil exclusion proceedings, resulting in criminal liability or exclusion from government programs against either party, or their respective officers or directors, by any governmental agency having jurisdiction over matters concerning Medicare and Medicaid fraud and abuse, including federal or state patient self-referral prohibitions, anti-kickback and false claims statutes; or (vii) the failure of UMROA to be affiliated with the University of Maryland School of Medicine. Termination shall not eliminate any rights and obligations that continue under the terms of the Professional Services Agreement, those accruing prior to the date of termination and those arising by reason of breach or default due to such termination. Upon termination, the Operator shall pay UMROA the pro rata share of any Base Compensation or Incentive Compensation earned by UMROA prior to the date of termination.

Insurance. The Operator and UMROA are both responsible for obtaining and maintaining worker’s compensation coverage covering their respective employees at the Project in amounts that are not less than the amounts required under applicable law. UMROA is responsible for obtaining and maintaining professional liability insurance covering the Services rendered by each UMROA physician under the Professional Services Agreement, at UMROA’s sole cost and expense, with coverage in the minimum amounts of one million dollars ($1,000,000) per occurrence and three million dollars ($3,000,000) annual aggregate. The Operator is responsible for obtaining and maintaining (i) professional liability insurance covering the Services rendered at the Project by the Operator’s employees, at the Operator’s sole cost and expense, with coverage in the minimum amounts of one million dollars ($1,000,000) per occurrence and three million dollars ($3,000,000) annual aggregate; (ii) general comprehensive liability insurance on the Operator’s facilities on an occurrence form with coverage in the minimum amounts of one million dollars ($1,000,000) per occurrence and three million dollars ($3,000,000) annual aggregate; and (iii)

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umbrella liability insurance with coverage in the minimum amounts of four million dollars ($4,000,000) per claim and aggregate as well as appropriate levels of coverage under other standard and normal business insurance policies to include employment practices liability, directors and officers liability, fiduciary, and crime/employee theft. In addition, the Operator shall require each contractor performing work at the Project to maintain insurance coverage comparable to the foregoing requirements.

Clinical Management and Administrative Services Agreement

General. The Operator and UMROA are parties to that certain Clinical Management and Administrative Services Agreement dated as of January 9, 2012 (as supplemented by Addendum No. 1 dated as of January 9, 2012 and as amended from time to time, the “CMASA”), under which UMROA provides an Executive Director and Medical Director for the Project in addition to certain other clinical, administrative management, and staffing services.

Executive Director. UMROA shall recommend and the Operator shall appoint an Executive Director for the Project. In addition to the requirements and responsibilities set forth in the CMASA, the Executive Director shall perform the responsibilities of an “administrator of a Major Medical Equipment Facility pursuant to the Code of Maryland Regulations title 10, subtitle 05, sections 10.05.01 and 10.05.03 (or successor provisions), shall oversee the activities of the Medical Director (described below), and shall participate on the Joint Operating Committee (described below). The Operator shall have the right to replace the Executive Director upon prior written notice to UMROA, subject to UMROA’s right to recommend a replacement and further subject to a thirty (30) period for UMROA to correct any deficiencies. In addition, upon the occurrence of certain specified events, the Executive Director shall be immediately removed and UMROA shall recommend a substitute Executive Director in a reasonable and timely manner. See “Appendix A – THE PROJECT AND THE OPERATOR – THE OPERATOR – Biographies of Key Personnel.”

Medical Director. UMROA shall appoint a Medical Director approved by the Operator, which shall be either the Chair or President of UMROA or the Chair’s designee and shall be an employee of UMROA. In addition to the requirements and responsibilities set forth in the CMASA, the Medical Director shall have the authority to approve, direct and provide oversight, evaluate and set standards for the providers practicing at the Project, and shall report to the Executive Director. The Operator shall have the right to require UMROA to replace the Medical Director, subject to a thirty (30) period for UMROA to correct any deficiencies. In addition, upon the occurrence of certain specified events, the Medical Director shall be immediately removed and UMROA shall provide a substitute Medical Director in a reasonable and timely manner. See “Appendix A – THE PROJECT AND THE OPERATOR – THE OPERATOR – Biographies of Key Personnel.”

Additional UMROA Responsibilities. In addition to recommending the Executive Director and appointing the Medical Director, UMROA is responsible for (i) establishing, implementing and managing clinical operating policies and procedures for the Project in consultation with the Joint Operating Committee (described below); (ii) making recommendations to the Joint Operating Committee on matters relating to the budget, personnel, equipment, strategies and annual performance goals; (iii) maintaining continued oversight and supervision of the professional performance of all physicians practicing in the Project; (iv) providing ongoing reviews of the Project’s management and conducting quality and service improvement activities; (v) participating in the recruitment process for all clinical support staff; (vi) supervising physicians, physicists, physician extenders and clinical support staff; (vii) assuring that all clinical staff required to maintain licensure are licensed with the State of Maryland; (viii) distributing and managing the workload of professional services physicians at the Project; (ix) assisting and cooperating with the Operator in its preparation for investigations and audits; (x) cooperating with the Operator’s third party billing agency; (xi) ensuring that reports concerning clinical services are transcribed and signed within thirty (30) calendar days; (xii) promoting communication by physicians providing services at the Project with referring physicians on a regular basis; (xiii) cooperating with, reporting to, and providing certain information to the Joint Operating Committee; and (xiv) all professional activities of the Project with attention to all matters affecting patient care, personnel safety precautions, supplies, standing orders and techniques. UMROA shall not be responsible for providing or paying the costs of non-physician personnel needed to staff the Project.

Operator Responsibilities. The Operator shall provide, or engage for one or more third parties to provide, all support services reasonable necessary or appropriate for operation of the Project, at the Operator’s expense.

Compensation. In consideration of UMROA’s provision of clinical management and administrative services, the Operator shall pay a Management Fee, which includes an hourly fee and an overhead charge as set

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forth in the CMASA. UMROA shall submit an invoice to the Operator by the tenth (10th) day of each month for the Management Fee (including hourly fees and any overhead charge) provided during the previous month, including information as detailed in the CMASA. Management Fee payments are due forty-five (45) days after receipt of the applicable invoice. In addition, the Operator shall pay a performance incentive payment of up to ten percent (10%) of the Management Fee, based on UMROA’s level of achievement of the performance measures set forth in the CMASA during each one (1) year period ending on June 30 (the “Measurement Period”). The performance incentive payment (if any) shall be payable within one hundred twenty (120) days following end of each Measurement Period. Interest on overdue payments shall accrue daily at a rate equal to the higher of either percent (8%) or the judgment rate in Maryland. The Management Fee and the performance incentive payment may be periodically adjusted to provide compensation on commercially reasonable terms consistent with fair market value as set forth in the CMASA. The Executive Director and the Medical Director are employees of UMROA, and not of the Operator, and UMROA is an independent contractor of the Operator.

Practice Name/Logo. The Operator may not use the name “University of Maryland Radiation Oncology Associates, P.C.” or UMROA’s logo marks or the likeness of any of UMROA’s staff without UMROA’s prior written approval.

Non-Solicitation Covenants. The CMASA includes (i) a non-solicitation of certain employees covenant by each party in favor of the other and (ii) a non-compete by the Executive Director and Medical Director in providing management, supervisory, professional or other services at a proton beam therapy treatment center located in or doing business in Maryland, Delaware or certain cities in Virginia.

Joint Operating Committee. A Joint Operating Committee shall be responsible for developing planning objectives and for the consideration and approval of all recommendations made by the Executive Director regarding the operation of the Project. The Joint Operating Committee shall also make recommendations to the Operator and UMROA for the general governance and management of the Project. The Joint Operating Committee shall consist of four (4) members, with two (2) of the members to be appointed by the Operator in its sole discretion and two (2) members to be appointed by UMROA in its sole discretion. Meetings of the Joint Operating Committee shall occur at least once every fiscal quarter or more often as mutually agreed by the Operator and UMROA. A quorum for a meeting of the Joint Operating Committee shall be the presence of a simple majority of the members, provided at least one member appointed by the Operator and one member appointed by UMROA is present and participating throughout the meeting. Any action of the Joint Operating Committee shall require the approval of a majority of the members present at a meeting at which a quorum is present, including the affirmative vote of at least one representative from each of the Operator and UMROA. The following issues shall require the approval of the Joint Operating Committee: (i) any change in the scope of services to be provided at the Project; (ii) any change in the types of providers required for coverage at the Project; (iii) recommendation of the budgets of the Project; (iv) recommendation of expenditures in excess of ten percent (10%) over budgeted amounts; (v) recommendation as to the schedule of fees and all credit and collection policies of the Project; (vi) changes to the Clinical Staffing Guidelines attached to the CMASA; (vii) development of planning objectives, management and fiscal policies for the overall operation of the Project; (viii) setting billing rates and all charges for professional/clinical services at the Project; (ix) approval of terms of any payor contracts; and (x) approval of specific goals within the performance measure categories provided in the CMASA. With respect to matters which constitute the practice of medicine, UMROA shall consult with the Joint Operating Committee; however, the Joint Operating Committee’s approval shall not be required for any matter that constitutes the exercise of medical judgment, and UMROA shall have the final authority to determine selection, hiring and firing of physicians and allied health professionals. The following matters will require the Operator’s prior written consent: (x) capital expenditures; (y) the incurrence of indebtedness or encumbrance relating to the Project outside the ordinary course of business; and (z) all matters required to be determined by the Operator pursuant to its license as a Freestanding Major Medical Equipment Facility under Maryland law.

Term. The CMASA commenced on December 22, 2015 and continues for twenty (20) years plus the balance of the months that extend to the end of the then-current academic year (June 30) (the “Initial Term”). Upon expiration of the Initial Term or any subsequent term, the CMASA shall renew automatically for a successive additional five (5) year period, unless the parties mutually agree in writing to terminate the CMASA.

Termination. Either party may terminate the CMASA, subject to a thirty (30) day cure period after the defaulting party has been informed of such default in writing, if (i) the other party is adjudicated bankrupt, has an order for relief thereunder entered against it or is in receivership and such judgment is not vacated within thirty (30)

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days; (ii) the other party is liquidated or dissolved, begins proceedings towards liquidating or dissolution or has filed against it a petition for liquidation or dissolution and such proceeding is not dismissed within thirty (30) days; (iii) the other party permits the sale or divestiture of substantially all of its assets; (iv) the other party fails to observe or perform any material term, covenant, agreement or condition of the CMASA; (v) the other party assigns or attempts to assign, subcontract, delegate or transfer its rights and obligations under the CMASA without the prior written agreement of the other party; (vi) there occurs the non-appealable completion of any formal criminal proceedings or civil exclusion proceedings, resulting in criminal liability or exclusion from government programs against either party, or their respective officers or directors, by any governmental agency having jurisdiction over matters concerning Medicare and Medicaid fraud and abuse, including federal or state patient self-referral prohibitions, anti-kickback and false claims statutes; or (vii) the failure of UMROA to be affiliated with the University of Maryland School of Medicine. Termination shall not eliminate any rights and obligations that continue under the terms of the CMASA, those accruing prior to the date of termination and those arising by reason of breach or default due to such termination. Upon termination, the Operator shall pay UMROA the pro rata share of any Management Fee earned by UMROA prior to the date of termination.

Insurance. The Operator and UMROA are both responsible for obtaining and maintaining worker’s compensation coverage covering their respective employees at the Project in amounts that are not less than the amounts required under applicable law. UMROA is responsible for obtaining and maintaining professional liability insurance for the Executive Director and the Medical Director, at UMROA’s sole cost and expense, with coverage in the minimum amounts of one million dollars ($1,000,000) per occurrence and three million dollars ($3,000,000) annual aggregate. The Operator is responsible for obtaining and maintaining (i) professional liability insurance for its employees, at the Operator’s sole cost and expense, with coverage in the minimum amounts of one million dollars ($1,000,000) per occurrence and three million dollars ($3,000,000) annual aggregate; (ii) general comprehensive liability insurance on the Operator’s facilities on an occurrence form with coverage in the minimum amounts of one million dollars ($1,000,000) per occurrence and three million dollars ($3,000,000) annual aggregate; and (iii) umbrella liability insurance with coverage in the minimum amounts of four million dollars ($4,000,000) per claim and aggregate as well as appropriate levels of coverage under other standard and normal business insurance policies to include employment practices liability, directors and officers liability, fiduciary, and crime/employee theft. In addition, the Operator shall require each contractor performing work at the Project to maintain insurance coverage comparable to the foregoing requirements.

Operations and Maintenance Agreement (Varian)

General. The Operator and Varian are parties to that certain Proton System Operations and Maintenance Agreement dated as of July 24, 2012 (as amended by that certain Amendment 1 to the Proton System Operations and Maintenance Agreement dated as of March 10, 2015, that certain Amendment 2 to the Proton System Operations and Maintenance Agreement dated as of February 1, 2018 and as further amended from time to time, the “O&M Agreement”), which was executed in connection with that certain Proton System Purchase Agreement dated as of June 30, 2011 (as amended from time to time, the “Proton System Purchase Agreement”) between the Operator and Varian, pursuant to which the Operator purchased the Proton System from Varian. The O&M Agreement outlines the agreements reached with respect to provision by Varian of maintenance and technical operations services related to the Proton System.

Support Services. Varian shall provide the Preventative Maintenance, Curative Maintenance and Technical Operations services described in the O&M Agreement (the “Support Services”) on treatment rooms 1, 2, 3 and 4 (but not on treatment room 5, unless Operator pays for such services for treatment room 5 as set forth in the O&M Agreement, provided that Varian shall have the right to use treatment room 5 for training and testing) to the Operator and shall, at Varian’s sole cost, obtain and maintain certain registrations, licenses, approvals, permits and regulatory clearances required for the operation of the Proton System. The following services are excluded from the Support Services: (i) any services defined under “Purchaser Responsibilities” in the O&M Agreement, (ii) maintenance and support of items that are not deliverable under the Proton System Purchase Agreement or the O&M Agreement; (iii) re-installing, moving or removing the Proton System, unless such re-installation, movement or removal is pursuant to the Proton System Purchase Agreement or the O&M Agreement; (iv) adaptation of the Proton System caused by any change of applicable laws or standards; (v) adaptation or reconfiguration of the Proton System outside the Specifications (as defined in the O&M Agreement) or outside the operating environment specified in the Proton System documentation; (vi) the clinical operation of the Proton System, including periodic dose calibration measurements; (vii) the logging of clinical operations; (viii) the provision of any equipment,

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supplies and services which become necessary due to System Exceptions (as defined in the O&M Agreement) or as a result of the Operator’s refusal to allow Varian to install mandatory safety releases or maintenance releases; and (ix) support or maintenance of the Operator’s network (other than deliverables under the Proton System Purchase Agreement), any hardware (other than deliverables under the Proton System Purchase Agreement) upon which Varian software is loaded, any interfaces between the Proton System and other products (other than interfaces with other Varian software is loaded, any interfaces between the Proton System and other products (other than interfaces with other Varian products or products that are deliverables under the Proton System Purchase Agreement), and any products with which the Proton System interfaces (other than deliverables under the Proton System Purchase Agreement). Varian shall ensure that the Proton System will function and be available in accordance with the O&M Agreement.

Pricing and Payment Schedule. In exchange for the Support Services, the Operator shall pay Varian the Support Services Fee set forth in the O&M Agreement, payable monthly in arrears. The Support Services Fee shall be adjusted annually by an amount equal to (i) the net percentage change in the Consumer Price Index for all Urban Consumers – All Items (Unadjusted) as published by the United States Department of Labor Statistics most recently prior to the applicable anniversary date times (ii) the Support Services Fee in effect for the immediately preceding year; provided, however, that in year 5 of the O&M Agreement, the parties shall negotiate the amounts payable for year 6, which agreed-upon amount shall then be adjusted annually in the same manner; provided, further, that negative indexes shall not be applied. Payments are due 30 calendar days after the end of each month, and interest shall accrue daily at a rate equal to the lower of 9% or the highest rate allowed by applicable law.

Guaranteed Proton System Availability: Error Resolution & Credits. Varian will maintain the Proton System from Monday to Friday from 7:00 AM to 7:00 PM (the “Access Period”), with a guaranteed minimum treatment room availability (“Minimum Availability”) with respect to each treatment room, meaning that such room is operating without any error that prevents the use of the treatment room for clinical purposes (“Errors”), with a measurement period of one year. For the period until Final Acceptance (defined as the acceptance of all five (5) treatment rooms or treatment of a patient in each treatment room), which has occurred, the Minimum Availability was seventy-five percent (75%); for the months 1 – 12 following Final Acceptance the Minimum Availability is ninety percent (90%); for months 13-24 following Final Acceptance the Minimum Availability is ninety-two percent (92%); and for the remainder of the term the Minimum Availability is ninety-five percent (95%). Varian is responsible for correcting Errors. For each measurement period that the Proton System fails to meet the Minimum Availability, Varian shall pay the Operator a credit. The maximum credit for any contract year shall not exceed ten percent (10%) of the Support Services Fee paid by the Operator for such year. Any credits due will be credited to the Operator’s next Support Services Fee. Any operations and maintenance that the Operator requests outside of the Access Period shall be charged to Operator at Varian’s prevailing hourly rate, and any technical phone support and remote support outside of the Access Period shall be billed on a time and materials basis.

Warranties. In addition to other representations and warranties contained in the O&M Agreement, Varian represents and warrants that all replacement hardware and spare parts provided to the Operator by Varian during the term of the O&M Agreement will be free from defects in design, material and workmanship for a period of three (3) months from their installation, and shall be delivered to the Operator free and clear of all security interests, liens claims and encumbrances or any other claims of any third party. Varian also represents and warrants that the Support Services provided under the O&M Agreement will be performed by qualified personnel and with diligence, and will be performed in a good and workmanlike manner, in accordance with professional standards, with a level of care, skill, knowledge and judgment required or reasonably expected of firms or persons performing comparable services. If Varian breaches a warranty, the Operator’s exclusive remedy therefore shall be to require Varian to promptly repair or replace the non-conforming item or re-perform the non-conforming services.

Term. The O&M Agreement commenced on July 24, 2012, and continues until the earliest of: (a) termination of the Proton System Purchase Agreement; (b) termination of the O&M Agreement for cause; or (c) expiration of the Support Period (as defined below). Varian began to provide the Support Services on October 28, 2015, and shall continue to provide Support Services until the tenth (10th) anniversary of such date (the “Initial Support Period”). Following the Initial Support Period, the Operator may, at its option, request to renew the O&M Agreement for two additional five (5) year periods (each, a “Renewal Support Period”), by providing Varian written notice of such request at least one hundred twenty (120) days prior to the expiration of the then current Support Period, and the parties shall then negotiate the term and conditions of such renewal. The Initial Support Period and the Renewal Support Periods are collectively referred to as the “Support Period.” Varian shall notify the Operator in

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writing at least one hundred eighty (180) days prior to the expiration of the then current Support Period that such term is to expire, specifying the date of such expiration.

Termination. Subject to the dispute resolution provisions set forth in the O&M Agreement, the Operator may terminate the O&M Agreement for cause if Varian is suspended or excluded from participation in Medicaid, Medicare or CHAMPUS/TRICARE or any other Federal or State health care or reimbursement program or is barred or restricted from selling proton therapy systems or components, or performing the Support Services, as the result of any governmental action. In the event the Operator terminates the O&M Agreement, Varian shall promptly refund to the Operator the Support Services Fees paid by the Operator prorated for the remainder of the then current Support Period. Subject to the dispute resolution provisions set forth in the O&M Agreement, Varian may terminate the O&M Agreement for cause if the Operator fails to pay any amount due within thirty (30) days after receipt of written notice that such amount is past due. Subject to the dispute resolution provisions set forth in the O&M Agreement, either party may terminate the O&M Agreement if the other party (i) materially breaches a material non-payment provision, other than the warranties, and fails to commence and diligently continue correction of such breach within sixty (60) days after written notice of the breach, or (ii) generally fails to pay or admits an inability to pay its debts as they become due, is in receivership or dissolution, is adjudicated a bankrupt, files a petition in voluntary bankruptcy, or other similar action. Any termination will be effective upon the termination date specified in the written notice of termination, provided that such date is not inconsistent with the minimum time periods specified in the applicable termination provision. Termination shall not eliminate or otherwise affect any rights or liabilities of either party that accrued prior to termination, and certain provisions (including taxes, representations and warranties, indemnification, confidentiality and non-solicitation) shall survive the expiration or termination of the O&M Agreement.

Non-Solicitation Covenant. During the term of the O&M Agreement and for one (1) year thereafter, each of Varian and the Operator agrees not to recruit any employees of the other party or any of its affiliates who have been involved in performing or receiving the Support Services, other than (i) any individual whose employment was terminated involuntarily one (1) year prior to the solicitation, (ii) any individual who voluntarily terminated their employment one (1) year prior to the solicitation and (iii) any employee so long as the solicitation is made to the public in general. A party’s exclusive remedy for breach of the non-solicitation covenant shall be payment to the other party, as liquidated damages and not as a penalty, of twelve (12) months’ salary of the employee hired in violation of such covenant.

Limitation of Liability. Except for a party’s obligation to indemnify the other pursuant to the O&M Agreement and/or the breach of a party’s confidentiality obligations, (i) in no event shall either party, its contractors, subcontractors, suppliers or licensors to be liable to the other for any incidental, consequential, special, or punitive damages or similar losses of any kind, including lost business, lost profits, or loss of or damage to data, however caused and regardless of the theory of liability; and (ii) except for Varian’s breach of its obligations with respect to curative maintenance in connection with the Proton System or Components, each party’s and its contractors’, subcontractors’, suppliers’ and licensors’ total liability in damages or otherwise to the other party for any contract year shall not exceed twenty percent (20%) of the total amounts paid or payable by the Operator to Varian during the relevant contract year. When assessing whether the aforementioned maximum amount has been reached for any contract year, any service level credits and any refunded service charges shall be included. This limitation shall not apply to any liability arising out of a party’s willful misconduct or gross negligence.

Insurance. The parties are required to maintain insurance of the types and with the liability limits and features as is customary in the industry, and agree to negotiate in good faith to agree on specific insurance terms and limits.

Billing Management and Consultant Services Agreement

General. The Operator and MMBC, LLC (“MMBC”) are parties to that certain Billing Management and Consultant Services Agreement dated as of March 25, 2015 (as amended by that certain Amendment 1 dated March 25, 2015 and Amendment 2 dated August 1, 2017, and as further amended from time to time, the “Billing Agreement”), under which MMBC provides certain management and billing consultant services for the Project.

Management and Billing Consultant Services. MMBC shall provide consultant services and management services related to all professional, technical and global billing services of the Operator as described in the Billing

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Agreement (collectively, the “Billing Services”), as well as hiring and managing a Senior Payer and Credentialing Coordinator.

Performance Levels. MMBC shall perform the Billing Services in compliance with the following Performance Levels: (i) a net collection rate of greater than or equal to ninety-five percent (95%); (ii) a year-to-date initial denial rate less than eight percent (8%); (iii) average accounts receivable days outstanding less than or equal to forty-five (45) days; (iv) accounts receivable outstanding more than ninety (90) days less than or equal to twenty-five percent (25%); (v) percentage credit balance to accounts receivable less than or equal to three percent (3%); and (vi) accounts receivable outstanding more than one hundred twenty (120) days less than or equal to eleven percent (11%) . For purposes of calculating compliance with the Performance Levels, any uncollected authorized write-offs shall be excluded. The Performance Levels shall be calculated annually based on each successive twelve (12) month period after the Treatment Commencement Date (each, a “Measurement Period”). If MMBC fails to comply with one (1) or more such Performance Levels during any Measurement Period, it shall have ninety (90) days following written notice to cure such noncompliance.

Exclusivity. Until the termination of the Billing Agreement, MMBC shall be the exclusive provider of any and all Billing Services.

Compensation. The Operator shall pay to MMBC on a monthly basis a Billing Overhead Fee calculated as 4.5% of gross monthly collections, subject to a minimum amount of $67,000 per month and a maximum amount of $135,000 per month, plus additional monthly reimbursements of $7,000 for the Senior Payer and Credentialing Coordinator. MMBC shall provide, not later than the fifth (5th) day of each month, an invoice of the Billing Overhead Fee. Payments are due not later than the twentieth (20th) business day following receipt of an invoice. All fees in excess of $74,000 per month (the “Deferred Amount”) were deferred during the five-month period commencing on August 1, 2017 and ending on December 31, 2017. The Deferred Amount is equal to $274,715.42. Commencing on May 1, 2018 and continuing for a period of two (2) consecutive months thereafter, the Operator shall repay the Deferred Amount in two (2) equal monthly installments, which shall be due on the first day of the corresponding month and shall be paid in addition to any fees earned by MMBC during such month. If the Deferral Amount is not paid in full on or before June 1, 2018, the maximum amount shall be adjusted from $135,000 to $160,000.

Term. The Billing Agreement commenced on March 25, 2015 and continues for a term of five (5) years (the “Initial Term”). Following the Initial Term, the Billing Agreement shall renew automatically for an additional five (5) year period (the “Second Term”). Following the Second Term, the Billing Agreement shall renew automatically for additional successive periods of five (5) years, unless one hundred eighty (180) days before the end of the existing term, a party shall notify the other in writing that it has elected not to renew the Billing Agreement.

Termination. The Operator may terminate the Billing Agreement (i) if MMBC or any of its agents, principals or employees is convicted of a criminal offense related to the provision of healthcare items or services, is under indictment or is notified in writing by any state or federal agency of their intention to exclude MMBC or any of its agents, principals or employees from participation in any healthcare benefit program; (ii) upon receipt of actual notice of MMBC’s breach of any law, which breach is not cured by MMBC within fifteen (15) days of written notice if applicable; (iii) upon one hundred eighty (180) days’ notice if MMBC fails to comply with three (3) or more of the Performance Levels during any Measurement Period, which failure is not cured within ninety (90) days of notice. Either party may terminate the Billing Agreement (i) if the other party has materially breached any of its obligations under the Billing Agreement and such breach continues for fifteen (15) days after written notice thereof; (ii) with the written consent of the other party; (iii) upon the assignment of substantially all of the assets of the other party for the benefit of its credits, the initiation of a bankruptcy proceeding by the other party, the placement of the other party’s assets in the hands of a trustee or receiver or if the other party ceases to do business; or (iv) if the other party is excluded or barred from participating, or serving as a vendor in the federal Medicare, Medicaid or any other federal health care program or of the federal General Services Administration.

Insurance. During the term of the Billing Agreement and for a period of three (3) years following the termination thereof, each party shall maintain insurance coverage with companies and on terms reasonable acceptable to the other party, including general liability of $1,000,000 per occurrence and $3,000,000 in the aggregate.

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Employee Leasing Agreement

General. The Operator and UMMS are parties to that certain Employee Leasing Agreement dated March 29, 2012 (as amended by that certain First Amendment to Employee Leasing Agreement dated as of September 23, 2014 and that certain Amendment to Employee Leasing Agreement effective on May 13, 2015, and as further amended from time to time, the “Employee Lease”), under which UMMS provides all non-physician personnel necessary for the operation of the Project (the “Leased Employees”). UMMS shall have no control or direction over any Leased Employee’s involvement in the operations, provision of any services and overall responsibilities and duties at the Project, however UMMS shall retain the human resource management function related to the Leased Employees.

Compensation. The Operator shall pay UMMS compensation based on the Projected Budget Costs (which is a combination of salary plus benefits) plus five (5%) percent of the Projected Budget Costs for any given year (such amount, the “Projected Budget Fees”), payable quarterly in advance no later than fifteen (15) days before the start of each quarter. Not later than thirty (30) days after the end of each quarter, UMMS shall calculate the total amount of compensation due to it by reconciling the Projected Budget Costs with the actual salaries plus the actual benefits cost for the Leased Employees for such quarter (the “Total Fees”). The Total Fees and Projected Budget Fees shall be compared and the amount by which the Projected Budget Fees is less than the Total Fees shall be considered the “Deficit,” and the amount by which the Projected Budget Fees is more than the Total Fees shall be considered the “Excess.” The Operator shall pay any Deficit to UMMS within thirty (30) days of receipt of any invoice from UMMS that details actual salaries and benefits costs for the applicable period, and the Operator may reduce the amount of the monthly installment(s) due to UMMS for the next payment period by the amount of any Excess. The parties shall use commercially reasonable efforts to resolve any disagreement with respect to any Deficit or Excess within sixty (60) days, after which the disagreement shall be resolved by the mutual agreement of the Chief Executive Officers (or equivalent) of each party, whose decision shall be binding. Overdue amounts shall be subject to late fees of 1.5% for each month, with such late fees not to exceed the lesser of eighteen percent (18%) per annum and the maximum amount allowed under Maryland law.

Escrow Account. During the term of the Employee Lease, the Operator shall maintain an escrow account with a minimum Required Security Amount equal to four (4) months of the Projected Budget Costs, which shall be subject to the joint control of the Operator and UMMS for the sole purposes of securing payment of undisputed compensation owed pursuant to the Employee Lease, provided that the Operator is not required to fund the initial $2,500,000 of the calculated annual funding requirement of such escrow account that would have otherwise been required to be funded under the Employee Lease.

Term. The Employee Lease commenced on September 1, 2015 and continues for a term of twenty (20) years plus the balance of months to the end of the then-current academic year (June 30), subject to automatic successive five (5) year renewals unless the parties mutually agree in writing to terminate the Employee Lease.

Termination. The Employee Lease shall automatically terminate upon termination of the CMASA or the Professional Services Agreement following sixty (60) days prior written notice by the Operator to UMMS. Either party may terminate the Employee Lease (i) upon 365 days prior written notice; (ii) upon the occurrence of certain bankruptcy, insolvency and liquidation defaults; (iii) if a party shall fail to observe or perform any material term, covenant agreement or condition of the Employee Lease, subject to a thirty (30) day notice and cure period; (iv) upon the assignment or attempted assignment, subcontract, delegation or transfer by either party of its rights and obligations under the Employee Lease without the prior written consent of the other party; and (v) if there occurs the non-appealable completion of any formal criminal proceedings or civil exclusion proceedings, resulting in criminal liability or exclusion from government programs against either party, or their respective officers or directors, by any governmental agency having jurisdiction over matters concerning Medicare and Medicaid fraud and abuse, including federal or state patient self-referral prohibitions, anti-kickback and false claims statutes.

Non-Solicitation and Non-Compete Covenants. The Employee Lease includes (i) a non-solicitation of patients covenant by UMMS in favor of the Operator, (ii) a non-solicitation of employees covenant by Operator in favor of UMMS and (iii) non-compete covenants by both parties in the construction, operation, leasing, franchising, managing, investing or otherwise providing services at/to a proton beam therapy treatment center located in Maryland, Delaware, the District of Columbia or certain cities in Virginia.

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Additional UMMS Agreements

In addition to the Employee Leasing Agreement, the Operator is party to various additional agreements with UMMS, described below.

IT Services Agreement

The Operator and UMMS are parties to that certain IT Services Agreement dated as of November 30, 2015 (as amended from time to time, the “IT Agreement”), under which UMMS provides certain information technology services including (i) maintenance, configuration, and day to day support of all data, internet and voice equipment, (ii) imaging, configuration and installation of end user equipment; (iii) laptop encryption; (iv) break/fix support to end user equipment; (v) internet connectivity; (vi) purchase of ARIA servers; (vii) IT support staff, including a project manager, and (viii) certain software services and support. The Operator shall pay, within 30 days after receipt of monthly invoices, fees in accordance with the Fee Schedule attached to the IT Agreement. The IT Agreement commenced on November 30, 2015 and continued for a term of two (2) years, subject to automatic successive one (1) year renewals, unless either party provides six (6) months prior written notice of its intention not to renew the IT Agreement. UMMS may terminate the IT Agreement upon certain events of default related to the Operator, subject to a thirty (30) day notice and cure period. Either party may terminate the IT Agreement (i) upon breach of a material term of the IT Agreement by the other party, subject to a thirty (30) day notice and cure period, and (ii) without cause upon at least ninety (90) days prior written notice to the other party.

Equipment Lease

In connection with the IT Agreement, UMMS purchased certain computer equipment, which it then leased to the Operator under that certain Equipment Lease dated as of February 9, 2016 (as amended from time to time, the “Equipment Lease”). The rent for such leased equipment is $6,219.63 per month, payable on the first day of each month, subject to renewal of such amount at the beginning of each new lease year during the term to ensure it remains a fair market value rental fee. The leased equipment shall be located at UMMS’ Technology Operations Center located at 7060 Columbia Gateway Drive, Columbia, Maryland 21046, and the Operator shall not have the right to move the leased equipment. The Equipment Lease commenced on February 9, 2016 and continues for a period of three (3) years, subject to an automatic renewal for successive one (1) year terms, unless either party provides six (6) months prior written notice of its intention not to renew the Equipment Lease. UMMS may terminate the Equipment Lease upon certain events of default related to the Operator, subject to a thirty (30) day notice and cure period. Either party may terminate the Equipment Lease (i) upon breach of a material term of the Equipment Lease by the other party, subject to a thirty (30) day notice and cure period, and (ii) without cause upon at least ninety (90) days prior written notice to the other party.

Co-Branding Agreement

The Operator and UMMS d/b/a the University of Maryland Marlene and Stewart Greenebaum Cancer Center are parties to that certain Co-Branding Agreement dated as of February 12, 2016 (as amended from time to time, the “Co-Branding Agreement”), under which both parties granted the other a royalty-free, limited, non-assignable, non-transferrable, non-sublicensable, non-exclusive and revocable right to use certain of its trademarks (including “University of Maryland Marlene and Steward Greenebaum Cancer Center” and related logo, and “Maryland Proton Treatment Center” and logo) on all marketing and communications materials, subject to approval of the other party prior to production. No fee is owed by either party under the Co-Branding Agreement. The Co-Branding Agreement commenced on February 12, 2016, and continues for a term of three (3) years. Thereafter, the parties may negotiate in good faith to renew the Co-Branding Agreement, with any such renewal accomplished by an amendment to the Co-Branding Agreement. The Co-Branding Agreement may be terminated by either party (i) if at any time either party determines in its reasonable discretion that the other party has acted in a manner detrimental to it or its marks, subject to a twenty (20) day notice and cure period and (ii) upon the occurrence of certain bankruptcy and insolvency defaults.

Physician Affiliation Agreements

The Operator is party to affiliation agreements with various medical practices which provide for certain physician staffing, coverage and professional medical services at the Project. These agreements and certain key provisions thereof are summarized below.

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Radiation Oncology Associates, PC

The Operator and Radiation Oncology Associates, PC (“ROA”) are parties to that certain Proton Therapy Physician Affiliation Agreement dated as of February 1, 2017 (as amended from time to time, the “ROA Agreement”), under which the Operator provides proton therapy services to ROA’s patients under the supervision of ROA’s physicians at agreed rates as set forth in the ROA Agreement. ROA shall identify two (2) to four (4) of its physicians who will comply with the privileging and credentialing requirements of the Project and UMMS and be available for patient care cross coverage. The Operator shall be solely responsible for billing and collection of fees for all technical and professional services rendered to ROA’s patients at or through the Project. The ROA Agreement commenced on February 1, 2017 and terminates on June 30, 2019, subject to automatic two (2) year renewals unless terminated by either party. Either party may terminate the ROA Agreement for any reason upon ninety (90) days’ prior written notice. The ROA Agreement includes (i) a non-solicitation of patients covenant by ROA in favor of the Project, (ii) a non-solicitation of physicians covenant by the Operator in favor of ROA, (iii) a non-solicitation of employees covenant by ROA in favor of the Operator, (iv) a non-solicitation of managed care organizations covenant by both parties in favor of the other, and (v) non-competes by ROA and its physicians in providing proton therapy services at certain other proton centers.

MedStar-Georgetown Medical Center, Inc.

The Operator and MedStar-Georgetown Medical Center, Inc. d/b/a MedStar Georgetown University Hospital (“MedStar”) are parties to that certain Proton Therapy Professional Services Agreement dated as of April 25, 2016 (as amended from time to time, the “MedStar Agreement”), under which the Operator provides proton therapy services to MedStar’s patients under the supervision of MedStar’s physicians at agreed rates as set forth in the MedStar Agreement. MedStar shall identify two (2) of its physicians who will comply with the privileging and credentialing requirements of the Project and UMMS and be available for patient care cross coverage. The Operator shall be solely responsible for billing and collection of fees for all technical and professional services rendered to MedStar’s patients at or through the Project. The MedStar Agreement commenced on April 25, 2016 and expires on June 30, 2019, subject to three (3) consecutive one (1) year renewals unless terminated by either party. Either party may terminate the MedStar Agreement for any reason upon ninety (90) days’ prior written notice, and either party may also terminate in the event the other party is in material breach of the terms of the MedStar Agreement subject to a thirty (30) day notice and cure period. The MedStar Agreement includes (i) a non-solicitation of patients covenant by MedStar in favor of the Operator, (ii) a non-solicitation of employees and physicians covenant by the Operator in favor of MedStar, (iii) a non-solicitation of employees covenant by MedStar in favor of the Operator and (iv) a covenant prohibiting both parties from attempting to induce any third party payor or referring health care provider to terminate its current agreement.

WellSpan Medical Group

The Operator and WellSpan Medical Group (“WellSpan”) are parties to that certain Proton Therapy Physician Affiliation Agreement dated as of July 5, 2016 (as amended from time to time, the “WellSpan Agreement”), under which the Operator provides proton therapy services to WellSpan’s patients under the supervision of WellSpan’s physicians at agreed rates as set forth in the WellSpan Agreement. WellSpan shall identify between two (2) and three (3) of its physicians who will comply with the privileging and credentialing requirements of the Project and UMMS and be available for patient care cross coverage. The Operator shall be solely responsible for billing and collection of fees for all technical and professional services rendered to WellSpan’s patients at or through the Project. The WellSpan Agreement commenced on July 5, 2016 and expires on June 30, 2021, subject to automatic three (3) year renewals unless terminated by either party. Either party may terminate the WellSpan Agreement in the event the other party is in material breach of the terms of the WellSpan Agreement subject to a thirty (30) day notice and cure period. The WellSpan Agreement includes: (i) a non-solicitation of patients covenant by both parties in favor of the other, (ii) a non-solicitation of physicians covenant by the Operator in favor of WellSpan, (iii) a non-solicitation of employees covenant by the Operator in favor of WellSpan, (iv) a covenant prohibiting both parties from inducing any managed care organization, referring health care provider, or third party payor to terminate their current relationship with the other party, and (v) a non-compete covenant by WellSpan and its physicians in providing proton therapy services at any other location in Maryland, Delaware, the District of Columbia and certain cities in Virginia.

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Chesapeake Oncology Hematology Associates, P.A.

The Operator and Chesapeake Oncology Hematology Associates, P.A. (“COHA”) are parties to that certain Proton Therapy Physician Affiliation Agreement dated as of March 1, 2017 (as amended from time to time, the “COHA Agreement”), the Operator provides proton therapy services to COHA’s patients under the supervision of COHA’s physicians at agreed rates as set forth in the COHA Agreement. COHA shall identify two (2) of its physicians who will comply with the privileging and credentialing requirements of the Project and UMMS and be available for patient care cross coverage. The Operator shall be solely responsible for billing and collection of fees for all technical and professional services rendered to COHA’s patients at or through the Project. The COHA Agreement commenced on March 1, 2017 and terminates on June 30, 2021, subject to automatic three (3) year renewals unless terminated by either party. Either party may terminate the COHA Agreement in the event the other party is in material breach of the terms of the COHA Agreement subject to a thirty (30) day notice and cure period. The COHA Agreement includes (i) a non-solicitation of patients covenant by COHA in favor of the Operator, (ii) a non-solicitation of physicians covenant by the Operator in favor of COHA, (iii) a non-solicitation of employees covenant by COHA in favor of the Operator, (iv) a non-solicitation of managed care organization, referring health care provider, or third party payor covenant by both parties and (v) a non-compete covenant by COHA in providing proton therapy services at another treatment center in Maryland, Delaware, the District of Columbia, certain cities in Virginia.

University of Maryland Anesthesiology Associates, P.A.

The Operator and University of Maryland Anesthesiology Associates, P.A. (“UMAA”) are parties to that certain Professional Services Agreement dated as of February 29, 2016 (as amended by that certain First Amendment to Professional Services Agreement dated as of March 1, 2018, and as further amended from time to time, the “Anesthesia Agreement”), under which UMAA provides pediatric trained anesthesiologists to provide anesthesia services to all patients requiring such services at the Project. The Anesthesia Agreement commenced on February 29, 2016 and continues for until June 30, 2021, subject to an automatic renewal for successive one (1) year terms, unless terminated by either party. The Anesthesia Agreement may be terminated by either party (i) if the other breaches a material term subject a thirty (30) day cure period or (ii) without cause with at least one hundred eighty (180) days prior written notice.

Asset Purchase Agreement

Subject to and upon the terms and conditions of the Asset Purchase Agreement, the Ground Lease and the Bill of Sale, the Authority shall purchase from Operator, as seller, and the Operator shall convey, sell, assign, transfer, set over and deliver to the Authority, all right, title and interest in and to the Acquired Assets, free and clear of any charge, claim, interest, condition, lien, security interest, pledge, mortgage, or other similar restriction (collectively, “Encumbrances”), other than those permitted exceptions set forth on an exhibit attached to the Asset Purchase Agreement (the “Permitted Exceptions”).

The Acquired Assets consist of all of the Operator’s right, title and interest in and to the personalty as

particularly described in the Bill of Sale. Except for those contracts and leases identified in the Asset Purchase Agreement, if any, the Authority is

not assuming, and under no circumstances will the Authority be obligated to pay, discharge or be responsible for (and none of the assets of the Authority shall be or become liable for or subject to), any liability, indebtedness, commitment, or obligation of the Operator, whether known or unknown, fixed or contingent, recorded or unrecorded, currently existing or hereafter arising or otherwise (collectively, the “Retained Liabilities”).

The purchase price to be paid for the Acquired Assets shall be ____________________ and _____/100

Dollars ($_______________) (the “Purchase Price”). The Purchase Price will be subject to certain credits and adjustments, which shall be reflected in the closing

statement prepared in connection with the closing of the sale, including, but not limited to, all taxes with respect to the Acquired Assets accrued or payable for the year in which the sale occurs, which shall be prorated as of the date of the sale with The Authority receiving a credit for the period prior to and including the date of the sale for which such taxes have not been paid by the Operator.

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The Purchase Price shall be paid by the Authority to the Operator as follows: (i) a cash payment (the

“Closing Cash Payment”); and (ii) the issuance and delivery to, and registration in the name of, the Operator (or otherwise, at the direction of the Operator, issuance and delivery to, and registration in the name of, one or more other Persons) of the Series 2018B Bonds and the Series 2018C Bonds.

All obligations of the Authority under the Asset Purchase Agreement, including payment of the Purchase

Price, are conditioned and contingent upon the issuance of the Series 2018 Bonds in accordance with the Indenture with sufficient proceeds from the sale of the Series 2018A Bonds (net of costs of issuance and funding of required reserves under the Indenture, herein referred to as “Net Bond Proceeds”) to pay the Closing Cash Payment.

FEASIBILITY STUDY

The Operator has engaged the Feasibility Consultant to analyze the Project. For more information about the Feasibility Consultant, see “PROJECT PARTICIPANTS – Feasibility Consultant” herein. A copy of the Feasibility Study is attached hereto as “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

Below are certain conclusions expressed by the Feasibility Consultant in the Feasibility Study. This is merely a summary and is subject to and qualified by the information contained, and the assumptions made, in the Feasibility Study. The Feasibility Study should be read in its entirety in order for the reader to completely understand the basis of the conclusions and the assumptions upon which they are based. Capitalized terms used in the summary below are defined in the Feasibility Study.

• Change is a constant in oncology care. Further complicating future predictions is the position of the proton therapy industry, and by extension the Project, within a healthcare environment that prioritizes cost containment yet increasingly views proton therapy as a natural extension of the current culture of precision therapy that has developed over the last several decades.

• A number of factors support industry growth. These include rising demand for this technology stemming from a growing and rapidly aging population, growing evidence of clinical efficacy, generally adequate public and private third-party reimbursement to support efficiently delivered care and rapid technological advances making proton therapy centers more scalable and cost efficient. Potential future areas of uncertainty include the competitive environment, potential long-term technology obsolescence and shifting physician preference patterns.

• Looking to the future, the evolution of proton therapy appears to be moving in a positive direction as evidenced by the growing number of centers being planned and implemented. Well-designed centers incorporating advanced technology and operating efficiencies that are affiliated with reliable patient referral sources such as academic medical centers with strong oncology programs and affiliate networks should be well positioned for sustainable growth.

• This feasibility study considered the possible implications of changing external factors and dynamics within the anticipated market to be served by the Project as well as internal operating characteristics of the Project. Examples of external factors assessed included implications of increasing service demand from a growing and aging population, patient referral patterns, Project affiliations, third-party coverage and payment policies and potential future competition. Internal operating characteristics examined included patient case mix, financial performance, technology features, operating efficiency, and strategic relationships.

• Taking the totality of these factors into account, the Project appears favorably positioned for future success and sustainability. Although operating in a cost-adverse healthcare landscape, this well-designed center incorporates advanced technology features and operating efficiencies. Equally important for long-term sustainability is its affiliation with the University of Maryland and affiliates through agreements that provide patients, staffing and treatment guidelines. As discussed

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above, this affiliation positions the Project to benefit from a robust and reliable patient referral source and nationally recognized oncology program.

FUNDING PLAN

A portion of the proceeds of the Series 2018A Bonds are to be deposited in the Project Fund held by the Trustee pursuant to the Indenture and disbursed on the date of issuance of the Series 2018 Bonds in order to consummate the acquisition of the Project by the Authority (the “Acquisition”). In addition, a portion of the proceeds of the Series 2018A Bonds will be deposited in the following funds and accounts: the Senior Debt Service Reserve Fund, the Capitalized Interest Subaccount of the Senior Debt Service Account, the Repair and Replacement Fund, the Liquidity Reserve Fund and the Extraordinary Expense Fund as well as in the Operating Account of the Operator established in accordance with and pursuant to the Facility Operating Agreement.

As part of the cost of the Acquisition, the Series 2018B Bonds and the Series 2018C Bonds will be issued to the Operator, or other parties as directed by the Operator, as described under the heading “PRINCIPAL PROJECT AGREEMENTS – Asset Purchase Agreement.”

The University of Maryland Faculty Physicians Inc. (“FPI”), on behalf of itself and UMB, has signed a letter of intent (the “FPI Letter of Intent”) to purchase an aggregate of $8,250,000 of the Series 2018A-2 Bonds, and UMMS has signed a letter of intent to purchase $1,750,000 of the Series 2018A-2 Bonds.

Series 2018B Bonds will be issued to Varian (approximately $46 million*) and The University of Maryland College Park Foundation, Inc. (approximately 3.7 million*) in exchange for the release of claims and liens by Varian and The University of Maryland College Park Foundation, Inc. against the Operator and its assets contemporaneously with the issuance of the Series 2018B Bonds and the consummation of the Acquisition.

Series 2018 Bonds and Series 2018C Bonds will also be issued to various other existing creditors of the Operator in exchange for the release of claims and liens against the Operator and its assets contemporaneously with the issuance of the Series 2018 Bonds and the consummation of the Acquisition. See “APPENDIX A – THE PROJECT AND THE OPERATOR – THE OPERATOR– Existing Indebtedness.”


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Estimated Sources and Uses of Funds*

Series 2018A Bonds Sources and Uses of Funds

Sources

Proceeds of Series 2018A-1 Bonds $259,942,905 Proceeds of Series 2018A-2 Bonds 10,000,000

Total Sources $269,942,905

Uses Acquisition of Project $196,782,955 Deposit to Operating Account 4,700,000 Deposit to Debt Service Reserve Accounts 25,394,325 Deposit to Bond Fund for Capitalized Interest 22,565,625 Deposit to Extraordinary Expense Fund 2,500,000 Deposit to Liquidity Reserve Fund 5,000,000 Deposit to Repair and Replacement Fund 2,000,000 Costs of Issuance (1) 11,000,000

Total Uses $269,942,905 __________ Note: Totals may not add due to rounding. (1) Represents costs of issuing the Series 2018 Bonds, including Underwriters’ discount, legal fees and printing costs.


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PROJECTED FINANCIAL INFORMATION*

The following tables show the Project’s moderate growth scenario as more particularly described in APPENDIX B (the “Base Case Scenario”).

(dollar amounts in thousands)

Year*

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

Gross Operating Revenues

22,049

57,567

63,493

68,472

73,235

77,501

80,503

82,185

84,206

86,077

88,470

90,028

91,747

93,643

95,726

Operating Expenses

14,749

36,121

37,614

39,289

40,835

42,908

44,412

45,072

45,997

46,953

48,090

48,936

49,731

50,260

50,964

Net Income

7,300

21,446

25,878

29,183

32,400

34,593

36,091

37,114

38,209

39,125

40,380

41,092

42,017

43,383

44,762

Senior Debt Service

-

2,307

18,053

18,053

18,053

19,158

20,036

20,638

21,272

21,797

22,514

22,914

23,440

24,222

25,003

Senior Debt Service Coverage

-

9.30x

1.43x

1.62x

1.79x

1.81x

1.80x

1.80x

1.80x

1.79x

1.79x

1.79x

1.79x

1.79x

1.79x

Deposit to Liquidity Reserve Fund

7,191

4,894

1,216

550

508

681

484

186

257

251

293

176

140

35

69

Deposit to Repair and Replacement Reserve Fund

-

13,648

6,008

8,953

-

-

-

2,367

2,624

2,899

2,883

2,883

3,384

3,384

3,384

Deposit to Operator Fee Fund

109

263

268

274

279

285

291

296

302

308

315

321

327

334

340

Deposit to Extraordinary Expense Fund

-

333

333

333

-

-

-

-

-

-

-

-

-

-

-

Subordinate Debt Service

-

-

-

1,020

8,390

10,425

11,125

7,989

7,989

7,989

8,299

8,623

8,430

8,922

9,297

Subordinate Debt Service Coverage

-

-

-

1.00x

1.19x

1.13x

1.13x

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

Junior Debt Service

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Junior Debt Service Coverage

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Net Cash Flow

-

-

-

0

5,170

4,044

4,156

5,638

5,766

5,880

6,077

6,175

6,296

6,486

6,668

75% to Turbo Redemption Account

-

-

-

0

3,877

3,033

3,117

4,229

4,324

4,410

4,558

4,631

4,722

4,865

5,001

25% to Excess Revenue Fund

-

-

-

0

1,292

1,011

1,039

1,410

1,441

1,470

1,519

1,544

1,574

1,622

1,667

* Notes: (1) The prospective financial information has been provided by management of the Operator. BDO USA, LLP has not compiled or examined this information and accordingly does not express an opinion or any other form of assurance on the prospective financial information included herein; and (2) the forecasted revenue does not consider the impact of new accounting guidance which may or may not have a significant impact on revenue recognized by the Project during fiscal year 2019 and all years thereafter.

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Year*

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

Gross Operating Revenues

96,873

96,991

97,102

97,212

97,133

97,243

97,543

98,033

97,574

97,684

97,794

98,286

98,206

98,317

97,852

Operating Expenses

51,434

51,992

52,431

52,516

52,687

52,994

53,330

53,929

54,508

55,114

55,712

56,337

56,945

57,597

58,235

Net Income

45,440

44,999

44,671

44,696

44,446

44,249

44,212

44,104

43,067

42,571

42,083

41,949

41,260

40,720

65,012

Senior Debt Service

25,394

25,140

24,952

24,970

24,823

24,710

24,694

24,631

24,036

23,755

23,476

23,405

23,005

22,704

20,906


1.79x

1.79x

1.79x

1.79x

1.79x

1.79x

1.79x

1.79x

1.79x

1.79x

1.79x

1.79x

1.79x

1.79x

3.11x

Deposit to Liquidity Reserve Fund

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Deposit to Repair and Replacement Reserve Fund

2,884

2,884

3,284

3,284

3,284

2,884

2,884

3,384

3,384

3,384

2,884

2,884

3,284

3,284

3,284

Deposit to Operator Fee Fund

347

354

361

368

376

383

391

399

407

415

423

432

440

449

458

Deposit to Extraordinary Expense Fund

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Subordinate Debt Service

10,043

9,899

9,366

9,365

9,261

9,585

9,541

8,983

8,670

8,524

8,877

8,839

8,241

8,084

31,004

Subordinate Debt Service Coverage

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

1.18x

1.17x

Junior Debt Service

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Junior Debt Service Coverage

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Net Cash Flow

6,771

6,722

6,707

6,708

6,702

6,688

6,702

6,707

6,570

6,493

6,422

6,389

6,289

6,198

9,360

75% to Turbo Redemption Account

5,078

5,042

5,031

5,031

5,026

5,016

5,027

5,030

4,927

4,869

4,817

4,792

4,717

4,649

7,020

25% to Excess Revenue Fund

1,693

1,681

1,677

1,677

1,675

1,672

1,676

1,677

1,642

1,623

1,606

1,597

1,572

1,550

2,340

_________________________________ * Notes: (1) The prospective financial information has been provided by management of the Operator. BDO USA, LLP has not compiled or examined this information and accordingly does not expressan opinion or any other form of assurance on the prospective financial information included herein; and (2) the forecasted revenue does not consider the impact of new accounting guidance which may ormay not have a significant impact on revenue recognized by the Project during fiscal year 2019 and all years thereafter.

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The following tables show the Project’s projected balance sheets, statements of operations, statements of cash flows and Days Cash on Hand for the periods ended December 31, 2018 through December 31, 2022*.

(dollar amounts in thousands) Consolidated Balance Sheets

As of December 31, 2018 2019 2020 2021 2022

Assets

Current assetsCash and cash equivalents 4,700$ 4,814$ 7,779$ 5,406$ 5,363$ Patient accounts receivable, net 7,887 8,662 9,545 10,259 10,895Prepaid expenses and other assets 705 714 726 718 740Capitalized Interest fund restricted by debt agreements 16,548 6,018 0 0 0Repair and replacement fund, current 0 3,098 3,404 3,410 3,415

Total current assets 29,840 23,306 21,454 19,793 20,413

Certificates of deposit 225 225 225 225 225

Cash and cash equivalents restricted by debt agreementsCapitalized Interest fund, non-current 6,018 0 0 0 0Debt service reserve fund 25,394 25,394 25,394 25,394 25,394Liquidity reserve fund 12,191 17,085 18,301 18,852 19,360Repair and replacement fund 2,000 12,550 15,153 20,697 17,281Extraordinary expense fund 2,500 2,833 3,167 3,500 3,500Excess revenue fund 0 0 0 0 5,170

Total long-term cash and cash equivalents, restricted by debt agreements

48,328 58,087 62,240 68,668 70,930

Property, plant and equipment, net 218,420 207,660 200,976 196,841 192,720

Total assets 296,588 289,053 284,670 285,302 284,063 Liabilities and members' deficit

Current liabilitiesAccounts payable 9,060$ 9,170$ 9,321$ 9,219$ 9,502$ Accrued expenses 4,421 4,475 4,549 4,499 4,637Current portion of bond principal 0 0 0 0 0Current portion of senior bond interest 6,820 9,027 9,027 9,027 9,027

Total current liabilities 20,301 22,672 22,897 22,745 23,166

Long-term liabilitiesBond series 2018A 278,500 278,500 278,500 278,500 278,500Bond series 2018B-1 22,619 24,347 26,207 28,210 28,210Bond series 2018B-2 58,204 63,256 68,747 74,715 77,890Bond series 2018C 5,853 6,576 7,391 8,305 9,329Less: current portion of bond debt 0 0 0 0 0

Total long-term liabilities 365,176 372,679 380,845 389,730 393,929

Total liabilities 385,477 395,351 403,742 412,475 417,095

Net deficitAccumulated deficit (88,889) (106,298) (119,072) (127,173) (133,032)

Total net deficit (88,889) (106,298) (119,072) (127,173) (133,032)

Total liabilities and net deficit 296,588 289,053 284,670 285,302 284,063

* Notes: (1) The prospective financial information has been provided by management of the Operator. BDO USA, LLP has not compiled or examined this information and accordingly does not express an opinion or any other form of assurance on the prospective financial information included herein; and (2) the forecasted revenue does not consider the impact of new accounting guidance which may or may not have a significant impact on revenue recognized by the Project during fiscal year 2019 and all years thereafter.

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Consolidated Statements of Operations

Years Ended December 31, Aug - Dec 2018 2019 2020 2021 2022

Patient service revenue, net of contractual allowances,

discounts and provision of bad debt1 21,908$ 57,747$ 63,632$ 68,395$ 72,630$

Operating expenses Salaries / wages and employee benefits 8,801 21,902 22,713 23,969 24,856 Professional fees 1,062 2,098 2,122 2,125 2,127 Supplies 191 515 572 624 675 Depreciation and amortization 5,825 13,858 13,186 10,949 10,947 Other expenses 4,804 11,869 12,476 12,844 13,456

Total operating expenses 20,683 50,242 51,069 50,511 52,061

Income from operations 1,225 7,505 12,563 17,884 20,569

Other expenses, netInterest income - bond reserves 553 642 884 951 1,039Interest expense - series 2018 A bonds (6,820) (18,053) (18,053) (18,053) (18,053)Interest expense - series 2018 B-1 bonds (620) (1,728) (1,860) (2,003) (2,039)Interest expense - series 2018 B-2 bonds (1,802) (5,052) (5,491) (5,968) (6,351)Interest expense - series 2018 C bonds (253) (723) (816) (913) (1,024)

Total other expenses, net (8,942) (24,914) (25,336) (25,986) (26,428)

Net loss (7,717) (17,409) (12,773) (8,102) (5,859)1Projected revenues due not consider the implications of ASC 606, which may or not may have a significant impact on revenue recognition

at the Project. The new accounting guidance will be effective for the Project beginning January 1, 2019. _________________________________ * Notes: (1) The prospective financial information has been provided by management of the Operator. BDO USA, LLP has not compiled or examined this information and accordingly does not express an opinion or any other form of assurance on the prospective financial information included herein; and (2) the forecasted revenue does not consider the impact of new accounting guidance which may or may not have a significant impact on revenue recognized by the Project during fiscal year 2019 and all years thereafter.

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Consolidated Statements of Cash Flows

Years Ended December 31, 2019 2020 2021 2022

Cash flows from operating activitiesNet loss (17,409)$ (12,773)$ (8,102)$ (5,859)$ Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 13,858 13,186 10,949 10,947Changes in operating assets and liabilities (620) (670) (858) (237)Accrued interest on bonds 9,710 8,166 8,885 4,199

Drawn down of Capitalized interest fund 16,548 6,018 0 0Net cash flows provided by operating activities 22,087 13,927 10,874 9,050

Cash flows from investing activitiesPurchases of property, plant and equipment (3,098) (3,404) (3,410) (3,415)Liquidity reserve fund (4,894) (1,216) (551) (508)Repair & Replacement fund (13,648) (6,008) (8,953) 0Extraordinary expense fund (333) (334) (333) 0Excess revenue fund 0 0 0 (5,170)

Cash flows used in investing activities (21,973) (10,962) (13,247) (9,093)

Cash flows from financing activitiesPayments on long-term debt 0 0 0 0

Net cash flows provided by financing activities 0 0 0 0

Net increase in cash and cash equivalents 114 2,965 (2,373) (43)Cash and cash equivalents, beginning of year 4,700 4,814 7,779 5,406

Cash and cash equivalents, end of year 4,814 7,779 5,406 5,363

Cash paid for interest (15,847)$ (18,054)$ (18,054)$ (19,074)$ Projected Days Cash on Hand

Years Ended December 31, 2018 2019 2020 2021 2022

Cash and cash equivalents 4,700$ 4,814$ 7,779$ 5,406$ 5,363$ Liquidity reserve fund 12,191 17,085 18,301 18,852 19,360 Repair and replacement fund 2,000 12,550 15,153 20,697 17,281 Excess revenue fund - - - - 5,170 Unrestricted cash and reserves 18,891 34,449 41,233 44,955 47,174

Operating expenses2 14,749 36,121 37,615 39,288 40,835Senior bond interst expense 6,820 18,053 18,053 18,053 18,053Total 21,569 54,174 55,668 57,341 58,888

Days in the year 138 365 365 365 365 Daily expense requirement 156$ 148$ 153$ 157$ 161$ Days cash on hand 121 232 270 286 292

(2)Pursuant to definition within the trust indenture _________________________________ * Notes: (1) The prospective financial information has been provided by management of the Operator. BDO USA, LLP has not compiled or examined this information and accordingly does not express an opinion or any other form of assurance on the prospective financial information included herein; and (2) the forecasted revenue does not consider the impact of new accounting guidance which may or may not have a significant impact on revenue recognized by the Project during fiscal year 2019 and all years thereafter.

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SUMMARY OF BOND STRUCTURING ASSUMPTIONS

Introduction

The following discussion describes the assumptions used to calculate the projected Turbo Redemptions and the projected Weighted Average Lives (as described under this heading) for the Series 2018A-1 Bonds (the “Structuring Assumptions”). The Structuring Assumptions for the Series 2018A-1 Bonds as described below were applied to the Operator’s Base Case Scenario, as set forth above under the heading “PROJECTED FINANCIAL INFORMATION”.

Structuring Assumptions

The Structuring Assumptions described under this heading were prepared by the Underwriters and are believed to be reasonable. In addition, the Structuring Assumptions are based on the Operator’s projections which have been reviewed by the Feasibility Consultant. See “PROJECTED FINANCIAL INFORMATION” herein and APPENDIX B – “MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY” attached hereto.

Some assumptions inevitably will not materialize and unanticipated events and circumstances may occur. Actual results achieved will vary from the results based on the Structuring Assumptions, and the variations may be material. If actual results are materially different from those assumed, it could have a material effect on the projections set forth under this heading. See “RISK FACTORS” herein.

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Projected Turbo Redemptions

The following table was prepared by the Underwriters and sets forth the projected impact of Turbo Redemptions on the outstanding principal balance of the Series 2018A-1 Bonds in each Bond Year for the Base Case Scenario. The table shows for each period, the sum of the mandatory redemptions and the projected Turbo Redemptions and outstanding principal amounts under the Base Case Scenario. There can be no assurance that there will be sufficient funds available to redeem Series 2018A-1 Bonds in accordance with the following projections.

Date Beginning Balance

Redemption of Series 2018A-1

Bonds Aggregate

Redemptions Ending Balance

1/1/2019 268,500,000.00 - - 268,500,000.00 1/1/2020 268,500,000.00 - - 268,500,000.00 1/1/2021 268,500,000.00 - - 268,500,000.00 1/1/2022 268,500,000.00 - - 268,500,000.00 1/1/2023 268,500,000.00 370,000.00 370,000.00 268,130,000.00 1/1/2024 268,130,000.00 3,265,000.00 3,265,000.00 264,865,000.00 1/1/2025 264,865,000.00 3,850,000.00 3,850,000.00 261,015,000.00 1/1/2026 261,015,000.00 4,100,000.00 4,100,000.00 256,915,000.00 1/1/2027 256,915,000.00 4,470,000.00 4,470,000.00 252,445,000.00 1/1/2028 252,445,000.00 8,675,000.00 8,675,000.00 243,770,000.00 1/1/2029 243,770,000.00 10,735,000.00 10,735,000.00 233,035,000.00 1/1/2030 233,035,000.00 12,030,000.00 12,030,000.00 221,005,000.00 1/1/2031 221,005,000.00 13,360,000.00 13,360,000.00 207,645,000.00 1/1/2032 207,645,000.00 15,325,000.00 15,325,000.00 192,320,000.00 1/1/2033 192,320,000.00 16,830,000.00 16,830,000.00 175,490,000.00 1/1/2034 175,490,000.00 18,385,000.00 18,385,000.00 157,105,000.00 1/1/2035 157,105,000.00 19,295,000.00 19,295,000.00 137,810,000.00 1/1/2036 137,810,000.00 20,340,000.00 20,340,000.00 117,470,000.00 1/1/2037 117,470,000.00 21,695,000.00 21,695,000.00 95,775,000.00 1/1/2038 95,775,000.00 22,945,000.00 22,945,000.00 72,830,000.00 1/1/2039 72,830,000.00 24,315,000.00 24,315,000.00 48,515,000.00 1/1/2040 48,515,000.00 25,885,000.00 25,885,000.00 22,630,000.00 1/1/2041 22,630,000.00 22,630,000.00 22,630,000.00 - 1/1/2042 - - - - 1/1/2043 - - - - 1/1/2044 - - - - 1/1/2045 - - - - 1/1/2046 - - - - 1/1/2047 - - - - 1/1/2048 - - - - 1/1/2049 - - - -

Initial Projected Weighted Average Lives

The following table was prepared by the Underwriters assuming the initial mandatory redemptions and the Turbo Redemptions as described above under the subheading “Projected Turbo Redemptions,” and sets forth the Initial Projected Weighted Average Lives and Expected Final Turbo Redemption Date of the Series 2018A-1 Bonds. The table is based on the Structuring Assumptions and the application of the projected Gross Operating for each Scenario in accordance with the flow of funds pursuant to the Indenture. See the discussion herein under the headings “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2018 BONDS.”

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The Initial Projected Weighted Average Lives and Expected Final Turbo Redemption Date for the Series 2018A Bonds shown on the inside cover is based on the application of the projected Gross Operating Revenues for the Base Case Scenario.

A-1

Initial Average Life 21.64 Initial Final Maturity 1/1/2048

Expected Average Life with Turbo 16.40 Expected Final Maturity with Turbo 1/1/2041

Breakdown of Series 2018A-1 Term Bonds Turbo Initial Ave. Life Final Maturity Ave. Life Final Maturity

Term 2033 11.33 1/1/2033 12.36 1/1/2033 Term 2038 17.49 1/1/2038 17.48 1/1/2038 Term 2048 20.89 1/1/2041 25.23 1/1/2048

Total Series 2018A-1 Bonds 16.40 1/1/2041 21.64 1/1/2048

SECURITY AND SOURCES OF PAYMENT FOR SERIES 2018 BONDS

General

The Series 2018 Bonds will be special limited obligations of the Authority payable solely from Gross Operating Revenues and other funds pledged for their payment pursuant to the Indenture. The payment of the principal of, Redemption Price, if any, and interest on the Series 2018 Bonds will be secured under the Indenture by (i) moneys and investments held by the Trustee under, and to the extent provided in, the Indenture, including Gross Operating Revenues, and (ii) the Leasehold Mortgage.

Gross Operating Revenues mean all revenue and income of any kind derived directly or indirectly from operations at the Project, properly attributable to the period under consideration, determined in accordance with Generally Accepted Accounting Principles and a uniform system of accounts (except that in determining the amount deposited into the Revenue Fund, such determination shall be made on a cash basis and except that revenues paid with respect to use of any part of the Project with respect to particular months or other period will be considered properly attributable to those months or other period even if received by the Trustee before or after), except that the following shall not be included in determining Gross Operating Revenues:

(a) Professional Fee Revenues;

(b) Excluded Taxes and Other Charges;

(c) receipts from the financing, sale or other disposition of capital assets and other items not in the ordinary course of the Project’s operations and income derived from securities and other property acquired and held for investment;

(d) receipts from awards or sales in connection with any Taking, from other transfers in lieu of and under the threat of any Taking, and other receipts in connection with any Taking, but only to the extent that such amounts are specifically identified as compensation for alterations or physical damage to the Project;

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(e) proceeds of any insurance, including the proceeds of any Business Interruption Insurance;

(f) proceeds of any financing; and

(g) interest earned on funds held in any Fund or Account.

The Authority may issue Additional Bonds to finance or refinance the construction, installation and equipping of additions, renovation, betterments, extensions, expansions, repairs or improvements to the Project. See “—Indenture Covenants” below and “APPENDIX E – PROPOSED FORM OF THE INDENTURE – Provisions for Issuance of Bonds.”

Indenture

The Series 2018 Bonds are issued pursuant to the Indenture and, together with any Additional Bonds that may be issued from time to time under the Indenture, are secured thereby according to the priority established in the Indenture. Pursuant to the Indenture, the Authority has pledged to the Trustee, for the benefit and security of all Bondholders, all of the Revenues and any other amounts (including proceeds of the sales of the Series 2018 Bonds) held by the Trustee in any Fund or Account established pursuant to the Indenture (other than the Rebate Fund).

Pursuant to the Indenture, the Trustee is to establish the following funds in connection with the execution and delivery of the Series 2018 Bonds: (1) Revenue Fund, (2) Debt Service Fund, (3) Project Fund, (4) Senior Debt Service Reserve Fund (which is held for the benefit of only the Beneficial Owners of the Senior Bonds), (5) Extraordinary Expense Fund, (6) Repair and Replacement Fund, (7) Operator Fee Fund, (8) Liquidity Reserve Fund, (9) Excess Revenue Fund, (10) Insurance and Condemnation Proceeds Fund, and (11) Rebate Fund, along with various Accounts and Subaccounts which may be established under any such Funds as provided in the Indenture and as described herein below. All moneys and instruments required to be deposited with or paid to the Trustee for the account of such funds (except for the Rebate Fund and except for the Senior Debt Service Reserve Fund which is held for the benefit of only the Beneficial Owners of the Senior Bonds) or any other trust fund or reserve established under any provision of the Indenture, and any investments purchased with such moneys, are to be held by the Trustee for the benefit of the owners of the Bonds. For a further discussion of the terms of the Indenture, see “APPENDIX E – PROPOSED FORM OF THE INDENTURE.”

Leasehold Mortgage

The Series 2018 Bonds are further secured by a certain Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Leasehold) dated as of August __, 2018 and executed by the Authority, as mortgagor, in favor of the Trustee, as mortgagee, which creates a lien upon the Authority’s leasehold interest in the land, the improvements and the fixtures constituting the Project, and a security interest in other equipment of the Project, subject to certain Permitted Encumbrances. The Leasehold Mortgage will secure a maximum principal amount of $221,000,000. For a discussion of the Leasehold Mortgage, see “APPENDIX F —PROPOSED FORM OF THE LEASEHOLD MORTGAGE.”


The Operating Agreement will require the Operator to (i) transfer to the Trustee for deposit in the Revenue Fund, as long as any of the Bonds remain Outstanding, the Gross Operating Revenues as required by the Operating Agreement and (ii) grant to the Collateral Agent, for the benefit of the Authority, and by the assignment pursuant to the Indenture, the further benefit of the Trustee and the Bondholders under the Indenture, a security interest in the Operator Collateral to secure the Operator’s obligations under the Project Documents, including the Operating Agreement. All such Gross Operating Revenues deposited with the Trustee in the Revenue Fund and all proceeds of the Operator Collateral shall be held, disbursed, allocated and applied by the Trustee only as provided in the Indenture.

The Collateral Agent shall hold a security interest in each Collection Account and Operating Account established pursuant to the Operating Agreement or any sub-Operating Agreement to, among other things, assure

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that amounts comprising Gross Operating Revenues deposited therein shall be paid and applied as provided by the Indenture.

As set forth in the Operating Agreement, the Operator shall pay or cause to be paid all Excluded Taxes and Other Charges, Professional Fee Expenses and Operating Expenses in accordance with the provisions of the Operating Agreement.

See “PRINCIPAL PROJECT AGREEMENTS – Facility Operating Agreement” and “APPENDIX G – PROPOSED FORM OF THE FACILITY OPERATING AGREEMENT.”

Revenue Fund and Flow of Funds

Except as otherwise provided in the Indenture after an Event of Default, on the first Business Day of each month, (commencing with the first month immediately after the Closing Date and each such date, a “Monthly Transfer Date”), the Trustee shall make the deposits, transfers or payments indicated below from amounts then on deposit in the Revenue Fund (provided that, in the event the Trustee has received moneys attributable to more than one Operating Year, the Trustee shall make the transfer in the Operating Year to which such moneys are attributable), as directed by the Operator, in the priority listed below (including curing any existing deficiency in deposits, transfers or payments required in prior months), the requirements of each Fund, deposit, transfer or payment of each priority to be fully satisfied, leaving no deficiencies, prior to any deposit, transfer or payment later in priority, unless as otherwise expressly provided below; provided, however, that all amounts on deposit in the Revenue Fund on each Monthly Transfer Date on or prior to the January 2019 Monthly Transfer Date shall be initially transferred to the Liquidity Reserve Fund at Sixth below and shall not flow through First through Fifth below:

First, to the Senior Debt Service Account of the Debt Service Fund, an amount equal to the quotient obtained by dividing the amount of interest on each Series of Outstanding Senior Bonds Outstanding payable on the first Interest Payment Date, net of any amounts in the Capitalized Interest Subaccount of the Senior Debt Service Account to be used for payment of that interest, by the number of months between the Closing Date and the first Interest Payment Date, and thereafter, one-sixth of any interest to become due and payable within the next six months on each Series of Outstanding Senior Bonds, net of any amounts in the Capitalized Interest Subaccount of the Senior Debt Service Account to be used for payment of that interest, plus an amount equal to any shortfall from prior periods to the extent not made up from another source;

Second, to the Senior Debt Service Account of the Debt Service Fund, an amount equal to the quotient obtained by dividing the amount of principal or Sinking Fund Installments on each Series of Outstanding Senior Bonds Outstanding payable on the first Principal Payment Date, by the number of months between the Closing Date and the first Principal Payment Date, and thereafter, one-twelfth of the principal to become due and payable within the next twelve months, on each Series of Outstanding Senior Bonds, plus an amount equal to any shortfall from prior periods to the extent not made up from another source;

Third, to the Rebate Fund, an amount (as determined by the Authority) which together with moneys on deposit in such Fund, will equal the aggregate amount required to be on deposit therein pursuant to the Tax Certificate delivered in connection with the issuance of each Series of Bonds;

Fourth, to the Senior Debt Service Reserve Fund, an amount which together with moneys on deposit in such Fund will equal the Senior Reserve Fund Requirement, in accordance with the provisions set forth below with respect to the Senior Debt Service Reserve Fund;

Fifth, to the Operator Fee Fund, an amount which together with prior deposits to such Fund is equal to the Subordinated Operator Fee for all prior Fiscal Years, including interest thereon pursuant to the Facility Operating Agreement, as such amount shall be certified to the Trustee by the Operator and approved by the Designated Agent;

Sixth, to the Liquidity Reserve Fund, an amount which together with moneys on deposit in such Fund will equal the Liquidity Requirement;

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Seventh, to the Repair and Replacement Fund, an amount which together with moneys on deposit in such Fund will equal the Repair and Replacement Requirement;

Eighth, to the Series 2018B-1 Debt Service Account of the Debt Service Fund:

(A) one-sixth of any interest to become due and payable within the next six months on the Outstanding Series 2018B-1 Bonds, plus an amount equal to any shortfall from prior periods to the extent not made up from another source; plus

(B) one-twelfth of the principal or Accreted Value, as applicable, to become due and payable within the next twelve months, on the Outstanding Series 2018B-1 Bonds, plus an amount equal to any shortfall from prior periods to the extent not made up from another source; and

Ninth, to the Subordinate Debt Service Account of the Debt Service Fund:

(A) one-sixth of any interest to become due and payable within the next six months on each Series of Outstanding Subordinate Bonds (other than the Series 2018B-1 Bonds), plus an amount equal to any shortfall from prior periods to the extent not made up from another source; plus

(B) one-twelfth of the principal or Accreted Value, as applicable, to become due and payable within the next twelve months, on each Series of Outstanding Subordinate Bonds (other than the Series 2018B-1 Bonds), plus an amount equal to any shortfall from prior periods to the extent not made up from another source; and

Tenth, to the Extraordinary Expense Fund, an amount which together with moneys on deposit in such Fund will equal the Extraordinary Expense Fund Reserve Requirement (and, to the extent that amounts have been advanced or paid to the Authority from the Extraordinary Expense Fund to pay Extraordinary Costs and Expenses and such amounts are subsequently recovered by the Authority from any third-person, such amounts shall be deposited to the Extraordinary Expense Fund); and

Eleventh, to the Junior Debt Service Account of the Debt Service Fund:

(A) one-sixth of any interest to become due and payable within the next six months on each Series of Outstanding Junior Bonds, plus an amount equal to any shortfall from prior periods to the extent not made up from another source; plus

(B) one-twelfth of the principal or Accreted Value, as applicable, to become due and payable within the next twelve months, on each Series of Outstanding Junior Bonds, plus an amount equal to any shortfall from prior periods to the extent not made up from another source; and

Twelfth, all remaining amounts in the Revenue Fund on such Monthly Transfer Date following the distributions in items First through Eleventh shall be deposited seventy-five percent (75%) in the Turbo Redemption Account and twenty-five percent (25%) in the Excess Revenue Fund.

The Trustee will also, from moneys in the Revenue Fund, pay to the party entitled thereto or transfer or cause to be transferred to any applicable debt service or other payment fund or account for any Additional Indebtedness, without preference or priority between transfers made pursuant to this sentence and the transfers to the Senior Debt Service Account, on the dates specified in the Issuing Instrument relating to such Additional Indebtedness (provided that a certified copy of such Issuing Instrument has been delivered to the Trustee), the sum or sums required to be paid or deposited in such debt service or other payment fund or account with respect to principal, premium, if any, and interest on Additional Indebtedness in accordance with the terms of such Additional Indebtedness.

Notwithstanding any provision in the Indenture to the contrary, if on the 10th Business Day immediately preceding each Interest Payment Date and Principal Payment Date there are not on deposit in the Senior Debt Service Account on such date amounts sufficient to pay the interest and Principal Payments to become due on the

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Senior Bonds on such Interest Payment Date or Principal Payment Date (other than Senior Bonds for which moneys have been already set aside and dedicated to the payment of such Senior Bonds as permitted herein), the Trustee shall transfer moneys to the Senior Debt Service Account from the following sources in an aggregate amount which, together with the amount then on deposit in the Senior Debt Service Account, will result in the Senior Debt Service Account having the balance required to be on deposit therein in order to pay interest and Principal Payments to become due and payable on such Interest Payment Date or Principal Payment Date:

First, seventy-five percent (75%) from the Turbo Redemption Account and twenty-five percent (25%) from the Excess Revenue Fund to the extent possible and until both of such funds are depleted in their entirety;

Second, from the Junior Debt Service Account; and

Third, from the Subordinate Debt Service Account; and

Fourth, from the Series 2018B-1 Debt Service Account; and

Fifth, from the Operator Fee Fund; and

Sixth, from the Repair and Replacement Fund; and

Seventh, from the Liquidity Reserve Fund; and

Eighth, from the Extraordinary Expense Fund; and

Ninth, from the Senior Debt Service Reserve Fund (but only at the end of the Business Day immediately preceding the Interest Payment Date or Principal Payment Date), in accordance with the provisions of the Indenture.

Excess Revenue Fund

Upon the receipt of a Request of the Operator, with the approval of the Authority, the funds in the Excess Revenue Fund shall be applied by the Trustee to remedy any shortfalls in the transfers in accordance with the flow of funds set forth above. The funds held in the Excess Revenue Fund will be distributed annually each January 1 in the following order of priority: (1) payment to the University of Maryland, Baltimore of 2.5% of the funds held in the Excess Revenue Fund at the time of distribution; (2) payment of deferred compensation to University of Maryland Radiation Oncology Associates, P.A. and to other University of Maryland clinical providers of amounts due under Section 5 of the Clinical Services Agreement pending performance of the Project, which amounts shall be set forth in the Request of the Operator; (3) payment to Varian Medical Systems, Inc. for non-budgeted payment obligations, which amounts shall be set forth in the Request of the Operator; (4) in the amounts set forth in the Request of the Operator, for transfer to the Operating Account to be used as (i) payment for optional patient transportation not budgeted as Operating Expenses; (ii) payment for patient thermal therapy equipment upgrades not budgeted as Capital Expenses; (iii) payment for private patient integrative medicine not budgeted as Operating Expenses; (iv) payment for patient accommodations not budgeted as Operating Expenses; and (v) payment for other expenses not budgeted as Operating Expenses or Capital Expenses.

Debt Service Fund

The Trustee will pay out of the appropriate Account of the Debt Service Fund on or before each Interest Payment Date for any of the Bonds the amount required for the interest payment on such Interest Payment Date, and will pay out of the appropriate Account of the Debt Service Fund on or before each Principal Payment Date, the amount required for the Principal Payment due on such due date; provided, that if any special fund, account or subaccount has been created for the payment of capitalized interest on the Bonds or any Series thereof, the Trustee will apply any amounts transferred to the Debt Service Fund from such special fund, account or subaccount to pay such interest prior to the use of any amounts in the Debt Service Fund for such purpose. On or before any Redemption Date for Bonds to be redeemed, the Trustee will pay out of the appropriate Account of the Debt Service Fund, from available amounts deposited therein from time to time, the Redemption Price of and interest on the Bonds then to be redeemed.

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The Trustee will apply amounts in the appropriate Account of the Debt Service Fund with respect to any Mandatory Sinking Fund Installment (together with amounts in the appropriate Account of the Debt Service Fund with respect to interest on the Bonds for which such Mandatory Sinking Fund Installment was established) to the redemption of Bonds of the Series and maturity for which such Mandatory Sinking Fund Installment was established in an amount not exceeding that necessary to complete the retirement of such Mandatory Sinking Fund Installment as hereinafter provided. The Trustee will credit the principal amount of Bonds of such Series and maturity delivered by the Authority to the Trustee for cancellation not less than 60 days prior to such due date, as provided below, against the amount of such Mandatory Sinking Fund Installment.

Except as otherwise provided in the flow of funds described above, the Trustee will apply amounts in the Senior Debt Service Account, the Series 2018B-1 Debt Service Account, the Subordinate Debt Service Account and the Junior Debt Service Account of the Debt Service Fund only to the payment of Debt Service on the Bonds of the same Series designation, in each case in the manner and at the times provided in the preceding two paragraphs. If any amounts remain on deposit in the Senior Debt Service Account when there are no Senior Bonds Outstanding, the Trustee will transfer such amounts to the Revenue Fund. If any amounts remain on deposit in the Series 2018B-1 Debt Service Account when there are no Series 2018B-1 Bonds Outstanding, the Trustee will transfer such amounts (i) first to the Senior Debt Service Reserve Fund, to the extent additional Senior Bonds are issued to finance the refunding of Series 2018B-1 Bonds and there is a deficiency in the Senior Debt Service Reserve Fund following such issuance, and (ii) second, any remainder to the Revenue Fund. If any amounts remain on deposit in the Subordinate Debt Service Account when there are no Series 2018B-2 Bonds Outstanding, the Trustee will transfer such amounts (i) first to the Senior Debt Service Reserve Fund, to the extent additional Senior Bonds are issued to finance the refunding of Series 2018B-2 Bonds and there is a deficiency in the Senior Debt Service Reserve Fund following such issuance, and (ii) second, any remainder to the Revenue Fund. If any amounts remain on deposit in the Junior Debt Service Account when there are no Junior Bonds Outstanding, the Trustee will transfer such amounts (i) first to the Senior Debt Service Reserve Fund, to the extent additional Senior Bonds are issued to finance the refunding of Junior Bonds and there is a deficiency in the Senior Debt Service Reserve Fund following such issuance, and (ii) second, any remainder to the Revenue Fund.

Senior Debt Service Reserve Fund

On the date of issuance of the Series 2018A Bonds, the Senior Reserve Fund Requirement shall be satisfied by a deposit of $25,394,325* into the Senior Debt Service Reserve Fund. The Trustee will apply amounts from the Senior Debt Service Reserve Fund to the extent necessary to cure any deficiency in the Senior Debt Service Account pursuant to the provisions of the flow of funds described above. Notwithstanding anything in the Indenture to the contrary, the Senior Debt Service Reserve Fund shall only secure the Series 2018A Bonds and if Additional Senior Bonds are issued under the Indenture while the Series 2018A Bonds are Outstanding and such Additional Senior Bonds are to be secured by a debt service reserve fund, the Trustee shall establish a separate and distinct account within the Senior Debt Service Reserve Fund to secure such Additional Senior Bonds.

Subject to the provisions of the Indenture relating to the valuation and application of interest earnings, if on the last Business Day preceding each Interest Payment Date the amount on deposit in the Senior Debt Service Reserve Fund exceeds the Senior Reserve Fund Requirement, the Trustee will deposit such amounts in the Senior Debt Service Account.

In the event of a draw on the Senior Debt Service Reserve Fund, the Trustee will, to the extent of amounts received from the Authority, restore the amount on deposit to equal the Senior Reserve Fund Requirement within 36 months in 36 equal installments. If any such installment payment is missed, it shall be an Event of Default under the Indenture.

In the event of the refunding of one or more Series of Senior Bonds (or portions thereof), the Trustee will, upon the Direction of the Authority, withdraw from the Senior Debt Service Reserve Fund any or all of the amounts on deposit therein with respect to the Senior Bonds being refunded and apply such amounts to the payment of the principal of and interest on the Senior Bonds (or portions thereof) being refunded; provided, that such withdrawal will not be made unless: * Preliminary, subject to change.

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(i) immediately thereafter the Senior Bonds (or portions thereof) being refunded shall be deemed to have been paid or defeased pursuant to the Indenture, and

(ii) the amount remaining in the Senior Debt Service Reserve Fund after such withdrawal, taking into account any deposits to be made in the Senior Debt Service Reserve Fund in connection with such refunding, shall not be less than the Senior Reserve Fund Requirement.

Extraordinary Expense Fund

The Extraordinary Expense Fund will be funded in an amount equal to the Extraordinary Expense Fund Reserve Requirement. The Extraordinary Expense Fund Reserve Requirement is an amount equal to (i) initially, $2,500,000, (ii) in Fiscal Year 2019, $2,833,333, (iii) in Fiscal Year 2020, $3,166,667, (iv) and thereafter, $3,500,000.

Amounts on deposit in the Extraordinary Expense Fund shall be used only for the purpose of paying (i) first, deficiencies in the Debt Service Fund but only as and to the extent provided in the flow of funds set forth above, and (ii) second, Extraordinary Costs and Expenses. The Trustee will disburse moneys from the Extraordinary Expense Fund to the Authority or as designated by the Authority upon receipt by the Trustee of a Request of the Authority pursuant to the Indenture. After discharge of the Indenture, the Authority will retain any monies in the Extraordinary Expense Fund, unless a different arrangement is agreed to, at the Authority’s discretion.

Repair and Replacement Fund

The Repair and Replacement Fund will be funded in an amount equal to the Repair and Replacement Requirement. The Repair and Replacement Requirement is an amount equal to the sum of the following: (a) an initial deposit of $2,000,000; (b) from January 1, 2019 through December 31, 2021, all net income for the Project, less any amounts transferred to the Extraordinary Expense Fund, once the Liquidity Requirement is met; and (c) from January 1, 2022 and thereafter, an amount equal to or greater than $9,000,000.

The Trustee will apply amounts on deposit in the Repair and Replacement Fund to the extent necessary to cure any deficiency in the Senor Debt Service Account pursuant to the Flow of Funds set forth above and to contribute towards the final debt service payments on the Bonds. Upon the receipt of a Request of the Operator, the Trustee will apply amounts in the Repair and Replacement Fund as directed by the Operator for (i) repair and replacement of the Project, (ii) Capital Expenses to further improve the operations of the Project, and (iii) payments to Varian Medical Systems, Inc. under the Service Agreement in addition to the base payments due to Varian Medical Systems, Inc. thereunder. The Trustee shall calculate the amount on deposit in the Repair and Replacement Fund as of the last day of each Fiscal Year. Beginning in Fiscal Year 2019, to the extent there are amounts on deposit in the Repair and Replacement Fund in excess of $9,000,000 as of the last day of the prior Fiscal Year (such excess amounts, hereinafter referred to as the “R&R Excess”), the Trustee will transfer annually the following amounts from the R&R Excess to the Extraordinary Expense Fund until the Extraordinary Expense Fund Reserve Requirement is met: $333,333.33 (“R&R Excess Requirement”), or the full amount of the R&R Excess if the R&R Excess is less than the R&R Excess Requirement, plus any amounts necessary to remedy any shortfalls from the R&R Excess Requirement in the previous Fiscal Year.

Operator Fee Fund

The funds held in the Operator Fee Fund shall be distributed to the Operator annually each January 1.

Liquidity Reserve Fund

The Trustee shall apply amounts on deposit in the Liquidity Reserve Fund to the extent necessary to cure any deficiency in the Senior Debt Service Account pursuant to the flow of funds described above and to contribute towards the final debt service payments on the Bonds.

If the amount on deposit in the Liquidity Reserve Fund exceeds the Liquidity Requirement, amounts in excess of the Liquidity Requirement will be deposited into the Revenue Fund.

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The Trustee will make disbursements of moneys in the Liquidity Reserve Fund pursuant to and in accordance with a Request of the Operator (with the written approval of the Authority) in substantially the form prescribed by the Indenture for the purposes of paying (i) first, Operating Expenses then due (and for funds that have not been made available to the Operator (or applicable Revenue Contractor) in accordance with the Operating Agreement), (ii) second, any Unpaid Operator Fees, including any Subordinated Operator Fee, then due in accordance with the Facility Operating Agreement, and (iii) third, Capital Expenses then due. The Trustee may rely upon any Request of the Operator substantially in the form prescribed by the Indenture and approved in writing by the Authority and will have no obligation to determine if the amounts disbursed are properly applied for the purposes set forth herein.

Upon the receipt of a Request of the Operator, the Trustee will also apply amounts in the Liquidity Reserve Fund as directed by the Operator (i) for repair or replacement of the Project in the event of casualty damage or (ii) for the payment of Emergency Expenses.

Turbo Redemption Account of the Debt Service Fund

The Turbo Redemption Account of the Debt Service Fund will be funded with Revenues as part of deposit Twelfth in accordance with the provisions described under “Revenue Fund and Flow of Funds” above. Provided that (i) there is no Event of Default, and (ii) the Senior Debt Service Reserve Fund, Extraordinary Expense Fund, the Liquidity Reserve Fund and the Repair and Replacement Fund are each funded at their respective required amounts, money in the Turbo Redemption Account shall be used to redeem the Series 2018A-1 Bonds, annually on each January 1, in the order of maturity and scheduled sinking fund redemption, in accordance with the provisions set forth herein under the heading “THE SERIES 2018 Bonds – Turbo Redemption.” The Trustee shall determine the amount available to redeem Bonds immediately following the Monthly Transfer Date occurring in November of each year (each, a “November Monthly Transfer Date”).

Moneys in the Turbo Redemption Account may be applied to pay debt service on the Bonds to the extent funds are not otherwise available in the Revenue Fund and the Debt Service Fund for such purpose as provided in the flow of funds above.

Insurance and Condemnation Proceeds Fund

The Insurance and Condemnation Proceeds Fund is a trust fund into which, under certain circumstances, net proceeds of insurance or condemnation awards are to be paid to the Trustee and deposited in the Insurance and Condemnation Proceeds Fund and used to prepay Bonds or to repair, rebuild, restore, or replace the Project. See “PROPOSED FORM OF THE INDENTURE – Insurance and Condemnation Proceeds Fund” in APPENDIX E hereto.

Indenture Covenants

Rate Covenant. The Operating Agreement will include the following provisions:

(a) The Operator will use its commercially reasonable efforts, in consultation with the Authority, to set fees and charges in each Operating Year in amounts reasonably calculated to produce Total Net Revenues in each Operating Year at least sufficient to meet the Debt Service Coverage Requirement for such Operating Year.

(b) If any proposed Operating Plan and Budget is projected to result in a Debt Service Coverage Ratio of less than the Debt Service Coverage Requirement, the Operator will include in such proposed Operating Plan and Budget a detailed written explanation as to why the Operator has not budgeted to attain such ratio.

(c) The Authority, the Controlling Party and the Trustee will have the right to object to any part of any proposed Operating Plan and Budget, including but not limited to a proposed Operating Plan and Budget that is projected to result in a Debt Service Coverage Ratio of less than the Debt Service

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Coverage Requirement (provided the Trustee shall have no obligation to review the Operating Plan and Budget nor to object to the Operating Plan and Budget).

“Debt Service Coverage Ratio” means a fraction calculated by dividing the Total Net Revenues for a particular period of time by the Net Debt Service for the Outstanding Bonds or Series of Bonds, as applicable, for the same period of time.

“Debt Service Coverage Requirement” means for each Operating Year, a Debt Service Coverage Ratio which is not less than: (i) 1.25x on the Senior Bonds with respect to the 2019, 2020, 2021 and 2022 Operating Years and (ii) 1.30x on the Senior Bonds with respect to the 2023 Operating Year and each Operating Year thereafter.

An Event of Default under the Indenture will occur if there is a failure to maintain a 1.05x Debt Service Coverage Ratio with respect to the Senior Bonds as of any Fiscal Year End.

Days Cash on Hand Covenant. The Authority covenants that it will maintain or caused to maintained as of December 31 of each Fiscal Year, commencing December 31, 2018 (each such date being a “Testing Date”), the following liquidity requirements (the “Liquidity Requirement”): (i) for the 2018 Testing Date, an initial deposit of $5,000,000 plus all net income for the Project through such Testing Date, and (ii) thereafter, an amount not less than 120 Days Cash on Hand.

The Authority shall deliver a Certificate setting forth the Liquidity Requirement and showing the calculation thereof as of December 31 of each Fiscal Year to the Trustee no later than January 15 of the following Fiscal Year.

Except for the failure to maintain a minimum of sixty (60) Days Cash on Hand, failure to achieve the Liquidity Requirement for any Testing Date shall not constitute an Event of Default under the Indenture if the Operator takes all action necessary to comply with the procedures set forth below for retaining a Medical Consultant and follows each recommendation contained in the Medical Consultant’s report to the extent permitted by law.

Annual Budget. The Operating Agreement will provide that at least 60 days in advance of the beginning of each Operating Year, the Operator will prepare and deliver to the Trustee and the Authority the Proposed Budget Documents for the next ensuing Operating Year. Such Proposed Budget Documents may be submitted by the Operator in preliminary form so long as the final Proposed Budget Documents for the next ensuing Operating Year are submitted to the Trustee and the Authority no later than the commencement of the applicable Operating Year. The Authority will promptly notify the Operator and each other in writing as to any objections it may have to the Proposed Budget Documents. The Trustee shall have no obligation to review any such Proposed Budget Documents received. The Authority shall be responsible for approving the Proposed Budget Documents.

Under the Operating Agreement, the Operator (i) will be required to use commercially reasonable efforts to operate within and in a manner consistent with each approved Operating Plan and Budget and each approved Capital Budget, (ii) will be prohibited from substantially deviating from the budgeted Capital Expenses in an approved Capital Budget unless the Operator obtains the prior written consent of the Authority (it being agreed that a deviation in excess of ten percent (10%) of the budgeted Capital Expenses in the aggregate is substantial), and (iii) will be prohibited from substantially deviating from the Budgeted Operating Expenses in an approved Operating Plan and Budget unless the Operator obtains the prior written consent of the Authority (it being agreed that a deviation in excess of ten percent (10%) of the approved Operating Plan and Budget is substantial).

The Operator will file or cause to be filed with the Trustee and the Authority, the Operating Plan and Budget and Capital Budget prior to the commencement of the applicable Operating Year. The Trustee will be entitled to rely on the Operator’s Direction in making the deposits into the various funds and accounts pursuant to the flow of funds set forth above.

Selection of Medical Consultant. If the Liquidity Requirement is not met as of any Testing Date, the Authority will, within 30 days after delivery of the Certificate disclosing such deficiency, cause the Operator to select and appoint (and, if the Operator fails to do so, the Authority will select and appoint and authorizes the

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Trustee to so select and appoint if the Authority fails to do so) with the approval of the Controlling Party, a Medical Consultant to make recommendations with respect to the rates, fees and charges and the Operator’s methods of operation and other factors affecting the financial condition in order to allow the Authority to meet the Liquidity Requirement for future periods. A copy of the Medical Consultant’s report and recommendations, if any, shall be filed with the Trustee and Authority within 60 days after the date such Medical Consultant is retained.

In addition, under each of the following circumstances, the Authority will cause the Operator to select and appoint (and, if the Operator fails to do so, the Authority will select and appoint and authorizes the Trustee to so select and appoint if the Authority fails to do so), with the approval of the Controlling Party, a Medical Consultant to make written recommendations as to the operation, management, marketing, improvement, condition or use of the Project or any part thereof that the Medical Consultant believes could result in satisfying the Debt Service Coverage Requirement or increasing the Total Net Revenues available to pay Debt Service on the Senior Bonds:

(i) If the proposed Operating Plan and Budget is projected to result in the Debt Service Coverage Requirement not being satisfied; or

(ii) If the financial statement delivered to the Authority pursuant to the Operating Agreement reflects that the Debt Service Coverage Requirement was not satisfied for the year covered by such financial statement.

The Person appointing the Medical Consultant will notify the Operator, the Trustee and the Authority of such appointment, and the Medical Consultant will deliver its report and findings to the Operator, the Trustee and the Authority. The Operating Agreement will provide that the Operator and the Authority will review such report and any written recommendations made by the Medical Consultant. The Operating Agreement will provide that the Operator will meet with the Medical Consultant to discuss the Medical Consultant’s reports, findings and written recommendations. The Operating Agreement will provide that the Operator will promptly implement all of the Medical Consultant’s written recommendations except those recommendations that (i) require an expenditure of funds greater than the amount available or projected to be available for such purpose under this Indenture, or (ii) that could, based upon the written advice of Bond Counsel, cause interest on the Bonds to be includible in gross income for federal income tax purposes, or (iii) conflict with the Operator’s duties and obligations under Applicable Laws or the Clinical Partners’ duties and obligations under Applicable Laws with respect to patient care. The fees and expenses of the Medical Consultant will be paid as an Operating Expense. Each party to the Operating Agreement will deliver to the other party at no additional charge copies of any information, correspondence or documents delivered to the Medical Consultant contemporaneously with delivering such information, correspondence or documents to the Medical Consultant.

Additional Indebtedness. At the sole and exclusive discretion of the Authority, Additional Indebtedness may be issued by the Authority for the purpose of financing working capital related to the Project. Additional Indebtedness may be issued by the Authority subject to the following conditions:

(A) The outstanding amount of Additional Indebtedness shall not exceed 1/12th of the then-current annual Budgeted Operating Expenses; and

(B) Additional Indebtedness shall be paid down to a zero balance for five consecutive days at least once every 365 days.

The pledge to secure the payment of the Senior Bonds will be on parity with any pledge and lien to secure the payments of Additional Indebtedness.

In addition, the Authority may issue Additional Bonds under the Indenture on a parity with the Senior Bonds, the Subordinate Bonds or the Junior Bonds. See “APPENDIX E – PROPOSED FORM OF THE INDENTURE – Provisions for Issuance of Bonds.”

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Direct Agreements

The Operator will enter into an agreement with the Authority and the Trustee (the “Operator Direct Agreement”) consenting to the Authority’s collateral assignment of the Authority’s rights under the Facility Operating Agreement to the Trustee.

UMROA will enter into an agreement with the Operator and the Trustee (the “UMROA Direct Agreement”) consenting to the Operator’s collateral assignment of the Operator’s rights under the Professional Services Agreement and the Clinical Management Agreement to the Authority and the Trustee.

Varian will enter into an agreement with the Operator and the Trustee (the “Varian Direct Agreement”) consenting to the Operator’s collateral assignment of the Operator’s rights under the O&M Agreement to the Authority and the Trustee.

MMBC will enter into an agreement with the Operator and the Trustee (the “Billing Direct Agreement”) consenting to the Operator’s collateral assignment of the Operator’s rights under the Billing Management and Consultant Services Agreement to the Authority and the Trustee.

UMMS will enter into an agreement with the Operator and the Trustee (the “UMMS Direct Agreement”) consenting to the Operator’s collateral assignment of the Operator’s rights under its agreements with UMMS to the Authority and the Trustee.

Each of the Direct Agreements is for the purpose of the respective contracting party acknowledging the assignment of its contract and agreeing that the Trustee may enforce its agreement upon an Event of Default.

RISK FACTORS

THE PURCHASE OF THE SERIES 2018A-1 BONDS IS SUBJECT TO CERTAIN RISKS. EACH PROSPECTIVE INVESTOR IN THE SERIES 2018A-1 BONDS IS ENCOURAGED TO READ THIS OFFICIAL STATEMENT IN ITS ENTIRETY, INCLUDING ALL APPENDICES HERETO. PARTICULAR ATTENTION SHOULD BE GIVEN TO THE FACTORS DESCRIBED BELOW, WHICH, AMONG OTHERS, COULD AFFECT THE PAYMENT OF PRINCIPAL OF AND INTEREST ON THE SERIES 2018A-1 BONDS AND WHICH COULD ALSO AFFECT THE MARKET PRICE OF THE SERIES 2018A-1 BONDS TO AN EXTENT THAT CANNOT BE DETERMINED.

ALTHOUGH THE OPERATOR BELIEVES THAT THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE THE MOST MATERIAL RISKS AND UNCERTAINTIES, THEY ARE NOT THE ONLY ONES THAT THE PROJECT MAY FACE. ALL OF THESE FACTORS ARE CONTINGENCIES WHICH MAY OR MAY NOT OCCUR. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO THE OPERATOR OR THAT THEY CURRENTLY DEEM IMMATERIAL MAY ALSO HAVE A MATERIAL ADVERSE EFFECT ON THE PROJECT, RESULTS OF OPERATIONS OR FINANCIAL CONDITION OF THE PROJECT.

THE SEQUENCE IN WHICH THESE RISKS ARE PRESENTED IN NO WAY REFLECTS ANY ORDER OF IMPORTANCE, CHANCE OR MATERIALITY.

Limitations on Recourse

THE SERIES 2018A-1 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM GROSS OPERATING REVENUES AND OTHER FUNDS PLEDGED FOR THEIR PAYMENT PURSUANT TO THE INDENTURE AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY MEMBER, ANY SPONSOR, THE STATE OF WISCONSIN, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE SERIES 2018A-1 BONDS DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL

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SUBDIVISION OR AGENCY THEREOF TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2018A-1 BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, ANY SPONSOR, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, NOR THE FAITH AND CREDIT OF THE AUTHORITY OR OF ANY SPONSOR OR AUTHORITY INDEMNIFIED PERSON, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2018A-1 BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

THE SERIES 2018A-1 BONDS DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER THE STATE OF MARYLAND OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2018A-1 BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF MARYLAND OR ANY POLITICAL SUBDIVISION THEREOF SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2018A-1 BONDS.

Limited Sources of Payment

The Series 2018A-1 Bonds have three sources of payment, as follows:

(1) Revenues received by the Trustee from the Operator from the operation of the Project pursuant to the terms of the Facility Operating Agreement. As described in the immediately preceding subsection, the Authority has no obligation to pay the Series 2018A-1 Bonds except from the Revenues of the Project. The Series 2018A-1 Bonds and the interest and premium, if any, thereon are payable solely from the Revenues. Such Revenues are anticipated to be derived solely from the Operator’s operation of the Project and investment earnings on the funds held under the Indenture. However, no assurance can be made that Revenues will be realized in the amounts necessary, after payment of Operating Expenses of the Project, to pay maturing principal of, premium, if applicable, and interest on the Series 2018A-1 Bonds.

(2) Revenues received from operation of the Project by a receiver upon a default. With respect to this source (2), attempts to have a receiver appointed to take charge of properties with respect to which loans have been made are frequently met with defensive measures such as the initiation of protracted litigation and/or the initiation of bankruptcy proceedings, and such defensive measures can prevent the appointment of a receiver or greatly increase the expense and time involved in having a receiver appointed. It is therefore apparent that prospects for uninterrupted payment of principal and interest on the Series 2018A-1 Bonds in accordance with their terms are largely dependent upon source (1) above, which is wholly dependent upon the success of the Project operating in a profitable manner.

(3) Proceeds realized from the sale or lease of the Project to a third party by the Trustee at or following sale by the Trustee under the Leasehold Mortgage. With respect to this source (3), attempts to foreclose on commercial property or otherwise realize upon security for obligations may be met with defensive measures, such as protracted litigation and/or bankruptcy proceedings, and such defensive measures can greatly increase the expense and time involved in achieving such sale or other realization. In addition, the Project is designed for use as, and subject to a restrictive easement to operate as, a proton treatment facility and the Leasehold Mortgage encumbers a leasehold interest and not a fee interest. As a result, the Trustee could experience difficulty in selling or leasing the Project upon an Event of Default and the proceeds of such sale may not be sufficient to fully pay the owners of the Series 2018A-1 Bonds. In addition, the Leasehold Mortgage secures a maximum principal amount which is less than the aggregate principal amount of the Series 2018A Bonds at the time of issuance. The maximum principal amount secured under the Leasehold Mortgage will be $221,000,000. As a result, if it is necessary to foreclose or otherwise realize on the Leasehold Mortgage before the Series 2018A Bonds have amortized to an aggregate principal amount equal to or less than the maximum amount secured under the Leasehold Mortgage, then the holders of the Series 2018A Bonds will only be secured creditors up to such maximum principal amount ($221,000,000). To the extent proceeds are realized above such maximum principal amount, the holders of the Series 2018A Bonds would share such proceeds equally with other unsecured creditors.

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The best prospects for uninterrupted payment of principal and interest on the Series 2018A-1 Bonds in accordance with their terms is source (1) above, which is wholly dependent upon the success of the Project operating in a profitable manner. Even if the Project is operating profitably, other factors could affect the ability of the Project to generate sufficient Revenues to pay maturing principal of, premium, if applicable, and interest on the Series 2018A-1 Bonds.

Sufficiency of Revenues

The primary source of moneys to pay the Series 2018A-1 Bonds is payments realized from treatment of patients. No representation or assurance can be made that Revenues will be realized by the Project in amounts sufficient to meet the obligations of the Authority under the Indenture. A significant portion of the expenses of the Project are fixed costs (including maintenance costs, labor costs and debt service). Realization of sufficient Revenues over the term of the Series 2018A-1 Bonds is subject to, among other things, the capabilities of the Operator as operator of the Project, the profitability of the Project, future economic conditions and market competition, the availability of qualified patients, changes in technology and other future conditions (such as governmental regulations affecting healthcare facilities and the payment of healthcare costs) that are unpredictable and may affect Revenues, operating and maintenance expenses, and payment of debt service on the Series 2018A-1 Bonds.

Enforceability of Remedies; Bankruptcy

The Authority has pledged or mortgaged all of its interest in the Project and the Revenues to the Trustee on behalf of the holders of the Series 2018 Bonds, subject to certain exceptions. Under the Indenture, if there is an Event of Default as defined therein, the Trustee may pursue any remedy permitted by law and the Bond Documents to exercise the remedies available to a secured creditor. See “PROPOSED FORM OF THE INDENTURE – Events of Default’ and “-Specific Remedies” in APPENDIX E hereto. There can be no assurance that the proceeds of a foreclosure sale of the Project, together with amounts on deposit in the accounts pledged to, and held by the Trustee, will be sufficient to pay unpaid principal of and interest on the Series 2018A-1 Bonds. Payments to the holders of the Series 2018A-1 Bonds can be delayed or reduced following a default under the Indenture.

Upon the occurrence of certain Events of Default, the Indenture provides that the Majority Holders may instruct the Trustee to accelerate the principal and interest on the Series 2018 Bonds and declare the same immediately due and payable. In connection with such declaration, the Majority Holders may also direct the Trustee to foreclose the Leasehold Mortgage.

Generally, if an Event of Default occurs and any Series 2018A-1 Bonds are accelerated, the Trustee is not obligated to exercise any of its rights or powers under any Bond Document (and any supplement thereto) unless the holders of affected Series 2018A Bonds offer the Trustee reasonable indemnity. Upon acceleration of the maturity of the Series 2018A Bonds following an Event of Default, the lien on the Project and the Revenues in favor of the Trustee for unpaid fees and expenses, will be senior to the lien in favor of the holders of the Series 2018A Bonds. As a result, any proceeds of sale of the Project will be applied first to the payment of unpaid fees and expenses of the Trustee before being applied to payment of unpaid principal, interest and other amounts due on the Series 2018A Bonds.

The lien of the Leasehold Mortgage will be insured by a title insurance policy in an amount equal to the maximum principal amount secured by the Leasehold Mortgage ($221,000,000). In the event that a title defect impairs the value of the Project, no assurance can be given that payments under the title insurance policy will be sufficient to offset the reduction in value caused by the title defect or that the combination of the proceeds of a foreclosure sale and payments under the title insurance policy will be sufficient to make timely payments of debt service on the Series 2018A-1 Bonds. There can be delays in, or reductions to, amounts paid to the holders of the Series 2018A-1 Bonds if the Trustee is required to commence litigation or other action against the title insurer in order to recover on the title insurance policy.

The Trustee has received a collateral assignment of the Material Project Documents pursuant to the Assignment of Contract Documents. In the event of a default, the Trustee may attempt to enforce the contractual obligations of the third parties under such Material Project Documents. If the Operator defaults on its obligations

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under those Material Project Documents, such third parties might attempt to cancel their contracts with the Operator. The Trustee may attempt to cause such third parties to enter into similar contracts directly with the Trustee or its designee. There can be no assurance that the Trustee would be successful. In the event of the effective termination of any Project Document with the Operator, the third party to such Project Document is not contractually obligated to enter into a new Project Document with the Trustee on terms and conditions similar to those provided to the Operator. Accordingly, if such termination occurs outside of a bankruptcy proceeding, then in order to obtain the services provided or goods supplied under such terminated Project Document, the Trustee may need to negotiate a new contract with such third party or with another service provider. The new contract could (i) require the Trustee to cure any defaults of the Operator under such Project Document, (ii) require the Trustee to pay increased or additional amounts for services provided or goods supplied by such third party under such Project Document or (iii) impose totally new terms and conditions on the Trustee. The Operator has represented that the Material Project Documents are enforceable, but such enforceability is subject to the limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally, and by general principles of equity.

If the Authority were to file a bankruptcy petition, the bankruptcy petition would be filed under the municipal bankruptcy provisions contained in Chapter 9 of the United States Bankruptcy Code (the “Bankruptcy Code”). Among other requirements contained in the Bankruptcy Code necessary for filing a petition under Chapter 9, a municipality must be specifically authorized by the State in which it is formed to file a petition under Chapter 9. Under current Wisconsin law, the Authority is not authorized to file a petition under Chapter 9

The filing by, or against, the Operator for relief under the Bankruptcy Code could cause delays or reductions in payments to the holders of the Series 2018A-1 Bonds. Pursuant to section 362(a) of the Bankruptcy Code, the filing of a bankruptcy petition creates an “automatic stay” that enjoins litigation against the debtor and its property and other efforts by creditors to enforce their claims, pending further order of the bankruptcy court. The filing would operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against the Operator. As a result, the holders of the Series 2018A Bonds will need to obtain the permission of the bankruptcy court before any rights or remedies can be exercised by the Trustee or the holders of the Series 2018A Bonds against the Operator.

The Operator as debtor or a bankruptcy trustee for the Operator may seek, subject to approval by the bankruptcy court, to reject the Operator’s executory contracts (including the Facility Operating Agreement and the other Material Project Documents). If the bankruptcy court approves the rejection of such executory contract, the Operator would be relieved of its further performance obligations under such executory contract. (The third party to such executory contract would have a claim for damages resulting from the rejection of such executory contract.)

The Operator is a party to license agreements for the use of intellectual property, which license agreements are necessary for the operation of the Project. If a licensor of intellectual property becomes bankrupt and seeks to reject the license agreement in such bankruptcy proceeding, the Operator nonetheless should be able to continue to use such intellectual property for the life of the Project so long as the Operator continues to make the contractual payments due, if any, under such rejected license agreement. If such licensor rejects the license agreement, however, such licensor cannot be compelled to provide any updates, modifications or enhancement to such intellectual property.

Operating Risk

The Project has a limited operating history. The Project has been in operation for just over two years and has not yet commenced operating all five treatment rooms. The Authority will enter into the Facility Operating Agreement with the Operator to operate the Project. The Operator has been the entity operating the Project since the commencement of operations in 2016. The Operator has entered into various agreements with third parties to provide certain services to the Project as more particularly discussed herein.

As with any facilities of similar size and nature, the operations of the Project could be affected by many factors, including start-up problems, the breakdown or failure of equipment or processes, the performance of the Project below expected levels of efficiency and/or, labor disputes. Additionally, the operations of the Project could be affected by both natural or man-made catastrophic events beyond the control of the Operator such as fires,

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earthquakes, explosions, major accidents, armed conflict, hostilities, acts of terrorism and/or similar events. The occurrence of such events could significantly reduce or eliminate revenues generated by the Project and significantly increase the expenses of the Project, thereby jeopardizing the ability of the Project to generate Revenues sufficient to pay the principal of, redemption premium, if any, and interest on the Series 2018A-1 Bonds. While the Operator will maintain insurance to protect against certain of these operating risks, the proceeds of such insurance may not be adequate to cover the Project’s lost revenues or increased costs. Under such circumstances, no assurance can be given concerning the ability of the Project to generate sufficient Revenues to make timely payments of debt service on the Series 2018A-1 Bonds.

The Project may also face civil liabilities or fines in the ordinary course of its business as a result of regulatory enforcement and adverse patient outcomes. These liabilities may result in the Project making payments in accordance with applicable laws to the extent and in the amount that such payments are not covered by the Project’s insurance policies.

In addition, as more particularly discussed below under the subheading “Reliance on Other Third Parties,” the Operator is outsourcing the majority of the operating activities of the Project to third parties. UMROA is providing professional services and clinical management services to the Project as more particularly described above under “PRINCIPAL PROJECT AGREEMENTS – Professional Services Agreement” and “PRINCIPAL PROJECT AGREEMENTS – Clinical Management Agreement.” Varian is providing certain operating and maintenance services with respect to the Proton System, and there is a third party medical biller, MMBC, which will provide billing and collection management services related to patient authorization and compliance services to the Operator.

A significant portion of the costs related to the Project are fixed costs (including, for example, maintenance costs, labor costs and debt service). Any decrease in Revenues, whether due to lower patient demand, decreases in payments for services, or other reasons, will not result in a decrease of fixed costs and could adversely affect the ability of the Authority to pay the principal of, redemption premium, if any, and interest on the Series 2018A-1 Bonds.

Revenues of the Project received from insurance companies, Medicare and other payors will be deposited in collection accounts which will be subject to deposit account control agreements and then automatically transferred to the Project Operating Account where such funds will be available to the Operator for the payment of Operating Expenses. The Operator is required under the Operating Agreement to transfer funds above $4,700,000 to the Revenue Fund on a monthly basis. To the extent there is any disruption in the deposits or transfers, the Authority’s ability to pay the principal of, redemption premium, if any, and interest on the Series 2018A-1 Bonds could be adversely affected.

The Operator, UMROA and/or Varian may not be able to attract and retain qualified managers and skilled employees, to operate the Project efficiently which could adversely affect the operations, cash flows and liquidity of the Project. In the past, the healthcare industry has experienced a shortage of qualified personnel to staff healthcare operations. There continues to be growing demand for nursing and other healthcare personnel, and in certain communities, the number of nurses, highly qualified and essential medical physicists and other paraprofessionals entering the profession is not sufficient to satisfy that demand. The proton therapy treatment facility requires a highly specialized workforce of both medical and technical personnel and the Operator and UMROA will compete with other healthcare providers for nursing personnel, medical physicists and other qualified personnel. Accordingly, it may be difficult to find and retain qualified and affordable personnel. Additionally, labor expenses may increase as a result of a shortage in the supply of skilled personnel due to increased salaries and benefits. The Project may be forced to bear significant training expenses if the Operator or UMROA are unable to hire or retain employees with the requisite skills, and in appropriate cases make greater use of temporary nursing and related personnel.

The cost and availability of utility services including sewage services, natural gas and electrical service are subject to change due to market economic forces and government regulations. Increases in the cost of necessary utility services could adversely affect the ability the Project to generate sufficient Revenues to pay the principal of, redemption premium, if any, and interest on the Series 2018A-1 Bonds.

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Similar Facilities

As described in APPENDIX A and APPENDIX B attached hereto, there are currently twenty-eight (28) proton therapy centers currently in operation and approximately 12 more planned for or under construction. However, some proton therapy centers have encountered or may encounter financial and operational challenges. For example, the proton therapy center located in San Diego, California, which is operated by an affiliate of Advanced Particle Therapy LLC (“APT”), recently filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code. It is not known why this center encountered financial difficulties, but the center’s bankruptcy filings indicate that the center has not operated on a profitable or even a break-even basis since opening in February 2014.

Internal Controls over Financial Reporting

The Operator’s independent audit firm identified material weaknesses in the Operator’s internal controls over financial reporting during the fiscal years ended December 31, 2016 and 2017. While the Board of Managers of MPTH and new management of the Operator are putting controls and procedures in place to remediate such deficiencies as of July 2018 and as described in Appendix A hereto, interim financial information may be inaccurate and subsequently have to be restated. In addition, if the Operator is unable to successfully remediate this material weakness and if the Operator is unable to produce accurate and timely financial statements, it could materially impact the market price or marketability of the Series 2018A-1 Bonds. See "APPENDIX A – THE PROJECT AND THE OPERATOR – THE OPERATOR – Remediation Plan for Bolstering Internal Controls and Reporting” for additional information on this matter.

Related Entities

The Operator was originally formed by APT and APT continues to hold a controlling interest in the Operator. The Operator, and its affiliates, have been involved in a number of disputes. In addition, the SEC has issued subpoenas to APT and certain current and former officers or managers of APT and the Operator. The Operator believes that the SEC investigation is related to previous fundraising activities of APT related to the Project and other proton therapy centers.

In conjunction with the sale of the Project to the Authority, the Operator anticipates receiving releases from certain parties with respect to claims they may have. However, there can be no assurance that additional claims will not be made against the Operator in the future. In addition, there can be no assurances that the SEC investigation will not ultimately involve the Operator or result in adverse consequences for the Operator. See “APPENDIX A – THE PROJECT AND THE OPERATOR – THE OPERATOR – Litigation.”

Reliance on Other Third Parties

The viability of the Project and the ability of the Project to generate Revenues sufficient to pay the debt service on the Series 2018A-1 Bonds depends significantly upon the performance by third parties in accordance with the Material Project Documents. If the parties to the Material Project Documents do not perform their obligations under the various Material Project Documents, the Operator may not be able to acquire alternate goods or services to cover such nonperformance and the Project may not be able to generate sufficient Revenues to make payments of the principal of, redemption premium, if any, and interest on the Series 2018A-1 Bonds. For example, UMROA is required to provide professional services, clinical management and administrative services to the Project (as more particularly described above under “PRINCIPAL PROJECT AGREEMENTS – Professional Services Agreement” and “PRINCIPAL PROJECT AGREEMENTS – Clinical Management Agreement”). A failure of UMROA to provide the professional services, clinical management and administrative services may have a material adverse effect on the Project’s operations.

As discussed in APPENDIX B – “MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY,” the Project’s relationship with UMROA is very important to the success of the Project. The affiliation with UMROA is important for long-term profitability and sustainability. In addition, operating under the University of Maryland brand is expected to create a strong and reliable patient referral source for the Project. If the Professional Services Agreement with UMROA were to be terminated for any reason, there can be no assurance that the Operator could find a replacement for UMROA or that the Operator could continue to attract the same number of patients to the Project.

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This Official Statement contains no financial information with respect to the parties to the Material Project Documents. As a result, in making an investment decision with respect to the Series 2018A-1 Bonds, a potential holder of the Series 2018A-1 Bonds can have no assurance, based on the information contained herein, that any third party to a Material Project Document will have the capability to meet its financial obligations (including the payment of any liquidated or other damages) under the agreements to which it is a party. Moreover, there can be no assurance that any such liquidated or other damages, if any, will be sufficient to compensate the Project for any shortfall in Revenues attributable to the default in respect to which such damages are being paid.

Market for Proton Therapy Treatment

The continued operation of the Project requires that the Operator be able to attract and treat patients at the Project to generate sufficient Revenues to pay, among other things, the operation and maintenance costs of the Project and debt service on the Series 2018A-1 Bonds. No assurances can be given by the Operator that the market demand for proton therapy treatment at the Project will be sufficient throughout the term of the Series 2018A-1 Bonds and/or the market price will be sufficient to enable the Project to generate Revenues to make all payments described above.

Competition

There are several treatment options for cancer, including surgery, chemotherapy and radiation therapy. Patients will consider many factors when selecting treatment options. In addition to competition with other existing treatment options, the Project will compete with potentially new treatment options, as well as other proton therapy centers. Although there are currently no other proton therapy treatment centers in the State of Maryland, the Project will be competing against other cancer treatment providers in the Mid-Atlantic United States, including in Philadelphia, Pennsylvania, Somerset, New Jersey, Washington, D.C. and Hampton, Virginia. Affiliates of the Project have also developed or are developing their own centers. MedStar recently opened a one room center located less than 50 miles from the Project, and INOVA is currently constructing a center that will be located 54 miles away. Each of these affiliates is or will become a competitor to the Project. There can be no assurances that current competitors (or other treatment competitors) will not maintain or increase their market share or that new proton therapy treatment competitors (including current or future affiliates of the Project) will not enter the market. Any competitors may affect the ability of the Operator to attract sufficient patients to the Project and their ability to hire and retain qualified personnel. Such existing and potential additional competition could adversely affect the Authority’s ability to pay the principal of, redemption premium, if any, and interest on the Series 2018A-1 Bonds. See “APPENDIX A – THE PROJECT AND THE OPERATOR – THE PROJECT – Competition” and “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

Technology Risk

New developments in proton therapy equipment are currently largely focused on supporting technology that will help to increase system accuracy and patient throughput. There can be no assurances that the Project will be able to generate sufficient Revenues to purchase such supporting technology, if and when it becomes available. Also in development now is technology to deliver radiation therapy using larger particles, such as Carbon Ions. This technology, Particle Therapy, is sparsely available globally, and not available in the United States. As such, there is currently no regulatory clearance, nor reimbursement in the United States market for this technology. Additionally, these technologies are currently an order of magnitude more complicated and expensive than proton therapy technology, which presents an additional barrier to mass adoption. However, there can be no assurances that Particle Therapy, or another as-yet unknown future technology, will not become available in the United States in the future and negatively affect the ability of the Project to generate Revenues.

Reliance on Projections and Underlying Assumptions

The financing of the Project has been structured on the basis of certain assumptions and projections made by the Operator with respect to the Project’s revenue generating capacity and the costs associated therewith over the term of the Series 2018A-1 Bonds. The Feasibility Consultant has evaluated certain aspects of the Project in the Feasibility Study. The Feasibility Study, which investors should review carefully in its entirety, contains a discussion of the many assumptions utilized in preparing the Operator’s projections, which include matters that are

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not within the control of the Operator, the Feasibility Consultant, the Authority, the Underwriters or any other person. The assumptions used in such projections are inherently subject to significant uncertainties, and actual results will differ, perhaps materially, from those projected. None of the Operator, the Feasibility Consultant, the Authority or the Underwriters intends to provide to holders of the Series 2018A-1 Bonds any revised projections or analyses of the differences between the projections and actual operating results later achieved. If actual results are less favorable than those shown or if the assumptions used in formulating the projections prove to be incorrect, the Authority’s ability to pay the principal of, redemption premium, if any, and interest on the Series 2018A-1 Bonds may be adversely affected.

Adequacy of Insurance

The Operator is obligated under the Facility Operating Agreement to obtain and keep in force certain insurance with respect to the Project including property insurance, general liability and business interruption insurance. There is no assurance that such insurance coverage will be available in the future at commercially reasonable costs or that the amounts for which the Operator is insured will cover all unanticipated losses and, in particular, outstanding debt service on the Series 2018A-1 Bonds in the event of a casualty loss.

While the Operator is required by the Facility Operating Agreement to have in effect at all times comprehensive general liability insurance providing insurance against liability for personal and bodily injury including death resulting therefrom, if a claim or judgment against the Operator for an amount in excess of the limits of such insurance were to arise, it would likely have a material adverse effect on the financial results of the Project and the Operator.

Governmental Regulations and Permits

The Project is required to comply with a number of statutes and regulation relating to the safety and health of the Project’s employees and the public during its operation, such as: safety and health standards, practices and procedures applicable to the construction and operation of the Project; environmental protection requirements; and employment, hiring and anti-discrimination requirements relating to the operation of the Project.

Federal, state, and local laws and regulations protecting the environment require the Project and/or the Operator to obtain permits and other authorizations to operate the Project. According to the Operator, the Project and/or the Operator have obtained all of the material permits required for operation of the Project and such permits remain in full force and effect.

Permits that have been obtained or will be obtained may be subject to challenge in public proceedings, including the filing of administrative or judicial appeals contesting the validity or the terms of the permits. If such permits are appealed, Project operation may be delayed or prohibited, and elements of the Project may need to be redesigned or replaced.

All permits and approvals issued by governmental agencies expire and must be renewed if the permitted activity is not complete. Renewals are typically discretionary with governmental agencies, and there is no assurance that required renewals will be obtained when required to continue construction or operation.

Laws and regulations applicable to the Project, including those under which permits and governmental approvals must be obtained, change frequently and may become more stringent. Changes in laws that govern operation of the Project could have an impact of increasing capital expenditures and operations and maintenance costs at the Project. The Project could be adversely affected if regulatory changes were implemented that imposed more comprehensive or stringent regulatory requirements, resulting in increased compliance costs.

The ability of the Project to comply with the requirements of permits, regulations and other governmental approvals is dependent upon many factors that may not be within the control of the Operator. The failure to comply with applicable laws, regulations and permits could result in fines, penalties and delays or suspension of the construction or operation of the Project. The issuing government agency may have continuing oversight authority over the permitted activity and could impose additional conditions or mitigation requirements or suspend or revoke the permit in certain circumstances. The inability to maintain required permits in force and effect, and their

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amendment, suspension or revocation would have adverse effects on the Project’s operations and financial performance.

Environmental Liability

The Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), as well as other federal laws and similar state laws, requires cleanup of sites from which there has been a release or threatened release of hazardous substances and authorizes the EPA to take any necessary response action at the locations of such releases. The construction and operation of the Project could produce hazardous substances and wastes and petroleum products, which, if released on-site or disposed of inappropriately off-site, may result in liability for removal and cleanup, or the payment of damages.

The handling, storage, management and disposal of hazardous materials—both known and unknown—at the Project, are subject to federal and State environmental regulations. No assurance can be made that compliance with these regulations, or the costs resulting from any new or different regulations, will not adversely affect the operations or financial condition of the Project. Environmental costs may include site surveys and environmental investigations of contaminated or potentially contaminated sites, as well as the costs for monitoring, mitigation and remediation of these sites, fines or penalties for non-compliance with environmental laws and regulations, and third party claims for property damage and/or personal injury or other damages.

In addition, past disposal practices may result in CERCLA liability as previously approved disposal methods or sites become candidates for federal listing. Under these statutes, a party may be held liable for cleanup activities on property that it owns and operates, even if the conditions requiring cleanup existed before such party’s occupancy of a site. No assurances can be given that contamination, whether pre-existing the Project or resulting from its construction or operations, is not present at the site of the Project. As a result, the Operator may incur substantial, but presently unknown, costs as a participant in the cleanup of sites contaminated with hazardous substances or wastes. The costs and expenses associated with such liabilities could adversely affect the Operator’s financial condition.

A Phase 1 Environmental Site Assessment (the “Site Assessment”) was completed on April 9, 2018 by ECS Mid-Atlantic, LLC (“ECS”) in general conformance with the American Society for Testing and Materials (ASTM) Process E1527-13. The purpose of the Site Assessment was to identify areas of environmental concern associated with the property on which the Project is located (the “Site”) and surrounding properties. The Site Assessment concluded that there was one recognized environmental condition, as defined by ASTM, at the Site. Such recognized environmental condition was the historic use of the eastern adjacent property as a gasoline filling station/service center. A previous assessment conducted by ECS identified contamination at the northeastern corner of the Site prior to the construction of the Project. A sub slab vapor barrier was installed in 2015 during the construction of the Project to mitigate the potential for vapor migration into the Project. No assurance can be given that the Site Assessment revealed all potential environmental concerns, that any prior owners or tenants did not create any other adverse environmental condition not known to the Operator or the Authority, that no additional environmental liabilities have developed since the Site Assessment was prepared, that future laws or regulations will not impose material environmental requirements or liability or that a material adverse environment condition does not otherwise exist.

Under certain circumstances, lenders and trustees can be exposed to liability for environmental contamination of real property held as security for a loan. Such liability is precluded under federal law so long as the lender or trustee complies with certain requirements, including taking actions only to obtain remedies available under loan documents or that are consistent with the rights of secured creditors. In the event that the Authority was to default on the Series 2018A-1 Bonds and enforcement of lender rights and remedies were required, the Trustee could be exposed to liability for site contamination, whether originating before the construction and operation of the Project or after. Any costs or expenses incurred by the Trustee or other financial participants in the Series 2018A-1 Bonds could adversely affect the availability of funds to repay the Series 2018A-1 Bonds or pay principal of and interest on the Series 2018A-1 Bonds.

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Tax Reform

On December 22, 2017, President Trump signed into law “H.R. 1 – An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” (the “Tax Cuts and Jobs Act”). The Tax Cuts and Jobs Act lowered corporate and individual tax rates and eliminated certain tax preferences and other tax expenditures. The Tax Cuts and Jobs Act also repealed a key provision of the Affordable Care Act known as the “individual mandate,” which imposes a tax on individuals who do not obtain health insurance, effective 2019. Such repeal of the individual mandate may result in a higher uninsured rate, which may adversely affect the financial condition of the Operator and the Project. The Tax Cuts and Jobs Act also eliminates the issuance of tax-exempt bonds to advance refund outstanding tax-exempt bonds. This could materially impact the market price or marketability of the Series 2018A-1 Bonds and/or the availability of borrowed funds for the Project, particularly for capital expenditures, as well as the operations, financial position and cash flows of the Project.

Healthcare Regulation

General. The health care industry is highly dependent on a number of factors that may limit the ability of the Authority to meet its obligations under the Indenture. Among other things, participants in the health care industry (such as the Operator) are subject to significant regulatory requirements of federal, state and local governmental agencies, as well as independent professional organizations and accrediting bodies, technological advances and changes in treatment modes, various competitive factors and changes in governmental and other third-party reimbursement programs. Discussed below are certain of these factors that could have a significant effect on the future operations and financial condition of the Project.

Comprehensive statutes and regulations govern the manner in which the Operator provides and bills for services, its contractual relationships with physicians, vendors and customers, marketing activities, and other operational aspects. Failure to comply with these laws can result in civil and criminal penalties such as fines, damages, overpayment recoupment, loss of enrollment status or exclusion from government healthcare programs. The risk of being found in violation of these laws and regulations is increased by the fact that many of them have not been fully interpreted by regulatory authorities or the courts, and their provisions are sometimes open to multiple interpretations. Any enforcement action for violation of these laws or regulations, even if they are successfully defended, could result in significant legal expenses and divert managements' attention from business operations.

These laws and rules, and their interpretations, may also change in the future. Any adverse interpretations or changes could force a restructuring of relationships with physicians, professional corporations, or health facilities, resulting in significantly increased costs. A restructuring could also result in a loss of contracts or a reduction in revenue under existing contracts. Moreover, financing agreements may prohibit or restrict such modifications.

Discussed below are certain of these factors that could have a significant effect on the future operations and financial condition of the Project.

Licensing, Surveys, Audits and Investigations. Healthcare facilities, including the Project, are subject to numerous legal, regulatory, professional and private licensing, certification and accreditation requirements. These include, but are not limited to, requirements relating to Medicare Conditions of Participation imposed by the Centers for Medicare and Medicaid Services, requirements for participation in Medicaid, State licensing agencies, private payors and the accreditation standards of The Joint Commission or other nationally recognized accreditation agencies. Renewal and continuation of certain of these licenses, certifications and accreditations are based on inspections, surveys, audits, investigations or other reviews, some of which may require affirmative actions by the Operator. The Operator anticipates that they will be able to obtain and periodically renew licenses, certifications or accreditations when required. Nevertheless, adverse actions in any of these areas could occur and result in the loss of utilization, revenue or the ability of the Operator to operate all or a portion of the Project and, consequently, could have a material and adverse effect on the financial condition of the Project.

Various licensing and certification laws, regulations and standards also apply to affiliated physicians and non-physician practitioners. Failure to comply with these laws and regulations could result in some services being found to be non-reimbursable or prior payments being subject to recoupment, and can give rise to civil or criminal penalties, including loss of licensure for the Project.

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State authorities in some jurisdictions could find that the Operator’s or management company’s contractual relationships with physicians violate laws prohibiting the corporate practice of medicine or fee-splitting. These laws are generally intended to prevent unlicensed persons or entities from interfering with or inappropriately influencing the physician's professional judgment, but they may also prevent the sharing of professional services income with professional, non-professional or other business interests. While the Operator believes it is in material compliance with applicable laws relating to the corporate practice of medicine and fee-splitting, regulatory authorities or other parties, including affiliated physicians, may assert that, despite these arrangements, it is impermissibly engaged in the practice of medicine or that its contractual arrangements with affiliated physician groups constitute unlawful fee-splitting. In this event, the Operator could be subject to adverse judicial or administrative interpretations, to civil or criminal penalties, its contracts could be found legally invalid and unenforceable or it could be required to restructure its contractual arrangements with affiliated physicians and physician groups.

Federal Privacy Laws. The Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”) added two prohibited practices, the commission of which may lead to civil monetary penalties: (i) the practice or pattern of presenting a claim for an item or service on a reimbursement code that the person knows or should know will result in greater payment than appropriate (i.e., upcoding); and (ii) the practice of submitting claims for payment for medically unnecessary services. Violation of such prohibited practices due to civil neglect could amount to civil monetary penalties ranging from $50,000 to $1.5 million for all identical violations in a calendar year and/or imprisonment.

HIPAA also includes administrative simplification provisions intended to facilitate the processing of health care payments by encouraging the electronic exchange of information and the use of standardized formats for health care information. Congress recognized, however, that standardization of information formats and greater use of electronic technology presents additional privacy and security risks due to the increased likelihood that databases of personally identifiable health care information will be created and the ease with which vast amounts of such data can be transmitted. Therefore, HIPAA requires the establishment of distinct privacy and security protections for individually identifiable health information (“Protected Health Information” or “PHI”).

The HHS promulgated privacy regulations under HIPAA (the “Privacy Rule”) that protect the privacy of PHI maintained by health care providers, health plans, and health care clearinghouses (collectively, “Covered Entities”) and provide individuals with certain rights regarding their PHI (including, for example, access to PHI, amending PHI, and receiving an accounting of disclosures of PHI). Security regulations have also been promulgated under HIPAA (the “Security Rule”). The Security Rule requires Covered Entities to have certain administrative, technical and physical safeguards in place to ensure the confidentiality, integrity and availability of all electronic PHI they create, receive, maintain or transmit. Additionally, HHS promulgated regulations to standardize the electronic transfer of information pursuant to certain enumerated transactions (the “Transactions and Code Sets Rule”).

The 2009 Health Information Technology for Economic and Clinical Health (“HITECH”) Act significantly changed the landscape of federal privacy and security laws regarding PHI. The HITECH Act (i) extended the reach of HIPAA, certain provisions of the Privacy Rule, and the Security Rule; (ii) imposed a breach notification requirement on HIPAA covered entities and their business associates; (iii) limited certain uses and disclosures of PHI; (iv) increased individuals’ rights with respect to PHI; and (v) increased enforcement of, and penalties for, violations of the privacy and security of PHI.

The HITECH Act also created a federal breach notification requirement that mirrors protections that many states have passed in recent years. This requirement provides that healthcare providers must notify patients of any unauthorized access, acquisition or disclosure of their unsecured PHI that poses significant risk of financial, reputational or other harm to a patient. In addition, a new breach notification requirement was established requiring reporting to the Secretary of HHS and, in some cases, local media outlets, of certain unauthorized access, acquisition or disclosure of unsecured PHI that poses significant risk of financial, reputational or other harm to a patient. On January 17, 2013, HHS issued an omnibus final rule interpreting and implementing various provisions of the HITECH Act, including a final breach notification rule. Any violation of HIPAA, the HITECH Act or the regulations promulgated thereunder is subject to HIPAA civil and criminal penalties, including monetary penalties and/or imprisonment.

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The Operator depends on complex, integrated information systems and standardized procedures for operational and financial information and billing operations. It may not have the necessary resources to enhance existing information systems or implement new systems where necessary to handle changing needs. Furthermore, it may experience unanticipated delays, complications and expenses in implementing, integrating and operating the systems. Any interruptions in operations during periods of implementation would adversely affect the ability to properly allocate resources and process billing information in a timely manner, which could result in patient dissatisfaction and delayed cash flow. In addition, the technology systems, or a disruption in the operation of such systems, could be subject to physical or electronic break ins, and similar disruptions from unauthorized tampering. The failure to successfully implement, protect, and maintain operational, financial and billing information systems could have an adverse effect on the ability to obtain new business, retain existing business and maintain or increase profit margins.

States may impose more protective privacy restrictions and laws related to health information and may afford individuals a private right of action with respect to the violation of such laws. In Maryland, the Maryland Personal Information Protection Act (“MPIPA”) requires businesses to protect “Personal Information”, which includes the names, social security numbers, driver’s license numbers, financial account information, and taxpayer identification number of Maryland residents who provide such information for the purpose of obtaining services. Recent amendments to the MPIPA effective January 1, 2018 expand the definition of protected Personal Information to include information created by an entity covered by HIPAA regarding an individual’s medical history, condition, treatment, or diagnosis; health insurance information; and biometric data, which includes unique biological characteristics that can be used to authenticate a person’s identity. The MPIPA requires businesses to implement and maintain reasonable security procedures and practices, including practices designed to protect personal information from unauthorized use, modification, disclosure, or destruction; and to conduct reasonable and prompt investigations of any data breaches to determine the likelihood that personal information has been misused as a result of any breach. Businesses are required to notify affected individuals and the Maryland Attorney General no later than 45 days after concluding the required investigation. Failure to comply with the MPIPA is an unfair and deceptive trade practice under Maryland law, and subject to causes of action by affected individuals for damages, and both civil and criminal penalties.

Both state and federal laws are subject to modification or enhancement of privacy protection at any time. The failure to comply with HIPAA or similar state laws, including laws addressing data confidentiality, security or breach notification could result in substantial monetary penalties and reputational harm.

Federal Anti-Kickback Law. The federal anti-kickback statute (“Anti-Kickback Statute”) is a broad criminal statute that prohibits one person from “knowingly and willfully” giving (or offering to give) “remuneration” to another person if the payment is intended to “induce” the recipient to: (i) “refer” an individual to a person for the furnishing, or arranging for the furnishing, of any item or service for which payment may be made, in whole or in part, under any federal health care program (i.e., a “covered item or service”); (ii) “purchase,” “order,” or “lease” any covered item or service; (iii) “arrange for” the purchase, order, or lease of any covered item or service; or (iv) “recommend” the purchase, order, or lease of any covered item or service. The Anti-Kickback Statute also prohibits the solicitation or receipt of remuneration for any of these purposes. The definition of “renumeration” has been broadly interpreted to include anything of value such as gifts, discounts, rebates, waiver of payments or providing anything at less than its fair market value.

Because the Anti-Kickback Statute is so broad, it covers a variety of common and non-abusive arrangements. Recognizing this overbreadth, Congress and HHS, through the Office of Inspector General (“OIG”) – the lead federal enforcement agency with respect to the Anti-Kickback Statute – have established a large number of statutory exceptions and regulatory safe harbors (collectively, “safe harbors”). An arrangement that fits squarely into a safe harbor is generally immune from prosecution under the Anti-Kickback Statute. The safe harbors tend to be narrow, however, and OIG takes the position that immunity is afforded only to those arrangements that “precisely meet” all of the conditions of a safe harbor. Moreover, safe harbors do not exist for every type of arrangement that does (or may) implicate the Anti-Kickback Statute.

Where the Anti-Kickback Statute has been violated, the government may proceed criminally or civilly. If the government proceeds criminally, a violation of the Anti-Kickback Statute is a felony punishable by up to five years’ imprisonment, a fine of up to $100,000 and mandatory exclusion from participation in all federal health care

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programs. If the government proceeds civilly, it may impose a civil monetary penalty of up to $100,000 per violation, which amount may be increased in annual adjustments for inflation, and an assessment of not more than three times the total amount of “remuneration” involved, and may exclude the offering or receiving party from participation in all federal health care programs. The respondent in an Anti-Kickback Statute proceeding may be required to enter into settlement agreements with the government to avoid such sanctions. Typically, such settlement agreements require substantial payments to the government in exchange for the government to release its claims, and may also require the respondent to enter into a Corporate Integrity Agreement, or CIA, with the OIG. The obligations contained in such CIA could have a material adverse effect on the business, financial condition and results of operations of the Project.

Both parties to a prohibited transaction are equally liable under the Anti-Kickback Statute. Many states have enacted laws similar to, and in some cases broader than, the Anti-Kickback Statute. Some of these state prohibitions apply to remuneration for referrals of healthcare items or services reimbursed by any payor, including private payors.

The Stark Law. The Social Security Act also includes a provision commonly known as the “Stark Law.” The Stark Law prohibits physicians from making referrals of Medicare or Medicaid patients to entities with which the physicians or any of their immediate family members have a direct or indirect financial relationship if these entities provide certain “designated health services” reimbursable by Medicare or Medicaid, unless an exception applies. The Stark Law also prohibits an entity from billing Medicare or Medicaid programs for any items or services that result from a prohibited referral and requires the entity to refund amounts received for items or services provided pursuant to a prohibited referral. By its terms the Stark Law applies to referrals of Medicare patients; however, recent case law has evidenced the government’s willingness to extend Stark Law requirements to referrals of Medicaid patients.

“Designated health services” include a broad range of services, including radiation therapy services, clinical laboratory services and radiology services. Sanctions for violating the Stark Law include denial of payment, refunding amounts received for services provided pursuant to prohibited referrals, civil monetary penalties of up to $24,253 per claim submitted, taking into account 2017 updates, and exclusion from federal healthcare programs. Failure to refund amounts received as a result of a prohibited referral on a timely basis may constitute a false or fraudulent claim and may result in civil penalties and additional penalties under the False Claims Act (“FCA”). In addition, a physician or entity that has participated in a “scheme” to circumvent the operation of the Stark Law is subject to civil penalties and possible exclusion from participation in federal health care programs. Civil monetary penalties will increase annually based on updates to the consumer price index.

If the Stark Law applies, there are exceptions to this self-referral prohibition for many of the customary financial arrangements between physicians and providers, including personal services arrangements, leases and referrals for in-office ancillary services. Unlike safe harbors under the Anti-Kickback Statute, with which compliance is voluntary, an arrangement must comply with every requirement of a Stark Law exception or the arrangement is in violation of the Stark Law.

Through a series of rulemakings, CMS has issued final regulations implementing the Stark Law. While these regulations were intended to clarify the requirements of the Stark Law’s exceptions, there is limited case law interpreting these rules. As such, it is unclear how the government will interpret many of these exceptions for enforcement purposes in practice. In light of the scarcity of case law interpreting the Stark Law provisions and the breadth and complexity of these provisions, there can be no assurances that the Operator will not be found to have violated the Stark Law provisions. Sanctions under the Stark Law, including exclusion from the Medicare program, could have a material adverse effect on the financial condition and results of operations of the Project, as would any significant penalties, demands for refunds or denials of payment.

CMS has established a voluntary self-disclosure program under which healthcare entities may report Stark violations and seek a reduction in potential penalty assessments. However, the program is relatively new and therefore it is difficult to determine at this time whether it will provide significant monetary relief to providers that discover inadvertent Stark law violations. The Operator may make self-disclosures under this program as appropriate from time to time in the future.

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Maryland Patient Referral Law. In addition to the Stark Law, Maryland law prohibits medical professionals from making certain referrals. The Maryland Patient Referral Law (“MPRL”) prohibits any physician or other healthcare practitioner licensed under the Maryland Health Occupations Article from referring patients to a healthcare entity in which the practitioner, or an immediate family member has a financial interest. The MPRL applies if there is a beneficial interest or compensation arrangement between the referring physician and the healthcare entity. Beneficial interest is defined as “ownership through equity, debt, or other means of any financial interest.” Compensation arrangement means “any agreement or system involving any remuneration between a healthcare practitioner and a healthcare entity.

While the Maryland Court of Appeals has upheld the state’s self-referral law prohibiting physicians from referring patients for MRI, CT and radiation therapy services to providers in their own group practice when no exception was fully satisfied and the referring practitioner gained from the referrals, the Court and the Maryland Board of Physicians have stated that the MPRL exceptions are intended to generally permit referrals when there is little incentive to the referring health care practitioner for financial gain. There remains limited case law interpreting these complex rules. As such, we cannot be certain how Maryland authorities will interpret the applicable MPRL exceptions for enforcement purposes. Sanctions under the MRPL, including disciplinary actions by Maryland regulatory bodies, could have a material adverse effect on the financial condition and results of operations of the Project, as would any significant penalties, demands for refunds or denials of payment.

The Federal False Claims Act. The federal civil False Claims Act (“FCA”) provides that “knowingly present[ing], or caus[ing] to be presented” a “false or fraudulent claim for payment or approval” to the United States, and its agents and contractor, constitutes a FCA violation. Under the FCA’s so-called “reverse false claims,” liability also could arise for “using” a false record or statement to “conceal,” “avoid” or “decrease” an “obligation to pay or transmit money or property to the Government.” Consequences for violating the FCA include liability for three times the amount of damages sustained by the government and a civil penalty per-claim. In 2016, the Department of Justice (“DOJ”) published an Interim Final Rule increasing the minimum per-claim penalty from $5,500 to $10,781 and the maximum per-claim penalty from $11,000 to $21,563. The penalties increased again in February of 2017, and are subject annually to a cost of living adjustment; as of May 2018, the minimum per-claim penalty has increased to $11,181 and the maximum per-claim penalty has increased to $22,363.

The FCA also empowers and provides incentives to private citizens (commonly referred to as qui tam relators or whistleblowers) to file suit on the government’s behalf. The qui tam relator’s share of the recovery can be between 15% and 25% in cases in which the government intervenes, and 25% to 30% in cases in which the government does not intervene. The government may use the FCA to prosecute Medicare and other government program fraud in areas such as coding errors, billing for services not provided and submitting false cost reports.

Amendments to the FCA in the Fraud Enhancement and Recovery Act of 2009 (“FERA”) and the Affordable Care Act amended and expanded the reach of the FCA. FERA expanded the FCA’s reverse false claims provision, imposing liability on any person who “knowingly conceals” or “knowingly and improperly avoids or decreases” an “obligation to pay or transmit money or property to the Government,” whether or not the person uses a false record in doing so. FERA also clarified that an “obligation” can arise from the retention of an overpayment. Section 6402 of the hereinafter defined Affordable Care Act further addresses the retention of overpayments by defining the term overpayment and the circumstances and timing under which an overpayment must be returned to the government before it becomes an “obligation” under the FCA. Providers and suppliers must report and refund the overpayments before the later of 60 days after the overpayment was identified or the date any corresponding cost report is due, if applicable. Any overpayment that is retained after this deadline is considered an obligation subject to an action under the FCA. FERA and the Affordable Care Act also amend certain jurisdictional bars to the FCA, effectively narrowing the public disclosure bar and expanding the definition of “original source,” thus potentially broadening the field of potential whistleblowers. Both direct enforcement activity by the government and whistleblower lawsuits under the FCA have increased significantly in recent years and have increased the risk of healthcare companies having to defend a false claims action, repay claims paid by the government, pay fines or be excluded from the Medicare and Medicaid programs.

While the criminal statutes are generally reserved for instances of fraudulent intent, the government applies criminal, civil and administrative penalty statutes to a range of circumstances, including coding errors, billing for services not provided, submitting false cost reports, submitting claims resulting from arrangements prohibited by the

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Stark Law or the Anti-Kickback Statute, billing for services not rendered in compliance with complex Medicare and Medicaid regulations and guidance, misrepresenting services rendered (e.g., miscoding, upcoding, etc.) and application for duplicate reimbursement. Additionally, the federal government has taken the position that claiming reimbursement for unnecessary or substandard services violates these statutes if the claimant should have known that the services were unnecessary or substandard. Criminal penalties also are available in the case of claims filed with private insurers if the federal government shows that the claims constitute mail fraud or wire fraud or violate a number of federal criminal healthcare fraud statutes.

Maryland False Claims; Insurance Law. Maryland law prohibits submitting a false record or statement in order to secure reimbursement from the State Medicaid program. Violation of this prohibition may lead to the imposition of civil or criminal penalties. In 2010, Maryland enacted the False Health Claims Act (“MFHCA”), which was modeled on the federal False Claims Act and designed to enhance Maryland’s anti-fraud efforts in the area of Medicaid fraud. MFHCA allows for civil monetary penalties of up to $10,000 for each false claim submitted to defraud the State Medicaid program and treble the damages sustained by the Maryland Medicaid program as a result of the acts. MFHCA also authorizes individuals to bring civil actions on behalf of the State and obtain a share of the recovery. In 2015, Maryland passed the Maryland False Claims Act (“MFCA”), which expanded the scope of MFHCA beyond Medicaid-reimbursable services. The MFCA applies to any person who knowingly or recklessly submits a false claim to any governmental body in Maryland, regardless of that person’s intent to defraud, and contains both qui tam provisions brought on behalf of the government and anti-retaliation provisions to protect whistleblowers. There can be no assurance that the Project’s operations will not become the subject of a Maryland false claim investigation in the future, and any such investigation could have a material adverse effect on the financial condition and results of the Project.

Maryland law allows any insurer or nonprofit health service plan that issues or delivers individual or group health insurance policies in the State to seek repayment from health care practitioners for amounts paid for a claim, bill, or other demand for payment that were provided as a result of a prohibited referral under the MPRL. In the event the Operator or UMROA are found to have violated the MPRL, demands for repayment from Maryland insurers could have a material adverse effect on the financial condition and operations of the Project.

Maryland Anti-Kickback Laws. The Maryland Physician Fee-Splitting Statute (the “Fee-Splitting Statute”) prohibits anyone licensed to practice medicine in the State from paying or receiving any sum for bringing or referring a patient. The Maryland Board of Physicians has the authority to discipline any licensee for violation of the Fee-Splitting Statute, including the revocation of the licensee’s medical license. In the event UMROA, or any of its licensed practitioners providing professional, clinical management, or administrative services under the applicable documents as described herein under the heading “PRINCIPAL PROJECT AGREEMENTS” is sanctioned under the Fee-Splitting Statute, it could have a material adverse effect on the financial condition and operations of the Project.

Maryland law imposes criminal and civil penalties on any person who solicits, offers, makes, or receives a kickback or bribe in connection with providing any items or services for which payment is made from federal or State funds under a State health plan. The law also prohibits anyone from soliciting, offering, making, or receiving a rebate of a fee or charge for referring another individual to a third person to provide items or services for which payment is made from federal or State funds under any such State health plan. The criminal sanctions range from fines between $50,000 and $100,000 for each misdemeanor violation, and between $100,000 to $250,000 for each felony violation. In addition, the law provides for up to three years’ imprisonment for misdemeanor violations to life imprisonment for felony violations that result in the death of an individual. There can be no assurance that the Project’s operations will not become the subject of a Maryland anti-kickback investigation in the future, and any such investigation could have a material adverse effect on the financial condition and results of the Project.

Affordable Care Act. In March 2010, the Patient Protection and Affordable Care Act of 2010 (the “Affordable Care Act”) was enacted. Because of the complexity of the Affordable Care Act generally, additional legislation is likely to be considered and enacted over time. The Affordable Care Act has and will continue to require the promulgation of substantial regulations with significant effects on the health care industry and third-party payors. In response, third-party payors and suppliers and vendors of goods and services to health care providers have and will continue to impose additional contractual terms and conditions. Thus, the health care industry is

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subjected to significant statutory and regulatory requirements and contractual terms and conditions, and consequently to structural and operational changes and challenges.

The future of the Affordable Care Act is unclear. Since its enactment, the Affordable Care Act has faced numerous legal challenges and legislative repeal efforts. The Affordable Care Act remains subject to amendment, repeal, lack of implementation, failure to fund and judicial interpretation. The Affordable Care Act repeal effort, to date, has focused on individual and employer mandates, exchanges, insurance industry regulations, Medicaid expansion, and the taxes to pay for these elements of the Affordable Care Act. As discussed above, the Tax Cuts and Jobs Act repealed the individual mandate. The timing of any further repeal of the provisions of the Affordable Care Act and whether it would be in whole or in part is unclear. It is also unclear when or if a replacement plan would be implemented. A repeal could result in additional pressure on Medicaid and Medicare funding and could have the effect of reducing the availability of health insurance to individuals who are previously insured, resulting in greater numbers of uninsured individuals, and could otherwise materially adversely affect the Project.

Whether or not the Affordable Care Act remains is repealed or amended, it is expected that the government will continue to consider various reform proposals in the health care industry. If adopted, such proposals may subject health care providers to increased compliance requirements, reduced reimbursement for services, increased costs, or a combination of such results. The ultimate outcome of any legislative efforts to repeal, substantially amend, eliminate or reduce funding for the Affordable Care Act is unknown. The effect of any major modification or repeal of the Affordable Care Act on the financial condition of the Project cannot be predicted with certainty, but could be materially adverse.

A significant component of the Affordable Care Act is reformation of the sources and methods by which consumers will pay for health care for themselves and their families and by which employers will procure health insurance for their employees and dependents and, as a consequence, expansion of the base of consumers of health care services. The Affordable Care Act was designed to make available, or subsidize the premium costs of, health care insurance for some of the millions of uninsured (or underinsured) consumers who fall below certain income levels. To the extent all or any of those provisions produce the expected result, an increase in utilization of health care services by those who are currently avoiding or rationing their health care can be expected and bad debt expenses and/or charity care provided may be reduced. Associated with increased utilization will be increased variable and fixed costs of providing health care services, which may or may not be offset by increased revenues.

Some provisions of the Affordable Care Act may adversely affect the Project’s operations more significantly than others, or may not affect them at all. The demographics of the market in which the Project provides services, the services that the Project provides to the community and other factors that are unique to the Project that are likely to affect operations, financial performance or financial conditions are described below. This listing is not intended to be, nor should be considered to be, comprehensive. The Affordable Care Act is complex and comprehensive, and includes a myriad of new programs and initiatives and changes to existing programs, policies, practices and laws.

Through September 30, 2019, payments under “Medicare Advantage” programs (Medicare managed care) will be reduced, which may result in increased premiums or out-of-pocket costs to Medicare beneficiaries enrolled in Medicare Advantage plans. Those beneficiaries may terminate their participation in such plans and opt for the traditional Medicare fee-for-service program. The reduction in payments to Medicare Advantage programs may also lead to decreased payments to providers by managed care companies operating Medicare Advantage programs. All or any of these outcomes will have a disproportionately negative effect upon those providers with relatively high dependence upon Medicare managed care revenues.

The Affordable Care Act provides for the expansion of Medicaid programs to a broader population with incomes up to 133% of federal poverty levels. In its decision in National Federation of Independent Business v. Sebelius, the U.S. Supreme Court determined that any expansion of Medicaid must be at the option of individual states, and not a mandatory obligation. Although the federal government is expected to fund most of the cost of the expanded Medicaid program through 2020, some state officials have expressed reluctance in continued participation, citing concerns that the administrative and other costs associated with enrolling and managing potentially millions of new individuals would add further stress to already depleted state resources.

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With varying effective dates, the Affordable Care Act enhances the ability to detect and reduce waste, fraud, and abuse in public programs through provider enrollment screening, enhanced oversight periods for new providers and suppliers, and enrollment moratoria in areas identified as being at elevated risk of fraud in all public programs, strengthening program integrity and enforcement measures and by requiring Medicare and Medicaid program providers and suppliers to establish compliance programs. The Affordable Care Act requires the development of a database to capture and share health care provider data across federal health care programs and provides for increased penalties for fraud and abuse violations, and increased funding for anti-fraud activities.

The Affordable Care Act created a Center for Medicare and Medicaid Innovation to test innovative payment and service delivery models and to implement various demonstration programs and pilot projects to test, evaluate, encourage and expand new payment structures and methodologies to reduce health care expenditures while maintaining or improving quality of care, including bundled payments under Medicare and Medicaid, and comparative effectiveness research programs that compare the clinical effectiveness of medical treatments and develop recommendations concerning practice guidelines and coverage determinations. Other provisions encourage the creation of new health care delivery programs, such as accountable care organizations or combinations of provider organizations that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program. The outcomes of these projects and programs, including their effect on payments to providers and financial performance, cannot be predicted.

Budget Control Act. The Budget Control Act of 2011 (the “Budget Control Act”) originally limited the federal government’s discretionary spending caps at levels necessary to reduce expenditures by $917 billion from the current federal budget baseline through fiscal year 2021. Medicare, Social Security, Medicaid and other entitlement programs were not affected by the limit on discretionary spending caps. Provisions of the Budget Control Act, as modified by the Taxpayer Relief Act of 2012, set in place a protocol for severe spending cuts (known as sequestration) resulting in an automatic 2% reduction in Medicare program payments for all healthcare providers effective March 27, 2013. The Consolidated and Further Continuing Appropriations Act of 2013, was subsequently enacted, providing funds for operation of the federal government through September 30, 2013 and off-setting some of the sequestration mandated reductions for federal fiscal year 2014. In December 2013, then-President Barack Obama signed the Bipartisan Budget Act of 2013 that increased the sequestration caps for federal fiscal years 2014 and 2015 by $45 billion and $18 billion, respectively, but extended the caps into 2023. On November 2, 2015, then-President Barack Obama signed into law the Bipartisan Budget Act of 2015, increasing the discretionary spending caps imposed by the Budget Control Act for fiscal years 2016 and 2017 and authorizing $80 billion in increased spending over the two years. The Bipartisan Budget Act of 2015 also suspended the limit on the federal government’s debt until March 15, 2017. On March 16, 2017, the debt limit reset to account for all debt issued while it was suspended. On February 7, 2018, Congressional leaders reached a bipartisan agreement to fund the federal government through March 23, 2018. The agreement was approved by the House of Representatives and the Senate on February 9, 2018.

Bipartisan Budget Act of 2018. On February 7, 2018, Congressional leaders reached a bipartisan agreement to fund the federal government through March 23, 2018. The agreement was approved by the House of Representatives and the Senate on February 9, 2018. On February 9, 2018, President Trump signed the Bipartisan Budget Act of 2018 which raises caps on domestic spending by $296 billion over the next two years and waives limits on federal borrowing until March 1, 2019. The act also includes health care policy changes impacting Medicare, Medicaid, and other federal health agencies, and addresses a number of key health funding issues. See “RISK FACTORS - Payment for Health Care Services – Value-Based Purchasing and Alternative Payment Models and – Reimbursement for Proton Beam Therapy” herein.

Because Congress may make changes to the budget in the future, it is impossible to predict the impact any spending cuts that are approved may have on the Project. Further, with no long-term resolution in place for federal deficit reduction, outpatient medical care and physician reimbursement are likely to continue to be targets for reductions with respect to any interim or long-term federal deficit reduction efforts. These and any additional reductions in Medicare spending could have a material adverse effect upon the financial condition or operations of the Project.

Maryland Total Cost of Care All-Payor Model. On May 14, 2018, the Centers for Medicare & Medicaid Services (“CMS”) announced federal approval of Maryland’s Total Cost of Care All-Payor Model (the “Maryland

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Model”). The Maryland Model is designed to shift how health care is funded and provided to patients in Maryland, and will reward efficiency, value, and better patient outcomes with the goal of saving over $1 billion by the end of 2023.

One component of the Maryland Model is the Care Redesign Program (“CRP”) that allows hospitals to make incentive payments to non-hospital healthcare providers who collaborate with them to provide care redesign activities aimed at improving quality of care. The effect of the Maryland Model on healthcare provider treatment and practice behaviors and reimbursement and on the financial condition of the Project cannot be predicted with certainty, but could be materially adverse.

Payment for Health Care Services

Third-Party Payment Programs. Most of the net patient service revenues of the Project will be derived from third-party payors that reimburse or pay for the services and items provided to patients covered by such third parties for such services, including the federal Medicare program, private health plans and insurers, health maintenance organizations (“HMOs”), preferred provider organizations (“PPOs”) and other managed care payors. Many of these third-party payors will make payments at rates other than the direct charges of the Operator, which rates may be determined other than on the basis of the actual costs incurred in providing services to patients. Accordingly, there can be no assurance that payments made under these programs will be adequate to cover the Operator’s actual costs of furnishing health care services. Moreover, any changes in the rates or methods of reimbursement for services could have a significant adverse impact on the Project’s revenue and financial results. In addition, the financial performance of the Project could be adversely affected by the insolvency of, or other delay in receipt of payments from, third-party payors, which provide coverage for services to the Project’s patients.

Medicare and Medicaid Programs. Medicare and Medicaid are the commonly used names for health care reimbursement or payment programs governed by certain provisions of the federal Social Security Act. Medicare is an exclusively federal program, while Medicaid is a combined federal and state program. Medicare provides certain health care benefits to beneficiaries who are 65 years of age or older, disabled or qualify for the End Stage Renal Disease Program. Medicare Part A covers inpatient services and certain other services, and Medicare Part B covers outpatient services, certain physician services, medical supplies, durable medical equipment, and certain prescription drugs. Medicaid is designed to pay providers for care given to the indigent and others who receive federal aid. Medicaid is funded by federal and state appropriations and administered by state agencies. CMS administers the Medicare program and works with the states regarding both the Medicaid program and other health care programs.

Health care providers have been and will continue to be significantly affected by changes made in the last several years in federal and state health care laws and regulations, particularly those pertaining to Medicare and Medicaid. For example, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “MMA”) generally increased reimbursement levels while the Deficit Reduction Act of 2005 (the “DRA”) contained, among other things, a number of provisions aimed at slowing the pace of spending growth in the Medicare and Medicaid programs while increasing health care providers’ focus on quality and efficient delivery of health care services. Such focus was further reflected in the provisions of the Affordable Care Act, Taxpayer Relief Act and Bipartisan Budget Act of 2018. Diverse and complex statutory and regulatory mechanisms, the effect of which is to limit the amount of money paid to health care providers under both the Medicare and Medicaid programs, have been enacted and approved in recent years. Some of these laws and/or regulations have been or are being implemented, and others may be implemented in the future. The Operator is unable to predict what effect, if any, current and future legislative initiatives related to Medicare and Medicaid may have on the operations of the Project.

Reimbursement for Proton Therapy. Radiation therapy services furnished in a nonhospital setting are paid for under the Medicare Physician Fee Schedule (“MPFS”). Under this system, CMS assigns a national relative value unit to most medical procedures and services, adjusted for geographic factors, intended to reflect the various resources required to provide the services relative to all other services. The Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) provides for a 0.5% update to the MPFS for each calendar year through 2019, partially offset by various adjustments and policy updates, and outlines a new method for determining subsequent updates. The Bipartisan Budget Act of 2018 reduced the update for 2019 to 0.25%.

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The Affordable Care Act and various other policy changes generally provide for significant reductions in federal healthcare program spending. However, the final 2018 MPFS released by CMS estimates an overall impact for radiation oncology services of an increase of 1%. Against 2017 charges for payment rates for proton therapy, CMS approved an increase of 5.7% - 5.9%, depending on CPT code. CMS indicated that it will continue to address radiation therapy codes and pricing in future years, as the agency identified certain codes as potentially mis-valued.

To be covered by Medicare, radiation therapy must comply with specific criteria established by the local Medicare Administrative Contractor (“MAC”) that are intended to ensure that the therapy is medically necessary and appropriate. The Maryland MAC, Novitas Solutions, Inc., has determined that proton beam therapy is considered medically necessary under certain circumstances but there can be no assurance that the local MAC or CMS will not restrict, reduce or eliminate coverage in the future for proton beam therapy.

The Operator, acting through a contracted third-party billing company, will bill the local MAC on a global basis (meaning fees for both the technical and professional components) for each proton beam treatment provided to Medicare beneficiaries. Medicare reimbursement rates for proton beam therapy are subject to change, and there is no guarantee that current rates will not be reduced in the future or that the local MAC or CMS will not change the coverage parameters or eliminate proton beam therapy as a covered service. The Operator intends to provide proton beam therapy and all other Medicare covered services to Medicare beneficiaries in compliance with the general Medicare requirement of medical necessity, as well as any specific coverage criteria established by the local MAC.

Because the Operator will furnish proton therapy to Medicare beneficiaries at a freestanding facility, the Operator is subject to and intends to comply with Medicare provisions requiring that a physician be in the area and immediately available to provide assistance and direction throughout the time the therapy is being provided. Failure to comply with this supervision condition could result in denial of Medicare claims and exposure to potential liability under federal and state health care fraud and abuse laws, and, thus, would have a significant adverse effect on the financial operations of the Project.

Medicare Audits. Organizations participating in Medicare are subject to audits and retroactive audit adjustments with respect to reimbursement claimed under the Medicare program. Medicare regulations also provide for withholding Medicare payment in certain circumstances if it is determined that an overpayment of Medicare funds has been made. In addition, under certain circumstances, payments may be determined to have been made as a consequence of improper claims subject to the FCA or other federal statutes, subjecting the Operator to civil or criminal sanctions.

Program Integrity Audits. The Recovery Audit Contractor Program (“RAC Program”) is a CMS program that began in 2003 as a pilot program and became permanent in 2006. The Affordable Care Act expanded the RAC Program to include Medicare Part C (Medicare Advantage plans), Medicare Part D (prescription drug coverage) and the Medicaid program. The goal of the RAC Program is to identify and correct improper payments made to providers. RAC Program activities are executed by contractors selected by CMS, who are compensated on a contingency basis. Contractors have three years from the time a claim is paid to review that claim.

The government maintains arrangements with other program integrity contract auditors, including Zone Program Integrity Contractors, Program Safeguard Contractors, Medicare-Medicaid Data Match programs, and Medicaid Integrity Contractors. CMS is in the process of consolidating these audit programs into a Unified Program Integrity Contractor (“UPIC”) audit program. It is unclear whether the anticipated benefits of coordination will result in increased audit and enforcement activity. Significant audit findings could result in material overpayment liability as well as referrals for enforcement under the civil or criminal laws, exclusion from participation in federal health care programs, or assessments of significant civil monetary penalties.

Value-Based Purchasing and Alternative Payment Models. Traditionally, Medicare reimbursement has been provided based on predetermined payment rates for given units of service, adjusted for variables such as geographic location. Some Medicare recipients enroll in Medicare Advantage managed care plans, under which providers may be reimbursed on a capitated basis. The healthcare industry is increasingly shifting toward value-based purchasing of healthcare services. The Operator expects value-based purchasing programs, such as programs that condition reimbursement on patient outcome measures, and alternative payment models, such as bundled payment programs, to become more common. For example, MACRA requires the establishment of the Quality

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Payment Program (“QPP”), a payment methodology intended to reward high-quality patient care. Beginning in 2017, physicians and certain other healthcare clinics are required to participate in one or two QPP tracks. Under both tracks, performance data collected in 2017 will affect Medicare payments in 2019. CMS expects to transition increasing financial risk to providers as the QPP evolves. The Advanced Alternative Payment Model (“Advanced APM”) track makes incentive payments available for participation in specific innovative payment models approved by CMS. Providers may earn a 5% Medicare incentive payment and will be exempt from the reporting requirement and payment adjustments imposed under the Merit-Based Incentive Payment System (“MIPS”) if the provider has sufficient participation (based on percentage of payments of patients) in an Advanced APM. Alternatively, providers may participate in the MIPS track. Providers electing this option may receive performance-based payment incentives or payment reductions of up to 4% of the provider’s Medicare payments based on their performance with respect to clinical quality, resource use, clinical improvement activities, and meaningful use of electronic health records. The adjustment percentage will increase incrementally, up to 9%, through 2022. The proliferation of value-based payment models may have an impact on the financial condition of the Project.

The aforementioned Bipartisan Budget Act of 2018 affected a number of changes to MIPS’ scoring mechanisms, as originally specified by MACRA. First, MACRA provided for the “resource use” category to account for 30% of a provider’s MIPS performance score by 2021, but made no provision for its scoring during MACRA’s first year. For years two through five, the Bipartisan Budget Act of 2018 provides CMS with the discretion to “gradually and incrementally” transition the weight of this category towards 30%, stipulating only that this category must, at minimum, comprise 10% of the overall performance score. Second, MACRA also sets a low-volume threshold for the purpose of excluding otherwise-eligible clinicians from participating in MIPS. Beginning with the 2018 performance year, the Bipartisan Budget Act of 2018 provides that this low-volume exclusion will only be based on “covered professional services,” rather than separately billed items. The act also excludes separately billed items from MIPS calculations and payment adjustments. Finally, MACRA originally intended to set overall performance thresholds for 2019 at the average MIPS score; consequently, nearly half of all clinicians would fall below the threshold and receive a Medicare Part B payment reduction. The Bipartisan Budget Act of 2018 allows CMS to gradually increase point values for the performance threshold until 2022, upon which point it must be set at the average MIPS score.

Commercial Insurance and Other Third-Party Plans

Many commercial insurance plans, including group plans, reimburse their customers or make direct payments to healthcare providers for charges at rates established by agreement. Generally, these plans pay per diem rates plus ancillary service charges, which are subject to various limitations and deductibles depending on the plan. To the extent allowed by law, patients carrying such coverage are responsible to the healthcare provider for any deficiency between the commercial insurance proceeds and total billed charges. There can be no assurance that patients will make payments of any such deficiencies.

The Operator has entered into agreements with the following PPOs and HMOs: Aetna, Cigna, CareFirst (BCBS), South Central, Medicare – Novitas, and Amerigroup and anticipates entering into additional contractual arrangements with PPOs and HMOs pursuant to which they agree to provide or arrange to provide certain health care services for these organizations’ eligible enrollees. Revenues received under such contracts are expected to be sufficient to cover the variable cost of the services provided. There can, however, be no assurance that revenues received under such contracts will be sufficient to cover all costs of services provided. Failure of the revenues received under such contracts to cover all costs of services provided may have a material adverse effect on the operations or financial condition of the Project.

State Laws. States also are increasingly regulating the delivery of health care services. Much of this increased regulation has centered on the managed care industry. State legislatures have cited their right and obligation to regulate and oversee health care insurance and have enacted sweeping measures that aim to protect consumers and, in some cases, providers.

Due to this increased state oversight, the Project and the Operator could be subject to a variety of state health care laws and regulations. In addition, the Project and the Operator could be subject to state laws and regulations prohibiting, restricting, or otherwise governing PPOs, third-party administrators, independent practice associations or other intermediaries on such items as fee-splitting, the “corporate practice of medicine” doctrine,

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selective contracting (“any willing provider” laws and “freedom of choice” laws), coinsurance and deductible amounts, insurance agency and brokerage, quality assurance, utilization review, and credentialing activities, provider and patient grievances, mandated benefits, rate increases, and many other areas.

Dependence Upon Third-Party Payors. The Project’s profitability is dependent upon the Operator’s ability to enter into contracts with third-party payors at competitive rates. There can be no assurance that the Operator will be able to attract and maintain third-party payors in the future, and where it does, there can be no assurance that it will be able to contract with such payors on advantageous terms. The inability of the Operator to contract with a sufficient number of such payors on advantageous terms would have a material adverse effect on the Project’s operations and financial results.

Failure to Cover Proton Therapy. Several major payors have decided to limit coverage for proton therapy nationally as a treatment option for certain types of cancer. For example, UnitedHealth Care no longer covers proton therapy treatments for certain types of cancer, including breast, lung, bladder, head and neck, lymphomas, pancreatic and prostate cancer. Cigna only covers proton therapy for cancer of the eye, as well as cranial and liver cancer. These decisions are not expected to have a significant impact on total reimbursement available to the Project based on the Project’s current payor mix. However, there can be no assurances that additional third-party payors or Medicare will continue to cover proton therapy for prostate cancers or other cancers. The decision by additional third-party payors or Medicare to no longer cover proton therapy for prostate cancers or other cancers could have a material adverse effect on the Project’s operations and financial results.

Medicaid

Medicaid (Title XIX of the federal Social Security Act) is a health insurance program for certain low-income and needy individuals that is jointly funded by the federal government and the states. It covers approximately 50 million people, including children, the aged, blind, and/or disabled, and individuals who are eligible to receive federally assisted income maintenance payments. Pursuant to broad federal guidelines, the states and the United States territories (Puerto Rico, Guam, the Virgin Islands, American Samoa, and the Northern Mariana Islands) each (i) establish their own eligibility standards; (ii) determine the type, amount, duration, and scope of services; (iii) set the payment rates for services; and (iv) administer their own programs. Some states, including Maryland, operate certain Medicaid programs under a waiver of some of the basic Medicaid requirements. Pursuant to the Medicaid program, the federal government supplements funds provided by the various states for medical assistance to the medically indigent. In Maryland, Medicaid is administered by the Medical Assistance Program of the Maryland Department of Health.

In order for Maryland to continue to receive funding for the cost of its Medicaid program from the federal government, it must administer its program in accordance with federal statutes and regulations. The federal government has on occasion cut off Medicaid funds to states that were not in compliance with such laws and regulations. Medicaid is of limited relevance to the Project, because Medicaid patients have not and the Operator’s current expectation is that Medicaid patients will not represent a significant percentage of its patients. However, any such federal action taken with respect to the Maryland Medicaid program could have an adverse effect upon the Project.

Fiscal considerations of both the federal and state governments in establishing their budgets will directly affect the funds available to providers for payment of services rendered to Medicaid beneficiaries. It is important to note that although the payment systems can be categorized in general terms, the specific methodology varies from state to state. Significant changes have been and may continue to be made in the Medicaid program that could have a material adverse impact on the financial condition of the Project.

Medicaid eligibility is generally based on a combination of financial and categorical eligibility requirements. Most states determine threshold Medicaid eligibility levels by reference to other federal financial assistance programs, including Temporary Assistance to Needy Families (“TANF”) and Supplemental Security Income (“SSI”). TANF is a low-income assistance program for families with children that was adopted to replace the Aid to Families with Dependent Children program. SSI is a federal program that provides assistance to low-income aged, blind or disabled individuals.

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The Maryland Medicaid program, including the Children’s Health Insurance Program (“CHIP”), provides health care benefits to children, pregnant women, senior citizens, individuals with disabilities, and low-income adults. As of November, 2017, over 1.3 million individuals were enrolled in the Maryland Medicaid Program.

Maryland administers its Medicaid program through the mandatory HealthChoice managed care program through contractual arrangements with designated third-party managed care service providers. Currently, the Operator has contracted with one (1) such managed health service provider, Amerigroup Maryland, Inc., to provide coverage for its services.

While Medicaid is of limited relevance to the Project, because Medicaid patients have not and the Operator’s current expectation is that Medicaid patients will not represent a significant percentage of its patients, if the existing contract with Amerigroup is terminated or expires, and additional agreements with designated HealthChoice payers are not secured, it could have an adverse effect on the Project.

Reimbursement under the Medicaid program is subject to the timely appropriation of sufficient funds by state legislatures, as well as complexities inherent in claims’ processing and cost-report settlement under each state’s Medicaid program. The federal and state governments, including Maryland, have considered, and are continuing to consider, changes to Medicaid funding, particularly in light of the budget crises facing many states. The United States Congress approved an increase in Medicaid funding to states; however, the federal government continues to explore long-term options to the funding difficulties with Medicaid. Certain additional proposals being examined may ultimately result in reduced federal Medicaid funding to the states, which could adversely impact the amount of revenue generated by the Project.

While the Affordable Care Act provides incentives for states to expand their Medicaid eligibility requirements, the U.S. Supreme Court, in National Federation of Independent Business v. Sebelius, struck down Affordable Care Act provisions eliminating federal Medicaid funding for those states that do not accept the new funds as an unlawful coercion of the states by the federal government. Therefore, states have the option to accept or not accept the new federal Medicaid funds with the attached conditions without risking the loss of all federal Medicaid funding. Although certain states have opted to fund Medicaid expansion in the near term, including Maryland, no state is obligated to maintain expanded Medicaid eligibility in future years.

Antitrust

Antitrust liability may arise in a wide variety of circumstances, including payor contracting, physician relations, joint ventures, merger, affiliation and acquisition activities, trade restraints or limitations, exclusive providers, and certain pricing or salary setting activities, as well as other areas of activity. The application of the federal and state antitrust laws to healthcare is still evolving, and enforcement activity by federal and state agencies appears to be increasing. At various times, the Operator or the Project may be subject to investigation or inquiry by a governmental agency changed with the enforcement of the antitrust laws. Violators of the antitrust laws may be subject to criminal and/or civil enforcement by federal and state agencies, as well as by private litigants. A common area of potential liability is joint action among providers with respect to payor contracting. With respect to payor contracting, the Project may, from time to time, be involved in joint contracting activity with hospitals, physicians or other providers. The degree of antitrust risk, if any, involved in joint contracting activities depends on the particular facts and circumstances. Because the Project offers unique services that are not readily available at other facilities, any exclusive contracting arrangements with other healthcare providers and physicians from other geographic areas may increase the likelihood of antitrust lawsuits.

Cybersecurity

Healthcare providers are highly dependent upon integrated electronic medical record and other information technology systems to deliver high quality, coordinated and cost-effective healthcare. These systems necessarily hold large quantities of highly sensitive protected health information that is highly valued on the black market for such information. As a result, the electronic systems and networks of healthcare providers and insurance are considered likely targets for cyberattacks and other potential breaches of their systems. In addition to regulatory fines and penalties, the healthcare entities subject to the breaches may be liable for the costs of remediating the breaches, damages to individuals (or classes) whose information has been breached, reputational damage and

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business loss, and damage to the information technology infrastructure. The Operator intends to take measures to protect the Project’s information technology system against such cyberattacks, but there can be no assurance that the Project will not experience a significant breach. If such a breach occurs, the financial consequences of such a breach could have a materially adverse impact on the Project.

Debt Limit Increases

The federal government has, through legislation, created a debt “ceiling” or limit on the amount of debt that may be issued by the United States Treasury. In the past several years, political disputes have arisen within the federal government in connection with discussions concerning the authorization for an increase in the federal debt ceiling. Any failure by Congress to increase the federal debt limit may impact the federal government’s ability to incur additional debt, pay its existing debt instruments and to satisfy its obligations relating to the Medicare and Medicaid programs.

The Operator is unable to determine at this time what impact any failure to increase the federal debt limit may have on the operations and financial condition of the Project, although such impact may be material and adverse. Additionally, the market price or marketability of the outstanding Series 2018A-1 Bonds in the secondary market may be materially adversely impacted by any failure to increase the federal debt limit.

Professional Liability Claims and Losses

The operations of the Project may also be affected by increases in the incidence of professional liability lawsuits against healthcare facilities in general, and increases in the dollar amount of damage recoveries, resulting in increased insurance premiums and an increased difficulty in obtaining malpractice insurance. It is not possible at this time to determine either the extent to which such insurance coverage will continue to be available to the Operator or the premiums at which such coverage can be obtained.

Specialty Nature of Project

The Project is not comprised of general purpose buildings and generally would need to be retrofitted for industrial or commercial use. In addition, there is a restrictive easement encumbering the Project which requires that the Project be operated as a proton treatment center. Consequently, it could be difficult to find a buyer or lessee for the Project and, in the event of bankruptcy proceedings, the estate in bankruptcy may not realize the amount of the outstanding Series 2018A-1 Bonds and other outstanding debt from the disposition of the Project.

Financial Reporting

The Operator’s independent public accounting firm, in its report accompanying the Operator’s consolidated financial statements as of and for the years ended December 31, 2017 and 2016, expressed substantial doubt as to the ability of the Operator to continue as a going concern. See APPENDIX C - CONSOLIDATED FINANCIAL STATEMENTS OF MARYLAND PROTON TREATMENT HOLDINGS, LLC AND SUBSIDIARIES FOR THE FISCAL YEARS ENDED DECEMBER 31, 2017 AND 2016.” The Operator’s independent audit firm identified material weaknesses in the Operator’s internal control over financial reporting during the fiscal years ended December 31, 2016 and December 31, 2017. The Board of Managers of MPTH and new management of the Operator are in the process of putting controls and procedures in place to remediate such deficiencies as of July 2018.

Potential for Determination of Taxability

Under certain circumstances, interest on the Series 2018A-1 Bonds could become includable in gross income for federal income tax purposes. Furthermore, the occurrence of certain events, or the failure of the Authority to comply with certain covenants contained in the Indenture or the Tax Agreement may result in the interest on the Series 2018A-1 Bonds being includable in gross income for federal income tax purposes from the date the Series 2018A-1 Bonds were first issued. If interest on the Series 2018A-1 Bonds becomes includable in gross income for federal income tax purposes, the Series 2018A-1 Bonds are subject to mandatory redemption. The only funds available for the payment of the redemption price of the Series 2018A-1 Bonds are the Revenues

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generated by the Project. There can be no assurances that there will be sufficient funds available to the Trustee from such source at the time of such redemption in order to effectuate such mandatory redemption. In addition, in such an event, the holders of the Series 2018A-1 Bonds might incur a significant tax liability, and such holders would not in such event be entitled to receive any additional amounts from the Authority to pay such liabilities.

Possible Consequence of Tax Compliance Audit

The IRS has established a general audit program to determine whether issues of tax-exempt obligations, such as the Series 2018A-1 Bonds, are in compliance with requirements of the Code that must be satisfied in order for the interest of those obligations to be, and continue to be, excluded from gross income for federal income tax purposes. It cannot be predicted whether the IRS will commence an audit of the Series 2018A-1 Bonds. Depending on all the facts and circumstances and the type of audit involved, it is possible that commencement of an audit of the Series 2018A-1 Bonds could adversely affect the market value and liquidity of the Series 2018A-1 Bonds until the audit is concluded, regardless of its ultimate outcome. See “TAX MATTERS” herein.

State Regulation of Project; No Certificate of Need Required to Operate the Project

Although Maryland is a Certificate of Need (“CON”) state, the Operator received a determination in 2010 from the Maryland Health Care Commission (“MHCC”) that a CON was not required for the Project because the Project is not a “health care facility” as defined under the provisions of MHCC’s CON regulations and therefore does not require CON review and approval. The Operator received this determination because the Project is a stand-alone facility and is not affiliated with a hospital. Although a competing proton facility operated by a health care provider would require CON review and approval and, in connection therewith, would need to provide a justification that it was necessary based on community need, another stand-alone facility could be developed and operated without CON review and approval.

Additional Indebtedness

Simultaneously with the issuance of the Series 2018A-1 Bonds, the Authority is issuing, under the Indenture, the Series 2018A-2 Bonds, the Series 2018B Bonds and the Series 2018C Bonds. The Series 2018A-2 Bonds are also being issued as Senior Bonds and rank on a parity with the Series 2018A-1 Bonds. Additional Bonds may be issued by the Authority under the Indenture, subject to the limitations set forth in the Indenture. Additional Bonds may rank on a parity with all Series 2018A Bonds, as more fully described in the Indenture. See “APPENDIX E – PROPOSED FORM OF THE INDENTURE – Provisions for Issuance of Bonds.” In addition, the Authority may issue Additional Indebtedness ranking on a parity with the Series 2018A Bonds for the purpose of financing working capital related to the Project. See “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2018 BONDS – Indenture Covenants – Additional Indebtedness.”

Absence of Market for the Series 2018A-1 Bonds; No Credit Rating

The Series 2018A-1 Bonds have not been rated by any credit rating agency. The Series 2018A-1 Bonds are a new issue of securities and will not be listed on any securities exchange. Prior to this offering of the Series 2018A-1 Bonds, there has been no market for the Series 2018A-1 Bonds. The Underwriters are not required to make a market in the Series 2018A-1 Bonds, and they may cease market-making at any time without notice. No assurances can be made that an active market for the Series 2018A-1 Bonds will develop. Moreover, even if a market for the Series 2018A-1 Bonds does develop, holders of the Series 2018A-1 Bonds may be unable to resell the Series 2018A-1 Bonds for an extended period of time, if at all. Consequently, holders of the Series 2018A-1 Bonds may not be able to liquidate their investment readily, or liquidate it at an attractive price. In addition, lenders may not readily accept the Series 2018A-1 Bonds as collateral for loans.

CONTINUING DISCLOSURE

Reports and Material Event Notices

The Operator has undertaken all responsibilities for any continuing disclosure to Bondholders as described below, and the Authority will have no liability to the Bondholders or any other person with respect to such disclosures.

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The Operator has covenanted for the benefit of Bondholders to provide certain financial information and

operating data relating to the Project by not later than 120 days following the end of each of the Project’s fiscal years (the “Annual Report”), to provide certain monthly and quarterly financial and operating data relating to the Project and to provide notices of the occurrence of certain enumerated events, in accordance with the requirements of Rule 15c2-12, as amended, under the Securities Exchange Act of 1934. The Annual Report and notices of material events, if any, will be filed by the Operator with the Municipal Securities Rulemaking Board (the “MSRB”) in an electronic format as prescribed by the MSRB. The specific nature of the information to be contained in the Annual Report and the notices of material events is set forth in “APPENDIX I —PROPOSED FORM OF CONTINUING DISCLOSURE UNDERTAKING.”

In the event the Operator is replaced, the Authority has agreed in the Indenture to require any replacement

operator of the Project to enter into a continuing disclosure agreement substantially similar to the continuing disclosure agreement contained herein in APPENDIX I. See “APPENDIX E – PROPOSED FORM OF THE INDENTURE – Continuing Disclosure Agreement.” Compliance With Prior Undertakings

The Operator has no prior continuing disclosure undertakings. Authority Not Responsible

The Authority has undertaken no responsibility for any continuing disclosure.

TAX MATTERS

In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority (“Bond Counsel”), based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Series 2018A-1 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Code. Bond Counsel is of the further opinion that interest on the Series 2018A-1 Bonds is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel observes that interest on the Series 2018A-1 Bonds is not exempt from Wisconsin income taxes. A complete copy of the proposed form of opinion of Bond Counsel is set forth in APPENDIX H hereto.

To the extent the issue price of any maturity of the Series 2018A-1 Bonds is less than the amount to be paid

at maturity of such Series 2018A-1 Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Series 2018A-1 Bonds), the difference constitutes “original issue discount,” the accrual of which, to the extent properly allocable to each Beneficial Owner thereof, is treated as interest on the Series 2018A-1 Bonds which is excluded from gross income for federal income tax purposes. For this purpose, the issue price of a particular maturity of the Series 2018A-1 Bonds is the first price at which a substantial amount of such maturity of the Series 2018A-1 Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Series 2018A-1 Bonds accrues daily over the term to maturity of such Series 2018A-1 Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Series 2018A-1 Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Series 2018A-1 Bonds. Beneficial Owners of the Series 2018A-1 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Series 2018A-1 Bonds with original issue discount, including the treatment of Beneficial Owners who do not purchase such Series 2018A-1 Bonds in the original offering to the public at the first price at which a substantial amount of such Series 2018A-1 Bonds is sold to the public.

Series 2018A-1 Bonds purchased, whether at original issuance or otherwise, for an amount higher than

their principal amount payable at maturity (or, in some cases, at their earlier call date) (“Premium Bonds”) will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross income for federal income tax

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purposes. However, the amount of tax-exempt interest received, and a Beneficial Owner’s basis in a Premium Bond, will be reduced by the amount of amortizable bond premium properly allocable to such Beneficial Owner. Beneficial Owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances.

The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross

income for federal income tax purposes of interest on obligations such as the Series 2018A-1 Bonds. The Authority and the Operator have made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the Series 2018A-1 Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Series 2018A-1 Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Series 2018A-1 Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention after the date of issuance of the Series 2018A-1 Bonds may adversely affect the value of, or the tax status of interest on, the Series 2018A-1 Bonds. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters.

Although Bond Counsel is of the opinion that interest on the Series 2018A-1 Bonds is excluded from gross

income for federal income tax purposes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the Series 2018A-1 Bonds may otherwise affect a Beneficial Owner’s federal, state or local tax liability. The nature and extent of these other tax consequences depends upon the particular tax status of the Beneficial Owner or the Beneficial Owner’s other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences.

Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions

may cause interest on the Series 2018A-1 Bonds to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Series 2018A-1 Bonds. Prospective purchasers of the Series 2018A-1 Bonds should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel is expected to express no opinion.

The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly

addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the Series 2018A-1 Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”) or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the Authority or the Operator, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The Authority has covenanted, however, to comply with the requirements of the Code.

Bond Counsel’s engagement with respect to the Series 2018A-1 Bonds ends with the issuance of the Series

2018A-1 Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Authority or the Beneficial Owners regarding the tax-exempt status of the Series 2018A-1 Bonds in the event of an audit examination by the IRS. Under current procedures, parties other than the Authority and its appointed counsel, including the Beneficial Owners, would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the Authority legitimately disagrees, may not be practicable. Any action of the IRS, including but not limited to selection of the Series 2018A-1 Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues may affect the market price for, or the marketability of, the Series 2018A-1 Bonds, and may cause the Authority or the Beneficial Owners to incur significant expense.

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INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The consolidated financial statements of Maryland Proton Treatment Holdings, LLC and subsidiaries for the years ended December 31, 2017 and 2016, included in this Official Statement, have been audited by BDO USA LLP, independent certified public accountants, as stated in their report (which contains an explanatory paragraph regarding the Company’s ability to continue as a going concern) appearing herein.

LITIGATION

The Authority

From time to time the Authority receives inquiries and requests for documents and information pertaining to unrelated bond issues from various regulatory agencies, including the Securities and Exchange Commission, and in connection with audits by the Internal Revenue Service. To the Authority’s knowledge, as of the date of this Official Statement, there is not pending against the Authority any litigation restraining or enjoining the issuance or delivery of the Series 2018A-1 Bonds or acquisition by the Authority of the Project or questioning or affecting the validity of the Series 2018A-1 Bonds or any proceedings or authority under which the Series 2018A-1 Bonds are to be issued or the Project is to be acquired.

The Operator

Except as described in “APPENDIX A – THE PROJECT AND THE OPERATOR – THE OPERATOR –Litigation,” there is not now pending or, to the knowledge of the Operator, threatened, any litigation or any proceeding before any governmental agency against or affecting the Operator which questions the right or ability of the Operator to operate the Project or perform under the Facility Operating Agreement or, which, if adversely determined, would materially and adversely affect the financial condition of, the operations of, or revenues generated by, the Operator.

UNDERWRITING

Subject to the terms and conditions set forth in a bond purchase agreement with the Authority (the “Bond Purchase Agreement”), the Underwriters have agreed to purchase the Series 2018A-1 Bonds from the Authority at an aggregate purchase price of $_________, which is equal to the principal amount of $___________, less $__________ of original issue discount and less the Underwriters’ discount of $________ In the Bond Purchase Agreement, the Underwriters have agreed to purchase all of the Series 2018A-1 Bonds if any are purchased. The Underwriters may offer and sell the Series 2018A-1 Bonds to certain dealers (including dealers depositing the Series 2018A-1 Bonds into investment accounts) and to others at prices lower than the initial offering price set forth on the inside cover page of this Official Statement.

In 2016, Raymond James acquired Alex Brown from Deutsche Bank Trust Company Americas (“DB”). While Alex Brown was owned by DB, the two entities had a revenue sharing agreement for business sourced to DB by Alex Brown. The existing loan from DB to MPTH was covered by this revenue sharing agreement. As described in Appendix A hereto, a portion of the proceeds from the sale of the Project (which are derived from the proceeds of the Series 2018 Bonds) will be used to repay the loan from DB. Alex Brown believes that they are entitled to a payment upon this repayment. At this time, the amount of such payment is not known.

The Underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. The Underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to the Authority or the Operator and to persons and entities with relationships with the Authority or the Operator, for which they received or will receive customary fees and expenses.

In the ordinary course of its various business activities, the Underwriters and their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively traded securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their

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own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the Authority or the Operator (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the Authority or the Operator. The Underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.

LEGAL MATTERS

Issuance of the Series 2018A-1 Bonds is subject to receipt of the legal opinions of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority, and to certain other conditions. A copy of the proposed form of Bond Counsel opinion is contained in Appendix H hereto. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. Certain legal matters will be passed upon for the Underwriters by its counsel, Nixon Peabody LLP, for the Operator by its counsel, Miles & Stockbridge P.C., and for the Authority by its counsel, von Briesen & Roper, s.c.

MISCELLANEOUS

The purpose of this Official Statement is to supply information to purchasers of the Series 2018A-1 Bonds. The summaries provided in this Official Statement and in the appendices attached hereto of the Series 2018A-1 Bonds and the documents referred to herein do not purport to be comprehensive or definitive, and all references to the documents summarized are qualified in their entirety by reference to each such document. All references to the Series 2018A-1 Bonds are qualified in their entirety by reference to the forms thereof and the information with respect thereto included in the aforesaid documents. Copies of the documents referred to herein are available for inspection during the period of the offering at the principal office of the Authority.

Statements in this Official Statement, including matters of opinion, projections and forecasts, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Authority and the purchasers of the Series 2018A-1 Bonds.

The Authority has furnished only the information that relates exclusively to the Authority under the captions in this Official Statement entitled “PROJECT PARTICIPANTS - The Authority” and “LITIGATION – The Authority.” The Trustee has neither participated in the preparation of, nor reviewed, this Official Statement.

The delivery of this Official Statement by the Underwriters in connection with the offer and sale of the Series 2018A-1 Bonds has been duly authorized by the Authority.

APPENDIX A

THE PROJECT AND THE OPERATOR

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THE PROJECT

Project Overview

The Project, known as “The Maryland Proton Treatment Center” (the “Center”) is a radiation therapy cancer treatment center consisting of a 110,000 square foot, purpose-built building with 40,000 square feet of radiation shielded space. The Project features a five (5) treatment room configuration, including four (4) rotational gantries, one (1) fixed-beam room, a full diagnostic suite with magnetic resonance imaging, computer tomography, physician offices as well as research and development space for clinical research. All treatment rooms are equipped with the Varian Pro-Beam® System, including Pencil Beam Scanning, Intensity Modulated Proton Therapy and volumetric Image Guided Radiation technology. The Project has the capacity to administer approximately 45,000 proton treatments per year, which translates to an estimated 1,500 patients per year. The Project is staffed with physicians provided by the University of Maryland Radiation Oncology Associates, P.A. (“UMROA”). See “THE OPERATOR – Principal Project Agreements – Clinical Management and Professional Services Agreement” below, and “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

Ownership

The Project is currently owned by Maryland Proton Treatment Center, LLC (“MPTC”). At the closing of the Series 2018 Bonds, MPTC will (i) ground lease the land on which the Project sits and the improvements on such land and proton equipment which are fixtures to such improvements to the Authority (the “Ground Lease”) and (ii) convey the equipment and other tangible assets of the Project which are not fixtures, and sell all intangible assets, to the Authority pursuant to an Asset Purchase Agreement between MPTC and the Authority (the “APA”). The Project will continue to be operated by MPTC, as operator (the “Operator”), pursuant to a Facilities Operating Agreement between the Authority and MPTC. See “THE OPERATOR – Operating History” below.

Location

The Project is located on a 1.492 acre parcel at 850 West Baltimore Street in Baltimore, Maryland on the campus of the University of Maryland BioPark (the “BioPark”). The BioPark is adjacent to the University of Maryland’s Baltimore campus, as well as the University of Maryland’s School of Medicine and the University of Maryland Medical Center (“UMMC”), the flagship hospital for the University of Maryland Medical System (“UMMS”). See the picture on the following page depicting the site of the Project. It is in the urban, densely populated area of Baltimore, Maryland accessible to several surrounding states, including Pennsylvania, Virginia, West Virginia as well as Washington, D.C. The Project’s proton treatment capability is complementary to and builds upon UMMS’s strong conventional photon radiation, chemotherapy, and surgical oncology offerings overseen by the University of Maryland Marlene and Stewart Greenebaum Comprehensive Cancer Center (“Greenebaum”). In 2016, the National Cancer Institute designated Greenebaum as a comprehensive cancer center, one of only 49 in the United States. Since peri- and post- operative chemotherapy and radiotherapy are recommended for the management of many types of cancers, most patients are managed with a combination of radiotherapy, chemotherapy, surgery, and medication. Having access to all forms of such treatment options within the same area is anticipated to benefit cancer patients.

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Permits and Approvals

All permits and approvals necessary to construct and operate the Project have been obtained. Below is a list of the permits and approvals, such as clinical operating permits, clinical regulatory permits and professional licenses, necessary to operate the Project as well as the dates such permits and approvals were received or obtained:

Maryland is one of 34 certificate of need (“CON”) states where policy makers strive to limit health care

capacity and growth in expenditures to what can reasonably be justified based upon community need. The Project does not require a CON as the Project is not classified or owned by a hospital. In 2010, MPTC sought and received clarification from the Maryland Health Care Commission (“MHCC”) that CON review and approval of the Project is not required because it is not a healthcare facility as defined under the provisions of the MHCC’s CON regulations, and is not otherwise the beneficiary of a capital expenditure made by or on behalf of a healthcare facility that exceeds the expenditure threshold.

Permits & Approvals Effective/Issue Date Status Medicare Enrollment September 1, 2015 Active Medicaid Enrollment September 1, 2015 Active Free-Standing Major Medical Equipment Facility License (MD Department of Health and Mental Hygiene)

February 18, 2014 Effective through January 28, 2020

Certificate of Occupancy (City of Baltimore) December 22, 2015 Active Radioactive Materials License (MD Department of Environment)

March 21, 2015 Effective through March 31, 2021

Radiation Machine Facility Registration (MD Department of Environment)

November 10, 2014 Effective through July 1, 2019

DEA Registration (DoJ Drug Enforcement Administration)

November 10, 2015 Effective through January 31, 2019

Maryland Controlled Dangerous Substance Registration(MD Department of Health and Mental Hygiene)

November 5, 2015 Effective through August 31, 2020

Particle Accelerator Registration (MD Department of Environment)

December 15, 2015 Effective through December 31, 2018

MRI American College of Radiation Accreditation (American College of Radiation)

January 27, 2016 Effective through January 27, 2019

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Project Design

The design of the Project was developed to prioritize operating efficiencies such as minimizing patient door-to-door treatment time and optimizing patient flow within the treatment area. The Project’s design provides that for every treatment room there are two patient preparation rooms where patients can be set up and immobilized. The Project design also incorporates a trolley system to assist with the movement of the immobilized patients from the preparation rooms to the treatment rooms. This configuration is expected to reduce overall in-room treatment time by performing setup and immobilization outside of the treatment room, thereby increasing time available for beam delivery and maximizing patient throughput.

Depending on cancer type, the Operator anticipates that patients will receive an average of 29 treatments, or fractions, during a 5-6 week period. Once the Project has achieved maximum efficiency, anticipated in year 15 of operation, each treatment is expected to require an average of 25 minutes. Currently, the Project’s average treatment time is approximately 30 minutes and is projected to ramp down approximately 0.5 minutes per year until maximum efficiency is reached. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

Project Technology & Equipment

The Project is equipped with Varian’s ProBeam® system to provide intensity modulated proton therapy (“IMPT”) delivered by pencil beam scanning (“PBS”).

The Project has one cyclotron and five treatment rooms (four with rotating gantries and one with horizontal fixed-beam technology). The one treatment room with horizontal fixed-beam technology has been commissioned by Varian and the Operator; however, it is expected that this treatment room will not be necessary for operations until mid-2019. In addition, the Project has a robotic positioning system, and a full suite of advanced imaging technology, including on-gantry Cone-Beam CT volumetric imaging. PBS uses an electronic guided scanning system to ‘paint’ the beam of protons in three dimensions. This allows clinicians to treat solid tumors around critical organs and healthy tissues.

PBS technology provides clinicians flexibility to shape the beam for more complex treatments. PBS also enables the use of IMPT to optimize precision, opening more potential disease sites to treatment than were possible under previous technology.

The treatment rooms feature robotic patient positioning tables with multiple degrees of freedom for treatment positioning. In addition, the on-gantry Cone-Beam CT system allows for greater visualization of the soft tissues and more precise tumor location than the X-ray positioning used in older-generation systems. Finally, the Project uses image-guided proton therapy (“IGPT”). IGPT allows physicians to track tumor motion, allowing for ability to maximize tumor dose delivery while minimizing radiation exposure to the surrounding healthy tissue. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

Demand

Patient Demand

The Feasibility Consultant has reviewed the projected demand for the services to be provided at the Project under four different approaches. These include: (1) a state of Maryland needs analysis; (2) a “Top-Down” population demand-based approach; (3) a “Bottom-Up” population demand estimation approach developed by MPTC staff; and (4) an independent treatment site-level analysis approach developed by the Feasibility Consultant, built up from county-level incidence estimates for cancer types for which it has been shown proton therapy has a likely efficacy. For each approach, projected demand is compared to expected capacity. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

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Service Area

Using patient origin information as of August 2017, the Center’s primary service areas for the purposes of the Feasibility Study are defined as the counties with the shortest driving distance to the Center, from which the first 75% of all Center patients as of August 2017 originate (“PSA”). The secondary service area (“SSA”) is defined as the counties with the shortest driving distance to the Center, which are not included in the PSA, from which the next 15% of patients originate.

State County Driving Distance (Miles)

Cumulative Percent of Patients

Service Area

Maryland Baltimore (city) NA 12% Primary Maryland Baltimore 16.3 26% Primary Maryland Howard 24.4 30% Primary Maryland Anne Arundel 28.5 39% Primary Maryland Harford 35.5 45% Primary District of Columbia District of Columbia 37.9 47% Primary Maryland Carroll 41.8 50% Primary Maryland Prince George's 43.3 57% Primary Virginia Arlington 43.9 58% Primary Maryland Montgomery 45.3 63% Primary Virginia Fairfax 49.3 68% Primary Virginia City of Alexandria 49.8 69% Primary Virginia Falls Church (city) 51.6 69% Primary Pennsylvania York 52.1 72% Primary Maryland Cecil 53.2 74% Primary Maryland Frederick 53.8 75% Primary Maryland Queen Anne's 54.3 76% Secondary Virginia Fairfax (city) 56.5 76% Secondary Pennsylvania Adams 62.8 77% Secondary Maryland Caroline 69.2 77% Secondary Virginia Manassas (city) 69.2 78% Secondary Maryland Charles 71.1 78% Secondary Maryland Talbot 71.2 79% Secondary Virginia Prince William 73.2 80% Secondary Maryland Washington 74.3 81% Secondary Maryland Calvert 75.8 82% Secondary Virginia Loudoun 79.6 83% Secondary Maryland Kent 79.9 84% Secondary Pennsylvania Chester 80.7 84% Secondary Virginia Fauquier 83.8 84% Secondary Pennsylvania Lancaster 84 85% Secondary Virginia Stafford 86.7 85% Secondary Maryland Dorchester 98.4 85% Secondary Pennsylvania Franklin 100 85% Secondary

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Service Area

Maryland St. Mary's 101 87% Secondary Pennsylvania Perry 101 87% Secondary Pennsylvania Cumberland 102 87% Secondary Delaware Sussex 103 87% Secondary Pennsylvania Lebanon 107 89% Secondary Virginia Spotsylvania 107 89% Secondary Maryland Wicomico 111 89% Secondary Virginia Fairfax (city) 56.5 89% Secondary* Virginia Fredericksburg (city) 96.4 89% Secondary* Virginia Frederick 121 90% Removed

* The Center has no current or past patients from these counties or county equivalents as of August 2017, but they have been added to the service area since they are surrounded by other counties in the Center service area, which suggests future patients will likely originate in these counties as Center marketing activities and patient volume grow.

A map illustrating the Project’s primary and secondary service areas is depicted below.

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In 2016, there were an estimated 14,437 radiation cases between both the primary and secondary service areas with 9,101 coming from the PSA and 5,336 coming from the SSA. By 2030, radiation cases are estimated to increase over 30% to 18,887 cases with 11,470 cases coming from the PSA and 7,417 cases coming from the SSA.

These projections apply only to patients from within the surrounding area and do not include patients coming from outside of the immediate region or international locations. Additionally, these projections include only cancer types that have been identified as being high-likelihood targets for proton therapy and may omit some cancer types that the Project may potentially treat in the future. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

Payer Mix

The payer mix by disease site for patients who have started or completed treatment is largely comprised of Federal healthcare payment programs (Medicare/Medicaid) and a mix of commercial plans. Payer mix as of June 2018 is made up of Medicare/Medicaid (23%) and commercial payers, including Carefirst BlueCross BlueShield (42%), Cigna (6%), UnitedHealth Group (5%), Aetna (4%), and a mix of other payers (7%). Self-pay accounts for approximately 6% of expected collections and military payer groups account for approximately 6%.

The Operator anticipates that Medicare patients will continue to represent approximately 21% of services provided. The federal Medicare program is administered by Centers for Medicare and Medicaid Services (“CMS”), an agency of the United States Department of Health and Human Services (“HHS”). As a free-standing facility, the Project’s Medicare coverage and reimbursement are established by the local intermediary, Novitas Solutions (“Novitas”), who makes coverage determinations and sets the payment fee schedule on behalf of CMS. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

Collections

Patients1

Medicare/Medicaid

Commercial Including

Tricare and VA

Self-Pay Genitourinary 195 38% 57% 5% Brain 174 12% 83% 5% Head & Neck 93 23% 68% 10% Lung 104 44% 55% 2% Breast 112 14% 85% 1% Endocrine 51 13% 81% 6% Gastrointestinal 104 35% 65% 0% Lymph 47 16% 84% 0% Soft Tissue 92 18% 62% 21% Other 36 8% 87% 5% Gynecologic 26 37% 58% 5% Skin 18 46% 53% 1% Liver 24 32% 68% 0% Total2 1,076 24% 70% 6%

1Patients were treated between February 2016 and June 2018. 2Payer mix may not add to 100% due to rounding.

Reimbursement Rates

Third-party reimbursement rates and service coverage levels for proton therapy treatment vary between public and private payers who make individual market determinations of what cancer types they will pay to have

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treated with proton therapy, and between United States and international private self-pay patients. Each payment methodology results in a different payment rate. As described below, Medicare, through the local CMS fiscal intermediary, as well as most commercial payers have established payment rates for proton therapy treatment. Medicare has reimbursed for proton therapy treatment since 1991.

According to the Center for Medicare & Medicaid Services (“CMS”), Maryland operates the nation’s only

all-payer hospital rate regulation system. This system is made possible, in part, by a 36-year-old Medicare waiver (codified in Section 1814(b) of the Social Security Act) that exempts Maryland from the Inpatient Prospective Payment System (IPPS) and Outpatient Prospective Payment System (OPPS) and allows Maryland to set rates for these services. Under the waiver, all third parties pay the same rate.

The State of Maryland and CMS expect that the All-Payer Model will continue to be successful in

improving the quality of care and reducing program expenditures for Maryland residents, including Medicare, Medicaid, and CHIP beneficiaries. Moreover, the Maryland system may serve as a model for other states interested in developing all-payer payment systems. This system allows the Center to offer proton therapy at similar cost to patients as conventional radiation therapy.

The chart below summarizes by treatment site estimated weighted average revenue per patient, treatment course and treatment fraction. These are based on the combination of payer mix summarized above, Medicare free-standing facility payment rates, assumptions regarding expected managed care and self-pay rates and expected revenue from ancillary services and patient co-payments.

Based upon these inputs and assumptions, as of June 2018, the average weighted revenue per patient treatment course was approximately $64,453, equating to average revenue of $2,234 per fraction. Expected total revenue per patient for a complete course of treatment ranges from about $33,850 (liver treatment) to $80,950 (head & neck treatment). See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.” Expected

Collections (millions)

Patients Treatments TXN/Patient Expected Collections / Patient

Disease Site Mix by Patients

Collections / Fraction

Genitourinary $12.1 195 6,928 36 $62,266 22% $1,753

Brain $12.9 174 4,917 28 $73,848 16% $2,613

Head & Neck $7.5 93 3,265 35 $80,950 11% $2,306

Lung $5.2 104 2,665 26 $50,346 9% $1,965

Breast $6.9 112 2,878 26 $61,958 9% $2,411

Endocrine $3.8 51 1,393 27 $75,345 4% $2,759

Gastrointestinal $5.8 104 2,771 27 $56,115 9% $2,106

Lymph $2.4 47 908 19 $50,965 3% $2,638

Soft Tissue $6.2 92 2,632 29 $67,504 8% $2,360

Other $3.2 36 1,131 31 $88,956 4% $2,831

Gynecologic $1.3 26 667 26 $50,424 2% $1,966

Skin $1.0 18 554 31 $58,129 2% $1,889

Liver $0.8 24 332 14 $33,850 1% $2,447

Total $69.3 1,076 31,041 29 $64,453 100% $2,234

Notes: 1) Several treatment sites have been excluded from this table due to small numbers of patients receiving treatment (i.e., one CNS, one HO and one Neuro-endocrinology patient). 2) Collections represent collections posted to date. Final collections may be higher depending upon realizable accounts receivables. 3) Totals may not sum to 100% due to rounding.

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Strategic Affiliations

The Operator has relationships with the UMMS network of thirteen (13) community-based hospitals and six (6) radiation oncology facilities. Each community practice within the UMMS network includes providers credentialed to practice at the Project. The Operator currently has proton therapy affiliation agreements with the following regional providers of radiation oncology services, and is in discussion with five (5) additional regional radiation oncology providers:

(i) Radiation Oncology Associates, PC (“ROA”);

(ii) MedStar – Georgetown Medical Center, Inc. d/b/a MedStar Georgetown University Hospital (“MedStar”);

(iii) WellSpan Medical Group (“WellSpan”); and

(iv) Chesapeake Oncology Hematology Associates, P.A. (“COHA”).

In addition, the Operator has an affiliation agreement with University of Maryland Anesthesiology Associates, P.A. (“UMAA”) with respect to anesthesia services at the Project. For a complete description of the existing physician affiliation agreements see “PRINCIPAL PROJECT AGREEMENTS – Physician Affiliation Agreements” in the forepart of this Official Statement.

The Operator anticipates that aggregate referred proton candidates will grow from roughly 600 in 2017 to approximately 1,700 by 2021, with proton candidate referrals from the University of Maryland growing from 220 in 2017 to 762 by 2021, and proton candidate referrals from affiliated partnerships growing from 75 in 2017 to 261 by 2021. See “Appendix B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

Competition

Within a 200-mile radius of the Center, there are four additional proton therapy centers currently operational: the Roberts Proton Therapy Center at the University of Pennsylvania Health System (five rooms), Procure Proton Therapy Center in New Jersey (four rooms), Laurie Proton Therapy Center at Robert Wood Johnson University Hospital (one room), and Lombardi Comprehensive Cancer Center at MedStar (one room). In addition to these competitors, three additional centers will open between 2018 and 2020 and include Johns Hopkins Sibley Memorial Hospital (two rooms), INOVA Health System (two rooms), and New York Proton Center (five rooms). Although the Lombardi Comprehensive Cancer Center at MedStar is located less than 50 miles from the Center, there is limited patient capacity due to it only having one room. The Roberts Proton Therapy Center located in Philadelphia, PA holds the greatest competitor risk for the Center due to the proximity, reputation, and affiliation with the Children’s Hospital of Philadelphia. Additionally, the INOVA center located 54 miles away will likely reclaim the volume currently directed to the Center through its affiliate agreement and become a competitor when it opens in 2020. Both Medstar and INOVA are anticipated to remain Affiliates and will continue to treat patients at the Center due to their respective center’s location and capacity constraint. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

The Operator believes that its ability to be competitive in the market will be influenced by a broad spectrum of objective and subjective factors. These include reimbursement levels, reputation, treatment efficacy, location, effective marketing, and strength of the clinical and management relationship with UMMS and other affiliates which serve as primary clinical and management partner and patient referral sources. Additional external factors include population service demand, competition and Maryland’s regulatory environment.

Historical Performance

The charts below present the Project’s performance from its opening in early 2016 until June 2018 in terms of average numbers of daily treatments. During the first eight months of 2016, the actual average treatments per day tracked closely to the budget forecast. However, in the last quarter of the year, the Project’s treatments per day were

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below the budget forecast. Discussions with MPTC’s management suggested that the primary reason for this variance was an overly aggressive phase-in forecast for that period. In contrast to the initial budget forecast, which was based on assumptions for a new Project, the current budget forecast is based on historical performance data for the Project. In addition, there is now increased public market data on other similar proton therapy centers (both for nationwide operating centers as well as planned centers within the Baltimore-Washington, D.C. metropolitan area) than existed at the time of preparation of the initial budget forecast. Finally, while there was delay in treatment room handover which impacted the Project’s operations, all treatment room handover has now occurred. Over time, the general trend shows an increase in treatments per day and per month, with some month-to-month variability. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.”

Management’s Discussion of Financial Results

Fiscal Year 2016 and Fiscal Year 2017

The Center grew total revenue by over 130% from $15.2M in 2016 to $35.1M in 2017 and loss from operations fell from ($21.2M) in 2016 to ($12.9M) in 2017. Salaries and wages made up the largest component of operating expense increasing from $10.6M in 2016 to $15.0M in 2017. The Center had $52.1M in interest expense in 2016 and $50.6M in 2017, leading to a net loss of ($73.3M) and ($63.5M) in 2016 and 2017, respectively.

Current assets remained relatively consistent, increasing from $28.0M in 2016 to $28.9M in 2017. Total assets fell by over $19M between 2016 and 2017 due to a reduction in net property, plant, and equipment from $234.7M to $229.6M in 2017. Current liabilities significantly rose between years from long-term obligations becoming due. Total liabilities grew from $335.0M in 2016 to $379.5m in 2017. The net losses from the Operator led to an increase in member’s deficit from ($55.9M) in 2016 to ($119.4M) in 2017.

Cash, cash equivalents and restricted cash dropped between 2016 and 2017 from $40.4M to $22.9M mainly due to (14.5M) net cash outflow from operating activities. In 2016, the Operator received $39.8M in proceeds from longer term debt and received no long-term debt financing in 2017. The Operator paid $23.8M and $22.0M in cash for interest expenses in 2016 and 2017, respectively.

See APPENDIX C - CONSOLIDATED FINANCIAL STATEMENTS OF MARYLAND PROTON TREATMENT HOLDINGS, LLC AND SUBSIDIARIES FOR THE FISCAL YEARS ENDED DECEMBER 31, 2017 AND 2016.”

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Year-to-Date May 31, 2018

Net Patient Revenue. For the five-month period ended May 31, 2018, patient service revenue, net of contractual adjustments and the provision for bad debt, was approximately $16.7 million related to services of over 7,400 treatments. MPTC served over 250 new patients during this period.

Cash Collections. For the five-month period ended May 31, 2018, MPTC recorded approximately $16.3 million of cash collections for patient services provided for periods prior to May 31, 2018. Cash collections during the five-month period ended May 31, 2018 was provided by 60% managed care payors, 25% from Medicare, 6% from self-pay patients, 6% from other third-party payors, and 3% from Tricare.

Real Property Tax Exemption

MPTC will enter into a ground lease of the real property on which the land and building comprising the Project is located (“Ground Lease”) with the Authority and the reversionary interests will be donated to UMB Health Sciences Research Park Corporation (“RPC”) as a condition precedent to the issuance of the Series 2018 Bonds. Upon the donation of the reversionary interest to RPC, the Project will no longer be subject to annual real property tax. RPC is a Maryland 501(c)(3) corporation and is not subject to state or Federal real property taxation.

The term of the Ground Lease is 80 years and contains provisions (a) permitting the Operator to terminate the Ground Lease at any time after the 60th lease year, and (b) permitting the Authority to terminate the Ground Lease at any time after (i) the Bonds have been fully repaid and the Indenture is discharged, and (ii) the Leasehold Mortgage has been released. See “THE PROJECT – Ownership” above.

THE OPERATOR

Operator History

Maryland Proton Treatment Holdings, LLC (“MPTH”) is a limited liability company, formed under the laws of the State of Delaware on January 21, 2010 and authorized to transact business in the State of Maryland. MPTH, together with its wholly-owned subsidiary MPTC, were instrumental in the development, construction and operation of the Project to date. The Project broke ground in April 2012 and treated its first patients in February 2016. MPTC will be appointed by the Authority as the sole and exclusive operator of the Project pursuant to the Facility Operating Agreement between the Authority and MPTC (the “FOA”). MPTC will retain all prior and future service and equipment contracts with third parties as described below.

Amendment to MPTH Limited Liability Company Agreement

Prior to the issuance of the Series 2018 Bonds, the MPTH limited liability agreement will be amended to terminate the voting, Board designation and special consent rights (but not the economic rights) of the MPTH Class B Members and modify the provisions relating to the designation of MPTH’s Board members. MPTH’s second amended limited liability company agreement will provide that the Board will be comprised of (i) certain individuals currently serving on the Board and (ii) one or more additional members that represent the interests of MPTH’s Class A-1 Members and Class A-2 Members or are independent. MPTH may also establish a non-voting advisory board, which could include individuals designated by University of Maryland Faculty Physicians, Inc. and/or University of Maryland, Baltimore, which are entities affiliated with the Center’s clinical partner that are purchasing Series 2018A-2 Bonds.

Plan for Bolstering Internal Controls and Reporting

During the audits of MPTC’s 2016 and 2017 financial statements by BDO USA LLP (“BDO”), MPTC gradually recognized that in addition to deficiencies in its existing control environment, including the financial close process, it did not have the technical expertise to properly account for capitalized interest, debt issuance costs, the accretion of revenue share arrangements, debt modification/extinguishment adjustments, and key estimates necessary to determine the net realizable value of patient accounts receivable. Upon BDO’s recommendation, an

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accounting consulting firm was engaged to augment MPTC’s finance and accounting team, assist with audit preparation and identify potential improvements in the internal control environment. Subsequently, MPTC completed its 2016/2017 comparative audit in July 2018.

MPTC has reviewed and continues to update its internal control policies to ensure that procedures are in place to address concerns that were identified by BDO. For example, MPTC has implemented a remittance authorization system tiered by role at the Center which holds both the enterprise team (CEO, CFO and Finance Department) and the medical team (Executive Director, Medical Director and their reports) accountable for expenditures. MPTC has also set a limit of $200,000 on new management spending per remittance and requires MPTH Board approval above such threshold.

Previously, MPTC had relied on summary data from the Center’s billing and compliance partner for MPTC’s financial reporting. MPTC has now installed a methodology to utilize the Center’s billing partner’s raw data to create accounting journal entries consistent with GAAP. Learnings from the audit have not only allowed MPTC to identify and implement changes to weaknesses in controls, but to also improve MPTC’s reporting.

MPTC’s CEO has made internal controls a strategic priority and has provided a directive to add five new positions committed to augmenting controls and monitors. These new resources include a full-time chief financial officer, chief administrative officer, finance manager, business analyst and A/P specialist. MPTC’s management plan is to continue to invest in resources to enhance internal controls to ensure transparency and timely reporting on a going forward basis. The chart below reflects the revised MPTC organizational structure highlighting the new additional resources.

MPTC Organizational Chart

Existing Indebtedness

Credit Agreement. On May 13, 2015, MPTC entered into that certain Credit Agreement (as amended to date, the “Credit Agreement”) with the other Credit Parties (as defined therein) party thereto (including MPTH and APT (defined below)), the Lenders (as defined therein) from time to time party thereto (the “Senior Lenders”) and

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the administrative and collateral agent thereunder (the “Agent”). In connection with various events of default under the Credit Agreement, MPTC entered various amendments and waivers with the Agent and the Senior Lenders. As of the date hereof, there are no events of default existing under the Credit Agreement. The Credit Agreement provided for a term loan credit facility in original maximum principal amount of $172,000,000 (the “Senior Loans”). The Senior Loans are secured by a lien over all assets of MPTC (the “Senior Lien”). The Senior Loans mature on September 13, 2018, subject to any extension approved by the Senior Lenders. It is condition to closing the Series 2018 Bonds that the Senior Loans shall be deemed satisfied and paid in full, any commitment under the Credit Agreement shall be terminated and the Senior Lien shall be released, effective upon the issuance of the Series 2018 Bonds and simultaneous payments made to the Senior Lenders. See APPENDIX C - CONSOLIDATED FINANCIAL STATEMENTS OF MARYLAND PROTON TREATMENT HOLDINGS, LLC AND SUBSIDIARIES FOR THE FISCAL YEARS ENDED DECEMBER 31, 2017 AND 2016.” Amended and Restated Note Purchase Agreement. On May 13, 2015, MPTC entered into that certain Amended and Restated Note Purchase Agreement (as amended to date, the “Note Purchase Agreement”) with the Purchasers (as defined therein) party thereto, including Varian Medical Systems International AG, The University of Maryland College Park Foundation, Inc., Dall 2013 Partnership, Gregory F. Baiano and Dominion Capital LLC (the “Existing Noteholders”). The Note Purchase Agreement provided for the issuance by MPTC of (i) Series A (2018) Notes in original maximum principal amount of $7,500,000 maturing on March 31, 2019, (ii) Series A (2022) Notes in original maximum principal amount of $34,988,986 maturing on July 15, 2022, and (iii) Series B Notes in original maximum principal amount of $2,000,000 maturing on March 31, 2019 (collectively, the “Existing Notes”). The Existing Notes are secured by a lien over all assets of MPTC (the “Junior Notes Lien”). It is a condition to closing the Series 2018 Bonds that the Existing Notes shall be deemed satisfied and paid in full and the Junior Notes Lien shall be released, effective upon the issuance of the Series 2018 Bonds. Amended and Restated Secured Promissory Notes – Lulu Limited. On August 14, 2014, MPTC entered into that certain Note Purchase Agreement with Lulu Limited (“Lulu”) pursuant to which MPTC issued to Lulu that certain Senior Secured Promissory Note dated August 14, 2014 in the original maximum principal amount of $25,000,000 (as amended to date, the “Lulu Note”) maturing on September 30, 2018. The Lulu Note is secured by a lien over all assets of MPTC (the “Lulu Lien”). It is a condition of closing the Series 2018 Bonds that the Lulu Note shall be deemed satisfied and paid in full and the Lulu Lien shall be released, effective upon the issuance of the Series 2018 Bonds. Promissory Notes – Varian Medical Systems, Inc. In connection with the Varian Purchase Agreement (defined below), MPTC has issued to Varian (defined below) certain Promissory Notes in original maximum principal aggregate amount of $24,974,115 evidencing deferred payments permitted under the Varian Purchase Agreement and each maturing on September 30, 2018 (collectively, as amended to date, the “Varian Deferral Notes”). The Varian Deferral Notes are secured by a purchase money security interest in the Proton System (the “Varian PMSI”). It is a condition of closing the Series 2018 Bonds that the Varian Notes shall be deemed satisfied and paid in full and the Varian PMSI shall be released, effective upon the issuance of the Series 2018 Bonds.

Promissory Notes – Advanced Particle Therapy, LLC. MPTC has issued to Advanced Particle Therapy, LLC (“APT”), an equity investor in MPTH, certain Promissory Notes in original maximum principal aggregate amount of $14,200,000 (collectively, as amended to date, the “APT Notes”), in respect of funds that APT borrowed from an affiliate, Dallas Proton Treatment Center, LLC (“Dallas Proton”) and in turn loaned to MPTC, each maturing on December 1, 2020. The APT Notes are unsecured. In addition, APT has alleged that MPTC and MPTH have an unsecured note payable to APT in the amount of $5,561,389, which MPTC and MPTH have disputed. With respect to the obligations owed to APT, the trustee of the liquidating trust that is the successor in interest to Dallas Proton (the “Dallas Trustee”) has asserted claims against MPTC and MPTH based on MPTC and MPTH’s receipt of funds that the Dallas Trustee alleges were wrongfully directed by APT away from Dallas Proton to MPTC and MPTH. It is a condition of closing the Series 2018 Bond that the APT Notes and all other obligations of MPTC and MPTH owing to APT and the Dallas Trustee shall be deemed satisfied and paid in full, effective upon the issuance of the Series 2018 Bonds. Revenue Share Agreements. MPTC has entered various revenue sharing agreements (collectively, as amended to date, the “Revenue Share Agreements”) where it has granted to the certain persons (collectively, the “Revenue Share Holders”) an interest in certain of MPTC’s gross cash receipts (collectively, the “Revenue Share

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Interests”). On the date of issuance of the Series 2018 Bonds, the Revenue Share Interests shall be deemed satisfied and paid in full, and any obligation under the Revenue Share Agreements to make any future payment of Revenue Share Interests shall be terminated, effective upon the issuance of the Series 2018 Bonds and simultaneous payments made to certain of the Revenue Share Holders. Cash Collateralized Letter of Credit. MPTC is the applicant under a $225,000 irrevocable standby letter of credit (the “Letter of Credit”) issued by a commercial bank (the “LC Issuer”) in favor of the Maryland Department of the Environment (“MDE”), issued in connection with the Radioactive Materials License issued by MDE in accordance with COMAR 26.12.01.01 Section C-29 (B), The Atomic Energy Act of 1954, as amended, and The Energy Reorganization Act of 1974, which require that a holder of, or an applicant for, a materials license provide assurance that funds will be available when needed for decommissioning. The Letter of Credit automatically renews on February 15 of each year, unless at least ninety (90) days before the current expiration date the LC Issuer notifies both MPTC and MDE of the non-renewal thereof. If MPTC is unable to secure alternative financial assistance to replace the Letter of Credit within thirty (30) days of notification of cancellation, MDE may draw upon the full available value of the Letter of Credit prior to cancellation. The Letter of Credit is 100% cash collateralized by a Certificate of Deposit in the amount of $225,000 (the “Cash Collateral”) pledged as collateral for the Letter of Credit to the LC Issuer. Any draws under the Letter of Credit will be funded and debited by the LC Issuer from the Cash Collateral. Equipment Leases Master Equipment Lease Agreement – Imaging Equipment. On July 30, 2015, MPTC entered into a Master Equipment Lease Agreement (as amended to date, the “Imaging Lease Agreement”) with a finance company, pursuant to which the Operator leased two pieces of imaging equipment, commencing January 18, 2016. Lease payments under the Imaging Lease Agreement are due in arrears in the following amounts: 3 monthly payments of $0.00, followed by 80 monthly payments of $35,494.11, followed by 1 payment of $544,965.71. The term of the Imaging Lease Agreement is 84 months (January 18, 2023), at which time the Operator may purchase such leased equipment for a nominal fixed purchase price of $1.00. It is the Operator’s current expectation that it will so purchase such leased equipment and convey it at that time to the Authority for no consideration. Master Subscription Agreement – Storage Equipment. On July 13, 2015, MPTC entered into a Master Subscription Agreement (the “Equipment Storage Lease Agreement”) with a service provider pursuant to which the Operator leased from the service provider certain storage equipment for use at the Project. The monthly rent under the Equipment Storage Lease Agreement is $476. The term of the lease is 60 months (July 13, 2020), at which time the leased equipment shall be returned to the service provider subject to automatic successive twelve (12) month renewals of the Equipment Storage Lease Agreement.

Electricity Supply Agreement – Constellation NewEnergy, Inc. On December 19, 2017, MPTC entered into an Electricity Supply Agreement – Fixed Price Solutions (as amended to date, the “Electricity Agreement”) with Constellation NewEnergy, Inc. (“Constellation”), pursuant to which the Operator purchased from an energy efficiency equipment contractor the (“Contractor”) certain uninterruptible power supply system equipment (the “UPS Equipment”) under Constellation’s Efficiency Made Easy Express Program (“EMEX Program”). Under the Electricity Agreement, Constellation sells and supplies all electricity requirements of the Operator at fixed prices as provided therein. Costs associated with the EMEX Program and the UPS Equipment are invoiced in 60 equal monthly installments (ending February 2, 2023) of $13,044.86 as a separate line item on MPTC’s electricity invoices. The purpose of the UPS Equipment is to eliminate power conditioning issues including power outages related to voltage drops.

Principal Project Agreements

Clinical Management Agreement and Professional Services Agreement – University of Maryland Radiation Oncology Associates, P.A. On January 9, 2012, the Operator entered into a Professional Services Agreement (as amended to date, the “Professional Services Agreement”) and a Clinical Management and Administrative Services Agreement (as amended to date, the “Clinical Management Agreement”), each with University of Maryland Radiation Oncology Associates, P.A. (“UMROA”). UMROA is the clinical practice group

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and member of the faculty practice plan of the Department of Radiation Oncology of the University of Maryland’s School of Medicine.

Under the Professional Services Agreement, UMROA provides certain physician staffing, coverage and professional medical services at the Project. The Professional Services Agreement commenced on December 22, 2015 and continues for a term of 20 years, plus the balance of months that extends to the end of the academic year (June 30), subject to automatic successive five (5) year renewals unless the parties mutually agree in writing to terminate. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.” For a complete description of the Professional Services Agreement see “PRINCIPAL PROJECT AGREEMENTS – Professional Services Agreement” in the forepart of this Official Statement.

Under the Clinical Management Agreement, the Operator and UMROA established a Joint Operating Committee (“JOC”) consisting of four (4) members – two (2) appointed by the Operator and two (2) appointed by UMROA. The JOC is responsible for developing planning objectives for, and consideration and approval of recommendations regarding, the operation of the Project. The initial term of the Clinical Management Agreement continues for a term of 20 years, plus the balance of months that extends to the end of the academic year (June 30), subject to automatic successive five (5) year renewals unless the parties mutually agree in writing to terminate. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.” For a complete description of the JOC and the Clinical Management Agreement see “PRINCIPAL PROJECT AGREEMENTS – Clinical Management and Administrative Services Agreement” in the forepart of this Official Statement.

Employee Leasing Agreement – University of Maryland Medical Center. Under a March 2012 Employee Leasing Agreement, as amended, Operator engaged UMMC to lease non-physician personnel to perform specific services at the Project. The initial term of the agreement will extend through 2032 plus the balance of months that extends to the end of the applicable academic year and will renew automatically for additional successive fix year periods. Leased employees include a wide range of non-physician clinical and administrative titles to be adjusted periodically as determined by the clinical staffing guidelines for the Project and in consultation with UMROA. Examples of leased employees include: 1) nurse practitioners; 2) medical physicists; 3) radiologic technologists; and 4) ancillary support staff. Budgeted staffing costs include annual salaries and fringe benefits for leased employees consistent with the guidelines and approved budgets developed under the Professional Services and Clinical Management Services Agreements for each applicable budget year. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.” For a complete description of the Employee Leasing Agreement see “PRINCIPAL PROJECT AGREEMENTS – Employee Leasing Agreement” in the forepart of this Official Statement.

Operating and Maintenance Agreement – Varian Medical Systems, Inc. The Operator obtained certain of the Project’s proton therapy treatment-related equipment and software from Varian Medical Systems, Inc. (“Varian”) pursuant to a Proton System Purchase Agreement originally executed on June 30, 2011 (as amended to date, the “Varian Purchase Agreement”). Varian is a worldwide manufacturer of medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy. The Operator contracted with Varian to provide the equipment, hardware, firmware and software for the Varian “ProBeam®” Proton Therapy System and related components (collectively, the “Proton System”), and to perform installation services for the Proton System at the Project. The Operator has also entered into a Proton System Operations and Maintenance Agreement with Varian (as amended to date, the “O&M Agreement”) pursuant to which Varian agreed to provide certain ongoing operations, maintenance and support services for the Proton System commencing on October 28, 2015 for a term of ten (10) years. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.” For a complete description of the O&M Agreement see “PRINCIPAL PROJECT AGREEMENTS – Operation and Maintenance Agreement (Varian)” in the forepart of this Official Statement.

Imaging Technology. The Operator obtained certain of the Project’s imaging technology from a finance company under the Imaging Lease Agreement, pursuant to which two pieces of imaging equipment are leased to the Operator. The imaging equipment have a 97% uptime guarantee. For a complete description of the Imaging Lease Agreement, see “THE OPERATOR – Equipment Leases – Master Equipment Lease Agreement” above.

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Billing Management Consultant – Medical Management Billing & Compliance. The Operator and MMBC, LLC (“MMBC”) entered into a Billing Management and Consultant Services Agreement (as amended to date, the “Billing Agreement”) pursuant to which MMBC has agreed to provide billing and collection management services related to patient authorization and compliance services to the Operator. MMBC was founded in 2004 as a medical management company that specializes exclusively in the field of radiation oncology medical practice management and billing consultant services. MMBC is a provider for proton therapy billing to approximately five (5) proton centers in the United States. MMBC is familiar with all aspects of the radiation oncology revenue cycle and its scope of services includes training and overseeing all areas that impact charge capture. MMBC works with staff at proton centers to accurately code proton therapy procedures and improve reimbursement and revenue collection. The Billing Agreement commenced on March 25, 2015 and continues for a term of five (5) years, subject to automatic successive five (5) year renewals unless terminated by either party. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.” For a complete description of the Billing Agreement see “PRINCIPAL PROJECT AGREEMENTS – Billing Management and Consultant Services Agreement” in the forepart of this Official Statement.

Additional Service and Equipment Agreements

The Operator has entered into additional service and equipment agreements with third parties to support the on-going operations of the Project. These agreements will remain in place with the Operator and include, but not limited to following parties: UMMS, RaySearch Laboratories, UMB Health Sciences Research Park Corporation, and regional physician affiliates. See “APPENDIX B – MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY.” For descriptions of certain of these additional agreements see “PRINCIPAL PROJECT AGREEMENTS” in the forepart of this Official Statement.

Biographies of Key Personnel

Executive Director – William F. Regine, MD, FACR, FACRO is a leader in the field of radiation oncology. Dr. Regine leads a department which has achieved a Top 5 national ranking in National Institutes of Health research funding. He is recognized nationally and internationally in the areas of gastrointestinal and central nervous system malignancies and in the use of stereotactic radiosurgery. Dr. Regine has served as principal or co-principal investigator in at least four National Cancer Institute (NCI)-sponsored cooperative group clinical trials. He is a member of the GI and Brain Tumor steering committees for the NCI sponsored national cooperative clinical trials group known as NRG Oncology, and is the recent chairman of the GI section of the National Oral Board examination for trainees in radiation oncology. Dr. Regine served as the principal investigator of a study evaluating adjuvant therapy in patients with pancreatic cancer, which defined a new standard of care. He also has been the principal investigator/study chairman for two institutional clinical trials that defined new standards of care for patients with brain metastases and malignant spinal cord compression. Dr. Regine is co-editor of Principles and Practices of Stereotactic Radiosurgery, the first comprehensive textbook of its kind. He is also co-inventor of the first of its kind treatment device completely dedicated to the stereotactic radiation treatment of early stage breast cancer, known as the GammaPod. Dr. Regine received his Bachelor of Science from State University of New York at Albany and his Doctor of Medicine from State University of New York Health and Science Center at Syracuse.

Medical Director – Charles B. Simone, II, MD is the Medical Director of the Maryland Proton Treatment Center, an Associate Professor of Radiation Oncology at the University of Maryland School of Medicine, and the Fellowship Director for the Department of Radiation Oncology. Prior to his appointment at University of Maryland, Dr. Simone was an Associate Professor of Radiation Oncology, Chief of the Thoracic Oncology Service at the Hospital of the University of Pennsylvania, Co-Director of the Penn Mesothelioma and Pleural Program for the University of Pennsylvania Health System, and Director of Clinical Research and Operations for the Department of Radiation Oncology at the University of Pennsylvania. Dr. Simone is a National Institutes of Health, National Science Foundation, and Department of Defense funded investigator who performs clinical and translational research investigating the benefits of proton therapy as part of multi-modality therapy for thoracic malignancies. He has published over 150 peer-reviewed scientific articles and book chapters and given over 100 scientific lectures to national and international audiences. He is the Chair of the Proton Collaborative Group (PCG) Executive Committee, Chair of the PCG Lung Committee, and Chair of the American Society for Photobiology (ASP) Education Committee. He is appointed to the NRG Oncology (formerly Radiation Therapy Oncology Group (RTOG) Lung Cancer Core Committee; NRG Radiation Oncology Committee; NCI Thoracic Malignancies Steering

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Committee Mesothelioma Working Group; International Thymic Malignancy Interest Group (ITMIG) Research and Infrastructure Committee; ITMIG Thymic Carcinoma Workgroup; American Society for Radiation Oncology (ASTRO) Lung Cancer “Blue Ribbon” Panel; ASP Executive Council; PCG Reirradiation Committee; Particle Therapy Co-Operative Group (PTCOG) Scientific Committee; and multiple PTCOG Clinical Subcommittees. Dr. Simone received his Bachelor of Arts from University of Pennsylvania and his Doctor of Medicine from University of Pennsylvania.

Chief Executive Officer – Leigh T. Howe has spent over 30 years in the banking and healthcare finance industry. Ms. Howe was most recently an Executive Vice President and Chief Credit and Risk Officer at CFG Community Bank, a bank with a nationwide footprint in healthcare lending. Prior to that, she was a Principal member and Chief Operating Officer of private equity investment company, Windsor Health Equity, LLC. She oversaw real estate development and healthcare operations for a portfolio of senior housing companies in the Mid-Atlantic. She was responsible for development of the Long-Term Care Segment within the Mid-Atlantic Region for M&T Bank, developing a $2 billion portfolio of skilled nursing, assisted living and continuing care retirement community asset. Ms. Howe serves on the Board of Trustees of Lycoming College in Williamsport, Pennsylvania and chairs the Audit Committee. She is a member of the Executive Board of the YMCA of Central Maryland and chairs the Finance Committee. She served as Chair of the Beacon Institute and a Board Member of Mid-Atlantic LifeSpan. Ms. Howe received her M.B.A. from Loyola College in Maryland and is a graduate of Lycoming College.

Interim Chief Financial Officer / VP of Corporate Development – Shareef Batata is a private equity specialist bringing twenty (20) years of industry experience in healthcare, oil and gas and technology. While at Citigroup New York, Mr. Batata directed consumer and healthcare M&A as a Global Markets investment banker. While with the Qatar Investment Authority Foundation in Doha and Hermes in Dubai, he invested $85M in energy infrastructure projects across emerging markets including the Saharan Desert. While with Qualcomm in Silicon Valley, Mr. Batata managed a $100M telecommunications semiconductor product line which he successfully deployed worldwide. Shareef has conducted business in 30 countries and has worked and lived overseas for 5 years in China and the Middle East / North Africa region. Mr. Batata held Series 7 and 63 licenses while based on Wall Street and graduated from Columbia Business School with an MBA with honors in Finance and Management. Mr. Batata graduated from Cornell University with a Bachelor of Science cum laude in Electrical Engineering and concentration in International Relations. Vice President of Restructuring – Dylan Mesh has spent his career working in private equity, investment banking and restructuring across the healthcare, information technology, marine, and retail industries. Mr. Mesh most recently worked for a merchant banking firm based in Dallas, Texas, specializing in partnering with family offices to acquire and divest operating companies. He received his MBA in Finance and Accounting from the Cox School of Business at Southern Methodist University, and a Bachelor of Science degree in Economics from Southern Methodist University.

Biographies of Board of Managers

William Apollony has more than 30 years of experience in the healthcare and banking industries and is a Principal of Windsor Healthcare, a private equity group. Prior to launching Windsor Healthcare, Mr. Apollony served as Senior Vice President and Healthcare Banking Group Head at M&T Bank in Baltimore. There, he oversaw development of the bank’s healthcare market. Mr. Apollony also managed the development of the Mid-Atlantic not-for-profit market, of which, education was the largest sub-segment. The education portfolio included a significant amount of university related corporate banking including major relationships with the University of Maryland, John Hopkins University and Loyola University. Mr. Apollony is the current Chair of the RH Smith School of Business Advisory Board. He also served as a long-term Chair of the Advisory Board at Stella Maris, Inc. and is a past member of the American Health Care Association, the American Health Lawyers Association and the Healthcare Financial Management Association. Additionally, Bill served two terms as a trustee for the University of Maryland and received the “Distinguished Alumnus” award from the RH Smith School of Business.

Dr. Karyl Leggio is a Professor of Finance of the Sellinger School of Business and Management at Loyola University Maryland and served as Dean from 2008 to 2014. Dr. Leggio’s primary area of research is in deregulating industries, specifically in risk management. Additional avenues of active research for her are in the areas of real options, corporate restructuring, mergers, and individual risk management. Her research is presented

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both nationally and internationally. Dr. Leggio has been awarded numerous grants for her research projects as well as being an award-winning teacher. She has experience in developing customized executive education offerings as well as in designing curriculum and developing centers for excellence. Prior to this appointment at Loyola, Dr. Leggio was the Associate Dean at the Bloch School of Business at the University of Missouri Kansas City. Prior to her academic career, she consulted and worked in the telecommunications industry. Dr. Leggio earned a Ph.D. in Business with an emphasis in Finance from the University of Kansas where she also served as a visiting faculty member.

Jason Pappas is a co-founder of Antson Advisors and has served as the interim-CEO for MPTC. Prior to his role as interim-CEO, Jason served as Managing Director for MPTC overseeing the company’s marketing, operations, and worked closely with the Center’s clinical partner. For most of the previous decade, Mr. Pappas was the Chief Executive Officer of EntreQuest, Inc., a leadership consulting, training and staffing organization he co-founded in 2000 and subsequently sold in 2008. In January of 2010, he created a management and strategic consulting firm, Hannix Consulting, Inc., which provided interim C-Level talent and strategic advisory work for companies of all sizes. Mr. Pappas graduated from Yale University with a bachelor’s degree in Economics and Political Science and received a Juris Doctorate specializing in Finance and Taxation from the University of Maryland School of Law. In the community, Mr. Pappas is the immediate past Chairman of the Board for Big Brothers Big Sisters of the Greater Chesapeake and the Greater Baltimore Technology Council. He is an adjunct professor of entrepreneurship at University of Maryland Baltimore County and has served as an adjunct professor of sales, marketing and management at Towson University.

George Robinson is a co-trustee of the WRW Secure Trust, which owns Lulu Limited, an investor in MPTH and other proton cancer treatment facilities. He is also a member of the Dallas Proton Treatment Center Liquidating Trust Board. Prior to his appointment as Co-trustee he served as a business advisor to the entities owned by the trust. Mr. Robinson began his career with KPMG after graduating from Boston College with a bachelor’s degree in Accounting. During the twenty years he was with KPMG, he was a tax partner and National Director of Oil & Gas Taxation. Prior to his involvement with the WRW Secure Trust, Mr. Robinson was a senior executive in the oil and gas industry. His community involvement includes being Chair of the City of Dallas Reinvestment Zone Six (Farmers Market) Board and a Director of the Farmers Market Stakeholders Association.

Doug Sawyer has spent almost thirty (30) years working for PNC Bank and predecessor banks in a variety of capacities primarily within the business development and relationship management roles. Most recently, Mr. Sawyer has worked within the bank’s corporate banking group covering its Greater Maryland market. In this role, Mr. Sawyer works with middle market and large corporate companies helping to bring them targeted solutions to support and enable them to achieve their desired goals. Solutions include treasury management services, financing options and capital markets solutions. Mr. Sawyer graduated from University of North Carolina with a bachelor’s degree in Industrial Relations and Economics.

Ervin Terwilliger is the Founder and Managing Partner of Three Twenty-One Capital Partners and manages the firm’s portfolio of engagements, interacting directly with clients, investors, and Three Twenty-One Capital Partners’ deal teams. He has been featured in industry publications providing financial insight on various U.S. Industry Sectors and the M&A Landscape. He is also a relied upon valuation, process and sales expert in U.S. Bankruptcy Courts. Mr. Terwilliger has completed over 120 transactions and consulting engagements in the last 10 years, with a concentration on family and founder-run businesses. Mr. Terwilliger graduated from the University of Delaware with a Bachelor’s of Science in Business Administration in Management and Marketing and is an active member of the American Bankruptcy Institute and Turnaround Management Association.

Brian Walter is an investor in MPTH, along with other APT developed proton centers, and brings experience in the proton industry, having recently served on the Dallas bankruptcy trustee’s advisory board for Dallas Proton. He is a founding partner of TRC Consultants, LLC, an oil and gas engineering software company. Mr. Walter is also owner and president of Walter Exploration Company, an Exploration and Production oil company. He graduated from Texas A&M University with a degree in Petroleum Engineering and also holds an MBA from the University of Dallas. He is a member of many industry organizations including Dallas Wildcatters and the Texas Society of Professional Engineers where in 2008 he was engineer of the year for the Dallas Section.

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Insurance

The Operator currently maintains the following types of insurance (among others): (i) property insurance with a total insured value of approximately $271,000,000, and a property damage sublimit of $240,600,000 and deductible of $25,000; (ii) business interruption insurance; (iii) coverage against various cyber security related losses, which coverage includes limits of $1,000,000 per claim and aggregate, for losses related to first party coverage claims (including each of aggregate first party, crisis management expense, fraud response expense, public relations expense, forensic and legal expense, and extortion loss), business interruption and data recovery claims, PCI-DSS finds coverage claims, and ransomware loss claims (iv) employment practices liability insurance with a limit of $1,000,000 per claim and aggregate, with a deductible of $15,000; (v) workers’ compensation insurance in amounts required by applicable law and employers’ liability insurance in an amount equal to $500,000; (vi) general and professional liability insurance in the amount of $1,000,000 per incident and $3,000,000 aggregate; (vii) comprehensive crime insurance, including coverage against various losses such as blanket employee dishonesty, ERISA fidelity, forgery and alteration, money and securities inside or outside, computer fraud, and social engineering; and (viii) umbrella liability insurance in the amount of $10,000,000 per claim and aggregate.

Unless otherwise indicated, all insurance policies carried by the Operator (i) are provided by carriers

authorized to conduct business in the State of Maryland and with an A.M. Best Guide Rating no less than A VIII and a Standard and Poor’s Global Rating of no less than A, (ii) are written on an occurrence basis (and not “claims made” basis), provided however that employment practices liability insurance, professional liability insurance, cyber liability insurance, and insurance for crime coverage is maintained on a “claims made” basis, (iii) contain a provision whereby the insurer agrees to give GPM Municipal Advisors, LLC (the “Designated Agent”) at least thirty (30) days’ prior written notice of any cancellation or material modification, (iv) include a waiver of subrogation by the insurer as against the Trustee, (v) are primary and without right of contribution of any other insurance carried by or on behalf of the Operator or the Trustee with respect to their respective interest in the Gross Operating Revenues and/or the Project, (vi) list the Trustee and the Collateral Agent as additional insured and are payable to the Collateral Agent or the Trustee as mortgagee and not as a coinsured and, in the case of all policies of insurance carried by any lessee for the benefit of the Operator are payable to the Trustee as loss payee, and (vii) comply with any other insurance requirements provided in the Indenture, Ground Lease and Facility Operating Agreement.

Litigation

In June 2016, MPTH received a subpoena from the Securities and Exchange Commission (the SEC”), and MPTH and MPTC (together, the “Company”) are aware that the SEC has issued subpoenas to APT, and to certain former executive officers or managers of APT, including one individual who currently serves as a consultant to the Company. The Company believes that these subpoenas are related to previous fundraising activities of APT related to the Project and certain other proton treatment facilities. The Company has cooperated with the SEC’s inquiry, and the Company has received no indication from the SEC that they or any of its current officers or managers are under investigation by the SEC.

The Company is presently soliciting releases of all claims and obligations held by or otherwise owed to the Senior Lenders, the Existing Noteholders, Lulu, Varian, APT, the Dallas Trustee and the Revenue Share Holders (collectively, the “Creditors”), together with authorization to file UCC-3 termination statements releasing all liens against the assets of the Company held by the Creditors, effective upon the issuance of the Series 2018 Bonds and subsequent payments made to certain of the Creditors. See “THE PROJECT ANDS THE OPERATOR – THE OPERATOR – Existing Indebtedness”, above.

APPENDIX B

MARYLAND PROTON TREATMENT CENTER FEASIBILITY STUDY

i

Maryland Proton Treatment

Center Feasibility Study

07.19.2018

Prepared by

IHS Global, Inc.

1300 Connecticut Ave, NW

Suite 800

Washington DC, 20036

ii

DISCLAIMER

The forecasts included in this report, including, but not limited to, those regarding future service demand

and financial and operational performance of the Maryland Proton Treatment Center (MPTC), are

estimates, which have been prepared on the basis of certain assumptions and hypotheses. No

representation or warranty of any kind is or can be made with respect to the accuracy or completeness

of, and no representation or warranty should be inferred from, these forecasts. The MPTC feasibility

assessment contained in this report is based upon assumptions as to future events and, accordingly, is

subject to varying degrees of uncertainty. Some assumptions inevitably will not materialize and,

additionally, unanticipated events and circumstances may occur. Therefore, for example, actual operating

revenues and expenditures inevitably will vary from the forecasts included in this report and the variations

may be material and adverse.

iii

CONTENTS

1. INTRODUCTION ....................................................................................................................... 1

2. ONCOLOGY MARKET OVERVIEW ............................................................................................. 2

3. RADIATION AND PROTON THERAPY INDUSTRY OVERVIEW ................................................... 4

4. MPTC STRATEGIC RELATIONSHIPS ........................................................................................ 12

University of Maryland Affiliated Entities ............................................................................................... 12

Overview of UMMC and Greenebaum Cancer Center............................................................................ 12

Review of UMROA-MPTC Clinical Management and Professional Services Agreement ........................ 14

Review of the UMROA-MPTC Professional Services Agreement ........................................................ 14

Review of the UMROA-MPTC Clinical Management and Administration Services Agreement ......... 16

Public Finance Authority (PFA) ................................................................................................................ 18

Review of Varian Medical Systems, Inc. (“Varian”) Agreements ............................................................ 18

Review of Varian Proton System Purchase Agreement ...................................................................... 19

Review of Varian Proton System Operations and Maintenance Agreement ..................................... 20

Medical Management Billing & Compliance (“MMBC”) ......................................................................... 22

Review of MMBC Billing Management and Consultant Services Agreement..................................... 23

RaySearch Americas, Inc. (“RaySearch”) ................................................................................................. 23

Siemens Medical Solutions USA, Inc. (“Siemens”) .................................................................................. 24

UMB Health Sciences Research Park Corporation (“RPC”) ..................................................................... 25

Regional Partnership Model Affiliates .................................................................................................... 25

5. COMPETITIVE STRENGTHS, WEAKNESSES AND AREAS OF RISK ............................................ 28

Potential Competitive Strengths ............................................................................................................. 28

Potential Competitive Weaknesses ........................................................................................................ 32

Potential Risk Areas ................................................................................................................................ 37

Environmental Risks ................................................................................................................................ 37

Business Risks .......................................................................................................................................... 39

6. BUSINESS STRATEGY .............................................................................................................. 42

7. PROTON TREATMENT CENTER FACILITY ASSESSMENT ......................................................... 45

Geographic Location ............................................................................................................................... 45

Facility Description .................................................................................................................................. 47

iv

Proton System and Other Equipment ..................................................................................................... 51

The ProBeam® system ........................................................................................................................ 51

Other Center Equipment .................................................................................................................... 53

Center Staffing ........................................................................................................................................ 53

Overview of Center Patient Throughput ................................................................................................. 57

Proton Eligible Treatments as a Percent of all UMMS Radiation Therapy Treatments ...................... 63

Benchmark Comparison of Ramp up Performance ............................................................................ 64

Conclusion ........................................................................................................................................... 65

8. ASSESSMENT OF MPTC SERVICE DEMAND ........................................................................... 66

Expected MPTC Service Area .................................................................................................................. 66

MPTC Demand Projections ..................................................................................................................... 69

State of Maryland Needs Analysis ...................................................................................................... 71

“Top-Down” Service Demand Projections by Geographic Proximity to MPTC ................................... 72

“Bottom-Up” Demand Forecasting Approach .................................................................................... 78

Projected IHS County-Level Demand Estimates for Select Cancer Sites ............................................ 80

Summary Assessment of MPTC Service Demand ................................................................................... 85

9. MPTC FINANCIAL INFORMATION .......................................................................................... 85

Financial Projections ............................................................................................................................... 86

Financial Assumptions ............................................................................................................................. 90

Center Ramp-Up Period .......................................................................................................................... 90

Projected Center Revenues ................................................................................................................ 92

Collections by Payer and Treatment Mix Assumptions ...................................................................... 93

Reimbursement and Coverage Assumptions and Projections ............................................................ 95

Operating Expenses ............................................................................................................................ 98

Summary Assessment of Projected MPTC Financial Performance ....................................................... 101

10. MPTC FEASIBILITY CONCLUSIONS .................................................................................... 102

Summary Assessment of Factors Influencing Feasibility ...................................................................... 103

11. STUDY LIMITATIONS ........................................................................................................ 105

12. IHS OVERVIEW AND RELEVANT EXPERIENCE ................................................................... 106

v

Table of Exhibits Exhibit 1: Proton Bragg Peak Dose Distribution ............................................................................................ 5

Exhibit 2: Variance of Bragg Peak Depth....................................................................................................... 6

Exhibit 3: Proton Therapy Centers in the U.S: In Operation and Under Development ................................ 8

Exhibit 4: Proton Therapy Centers in the U.S.: Under Construction and Currently Operating .................... 9

Exhibit 5. Summary of Varian Guaranteed Treatment Room Availability .................................................. 21

Exhibit 6: Status and Location of MPTC Affiliate Partnerships ................................................................... 26

Exhibit 7: Trends in MPTC Affiliate Patient Consultations (2017) ............................................................... 27

Exhibit 8: Trends in MPTC Affiliate Referred Patients Completing Treatment (2017) ............................... 28

Exhibit 9: Current and Planned Potential Competitor Proton Centers within 200 Miles of MPTC ............ 34

Exhibit 10: Summary of Monthly Trends in MPTC Varian Equipment Up-Time (July 2016-July 2018) ...... 40

Exhibit 11: UM Medical System Facilities as of 2017 .................................................................................. 43

Exhibit 12: MPTC location in Baltimore, MD ............................................................................................... 46

Exhibit 13: MPTC 1st floor layout................................................................................................................. 47

Exhibit 14: MPTC 2nd floor layout ................................................................................................................ 48

Exhibit 15: MPTC 3rd floor layout ................................................................................................................ 49

Exhibit 16: MPTC Photo (Exterior) .............................................................................................................. 50

Exhibit 17: Summary of MPTC Staffing Model FTEs by Staff Category and Position .................................. 54

Exhibit 18: Overview of MPTC Patient flow ................................................................................................ 58

Exhibit 19: Results from 100 Days of Simulated MPTC Operation ............................................................. 59

Exhibit 20: Timeline of MPTC Room Handovers ......................................................................................... 60

Exhibit 21: Trends in Daily MPTC Throughput- Opening Day through June 2018 ...................................... 61

Exhibit 22: Trends in MPTC Average Minutes per Fraction by Treatment Room (2017) ........................... 62

Exhibit 23: Trends in Conventional Radiation Therapy Treatments vs Proton Treatments (2016-2017) ... 64

Exhibit 24: MPTC Ramp-up Performance vs. Other Proton Centers – Initial 18 Months ........................... 65

Exhibit 25: MPTC 2017 Estimated Primary and Secondary Service Areas .................................................. 67

Exhibit 26: County-Level Distribution of MPTC Primary and Secondary Service Areas .............................. 69

Exhibit 27: MPTC Projected Ramp-up Schedule ......................................................................................... 70

Exhibit 28: Estimated Maryland 2016 Proton Therapy Eligible Cases Under Two Alternative Scenarios .. 72

Exhibit 29: MPTC Catchment Area 200 Mile Radius from Baltimore ......................................................... 74

Exhibit 30: Estimated Number of Patients Eligible for Proton Therapy by Distance from Baltimore ........ 75

vi

Exhibit 31: Projected Population Growth Rates by Distance from Baltimore, relative to 2016 (2020-2030) .................................................................................................................................................................... 75

Exhibit 32: MPTC Projected Proton Eligible Cancer Cases by Geographic Radius (2016 – 2030) ............... 77

Exhibit 33: Estimated MPTC Referred Candidates by Marketing Strategy (2017-2021) ............................ 79

Exhibit 34: Projected Trends in Proton-Eligible Referred Candidates to MPTC by Source (2017-2021) .... 79

Exhibit 35: MPTC Primary Service Area Population Growth Projections by Age Group (2016-2030) ........ 81

Exhibit 36: MPTC Secondary Service Area Population Growth Projections by Age Group (2016-2030) .... 81

Exhibit 37: MPTC Patient Age Distribution as of mid-June 2018 ................................................................ 82

Exhibit 38: Projected MPTC Proton Therapy-Eligible Demand by Service Area and Site (2016-2030) ....... 84

Exhibit 39: Comparison of MPTC 2017 Average Treatments per Day vs. Projections ................................ 86

Exhibit 40: Projected Financial Performance – Cash Basis (2017-2046) ..................................................... 88

Exhibit 41: Projected MPTC Operational Phase-In Forecast ....................................................................... 91

Exhibit 42: Projected MPTC Net Revenue upon Center Steady-State (2032+) ........................................... 93

Exhibit 43: Distribution of MPTC Collections by Payer (as of June 2018) .................................................. 94

Exhibit 44: MPTC Collections by Payer and Treatment Site (as of June 2018) ........................................... 95

Exhibit 45: MPTC Proton Therapy Patient Revenue by Treatment Site (As of mid-June 2018) ................. 96

Exhibit 46: Medicare Freestanding Facility Proton Therapy Payment Rates by Fraction (2016-2018) ...... 97

Exhibit 47: Estimated Capex Expenditure Forecast (2018-2021) .............................................................. 100

Exhibit 48: Summary of Key Factors Influencing MPTC Feasibility Outlook ............................................. 104

1

1. INTRODUCTION

Constant and rapid change from shifting demographics, emerging care delivery and payment models,

advancements in technology, economic factors and evolving health policy and regulation characterize the

nation’s complex healthcare delivery market. Despite this challenging environment, proton beam therapy

continues to gain traction in the U.S. Approximately 28 centers are currently in operation, with an

additional 12 planned for or under construction.1

The Maryland Proton Treatment Center (MPTC or the

“Center”) located in Baltimore, Maryland is among those

currently in operation. To help convert to a non-profit

organization and recapitalize existing debt, at least $360

million in tax-exempt bonds is being contemplated. IHS

Global, Inc. (IHS) hereby consents to the inclusion in the

official statement and any related amendments for such

bond offering the results of a scope of research compiled by

IHS relating to a feasibility study conducted for MPTC.

Deciding which types of cancer should receive priority for

proton treatment and to what extent this technology should be funded is a complex medical and

economic issue amid ongoing discussion within the medical and policy communities. Against this

backdrop, a feasibility study organized to capture key considerations specific to MPTC and its market is an

important and prudent vehicle to help weigh the pros and cons of fully implementing and refinancing the

first and only large (five room) proton treatment center in Maryland and the Washington, D.C. area.

This feasibility study considers many market and MPTC-specific factors likely to influence future

performance. Examples include projected service demand by geography and cancer type, patient referral

patterns, the competitive environment, Center technology features and capabilities, operating costs and

third-party coverage and reimbursement. The remainder of this study includes the following sections:

Overview of the oncology market

1 Accessed at http//www.proton-therapy.org/map.htm

MPTC VISION: To become a Proton

Center of Excellence across all

academic missions, accessible as a

regional resource to and in

partnership with major regional

health system oncology providers and

payers.

Major Goal: To fully integrate MPTC

with all UM programs to drive success

for all of our patients and beyond.

2

Overview of radiation and proton therapy

Summary of MPTC strategic relationships

Review of MPTC competitive strengths and weaknesses

Summary of MPTC business strategy

Summary of MPTC environmental and business risks

MPTC facility assessment

Assessment of projected MPTC service demand

Review of MPTC financial information

MPTC feasibility study conclusions and limitations

2. ONCOLOGY MARKET OVERVIEW

In 2015, over 17.5 million incident cases of cancer were reported, with more than 8.7 million deaths

worldwide.2 Both outcomes are expected to increase, with the American Cancer society predicting 21.7

million cases, along with 13 million deaths globally by 2030.3 In the United States (USA), the cancer burden

is significant, with an estimated 1,735,350 new cancer cases and 609,640 estimated cancer associated

deaths in 2018.4 Forecasts to 2020 by the Centers for Disease Control and Prevention (CDC) indicate that

the numbers of new cancer cases and the number of cancer deaths are both expected to rise.5 It is clear

that both globally and nationally, cancer will remain a substantial concern, especially as the population

ages and persists in unhealthy lifestyle choices (e.g., smoking).

Advancements in medical technology have expanded available treatment options for cancer. Three of the

most common treatments are surgery, chemotherapy and radiation therapy, with treatments conducted

2 Fitzmaurice, Christina, et al. "Global, regional, and national cancer incidence, mortality, years of life lost, years lived with disability, and disability-adjusted life-years for 32 cancer groups, 1990 to 2015: a systematic analysis for the global burden of disease study." JAMA oncology 3.4 (2017): 524-548. 3 The Global Cancer Burden. American Cancer Society. Accessed at https://www.cancer.org/health-care-professionals/our-global-health-work/global-cancer-burden.html 4 American Cancer Society. Cancer Facts & Figures 2018. Atlanta: American Cancer Society; 2018. Accessed at https://www.cancer.org/content/dam/cancer-org/research/cancer-facts-and-statistics/annual-cancer-facts-and-figures/2018/cancer-facts-and-figures-2018.pdf 5 Expected New Cancer Cases and Deaths in 2020. Centers for Disease Control and Prevention. Accessed at https://www.cdc.gov/cancer/dcpc/research/articles/cancer_2020.htm

3

either separately or in some combination, and although each is distinct, the main goal is to halt the

uncontrolled growth of cancerous cells.6 After being diagnosed with cancer, each patient’s treatment plan

is unique and influenced by various factors, including but not limited to the type of cancer, the size and

location of the tumor, the stage of the disease as well as the patient’s health and ability to cope with

treatment.

Radiotherapy is the treatment of choice in many cases, with the Global Task Force on Radiotherapy for

Cancer Control (GTFRCC) reporting that it is the recommended treatment in 52% of new cancer patients.

In the USA, the National Cancer Institute (NCI) cites an estimate of 60%.7 The American Society for

Radiation Oncology (ASTRO) estimates that at least two thirds of all cancer patients will receive radiation

therapy, and demand for radiation therapy treatment was expected to rise 22% between 2010 and

2020.8,9,10

MPTC operates primarily in conjunction with the University of Maryland Medical System (UMMS), as well

as other nearby medical systems. A feasibility study commissioned by MPTC in February 2015 considered

it a reasonable estimate that most of the demand for proton therapy treatment will come from areas

within 200 miles of the Center, in which about 48.3 million people live. On an annual basis, this study

estimated that 0.3% of this population may develop cancer (145,000) and 60% of these cancer cases are

candidates for radiation therapy (87,000). Of this group, approximately 20% may be eligible for proton

therapy, leaving the anticipated number of patients requiring treatment at 17,400, not including patients

from overseas or outside the service area within 200 miles from MPTC. In combination with cancer

forecasts that indicate an increase in new cases, these estimates suggest that potential patient pool will

6 Common Types of Cancer Treatment. American Cancer Society. Accessed at https://www.cancer.org/treatment/understanding-your-diagnosis/after-diagnosis/common-cancer-treatments.html 7 See the NCI website http://www.cancer.gov/cancertopics/coping/radiation-therapy-and-you/page2 8 The American Society of Radiation Oncology. ASTRO Legislative Priorities 2015. ASTRO Targeting Cancer Care. https://www.astro.org/uploadedFiles/Main_Site/Meetings_and_Events/2015_Advocacy_Day/Advocacy%20Day%20-%20iPad%20-%20(Linked).pdf 9 Smith, Benjamin D., et al. "The future of radiation oncology in the United States from 2010 to 2020: will supply keep pace with demand?" Journal of clinical oncology 28.35 (2010): 5160-5165. 10 Global Radiotherapy. Global Task Force on Radiotherapy for Cancer Control. Accessed at http://gtfrcc.org/global-radio-therapy/

4

exceed the Center’s estimated annual treatments of approximately 1,350 patients upon full ramp up, with

slight variations from year to year based on the number of days the Center is operating.

3. RADIATION AND PROTON THERAPY INDUSTRY OVERVIEW

Radiation therapy remains one of the most widely-used treatments for cancers. In contrast to surgery (in

which cancer tumors are physically separated from the body during an operation), and chemotherapy

(which uses drugs to kill cancerous cells), radiation therapy utilizes ionizing radiation, which leaves behind

energy in the cells it passes through. High doses of radiation energy damage the genetic material inside

DNA, preventing the cells from repairing themselves.

A cell’s ability to divide is dependent on its DNA, a characteristic of both normal and malignant cells, along

with the ability to self-repair. However, the reparative capabilities of malignant cells are inherently weaker

due to their abnormality. As a result, in such instances, ionization often induces selective cell death. This

‘selectivity’ is an important advantage radiation therapy holds over other treatment options, as malignant

cells are more greatly affected by the radiation, and in general, radiation therapy causes fewer traumas

to the surrounding tissues versus surgery or chemotherapy, which can affect the whole body.

Radiation therapy is not a new treatment for cancer, having first been used in such a capacity as early as

1901. Since then, the technology behind the treatment has made significant improvements in efficacy,

effectiveness and side effect profile.11 For example, one of the earliest advancements made in the field

was the discovery that smaller doses of radiation, applied over a period of time yielded the same

outcomes as treating patients with one large dose, a modification that came with the added bonus of less

severe side effects.

Among the next big improvements was the development of generators that created stronger x-rays, which

allowed for deeper penetration into the body and less damage inflicted on the surface. Since then, the

technology has progressed to accommodate improved visualization and location capabilities, allowing a

greater degree of accuracy in determining the size and shape of tumors, which in turn allows for more

11 The History of Radio Therapy. Cancer Research UK. Accessed at http://www.cancerresearchuk.org/about-cancer/cancers-in-general/treatment/radiotherapy/radiotherapy3

5

precise dose delivery. Additional advancements included shorter patient treatment times, the ability to

target the tumor from multiple directions and varying the intensity of the radiation beams.

Today, proton beam therapy represents one of the latest in a series of enhancements in radiation therapy.

Protons have a unique energy distribution profile, known as the Bragg Peak, which makes them ideal for

use in radiation therapy.12 They enter the body at extremely high speeds, which means that tissues at the

site of entry and along the path to the target are exposed to minimal radiation, and most of the protons’

energy is expended at the terminus of its path. A small amount of radiation dose is delivered 1-2 mm

beyond the stopping point of the proton particle, beyond which point there is virtually no radiation dose,

limiting any potential radiation damage to the tissues and organs behind the tumor (Exhibit 1).

Exhibit 1: Proton Bragg Peak Dose Distribution

The unique properties of proton therapy allow clinicians to deliver much higher doses with greater

precision, potentially improving local tumor control, with the added advantages of reduced patient side

effects and improved quality of life from less tissue and organ damage and fewer and shorter treatments.

12 Protons accelerated to 60% of the speed of light contain 250 MeV of kinetic energy and penetrates approximately 38cm into the body. The distribution below shows protons with 190 MeV, penetrating to 25 cm http://www.rptc.de/en/proton-therapy/radiation-treatment-with-protons/properties-of-proton-beams.html

6

Increased control and precision is achieved by varying the velocity at which protons are launched into the

body, which modifies the depth of the Bragg Peak and allows clinicians to contour the beam to the tumor

(Exhibit 2).

Exhibit 2: Variance of Bragg Peak Depth

Due to the implications of less damage inflicted on tissues and organs in general, and more importantly

to structures in close proximity to the target site, proton therapy is particularly suited for cases where

limiting this damage is of great importance. A prime example is pediatric cancer patients, where limiting

the exposure of still-developing tissues and organs to unnecessary radiation is one of the highest

priorities. In the same vein, the treatment is well suited for cancers located in parts of the body where

even the potential of damage is unacceptable, such as the brain, eye, head, neck, central nervous system

as well as the breast, given its proximity to the heart.

In recognition of the potential benefits that proton beam therapy can bring, and tied to the expected

general increase in demand for radiation therapy, the number of proton therapy centers globally and

nationally has grown significantly. There are currently approximately 21 operating centers in Europe, 17

7

in Asia, and one in Africa. In the U.S., 28 proton therapy centers are currently in operation, with 12 under

construction or development (Exhibit 3, Exhibit 4). 13,14

13 Operating clinical proton centers. Proton Therapy Center. Accessed at http://www.proton-cancer-treatment.com/proton-therapy/proton-therapy-around-the-world/operating-clinical-proton-centres/ 14 http://www.proton-therapy.org/map.htm

8

Exhibit 3: Proton Therapy Centers in the U.S: In Operation and Under Development

9

Exhibit 4: Proton Therapy Centers in the U.S.: Under Construction and Currently Operating

Proton Center Name Year opened

No. of Rooms Operating Mileage

from MPTC

1 Johns Hopkins Sibley Hospital 2019 2 No 41

2 Inova Schar Cancer Institute 2020 2 No 52

3 New York Proton center 2018 5 No 194

4 Scott Hamilton Proton Therapy Center 2018 3 No 530

5 The McLaren Proton Therapy Center 2018 3 No 578

6 Emory Proton Therapy Center 2018 5 No 681

7 University of Alabama at Birmingham Proton Therapy Center 2019 1 No 782

8 Providence Proton at St. Vincent’s 2019 1 No 785

9 Delray Radiation Therapy Center 2019 1 No 1,052

10 Louisiana Proton Care Center Late 2019 1 No 1,122

11 Louisiana Proton Therapy Center Late 2019 1 No 1,233

12 Stephenson Cancer Center Proton Center at University of Oklahoma TBD 1 No 1,334

1 Maryland Proton Treatment Center 2016 5 Yes 0

2 Lombardi Comprehensive Cancer Center at MedStar Georgetown University Hospital 2018 1 Yes 46

3 The Roberts Proton Therapy Center at University of Pennsylvania Health System 2010 5 Yes 101

4 Laurie Proton Therapy Center at Robert Wood Johnson University Hospital 2015 1 Yes 162

5 ProCure Proton Therapy Center in Partnership with Princeton Radiation Oncology Group and CentraState Healthcare System

2012 4 Yes 168

10



from MPTC

6 Hampton University Proton Therapy Institute 2010 5 Yes 218

7 University Hospitals Seidman Cancer Center, Case Medical Center

2016 1 Yes 369

8 Francis H. Burr Proton Center at Mass. General Hospital

2001 3 Yes 403

9 Cincinnati Children's / UC Health Proton Therapy Center 2016 3 Yes

507

10 The Provision Center for Proton Therapy 2014 3 Yes 530

11 Proton Therapy Center at Beaumont Hospital Cancer Institute 2017 1 Yes 549

12 Northwestern Medicine Chicago Proton Center 2010 4 Yes 729

13 The University of Florida Health Proton Therapy Institute 2006 4 Yes 748

14 Ackerman Cancer Center 2015 1 Yes 770

15 S. Lee Kling Proton Therapy Center at the Siteman Cancer Center 2013 1 Yes 840

16 UF Health Cancer Center at Orlando Health 2016 1 Yes 892

17 St. Jude Red Frog Events Proton Therapy Center 2015 3 Yes 913

18 Mayo Clinic Proton Beam Therapy Program 2015 4 Yes 1,059

19 Miami Cancer Institute at Baptist Health South Florida 2017 3 Yes 1,109

20 Willis-Knighton Health System 2014 1 Yes 1,240

21 ProCure Proton Therapy Center Oklahoma 2009 4 Yes 1,332

22 The Texas Center for Proton Therapy 2015 3 Yes 1,379

23 MD Anderson Cancer Center's Proton Center 2006 4 Yes 1,449

11



from MPTC

24 Mayo Clinic Proton Beam Therapy Program, Arizona 2016 4 Yes 2,285

25 James M. Slater Proton Treatment and Research Center at Loma Linda 1990 4 Yes 2,623

26 California Protons Cancer Therapy Center (CPCTC), San Diego 2014 5 Yes 2,651

27 SCCA Proton Therapy Center Washington 2013 4 Yes 2,781

28 UCSF Ocular Tumor Proton Radiation Program 1994 1 Yes 2,820

This growth is reflected financially as well, with the global market reaching the USD billion-dollar mark for

sales in 2015—more than double the sales in 2014.15 This trajectory is expected to be sustained in the near

term, with the industry projected to reach USD 2.88 billion by 2025.16 In addition to growing consumer

interest in proton therapy as a potential treatment option, technological advancements are helping drive

growth. These include enhanced imaging and planning capabilities, as well as miniaturization of proton

therapy equipment. Such smaller “foot prints” remove the necessity for large buildings to house them and

decrease startup and operating costs. Additionally, the greater number of centers presents training and

research opportunities for clinicians.

The foregoing benefits aside, the industry also faces headwinds and barriers to widespread uptake.

Examples include the following:

• A currently limited, although growing, evidence base demonstrating superior efficacy to less costly

conventional photon-based radiation therapy

15 Source: “Proton Therapy Becomes Billion-Dollar Industry” by Jeff Zagoudis, September 07, 2016. [Retrieved online at www.itnonline.com] 16 Source: “Proton Therapy Systems Market Size to Reach $2.88 Billion by 2025: Grand View Research, Inc.” by Sherry James, July 25, 2017. [Retrieved online at http://www.prnewswire.com/news-releases/proton-therapy-systems-market-size-to-reach-288-billion-by-2025-grand-view-research-inc-636465733.html]

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• Unpredictable third-party coverage and a reimbursement environment that focuses on cost

containment and often requires clinical trials-based evidence that disadvantages newer technologies,

such as proton therapy, due to the length of time required to prove efficacy

These considerations, along with others, are explored in more detail in later sections of this study.

4. MPTC STRATEGIC RELATIONSHIPS

This section of the feasibility study profiles key project participants and affiliates and their relationships

with MPTC and roles in design, construction, operation, maintenance and financing of the Baltimore-based

treatment center.

University of Maryland Affiliated Entities

The University of Maryland clinical partners currently involved with MPTC include the University of

Maryland School of Medicine, the radiation oncology arm of the University of Maryland School of

Medicine’s faculty practice plan (University of Maryland Radiation Oncology Associates (UMROA)), the

University of Maryland Medical Center (UMMC) and the Marlene & Stewart Greenebaum Comprehensive

Cancer Center (UMGCCC).

Overview of UMMC and Greenebaum Cancer Center

UMMC is the flagship of the University of Maryland Medical System (UMMS or the “System”) and the heart

of the System’s downtown Baltimore campus. The approximately 770-bed hospital provides tertiary and

quaternary care, with more intensive care beds than any hospital in the state and internationally

recognized programs in trauma, cancer care, cardiac care, neurological care, women’s and children’s

health, and organ and tissue transplantation. UMMC also provides comprehensive care for the West

Baltimore community in coordination with its second location, UMMC Midtown Campus. The 1,200 faculty

physicians at UMMC are all faculty members of the University of Maryland’s School of Medicine.17

17 Accessed at file: http://www.umms.org/-/media/systemhospitals/umms/pdfs/about-us/annual-reports/ummssom21016-web.pdf?la=en&hash=6D1EE48A61F3FACE2FAFB6BEB44499245E25953C

13

UMMC has approximately 6,500 employees and provides training for about half of Maryland's physicians

and other health care professionals. All members of the medical staff are on the faculty of the University

of Maryland’s School of Medicine.18

UMMC is currently ranked among the top 50 hospitals nationwide in four specialties in U.S. News & World

Report’s “Best Hospitals” 2016-2017: Cancer, Diabetes and Endocrinology, Ear, Nose & Throat and Urology.

The Leapfrog Group has named UMMC as one of the nation’s best hospitals for patient safety and quality

of care for six years in a row. 19 With operating revenues in 2015 of about $1.4 billion, UMMC also has a

significant economic impact on the metropolitan Baltimore area.20

The Marlene & Stewart Greenebaum Comprehensive Cancer Center (UMGCCC) is one of 69 National

Cancer Institute designated centers. Of these centers, fewer than 50 share the UMGCCC’s status as a

Comprehensive Cancer Center.21 This higher designation, awarded in 2016, reflects the quality of

UMGCCC's cancer research. It is hoped that this distinction will drive more physicians to send patients to

UMGCCC, leading to more University of Maryland referrals to MPTC. The organization also is a major

referral center throughout Maryland and the region. Annually, it is estimated that approximately 3,390

new cancer patients seek care there, about 2,500 patients are admitted and about 45,000 outpatient visits

are seen.22 Annual cancer research funding at UMGCCC also has grown dramatically since 2002 from $19.4

to $61.7 million in 2016.

UMGCCC draws on the experience and expertise of clinicians and researchers from the University’s medical

school, and the UMROA, as well as fostering strong collaborative relationships with organizations such as

the Tate Cancer Center at UM Baltimore Washington Medical Center and with the University of Maryland’s

School of Public Health. As described below, it is anticipated that partnering with the University of

Maryland-affiliated clinical entities involved with this initiative will drive a significant number of annual

referrals to MPTC, serve as a source of clinical staffing and oversight and further round out and strengthen

the teaching and research capabilities of an already robust oncology program.

18 Accessed at file: https://en.wikipedia.org/wiki/University_of_Maryland_Medical_Center 19 Accessed at file: https://www.mesothelioma.com/treatment/cancer-centers/university-of-maryland-marlene-and-stewart-greenebaum-cancer-center.htm 20 Accessed at file: https://emma.msrb.org/EP872236-EP675552-EP1077195.pdf 21 Accessed at file: http://www.umm.edu/programs/cancer/about-us/nci-ccc-designation 22 Accessed at file: http://www.umm.edu/-/media/umm/pdfs/centers-and-services/cancer/about/umgcccfactsheet2016blue.pdf

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Review of UMROA-MPTC Clinical Management and Professional Services Agreement

Based on review of the Clinical Management and Professional Services Agreements, the terms of which are

summarized below, IHS concludes that the plan of operations, performance requirements, compensation

and guarantees herein are commercially reasonable for the services provided and are representative of

other comparable agreements with proton therapy treatment centers of similar size, operating

characteristics and affiliation with academic medical centers with strong oncology programs. Absent

material unanticipated adverse circumstances, the applicable parties should be able to perform their

respective obligations under the terms of these agreements.

UMROA is the clinical practice group and member of the faculty practice plan of the Department of

Radiation Oncology of the University of Maryland’s School of Medicine. UMROA provides to MPTC

physician clinical services under a Professional Services Agreement and management and administrative

services under a separate Clinical Management and Administrative Services Agreement.

Review of the UMROA-MPTC Professional Services Agreement

Concurrent with the Clinical Management and Administrative Services Agreements described below, MPTC

entered into a Professional Services Agreement in January 2012 with UMROA to provide certain physician

staffing, coverage and professional medical services at the Center. Unless terminated earlier, the initial

term of the agreement commenced on the agreement effective date (and will continue until 2036, a period

of twenty years plus the balance of months that extends to the end of the applicable academic year). The

agreement will renew automatically for a term of five years upon the expiration of the initial term unless

the Parties mutually agree in writing to terminate the agreement.

Under the agreement UMROA makes available through the Department of Radiation Oncology a sufficient

number of physicians to ensure that all Proton Therapy related services and consultations are provided

promptly and efficiently. Clinicians provide professional services, including radiation oncology services to

the patients at the Center using proton beam technology. Physician staffing levels are maintained in

accordance with Clinical Staffing Guidelines. These include guidelines for key positions hired in advance of

opening the Center and are subject to change upon review and written agreement by the Parties based

upon actual patient treatment volume relative to financial projections.

Physicians who hold a regular faculty appointment from the UM School of Medicine, are Board Eligible or

Board Certified in the field of Radiation Oncology, have obtained and maintained appropriate medical staff

15

membership and clinical privileges at UMMC and MPTC, maintain an unrestricted license to practice

medicine in the State of Maryland are eligible to provide professional services at the Center, subject to

credentialing requirements under federal and state law, and under UMMC’s and MPTC’s policies and

procedures. Both organizations also cooperate and coordinate with each other regarding participation in

network programs of third party payers and the Medicare and Medicaid programs, with all final decisions

resting with the ownership of the Center.

Regarding MPTC clinical leadership, Dr. William Regine, the Executive Director for the Center is the Isadore

and Fannie Schneider Foxman Chair and Professor of Radiation Oncology at the University of Maryland’s

School of Medicine. He also is ranked in the top five in the nation in NIH publications for research funding

profile, considered a national and international expert in GI and CNS malignancies and is co-inventor of the

GammaPodTM, the first treatment system dedicated to the stereotactic radiation of early stage breast

cancer. Dr. Charles Simone, the Center’s Medical Director, is an Associate Professor at the UM School of

Medicine Department of Radiation Oncology and former Associate Professor at the University of

Pennsylvania Proton Therapy Center. He has the authority to approve, direct, provide oversight, evaluate

and set standards for the physicians and non-physician staff practicing at the Center under the supervision

of the Executive Director.

The compensation formula for professional services provided includes both base and incentive

compensation payments as follows:

• Base compensation is calculated as a full-time equivalent (FTE) dollar amount specific to the levels

of physicians providing professional services. The per FTE amount of base compensation for

services provided by staff physicians is equal to the 75th percentile of physician compensation for

radiation oncologists as reported in the most recent Physician Compensation and Production

Survey of the Medical Group Management Association (“MGMA Survey”) plus 26%. The 26% add-

on represents an adjustment for the Dean’s tax and other practice plan assessments and the costs

of employee fringe benefits and related expenses.

In addition to the amount payable as base compensation to staff physicians, MPTC also pays for patient

care services provided by the Medical Director at the rate of 0.6 FTEs. The Medical Director’s compensation

is set at 115% of the 75th percentile of physician compensation for radiation oncologists as reported in the

most recent Physician Compensation and Production Survey of the MGMA plus 26%.

16

• The UMROA is eligible to receive incentive compensation payments annually based upon the

following formula: Incentive Compensation Payment= Incentive Rate x (the Practice’s W-RVUs-

Threshold).

o The incentive rate is defined as the Compensation to Physician Work RVUs Ratio”, at the

75th percentile as reported in the “overall” category of the most recent MGMA survey.

o Practice W-RVUs are determined by calculating total physician work-Relative Value Units

associated with services performed by practice physicians at the Center during the

reporting period.

o A Per-FTE W-RVU threshold that equals the Physician Work RVUs at the 75th percentile as

reported in the “overall” category of the most recent MGMA Survey is determined at the

start of each measurement period and establishes a payment upper limit.

Changes in compensation or third-party payer reimbursement methodologies may require periodic

adjustments in the compensation formula to continue to provide compensation on commercially

reasonable terms, consistent with fair market value. Accordingly, the management fee formula is subject

to periodic independent revaluation every three years.

The Agreement also includes non-compete clauses that apply in varying degrees of restrictiveness to

Center ownership, and UMMC physicians. The non-compete clauses require that while employed and for

a period of 18 months following termination of employment by the Practice or the agreement, the parties

involved not acquire or otherwise have an interest in or provide services at a proton therapy treatment

center in Maryland, Delaware, the District of Columbia, the City of Alexandria, VA., or the counties of

Arlington, Fairfax, Loudoun and Prince William, VA.

Review of the UMROA-MPTC Clinical Management and Administration Services

Agreement

Through the Clinical Management and Administrative Services Agreement entered into in January 2012,

UMROA in conjunction with MPTC established the Joint Operating Committee (“JOC”), which is responsible

for developing planning objectives for and consideration and approval of recommendations regarding the

operation of the Center. The JOC consists of four members, two appointed by MPTC and two appointed by

UMROA, one of whom shall always be the Executive Director. The role of the JOC in the budgeting process

is important in aligning all Center stakeholders.

17

Unless terminated earlier, the initial term of the agreement commenced on the agreement effective date

and will continue for a period of twenty years, until 2036. The agreement will renew automatically for a

term of five years upon the expiration of the initial term unless the Parties mutually agree in writing to

terminate the agreement.

Primary UMROA responsibilities under this agreement include: 1) recommending appointment of an

Executive Director and appointing the Medical Director at the Center; 2) establishing, implementing and

managing clinical operating policies and procedures for the Center; 3) establishing an audit or evaluation

program to evaluate the appropriateness and quality of professional services provided in the Center; 4)

making recommendations on annual budgets and operating plans, personnel and staffing levels and annual

performance goals and strategies to enhance the scope of services provided at the Center; and 5) providing

ongoing reviews of the Center’s utilization management and quality improvement activities.

In consideration for conducting clinical management and administrative services MPTC pays the UMROA a

management fee which includes an hourly fee, a monthly overhead charge and a performance incentive

payment subject to revaluation every three years:

o The hourly fee for services provided by staff physicians is based on the 75th percentile of physician

compensation for radiation oncologists as reported in the “overall” category of the most recent

MGMA Survey plus 26%. Hourly fees for the Executive Director and Medical Director also include

an additional 15% add-on payment.

o The monthly overhead charge is intended to reimburse the UMROA for operating expenses

associated with supporting practice physicians working at or for the benefit of the Center.

o Under the performance incentive payment structure MPTC pays the UMROA up to 10% of the

management fee based upon the UMROA’s level of achievement in meeting performance goals

related to specific quality of care and patient satisfaction metrics.

In addition to the Professional Services and Clinical Management and Administrative Services

Agreements, under a March 2012 Employee Leasing Agreement MPTC engaged UMMC to lease non-

physician personnel to perform specific services at the Center. Leased employees include a wide range

of non-physician clinical and administrative titles to be adjusted periodically as determined by Center

clinical staffing guidelines and in consultation with UMROA. Examples of leased employees include: 1)

nurse practitioners; 2) medical physicists; 3) radiologic technologists; and 4) ancillary support staff.

Budgeted staffing costs include annual salaries and fringe benefits for leased employees consistent

18

with the guidelines and approved budgets developed under the Professional Services and Clinical

Management and Administrative Services Agreements for each applicable Budget Year.

Public Finance Authority (PFA)

Under the proposed Facility Operating Agreement, PFA will own Maryland Proton Treatment Center, LLC

(the “Operator”). The Operator currently owns and operates MPTC and after the bond financing will

continue to operate MPTC pursuant to a Facility Operating Agreement between the PFA and the Operator.

The PFA is authorized and empowered to, among other things, issue bonds, notes or other evidences of

indebtedness in connection with the financing of projects located within and outside of the State of

Wisconsin, and to acquire, buy, sell, lease, encumber, mortgage, hypothecate, pledge, assign or transfer

any property or interest in property that is located within or outside of the State of Wisconsin and enter

into contracts related to the issuance of bonds.

Review of Varian Medical Systems, Inc. (“Varian”) Agreements

MPTC obtained its proton therapy treatment-related equipment and software from Varian pursuant to a

Proton System Purchase Agreement originally executed in June 2011 and amended in January 2014.

Varian is a worldwide manufacturer of medical devices for treating cancer and other conditions with

radiotherapy, proton therapy and other modalities. Varian employs approximately 7,400 people who are

located at manufacturing sites in North America, Europe, and China and sales and support offices around

the world. In addition to the California Protons Therapy Center in San Diego, California, Varian proton

therapy technology is also in place or under development in the U.S. at the Emory Proton Treatment Center

in Atlanta; Cincinnati Children's Hospital in Ohio; and the New York Proton Center in New York City.

Varian’s ProBeam System incorporates proprietary pencil-beam scanning technology allowing for precise

dose distribution as well as integrated scanning technology that applies a precise radiation dose, enabling

true intensity modulated proton therapy (“IMPT”). IMPT combines the precise dose delivery of pencil beam

scanning (PBS) with the dimensionally accurate imaging of 3D Cone Beam Computed Tomography, enabling

physicians to track where protons will be targeting tumor cells.

Other Varian system features include imaging, robotic patient positioning, and treatment planning and

information software to enhance treatment quality and workflow efficiency. These include the ARIA

Oncology Information System (OIS) which combines radiation, medical and surgical oncology information

into a complete, oncology-specific electronic medical record (EMR) to manage the patient from initial

19

diagnosis through post-treatment follow-up; and the Eclipse System, a treatment planning system that

supports a variety of proton beam lines as well as ocular planning.

Review of Varian Proton System Purchase Agreement

IHS reviewed the purchase agreement between MPTC and Varian summarized below and associated

appendices and amendments. This review finds and concludes that the pricing and payment milestones

performance requirements and terms are reasonable, standard for this industry and generally consistent

with other proton therapy industry contracts of a similar nature that we have recently reviewed. As a result,

barring unforeseen events and circumstances, the applicable parties should be able to perform their

obligations under this agreement.

The June 2011 purchase agreement with Varian was amended and restated in January 2014 to

accommodate change in MPTC ownership and facilitate the issuance of bonds to complete the facility. The

purchase agreement outlines the terms and conditions, pricing and milestones under which Varian

provides MPTC with the equipment, hardware, firmware and software and performs the installation

services in connection with development and construction of the proton treatment and research facility.

About $85.2 million is being spent on proton therapy treatment-related equipment and software furnished

by Varian pursuant to the amended purchase agreement. This includes about $80.6 million for a Proton

Therapy Treatment System and about $3.0 million for the ProBeam System Aria and Eclipse software. The

prices do not include applicable duties and taxes relating to the Proton System and Proton System

Installation Services. A down payment of about $17.0 million (20%) is non-refundable and has been paid

to Varian. Other payment milestones include:

• $4,259,521 due and paid upon shipment of Proton System components

• $29,816,647 due and paid on May 1, 2014

• $4,259,521 due and paid upon successful installation of Proton System components

• $12,778,563 due and paid upon successful handover of patient room one, with about $9,000,000

deferred to 9/30/2018

• $4,259,521 due and paid upon successful handover of patient room two, with about $4,000,000


• $4,259,521 due and paid upon successful handover of patient room three, with about $4,000,000


20

• $4,259,521 due and paid upon successful handover of patient room four, with about $4,000,000


• $4,259,521 due upon successful handover of patient room five, with about $4,000,000 deferred to

9/30/2018

The purchase agreement includes a provision for damages in the event Varian breaches a warranty. In that

event, Varian shall repair or replace the Proton System or any component as soon as practicable. If this

remedy fails, Varian will refund the purchase price paid for the System or components. Each party also

agrees not to recruit any staff involved with the installation of the System from the Effective Date for a

period of one year.

Review of Varian Proton System Operations and Maintenance Agreement

IHS reviewed the Operations and Maintenance Agreements between MPTC and Varian summarized below

and finds that the performance requirements, including guaranteed minimum treatment room availability,

are industry standard. The pricing provisions and terms are also generally reasonable, and consistent with

other proton therapy industry contracts of a similar nature. Therefore, the applicable parties should be

able to perform their obligations under these agreements.

The agreement includes preventive maintenance, curative maintenance and technical operations services.

Examples of preventive maintenance services include: 1) Replacement of such parts of the Proton System

as needed to keep it in good working order and operating in accordance with its specifications and

warranties; and 2) Monitoring and verification that the system software and hardware operates in

accordance with the specifications.

Examples of curative maintenance services include: 1) The provision of support by Varian personnel at the

Center to correct errors, and to bring the Proton System back to conformity with specifications in order to

mitigate downtime; and 2) Replacement and repair of defective parts and/or software of the Proton

System as necessary. In the event Varian is unable to correct errors by repairing or replacing the defective

Proton System Component within a commercially reasonable time, as determined by Varian, in its

reasonable discretion, Varian will refund the price paid by MPTC for the defective Proton System or system

components. Varian will also supply the hand tools, test equipment, and other equipment and specialized

fixtures needed to provide the support services at no additional cost.

21

During the support period, Varian ensures that the Proton System will function with guaranteed minimum

treatment room availability ranging from 75% to 95% as summarized in the table below. Availability means

that the treatment room is operating without any error that prevents the treatment of patients.

Exhibit 5. Summary of Varian Guaranteed Treatment Room Availability

Measurement Period

2nd Treatment Room Acceptance to Final Acceptance of all Treatment Rooms

Months 1-12 after Final Acceptance of all Treatment Rooms

Months 13-24 after Final Acceptance

Months 25 after Final Acceptance Through Termination

Guaranteed Treatment Room Availability

75% 90% 92% 95%

For each measurement period that the Proton System fails to meet the guaranteed treatment room

availability Varian will pay a service level credit calculated as follows: For each percentage point or fraction

thereof that the treatment room availability is less than the guaranteed treatment room availability for a

measurement period, the initial quarterly support services fee for the next contract year will be reduced

by the amount of the shortfall, expressed as a percentage, multiplied by two.

For example, if during a measurement period with a quarterly support services fee of $1,600,000, a

guaranteed treatment room availability of 92%, and an actual treatment room availability of 90.9%, the

Center’s guaranteed treatment room availability service level credit would be $35,200 as calculated below:

($1,600,000 X 1.1%) X2 = $35,200

The maximum guaranteed treatment room availability service level credit for any contract year will not

exceed ten percent (10%) of the service fee paid by MPTC for that contract year.

In addition, the contract also includes a down system credit arrangement. Under it if all five treatment

rooms are unavailable to treat patients for five consecutive operating days, for each additional consecutive

operating day that all five treatment rooms are unavailable for patient treatments, MPTC shall receive a

22

down system credit of $4,000. The maximum down system credit and guaranteed treatment room

availability credit for any contract year will not exceed 20% of the service fee.

Other proton centers have reliability commitments built into their equipment vendor contracts. For

example, the Robert Wood Johnson University Hospital Proton Therapy Center in New Jersey, which

opened in 2015, has an uptime commitment of 98% from Mevion Medical Systems, their equipment

vendor. For additional information, see the chapter below titled “Proton Treatment Center Facility

Assessment.”

Beginning on acceptance of the first two treatment rooms, MPTC paid Varian support services fees. The

payment schedule for these was adjusted depending on the actual timing of acceptance of each treatment

room.

The Operations and Maintenance Agreement also includes periodic pricing adjustments similar to those in

effect at the Emory Proton Treatment Center. Effective one year after the support service start date (i.e.

beginning in Quarter 5), the support services fees will be adjusted annually by an amount equal to the net

percentage change in the national Consumer Price Index for all Urban Consumers — All Items (Unadjusted)

as published by the United States Bureau of Labor Statistics (CPI) times the support services fees in effect

for the immediately preceding year. In year 5, the Parties will negotiate the support services fees for Year

6, which will not exceed about $8.2 million. The support services fees for all years following Year 6 will be

adjusted annually by an amount equal to the CPI times the Support Services Fees in effect for the

immediately preceding year.

Medical Management Billing & Compliance (“MMBC”)

The Center selected MMBC as the exclusive provider of management and billing and collections consultant

services. Founded in 2004 MMBC is a limited liability corporation authorized to transact business in

Maryland. MMBC specializes in the field of Radiation Oncology and is a leading provider for proton therapy

billing. MMBC works with staff at the proton center to accurately code Proton Therapy procedures and

maximize reimbursement and revenue collection. MMBC also reduces the risk associated with Proton

Therapy insurance authorizations by working with each provider to ensure approvals, often writing letters

on behalf of physicians and patients. In addition to MPTC, MMBC’s current proton clients include:

1. California Protons Cancer Therapy Center

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2. Cincinnati Children’s Proton Treatment Center

3. Cincinnati Adult Proton Treatment Center

4. Emory Proton Treatment Center

5. Baptist Health Miami Proton Treatment Center

Review of MMBC Billing Management and Consultant Services Agreement

MMBC provides billing and collection management services to the Center related to patient authorization,

ARIA encounter and compliance services. The scope of services also includes management of the Center’s

accounts receivable. Examples of management and consulting services provided by MMBC include:

• Management of accounts receivables

• Radiation Oncology billing/coding training for all physicians and staff, on an ongoing basis

• Insurance Authorization Approvals

• Coordination with Center accounting /finance staff

• Fee Schedule/Charge Master Analysis

Under the terms of an August 2017 Amendment to the Billing Management and Consultant Services

Agreement, the term of the agreement was made effective beginning March 25, 2015 for an initial period

of five years to be renewed automatically for additional successive periods of five years. For the

management and consultant services of MMBC, beginning August 1, 2017 the Center began paying MMBC

a billing rate of 4.5% of gross monthly collections. In any given month, the fee paid to MMBC will never be

less than $67,000 dollars or greater than $135,000 dollars.

RaySearch Americas, Inc. (“RaySearch”)

RaySearch Americas, Inc., a wholly owned subsidiary of RaySearch Laboratories, is a medical technology

company that develops software used in radiation therapy. The company markets its products worldwide

and has subsidiaries in the U.S., Singapore, Belgium, France, Germany and the UK. RaySearch markets the

RayStation® treatment planning system to clinics all over the world. In addition, RaySearch’s products are

distributed through licensing agreements with leading medical technology companies.23

23 Accessed at http://connect.physicsworld.com/raysearch-laboratories-ab/416105.supplier

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A total of 35 proton centers have purchased RayStation as their treatment planning system.24 Six of the

orders were received in June 2017, including:

• The Children’s Cancer Hospital Foundation (Cairo, Egypt);

• Hospital Quirónsalud (Madrid, Spain);

• Mayo Clinic Hospital (Phoenix, Ariz.);

• ZON-PTC (Maastricht, Netherlands);

• Medstar Georgetown University Hospital (Washington, D.C.); and

• The Johns Hopkins Medicine proton center at Sibley Memorial Hospital (Washington, D.C.)

RayStation® integrates all RaySearch’s advanced treatment planning solutions into one treatment planning

system. It combines features such as multi-criteria optimization tools with full support for 4D adaptive

radiation therapy. It also includes functionality such as RaySearch’s algorithms for intensity-modulated

radiation therapy (IMRT), which uses advanced technology to manipulate photon and proton beams of

radiation to conform to the shape of a tumor. The system is built on the latest software architecture and

has a graphical user interface offering state-of-the-art usability.

In March 2017 Raysearch and MPTC executed a non-cancelable purchase agreement for ten additional

licenses of RayStation Version 6 for $1.99 million. The included configuration provides for ten simultaneous

planning access points and external beam planning software and applicable hardware.

.

Siemens Medical Solutions USA, Inc. (“Siemens”)

Under a Master Equipment Lease Agreement with a term of 84 months dated July 30, 2015, MPTC leased

from Siemens an MR (MAGNETOM Aera System), and a SOMATOM Definition Edge CT for a total price of

about $2.8 million. The systems had a full warranty, including parts and labor, for a period of 12 months.

The SOMATOM Definition Edge CT and MAGNETOM Aera System also have a 97% uptime guarantee and

were installed and calibrated during October 2015 and December 2016, respectively.

24 Accessed at https://www.itnonline.com/content/eight-proton-therapy-centers-worldwide-adopt-raystation-treatment-planning

25

UMB Health Sciences Research Park Corporation (“RPC”)

In April 2012 UMB Health Sciences Research Park Corporation acting through its affiliate BioPark Fayette

executed a development agreement selling a 1.492-acre site in Baltimore, Maryland to MPTC for

$13,400,000 to construct the proton therapy center, a 138-room hotel and about 3,905 square feet of

ancillary retail and office space, but current plans do not include hotel development. The agreement was

amended in December 2013 and again in January 2015. The transaction closed year-end 2013. The MPTC

contains 110,389 gross square feet. MPTC also received approval for reduced property taxes as part of the

Enterprise Zone/Focus area through the City of Baltimore Development Corporation. The tax credit applies

for ten years and is renewable if the Center continues to invest in the facility. Common area maintenance

charges commenced March 1, 2016 at $400,000 per quarter, increasing 2.0% each January 1st. The current

annual cost is $416,160.

Regional Partnership Model Affiliates

Per the Exhibit below MPTC currently (2017) has four signed formal affiliation partnership agreements and

is in discussion with five additional regional providers of radiation oncology services. Current affiliate

partners include 1) Chesapeake Oncology and Hematology Associates (COHA); 2) Radiation Oncology

Associates at INOVA Fairfax;3) Medstar Georgetown University d/b/a MedStar Georgetown University

Hospital; and 4) Wellspan Health in York, PA. The Exhibit below outlines the commencement date, term,

renewal date, and terms of automatic renewal for each agreement.

26

Exhibit 6: Status and Location of MPTC Affiliate Partnerships

Affiliate Partner Commencement

Date Term

Renewal

Date

Terms of Automatic

Renewal

WellSpan Medical Group July 5, 2016 About 5.0 Years

June 30, 2021 3 Years

MedStar-Georgetown

Medical Center April 25, 2016

About 3.2 Years

June 30, 2019 1 Year for 3 Renewals

Chesapeake Oncology

Hematology Associates, PA March 1, 2017

About 4.3 Years


Radiation Oncology

Associates, PC at Inova February 1, 2017

About 2.4 Years


Patient consultations referred from MPTC affiliate partners trended steadily upward throughout 2017

(Exhibit 7). The Medstar Georgetown, WellSpan, Inova, and COHA affiliates collectively referred about

153 patient consultations to the Center and MPTC converted approximately 49% (75) of these

consultations to completed patient treatments (Exhibit 8).

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Exhibit 7: Trends in MPTC Affiliate Patient Consultations (2017)

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Exhibit 8: Trends in MPTC Affiliate Referred Patients Completing Treatment (2017)

5. COMPETITIVE STRENGTHS, WEAKNESSES AND AREAS OF RISK

The Center believes that its ability to be competitive in the market will be influenced by a broad spectrum

of objective and subjective factors. These include reimbursement levels, reputation, treatment efficacy,

location, effective marketing, and strength of the clinical and management relationship with UMMS and

other affiliates which serve as primary clinical and management partner and patient referral sources.

Additional external factors include population service demand, competition and Maryland’s regulatory

environment. Based upon review of these and other factors discussed below, the Center currently appears

well positioned to compete within its service area.

Potential Competitive Strengths

As discussed throughout this study, key operating features and environmental factors intersect to render

the Center unique in the local market. These include size, state of the art technology, design features that

foster efficiency and revenue maximization, strong affiliations with local healthcare providers, including

the University of Maryland Medical System, UMROA and affiliates, who combined have a market presence

sufficient to help ensure the patient volume needed for financial viability, about 440 referring physicians

29

to date25, high levels of population demand for proton therapy services within the Center’s primary and

secondary service areas, adequate reimbursement and the support of city and state governments.

Historically, the layout of most proton therapy centers was designed primarily for research purposes and

did not prioritize such operating efficiencies as minimizing patient door-to-door treatment time by

optimizing patient flow within the treatment area. By comparison, technological advances, design and

other features that distinguish this Baltimore-based Center include:

• Efficient Design Features: One enhanced design feature is that for every treatment room there are

two preparation rooms where patients can be set up and immobilized. This configuration virtually

eliminates the use of the treatment room for patient preparation and immobilization, increasing time

available for beam delivery. As the only center in the region with loading rooms and a trolley system

for patient immobilization outside of the treatment room, this feature is estimated conservatively to

save about five to seven minutes per treatment as compared to centers without similar technology.

• Superior IMPT and PBS Technology: IMPT, the form of proton therapy treatment provided at the

Center, allows a targeted dose of radiation to be delivered directly to tumors, minimizing radiation

exposure to surrounding healthy tissues. IMPT also allows for single-field optimization, in which the

spot intensities for each beam are optimized one by one, and multiple-field optimization, where the

optimization happens for all beams at once. Scanning is more efficient, and since it does not involve

the collision of protons with materials such as scatter foils, the generation of secondary neutrons is

minimal.

In addition, the Proton System provided by Varian utilizes pencil beam scanning, a robotic positioning

system and on-gantry Cone beam CT scanning. Pencil beam scanning is considered superior to

traditional proton therapy as it provides clinicians more flexibility to shape the beam for more complex

treatments and the ability to treat deeper seated tumors. This advancement in treatment delivery is

characterized by the use of magnets that deflect the proton beam, guiding it across the surface of the

target tumor. Computers are used to map the treatment area, layer by layer, with the energy of the

beam modified depending on spot depth to arrive at the intended dose pattern. This allows for a much

higher level of conformity.

25 Source: MPTC management

30

PBS is a technology feature that many older centers do not possess. In addition to IMPT and PBS, the

Center uses image guided proton therapy (IGPT), allowing physicians to track tumor motion, thus

providing the ability to maximize tumor dose delivery while minimizing radiation exposure to healthy

tissue.

In addition to technology and design features that foster efficiency and high-quality patient care, other

environmental factors unique to the local market within which MPTC operates also present competitive

strengths and opportunities. Foremost among these include:

• Benefiting from the University of Maryland Brand and Patient Referral Network: Understanding

referral patterns and the politics of referrals is an important success factor. In the past, early adopters

with little to no experience in the referral patterns of proton therapy, and without understanding the

politics of physician referrals, accepted aggressive performance projections that were largely based on

a simple calculation of hours in the day, and equipment vendor statements on how many patients

could be treated per hour. What was not well understood was the impact of referring physicians, many

of whom may not at the time have been well informed of proton therapy and had competing issues to

consider.26

These issues appear to have largely been avoided by MPTC in its selection of clinical partners. As

enumerated in the Clinical Management and Professional Services Agreements between UMROA and

MPTC, UMROA provides the clinical expertise for the Center, including physician services, medical

direction, clinical management and other administrative services. The Center also currently draws a

significant portion of its radiation therapy patients from the UMMS state-wide network of 13

community-based hospitals, six radiation oncology facilities and other referring practitioners.

In addition, the Center also has and continues to develop affiliations with major regional providers of

radiation oncology services (see the section of the study below titled “Assessment of MPTC Service

Demand”). As a result, MPTC is positioned to receive a significant number of referrals from UMMS and

other affiliates, helping ensure a stable and sustainable market presence.

26 Uploaded from https://www.loopcapital.com/sites/default/files/An%20Insiders%20Perspective%20on%20Proton%20Therapy%20Investment_vF%20(002).pdf

31

• Benefiting from Maryland’s Certificate of Need (CON) Regulatory Environment: Maryland is one of

34 CON states where, in varying degrees, policy makers strive to limit health care capacity and growth

in expenditures to what can reasonably be justified based upon community need.27 The State’s CON

program is intended to ensure that new health care facilities and services are developed in Maryland

only as needed and that, if determined to be needed, they are: (1) the most cost-effective approach to

meeting identified needs; (2) of high quality; (3) geographically and financially accessible; (4) financially

viable; and (5) will not have a significant negative impact on the cost, quality, or viability of other health

care facilities and services.28

In 2010 MPTC sought a determination from the Maryland Health Care Commission (MHCC) that CON

review and approval of the proposed facility was not required. In due course MPTC received

correspondence from the MHCC clarifying that the Center is not a “health care facility” as defined

under the provisions of MHCC’s CON regulation and therefore does not require CON review and

approval.

The Maryland CON requirements and approval process should help channel technological diffusion and

support MPTC in carrying out its business plans by restricting potential external competition from

moving into the state. Put another way, the Center will likely continue to have a first-mover advantage

in helping deter potential outside competitors from entering the local market.

• Benefiting from geographic proximity due to a large and growing regional market: The state of

Maryland is one of the most densely populated states with nearly six million residents, and MPTC is in

the largest city in the state. In addition, the 200-mile radius surrounding MPTC includes the heavily

populated east coast urban areas and suburbs of New York, Philadelphia, and Washington D.C. As

discussed below in the assessment of MPTC service demand the growing number of cancer cases

eligible for proton therapy exceeds the treatment capabilities of both existing and currently planned

proton centers in the regional market.

• Benefiting from growing acceptance within the medical community: There are signs of growing

acceptance of proton therapy’s efficacy within the medical community. For example, a February 2017

27 Uploaded from http://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx 28 Uploaded from http://mhcc.maryland.gov/mhcc/pages/hcfs/hcfs_con/hcfs_con_overview.aspx

32

market survey of 1,200 hospitals by Robust Insight found 82 percent of respondents were aware that

proton therapy has lower risk of treatment-induced disorders than conventional radiotherapy.29

Furthermore, survey results indicated that more people saw proton therapy as an effective option for

treating pediatric cancers and those at the base-of-skull, lung and prostate than in a similar survey in

2009. Ultimately, 77 percent of survey respondents believed that more clinical evidence demonstrating

the benefits of proton therapy will be forthcoming.

Overall, the Center appears well positioned to successfully operate and compete within its service area.

The combination of these and other features described below should ensure robust patient volume

through the UMMC affiliation and independent marketing efforts, and shorten treatment times,

thereby increasing patient throughput and revenue.

Potential Competitive Weaknesses

The cancer treatment industry is competitive and the Center likely will compete to some degree with other

cancer treatment providers and settings.

• Increased regional competition may adversely affect the utilization and revenues of the Center: MPTC

will compete against other cancer treatment settings, methods and technology systems. Increased

competition from a variety of existing and potential new competitors, including but not limited to, local

and regional proton treatment centers, hospital-based and free-standing radiation therapy,

chemotherapy and other services that may adversely affect future Center utilization and revenues.

As depicted in the table below, currently, the closest operating proton therapy treatment sites within

200 miles of the Center are in Washington, D.C.; Philadelphia, PA; Somerset, NJ and Hampton, VA.

Among these four, the Roberts Proton Therapy Center in Philadelphia is the most likely potential

competitor in the near term.

Able to treat about 100 patients daily, it is reportedly highly regarded within the radiation oncology

community. Positive factors cited include its affiliation with the University of Pennsylvania Health

System and Medical School, strong clinical faculty, specialized expertise with pediatric patients

29 Accessed at https://www.itnonline.com/article/proton-therapy-continues-rapid-growth

33

implemented through an affiliation agreement with Children’s Hospital of Philadelphia and ability to

achieve program growth targets and operate successfully in the market. 30

By comparison, the Hampton University Center, although large, lacks an affiliation with an academic

medical center or medical school and is reportedly operating below capacity. Several years ago,

Procure Proton Therapy Center in Somerset, New Jersey established an affiliation with Memorial Sloan

Kettering, a member of the New York Proton Consortium, and currently benefits from a referral stream

from the well-known NYC oncology center. Several Memorial Sloan Kettering attending physicians also

currently treat patients and supervise residents at the Procure facility.

With these factors in mind and, except for the Roberts Center, MPTC likely will not meaningfully

compete with currently operating facilities in the foreseeable future. As described below in the

discussion of service demand, the majority of MPTC patients is likely to originate within the greater

Maryland service area and the Center is partnering with UMMS, UMROA and external affiliates to

ensure an adequate and sustainable volume of patient referrals. MPTC is also implementing a

comprehensive marketing and communications plan directed towards this population to further

develop and strengthen physician referral streams.

30 https://emma.msrb.org/EP956899-EP742334-EP1143916.pdf

34

Exhibit 9: Current and Planned Potential Competitor Proton Centers within 200 Miles of MPTC

Center Name City/State Distance from MPTC

(Miles)

Number of

Rooms

Year Opened

Potential Competitive

Risk

Competitive Factors

MedStar Georgetown Center31

Washington, D.C.

<50 1 2018 Low • Limited capacity: only one treatment room

Roberts Proton Therapy Center

Philadelphia, PA

89 5 2010 Moderate • Strong reputation in the market

• Strong clinical faculty • Affiliation with leading

academic institution • Leader in treating

pediatric patients through affiliation with Children’s Hospital of Philadelphia

Procure Proton Therapy Center

Somerset, NJ 135 4 2012 Low • Operates pursuant to creditor forbearance agreements

• Affiliation with Sloan Kettering Cancer Center in NYC is a strong referral source

Hampton University Proton Therapy Institute

Hampton, VA 157 5 2010 Low • Debt restructured to meet lower volume expectations

• Lacks academic medical center or school affiliation

31 Source: District of Columbia STATE HEALTH PLANNING AND DEVELOPMENT AGENCY: Notice of Official Action MedStar Georgetown University Hospital Certificate of Need: May 2013.

35

Center Name City/State Distance from MPTC

(Miles)

Number of

Rooms

Year Opened

Potential Competitive

Risk

Competitive Factors

Johns Hopkins Sibley Memorial Hospital

Washington, D.C.

<50 2 2019 Low • Strong brand • Likely referral base

from Johns Hopkins Health System

• Affiliations with Children’s National Medical Center and Howard University Hospital

• Partial service area over-lap with MPTC

• Limited capacity with one room reportedly dedicated to research

INOVA Fairfax, Va. 54 2 2020 TBD • TBD

New York Proton Treatment Center

New York City

188 5 + 1 research room

2019 Low • Likely strong referral base from Center sponsors and other high profile local cancer treatment providers

• High service demand in the heavily populated local market

New District of Columbia-based proton treatment centers include a one treatment room center at MedStar

Georgetown University Hospital which opened in 2018, and a two-room center at Johns Hopkins Sibley

36

Memorial Hospital, scheduled to open in the near future.32 There likely will be little competitive risk to

MPTC from the MedStar Center given its limited one room capacity.

Sibley may become a limited competitor in the MPTC regional market due, in part, to overlapping service

areas, a strong Johns Hopkins Health System-based referral network and the Johns Hopkins reputation.

However, these factors are offset by limited capacity (two treatment rooms with one dedicated to

research). Sibley has defined its primary service area to include counties within a 100-mile radius and

estimates that about 70% of pediatric and adult proton therapy patients will be generated from this

regional market. The market is anticipated to include Washington, D.C., counties in Northern Virginia,

Central Maryland, Southern Pennsylvania, Delaware and small portions of West Virginia.33

As noted, Sibley anticipates reaching its capacity goals primarily through referrals from Johns Hopkins

Health System (which has extensive regional breadth), Children’s National Medical Center and Howard

University Hospital. Their anticipated market includes all Johns Hopkins Health System providers and

affiliates, including the Johns Hopkins Kimmel Comprehensive Cancer Center, a National Cancer Institute

designated comprehensive cancer center, which US News and World Report ranked as the number three

cancer hospital in the nation in 2012. All Children’s Hospital, a Johns Hopkins pediatric hospital located in

Tampa, Florida also will refer children to the Sibley site.

Inova Health System in Virginia also plans to begin offering proton beam therapy at its Inova Schar Cancer

Institute by 2020 after signing a $60 million contract in 2017 for a proton system from Reston-based Ion

Beam Applications S.A.34 The INOVA center’s future competitive profile remains to be determined, based

on available capacity, future referral channels and other factors.

Doctors in New York City currently send patients to Philadelphia, Boston or New Jersey for proton therapy

treatment. However, the New York Proton Center, made up of a consortium of three of New York City’s

leading cancer treatment providers — Sloan Kettering, Mt. Sinai and Montefiore Health System is

32 Accessed at https://archive.org/stream/705979-sibley-memorial-hospital-decision/705979-sibley-memorial-hospital-decision_djvu.txt. 33 Source: District of Columbia STATE HEALTH PLANNING AND DEVELOPMENT AGENCY: Sibley Memorial Hospital Certificate of Need Application for the Establishment of Proton Therapy Service: October 2012. 34 Accessed at https://www.bizjournals.com/washington/news/2017/07/07/inova-health-system-inks-60-million-proton-therapy.html.

37

scheduled to begin seeing patients in February 2019. The new center is expected to treat around 1,400

patients annually. 35

These pending developments suggest a somewhat limited future competitive environment within a heavily

populated regional market where projected service demand, as detailed below, will likely exceed available

capacity under any reasonable planning scenario.

Potential Risk Areas

Potential environmental and business-related risks associated with the proposed operations of the Center

are summarized below. The occurrence of one or more of these risks could have a material adverse effect

on the financial condition and results of operations of the Center and, in turn, the ability to service the debt

on the Project. Additional risks and uncertainties currently not known to us or that we currently consider

to be immaterial may also impair business operations.

Environmental Risks

• General economic conditions may adversely affect the Center. Health care providers are affected by

the economic environment in which they operate. To the extent in the future that employers reduce

employee healthcare coverage, health insurers reduce proton therapy service coverage and/or

payment rates and economic conditions increase stresses on the budgets of states, including the State

of Maryland, the Center may experience declines in patient volume, payment delays and reductions in

service revenue. Furthermore, lower funding of Medicare, Medicaid and other public payment

programs may increase the number of patients unable to pay for services, increasing uncollectable

accounts and reducing Center operating income. In addition, although there are no limits on the

geographic location of patients treated at the Center, it is based in Baltimore, Maryland. Hence, any

adverse regional economic or business developments may also result in material adverse “trickle-

down” effects upon the Center.

• Changes in Federal and State healthcare policies may affect Center operations in unpredictable ways.

The 2010 Affordable Care Act (ACA) includes numerous provisions affecting healthcare delivery and

financing slated to take effect at specified times, and many of these provisions have been

35 Accessed at https://www.nytimes.com/2017/12/26/nyregion/the-high-tech-big-footprint-cancer-center.html

38

implemented. It remains possible, however, that changes in administration and policy resulting from

the 2016 U.S. presidential election could lead to changes to ACA, including the potential repeal of all

or parts of that law.

The U.S. Congress and the Maryland General Assembly have considered proposals involving

comprehensive healthcare reform in recent years. No assurance can be given that any future legislation

enacted will not materially adversely affect the Center or the University of Maryland Health System.

For example, the Republican health care reform proposal introduced in March 2017, if passed by

Congress, would have undone the ACA’s expansion of Medicaid, replaced the ACA’s insurance subsidies

with a tax credit, and done away with the individual mandate requirement. While the future of federal

and state policies and their downstream effects on the Center are unclear, these types of uncertainties

create unpredictability for the business planning efforts of the Center which, in turn, may contribute

to possible risk.

Another potential uncertainty is the future of Maryland’s unique all-payer rate setting system for

hospital services. Under this system Maryland and CMS agreed to test whether an all-payer system for

hospital reimbursement is effective for advancing better care and reducing cost growth. This model

required Maryland to limit its annual per capita total hospital cost growth to 3.58% and generate $330

million in Medicare savings over a five year period.36 During this period Maryland achieved an

estimated $429 million in total Medicare hospital savings, exceeding the model’s hospital savings

requirement.37 Federal regulators have been enthusiastic about Maryland's experiment and, although

the program is scheduled to sun-set in January 2019, appear flexible regarding the future.38

Nevertheless, changes in federal policy may influence the future state all-payer system and financial

environment in unpredictable ways that may affect future MPTC revenue.

• Technological and clinical developments may impact service demand. New technologies, medical

practices and/or changes in physician technology preferences and referral patterns may alter the

future course of medical treatments in ways that are currently unanticipated and that may dramatically

36 Uploaded from https://innovation.cms.gov/initiatives/Maryland-All-Payer-Model/ 37 Uploaded from http://www.healthaffairs.org/do/10.1377/hblog20170131.058550/full/ 38 Uploaded from http://www.baltimoresun.com/news/opinion/editorial/bs-ed-hospital-rates-20160604-story.html

39

change the practice of oncology and radiation therapy. For example, if clinical data proves favorable,

adoption of hypo-fractionation may become common in the future; possibly increasing the number of

patients seeking proton therapy while reducing both per patient revenue and cost. Technological

developments also might support the continued evolution of smaller less costly one room centers with

lower financial break-even points, possibly extending this technology to additional care settings, such

as community hospitals and mid-sized academic medical centers.

Business Risks

• The Center has limited operating history on which to judge future prospects. To date the Center has

an operating history of about two years on which to base an evaluation of its business. The Center

continues to be subject to risks inherent in start-up businesses with a limited operating history,

including unanticipated delays, and problems often encountered by new businesses operating in

evolving markets. Failure to successfully address these risks could have an adverse effect on the

Center’s business and financial condition.

• Failure of the Center’s technological advances to perform as expected may adversely affect financial

performance and results of operations. The Center believes it is distinguishing itself from competitors

by incorporating new technological advances, including a new efficient layout to increase patient

throughput, and PBS technology developed by Varian. It is expected that these unique features will

provide clinicians with better efficiency and more flexibility to handle complex treatment protocols.

The Maryland Proton Treatment Center is a relatively new facility with five treatment rooms (of which

four are currently in use with the fifth planned for utilization in 2019), pencil-beam scanning and an

efficient layout. However, if the layout of the facility or the facility’s technology does not function as

efficiently as expected, the Center could fail to achieve the desired shorter treatment times and

enhanced patient throughput expected to help drive volume and profitability. Any failure of these

advances to provide expected benefits could materially affect financial condition and results of

operations. To help protect against such risks, MPTC’s contract with Varian stipulates that,

commencing 13 months after final equipment acceptance, the manufacturer compensate the Center

if equipment downtime drops below 92% for months 13-24 and below 95% for months 25 on due to

operational issues with the technology.

By way of illustrating this type of operational business risk, Exhibit 10 depicts trends in average Varian system up time at MPTC during from July 2016-July 2018. During 2017, the system achieved sound overall

40

stability with an average up time of about 97%. Nevertheless, occasional intermittent local utility issues

affected power reliability which impacted system stability during May and August, resulting in lower

average clinical up times of 86% and 88%, respectively.39 Similarly, MPTC experienced issues with

downtime in mid-October 2017 early December 2017, and February 2018. Center downtime root causes

include power quality events, system reboots, and hardware replacement/recalibrations. Despite

occasional disruptions, Center uptime has been increasing over time.

Exhibit 10: Summary of Monthly Trends in MPTC Varian Equipment Up-Time (July 2016-July 2018)

• Proton therapy services must achieve and maintain market acceptance with payers and the medical

community for the Center to succeed. The success of proton therapy will depend on the treatment’s

acceptance by payers and clinicians as clinically useful, cost-effective and safe. As described below, to

date the Center has been successful in gaining payer acceptance. In addition, the Center has and will

continue to devote significant resources on educational efforts to expand awareness of proton

therapy, to encourage acceptance and adoption of these technologies and to promote their safe and

effective use. The Center will also need to continue demonstrating effective payer relations through

the ability to obtain high levels of coverage and reimbursement from public and private third-party

payers.

Historically, third-party reimbursement rates and service coverage levels vary between private payers

who make individual determinations of what cancer types they will pay to have treated with proton

39 Source: Varian Equipment Update Reports

41

therapy. Nationally, Medicare currently provides the backbone for proton therapy in terms of public

payer coverage and reimbursement. As a free-standing facility MPTC’s Medicare payments are

administered by the federal Centers for Medicare and Medicaid Services (CMS) through Novitas

Solutions, Inc. (Novitas) a local Medicare Administrative Contractor (MAC) who establishes payment

fee schedules and local coverage decisions. As noted below in the review of financial information, the

Center also reportedly continues to execute additional commercial payer contracts (e.g., Blue

Cross/Blue Shield, Aetna, and Cigna).

In addition, MPTC benefits directly from Maryland’s unique reimbursement landscape. The “all payer”

rate setting model enables all payers to pay the same rate for hospital-based treatments. This rate

system supports a high IMRT rate and allows MPTC to charge for proton therapy the same rate as IMRT,

making the decision to approve proton therapy cost-neutral to payers. This means payers are more

likely to cover patients who are eligible for proton therapy since the cost is neutral to them compared

to traditional radiation therapy.

Although recent developments are encouraging, if MPTC’s proton therapy services do not achieve

widespread market acceptance, insufficient revenue may be generated to achieve or maintain

profitability. In addition, if commercial payers or Medicare reduce their reimbursement, or the current

“all-payer” system experiences major future changes, the Center’s revenue base and profitability might

be adversely affected.

• Long-term clinical research and data validating efficacy and safety of proton therapy is limited.

Because proton therapy has been commercially available only since 1991, long-term results from

research demonstrating the advantages of proton therapy over competing products and technology is

limited and subject to continuing studies. While proton therapy’s effectiveness is well understood,

currently there are a limited number of peer-reviewed publications regarding its efficacy. If future

studies or experience do not support the belief that proton therapy offers an improved treatment

modality for a wide variety of cancers, use of this therapy could decline, slowing adoption by physicians

and negatively affecting third-party coverage and reimbursement. This risk is being mitigated by most

new proton treatment providers participating in clinical trials, and by the quantity of available trials

growing quickly.

• Forward looking financial information and projections provided in this offering document may not

be indicative of actual Center revenues and expenses. The financial information presented below is

42

based on assumptions relating to the future business of the Center. All are subject to significant

uncertainties based upon matters over which the Center will have limited control.

One complicating factor to note is that actual utilization may be lower than the number of patients

deemed appropriate for proton therapy. That is because each cancer treatment decision is based on

numerous factors related to patient’s status and the clinical decision-making of the patient’s

physicians. As a result, although it is expected that once fully operational the Center will treat an annual

average of about 1,350 patients, there remains a risk that Center utilization may be lower, and revenue

may be insufficient to meet operating expenses and debt service coverage.

Other examples of potential business risks include unanticipated increases in operating costs, fewer

patient referrals than expected and shifting regulatory requirements. To the extent that actual

operating results are not consistent with the assumptions upon which the financial projections are

based, the Center’s financial results and benefits to investors may be adversely affected.

6. BUSINESS STRATEGY

The Center aims to be a regionally and nationally recognized, premiere provider of proton therapy services.

To achieve this goal, the business strategy intends to align around several fundamentals:

• Provide superior cancer therapy treatment and clinical capabilities. Proton therapy is associated with

several characteristics that make it an attractive alternative to surgery and conventional photon based

radiotherapy. Covered at length elsewhere in this report, proton therapy allows for highly precise

doses of radiation to be administered during a course of treatment. This provides the potential for

better local tumor control, fewer side effects and less damage to areas proximal to the tumor all the

while shortening patient treatment time and improving quality of life while decreasing time away from

work or school. In addition, the Center will be outfitted with the latest proton therapy equipment—

intensity-modulated pencil beam scanning—which suggests that the Center not only provides a

superior cancer treatment, but a superior proton therapy treatment.

• Capitalize on strong strategic affiliations. MPTC has relationships with the UMMS network of 13

community-based hospitals and six radiation oncology facilities (Exhibit 11) as well as affiliations with

major regional providers of radiation oncology. Each community practice within the UMMS network

43

includes providers credentialed to practice at the Center. Based on the partnerships established to

date, MPTC plans to increase the number of affiliates from four to up to ten between 2017 and 2021.

Exhibit 11: UM Medical System Facilities as of 2017

44

In addition, the University of Maryland Department of Radiation Oncology (UM RadOnc) plans to open

the Prince George’s Regional Medical Center in 2019. With this new location for UM RadOnc patients

and physicians, the Center expects to see an increase in UM RadOnc’s patient population, especially

from the Washington, D.C. and Northern Virginia population.

Regarding physician referrals, to date patients were referred to the Center by more than 435 unique

doctors coming from three main sources: 1) UMROA; 2) Community centers in the Exhibit above that

are MPTC Affiliates; and 3) Other referring practitioners who do not have formal affiliation agreements

with the Center.40 Approximately 388 of those physicians have referred two or fewer patients each.

The Center’s marketing strategy calls for continuing to educate these referring physicians so they know

which patients to refer for proton therapy and how to easily refer them through UMMS programs. The

goal over the next four years is to expand referrals per physician from approximately 1.5 to an average

of four patients a year.

Having a strong, established and public relationship with a respected and well-regarded system will be

of importance to patients choosing their treatment facility, as access to top notch clinicians and being

part of the most comprehensive healthcare system in the state are important considerations.

• Leverage the full capabilities of the Center: Even under the conservative assumption that the Center’s

patients will come primarily from the state of Maryland the number of patients potentially eligible for

proton therapy outstrips the Center’s estimated annual capacity under all planning assumptions

modeled. The Center’s size, state of the art design features, latest vendor equipment and software and

referral network, allow for a potentially highly efficient operation able to maximize patient throughput

and capacity during its hours of operations.

• Raise awareness of proton therapy treatment: Although proton therapy is no longer new, it is not as

widely known as its close counterpart, conventional photon radiation therapy. Therefore, the Center

implemented an aggressive marketing plan to generate awareness and promote the benefits of proton

therapy to key stakeholders, including doctors, payers and patients to generate consultations by

eligible patients who would benefit the most from the treatment. In addition to focusing on


45

development of regional physician referral streams, the Center also is developing an international

program in parallel with its domestic efforts. International patients have already been treated at the

Center and efforts are underway to establish referral patterns for patients from the Middle East and

additional countries (e.g., Canada, Norway, Poland and China).

7. PROTON TREATMENT CENTER FACILITY ASSESSMENT

The Maryland Proton Treatment Center in Baltimore is a 110,000-square-foot, purpose-built building, with

40,000 square feet of radiation shielded space. A licensed, freestanding facility, MPTC’s design and

equipment are state-of-the-art. The Center features a 5-treatment room configuration, including 4

rotational gantries, 1 fixed beam room, a full diagnostic suite with magnetic resonance imaging (MRI),

computer tomography (CT), physician offices as well as research and development space for clinical

research. All treatment rooms are equipped with the Varian ProBeam® System, including the latest Pencil

Beam Scanning, Intensity Modulated Proton Therapy and volumetric Image Guided Radiation technology.

The Center broke ground in April 2012, and opened its doors to its first patient treatments in February

2016, with the capacity to administer approximately 45,000 proton treatments per year, which translates

to an estimated 1,500 patients a year.

MPTC’s clinical leadership team is world-class, and includes several proton therapy experts who altogether

have over 20 years of proton experience. Led by Dr. William Regine, the Center is currently staffed by

approximately 118 professionals including radiation oncologists, medical physicists, dosimetrists, radiation

therapists, medical support and administrative staff as summarized in the staffing model depicted below.

Geographic Location

The Center is located at 850 W Baltimore Street, Baltimore MD, in the heart of the University of Maryland’s

BioPark. BioPark is a hub for biomedical research, and is adjacent to the University of Maryland’s Baltimore

campus, as well as the University of Maryland’s School of Medicine and nearby UMMC, which houses the

UM Cancer Center (UMCC). The School of Medicine is noted as among the most prestigious medical schools

in the nation. Given the Center’s close proximity to the campus, as well as its presence in BioPark, it enjoys

the advantages of strong relationships and support from a nationally ranked academic institution as well

46

as opportunity to further cancer research, as UMCC is a top 10 oncology department nationally for research

grants and is easily accessible.41

Baltimore and the surrounding area around Washington, D.C. is densely populated, with over 9.6 million

people living in the area.42 According to statistics from the 2010 – 2014 period, the cancer incidence rate

for the combined area is high –areas such as DC and West Virginia were, respectively, the 8th and 12th

highest in the nation (477.0/100,000, 468.8/100,000).43 As MPTC is located within this densely populated

area with high cancer incidence rates, patients requiring proton therapy should benefit from its favorable

location.

Exhibit 12: MPTC location in Baltimore, MD

41 The department has received federal funding for “cutting-edge” research. Source: UMMS; https://www.umms.org/umgccc/healthcare-professionals/training-education/residency-fellowship/radiation-oncology-residency 42 https://censusreporter.org/profiles/33000US548-washington-baltimore-northern-virginia-dc-md-va-wv-csa/ 43 https://www.statecancerprofiles.cancer.gov/incidencerates/index.php?stateFIPS=00&cancer=001&race=00&sex=0&age=001&year=0&type=incd&sortVariableName=rate&sortOrder=default#results

47

Facility Description

MPTC is a free-standing structure located on the north side of the 800 block, between West Baltimore

Street and West Lafayette Street. During construction, a new entrance drive was opened off West

Baltimore Street and leads to the covered drop off area in front of the Center’s entrance. Upon entering,

the patients arrive in the lobby, where the check in area as well as the concierge desk is located. The

concierge team provides a range of free services for the patients, including free valet parking, making

lodging arrangements, securing transportation and assisting with appointment coordination, for both

domestic and international patients. Dedicated to ensuring a positive experience for the patient, the

concierge team pays special attention to the Center’s pediatric patients. Adjacent to the check in area are

a few administrative areas, such as a scheduling room and a staff room/lounge. The first floor also includes

the bulk of the Center’s service and maintenance areas (Exhibit 13).

Exhibit 13: MPTC 1st floor layout

48

The second-floor houses patient preparation rooms, waiting and changing rooms, with a dedicated

pediatric waiting suite, and is where the administration of proton therapy treatment occurs. MPTC’s 4

rotational gantries and 1 fixed beam room are located on this level. The floor also includes the cyclotron,

the dosimetry rooms, as well as the facility’s research area and staff offices (Exhibit 14). Before treatment

begins, MPTC staff work with each patient to create individual treatment plans and assessments, making

use of the advanced imaging techniques at the Center. Before each treatment, patients are immobilized

and then examined using a volumetric CT scan in the treatment room to ensure precision in the delivery of

radiation.

Exhibit 14: MPTC 2nd floor layout

On the third floor of the facility are multiple patient exam rooms, imaging rooms, a patient waiting area

and staff office space. Most of the initial treatment planning and imaging before a treatment course begins

occurs on this floor.

49

Exhibit 15: MPTC 3rd floor layout

Below are several pictures of the completed facility as it appears today. The facade includes red brick with

grey brick accents, metal panels and metal window frames and clear glass glazing. The columns supporting

the structure by the entrance area are metal-clad.

50

Exhibit 16: MPTC Photo (Exterior)

51

Proton System and Other Equipment

The ProBeam® system

MPTC’s treatment rooms are equipped with technology from Varian, a key partner of the Center

responsible for the installation and maintenance of the equipment. Each treatment room contains the

proprietary ProBeam® proton system.44 The fully integrated system can be used to deliver various types of

proton treatment, including image-guided proton therapy (IGPT) and intensity modulated proton therapy

(IMPT).

Additionally, the Probeam® system makes use of Dynamic PeakTM integrated technology to facilitate IMPT.

The system also delivers the most sophisticated proton therapy currently available—intensity modulated

proton therapy delivered by pencil beam scanning. IMPT “paints” radiation on treatment sites layer by

layer; conforming to the tumor’s shape and minimizing the radiation dose neighboring healthy tissues

receive. This innovation enhances the already considerable precision of pencil beam technology, resulting

in greater radiation dosages delivered directly to the disease site, both shortening daily treatment time

and decreasing treatment side effects. This technology is particularly effective in treating complex tumors

in children, leaving the normal tissues and organs adjacent to the treatment site unharmed.

The ProBeam® system includes the following components:

• Superconducting Cyclotron and Energy Selection System: The 250 MeV Isochronous Superconducting

Cyclotron uses powerful magnetic and electrical fields of alternating polarity to create an accelerated

beam of protons. The life span of the cyclotron is tied to the life span of the facility-if one needs to be

replaced, then so does the other.

o 250 MeV proton therapy energies allow for dose delivery to deep- seated tumors

o Continuous and stable proton beam allows for increased dose delivery rates and precise beam

control

o High beam extraction rate achieves excellent reliability by maximizing availability and

facilitating preventive maintenance

44 https://www.varian.com/oncology/products/treatment-delivery/dynamic-peak-scanning

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• The energy selection system (ESS) adjusts the proton's beam energy to control its penetration depth.

The amount of delivered radiation as prescribed in the treatment plan is determined by the duration

of the beam and its intensity. The components of the system are anticipated to last as long as the

facility

• RF Amplifier: The radio frequency amplifier will likely require upgrades at some point in the future.

Estimated costs are included in the maintenance capital expenditure forecast

• Therapy Safety and Control System

• Dosimetry equipment for five room proton therapy configurations

• Beam Transport System: The beam transport system consists of a series of bending and focusing

magnets, as well as diagnostic measurement tools, used to transport the proton beam from the

cyclotron to the desired treatment room. Its lifetime is anticipated to be similar to the facility lifetime

The Center’s four gantries each contain a rotational gantry that is the patient-facing structure that houses

the Dynamic PeakTM integrated scanning technology. The structure of the gantry is meant to have a long

useful life, as to replace the gantry would require complete redesign of the room and significant downtime.

Each gantry includes:

• A 360-degree Rotating Isocentric Gantry with Rolling Floor

• ProBeam Treatment Nozzle with Dynamic Peak™ integrated scanning technology that incorporates proprietary pencil-beam scanning technology

• A 6 degree of freedom robotic Patient Positioning System (X, Y, Z, Rotation, 15° Pitch & Roll)

• Patient alignment and verification system equipped with: Lasers, Light field (beam eye view)

• X-ray orthogonal imaging system equipped

• X-ray tubes and power supply

• Amorphous silicon imaging panels: Over time, the panels are expected to require repair or replacement. Cost estimates are included in the major maintenance capital expenditure forecast

• Software needed to automatically define correct patient position

MPTC’s fixed beam room includes the following:

• ProBeam Treatment Nozzle with Dynamic Peak™ integrated scanning technology that incorporates proprietary pencil-beam scanning technology

• A 6 degree of freedom robotic Patient Positioning System (X, Y, Z, Rotation, 15° Pitch & Roll)

• Patient alignment and verification system equipped with: Lasers, Light field (beam eye view)

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• X-ray orthogonal imaging system equipped

• X-ray tubes and power supply

• Amorphous silicon imaging panels

To run the ProBeam system, System Control Software for the proton therapy equipment and supporting

hardware is necessary, along with ARIA and Eclipse software for the clinical users.

Other Center Equipment

In addition to the proton beam technology/equipment described above, the Center includes imaging

equipment (CT and MRI). This equipment provides diagnosis confirmation, including confirmation of the

size, shape and location of patients' tumors and supports treatment planning activities at the Center. Re-

confirmation of tumor size, shape and location is required periodically throughout the course of treatment

as proton therapy reduces tumor size and shape.

In December 2017, MPTC purchased a MegaWatt UPS unit for about $812,000 from Quality Power

Solutions. The unit protects the center’s Varian equipment from issues related to poor utility power and

voltage fluctuations.

Center Staffing

The staffing mix includes clinicians (e.g., physicians, physicists, dosimetrists, nurses, therapists, research

staff, administrative and support staff). MPTC anticipates that the center will run at steady state by 2033

and Exhibit 17 presents an FTE comparison between June 2018 and 2033. Overall, the staff at MPTC is

expected to increase to about 169.5 FTEs by 2033, a level close to the expected 159.5 FTE staffing forecast

by the Emory Proton Treatment Center, a center of similar capacity and layout.

54

Exhibit 17: Summary of MPTC Staffing Model FTEs by Staff Category and Position

Staff Category Position FTE 6/2018 FTE 2033

UMROA Staffing

Physicians Medical Director 1 1

Physicians 5 7

UMMC Staffing

Administration Sr. Administrator 1 1

Director of Operations 1 1

Administration Assistant Supervisor 1 1

Admin Assistant 5 6

Nurse Practitioners Nurse Practitioner, Fellows and Residents

4 6

Physics Chief Medical Physicist 1 1

Associate Lead Medical Physicist 1 1

Staff Medical Physicist 5 10

Physics Extender 3 5

Radiation Therapy / Imaging

Chief Radiation Therapist 1 1

Staff CT SIM Therapist 1 1

Sr. MRI Technician 1 1

Staff Nuclear Medicine Therapist 0 1

Sr. Nuclear Medicine Technician 0 1

Assistant Chief Radiation Therapist 1 1

Sr. Radiation Therapist 5 9

Staff Therapist 11 20

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Therapy Aid 3 5

Dosimetry Chief Dosimetrist 0.5 1

Lead Dosimetrist 1 1

Sr. Dosimetrist 5 9

Staff Dosimetrist 5 13

Nursing Chief Nurse 1 1

Nurse 6 14

Medical Assistant 3 3

Nurse Unit Secretary 1 2

Social Worker 1 1

Case Manager 0 1

Dietician 1 1

Front Desk Medical Practice Supervisor 1 1

Medical Practice Lead 1 1

Patient Coordinator (Registration, Check-in, Scheduling, Medical Records)

7 7

Patient Navigation / Concierge Advocate

2 2

Clinical Research Research Manager 1 1

Research Nurse 2 2

Research Data Assistant 1 1

Research Analyst 1 1

Research Protocol Coordinator 2 2

Clinical Research Specialist 2 2

56


Information Systems & Technology

Clinical System Administrator 2 2

97.5 149

MPTC Direct Staffing Business Enterprise Team Position 6/2018 POST FINANCING

Administration Board (7 Members) 1 (Equivalent) 1 (Equivalent)

Executive Advisor to the Board 1 0

CEO / President 1 1

COO 1 1

CFO 1 1

Executive Administrator 1 0-1

Finance and Accounting Controller / Finance Manager / Director of Finance

1 1

Audit / Compliance Consultant 1 1

Senior Accountant 1 1

A/P Specialist 0 1

Business Analyst 1 1

VP / Director of Investor Relations 1 1

Director of IT and Information Systems 0.5 0.5

Marketing / Growth VP / Director of Marketing 1 1

Marketing Manager / Communications Specialist

1 1

Patient Outreach Manager 0 1

Physician Liaison 1 1 1

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Physician Liaison 2 1 1

Physician Liaison 3 / Affiliate Lead 1 1

Marketing Administrator / Assistants 1 2

Integrative Medicine Program Administrator 1 1

Project Coordinator 1 1

Total 19.5 20.5

Grand Total 117 169.5

Overview of Center Patient Throughput

Exhibit 18 summarizes the flow of patients through the treatment center, based on a typical treatment

plan. Moving through three rooms, patients usually gather in a waiting room before undergoing an imaging

process in the imaging room to ensure the precision and accuracy of the dose that is to be delivered in the

third and last room, the gantry. During the imaging step (step 2), the patient’s immobilization devices are

placed onto the transporter, followed by the patient. The patient is then positioned by a therapist into

their immobilization devices after which the cart is moved into the treatment room. During treatment, the

cyclotron delivers protons to a single treatment room at any point in time. Switching delivery of protons

from one gantry room to another incurs a delay of about 45 seconds. One to three beam angles are usually

necessary for each treatment fraction, and the gantry must be rotated between each angle – a process

that takes up to 90 seconds. Treating a beam angle then takes up to 75 seconds. 45

45 Price, S, Golden, B, Wasil, E, Zhang, H, Design and scheduling of proton therapy treatment centers, INFORMS Annual Conference, Minneapolis, Minnesota, October 2013

58

Exhibit 18: Overview of MPTC Patient flow

Researchers at the University of Maryland conducted a simulation study to estimate steady-state patient

throughput, based on MPTC. The study randomly assigned patients to receive one, two or three beams,

and although MPTC had 4 gantries in operation at the time, the simulation included scenarios of having up

to 5 gantries in operation.46 Exhibit 19 presents the findings based on 100 days of simulated operation in a

mature version of MPTC, taking into account six combinations of arrival rates, operating gantry rooms (4 –

5) and imaging room availability.

Researchers concluded that in a scenario with 4 gantries and 5 imaging rooms in operation, decreasing the

arrival rate of patients from 12 per hour to approximately 11 reduced the total time spent per patient by

55% (7.38 minutes to 3.28 minutes). The scenario of 5 operating gantry rooms and imaging room had a

longer total time spent per patient (5.73 minutes) but the highest numbers of patients treated per day.

46 Price, S, Golden, B, Wasil, E, Zhang, H, Design and scheduling of proton therapy treatment centers, INFORMS Annual Conference, Minneapolis, Minnesota, October 2013

59

Exhibit 19: Results from 100 Days of Simulated MPTC Operation

Number of rooms Number of patients Time Spent (minutes) Gantry Imaging Per hour Per day Waiting Imaging Gantry Total 4 4 11.25 157.50 0.51 1.33 1.87 3.71 4 5 11.25 157.50 0.03 1.42 1.83 3.28 4 5 12.00 168.00 1.39 3.78 2.21 7.38 5 5 12.00 168.00 0.00 0.40 2.63 3.03 5 5 13.33 186.67 0.68 1.72 3.33 5.73

The study illustrated that efficiency in treatment room use directly determines the number of patients the

Center can treat. While useful, the results from the study are gleaned from simulation, and MPTC has now

been in operation for almost two years, and therefore real-world data is increasingly available.

Exhibit 20 presents the timeline of when rooms transitioned from handover by Varian to the treatment of

the first patients. For gantries 1 – 4, treatment of the first patients began 2 – 4 months after handover was

complete. The Center had one gantry operational by February 2016, two gantries by May 2016, three

gantries by July 2016 and all four operational within one year after the first patients were treated. Although

commissioned in March 2018, Center management plans to use fixed beam treatment room 5 in January

2019. At that point, all five treatment rooms will be fully operational.

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Exhibit 20: Timeline of MPTC Room Handovers

Room Varian Handover 1st patient treatment Initial Schedule

“Gantry Treatment Room 4” 10/28/2015 2/17/2016 12/31/2015




“Fixed Beam Treatment Room 5” 7/30/2017 1/2019 (plan) 1/31/2017

Exhibit 21 presents Center performance from its opening in early 2016 through December 2017 in terms

of trends in average numbers of daily treatments.47 From June through December 2016, actual average

treatments per day tracked below the budget forecast in varying degrees, with some months slightly above

the forecast. During 2017, average daily treatments tracked more closely to the budget forecast. The

Exhibit below also shows that 2017 demonstrated strong growth in MPTC treatments per month compared

to 2016, notwithstanding some month-to-month variability.

47 Source: MPTC internal materials

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Exhibit 21: Trends in Daily MPTC Throughput- Opening Day through June 2018

Data provided by MPTC indicated that the average minutes per fraction in 2016 was an estimated 40

minutes. 2017 data indicates significant improvement, with average minutes per fraction averaging over

10 minutes less than the prior year. As a result, average minutes per fraction across treatment rooms

averaged less than 28 minutes in 2017.

0 7 14 27 27 32 40 33 35 46 61 67 50 52 55 57 60 62 65 68 71 74 78 71 73 75 77 79 81 83 6

11 12

26 24 27

40 37 38 40 39

56 51

66 60 57

72 67

5566 68

76 73 69

49

80 77 8089

1/2016 5/2016 9/2016 1/2017 5/2017 9/2017 1/2018 5/2018

Budget vs. Actual Average Treatments per Day

Budget (1H2016 as of 2/2016, 2H2016 as of 6/2016, 2017 as of 1/2017, 2018 as of 12/2017) Actual

62

Exhibit 22: Trends in MPTC Average Minutes per Fraction by Treatment Room (2017)

Treatment Room Average minutes TR1 26.6

TR2 31.2

TR3 25.9

TR4 26.3

2017 Center average 27.4

The predictability and speed of patient throughput can also be influenced by factors other than technology,

such as rates of patient no show/lateness, the unique clinical challenges of each patient, and staff

efficiency:

• Patient tardiness and absenteeism have traditionally been a concern for outpatient providers. 48

However, we expect patient absenteeism rates at the Center to be lower than most other outpatient

48 Nan Liu, Serhan Ziya, Vidyadhar G. Kulkarni, Dynamic Scheduling of Outpatient Appointments Under Patient No-Shows and Cancellations, Manufacturing & Service Operations Management, v.12 n.2, p.347-364, Spring 2010

63

settings due to cancer patients’ high commitment to their treatment protocol, the travel-related costs

incurred by lengthening treatment courses and more tolerable side effects associated with proton

treatment when compared to other cancer treatment modalities.

• The size, shape, and location of a tumor will vary between patients, and between different points in

time over the course of treatment for the same patient. Age and other patient comorbidities will also

influence treatment protocols.

For instance, pediatric patients may need to be sedated before going into the gantry room, which, on

average, may make pediatric cases more complicated and time consuming than adult cases. As a result,

each patient visit will require different durations and resources, making scheduling precise patient

arrival and departure times an operational necessity. All treatment tasks will be carried out by teams

of physicians, physicists, dosimetrists, therapists, nurses, and other staff. The efficiency of everyone as

well as team cohesion and communication will influence patient turnaround time.

Proton Eligible Treatments as a Percent of all UMMS Radiation Therapy Treatments

Exhibit 23 profiles trends in numbers of conventional radiation therapy treatments and proton therapy

treatments within UMMS during 2016 and 2017.49 Beginning in mid-2016 when four MPTC treatment

rooms were in operation, the proportion of radiation therapy candidates eligible for proton therapy grew

steadily from about 15% in July 2016 to about 30% by December 2017.

49 Source: MPTC Management

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Exhibit 23: Trends in Conventional Radiation Therapy Treatments vs Proton Treatments (2016-2017)

Benchmark Comparison of Ramp up Performance

To further assess the early performance of the Center, MPTC’s patient ramp up speed was compared to

the performance of eight other proton therapy centers over their first 18 months of operations (Exhibit

24). Initially, MPTC’s ramp up speed measured in average numbers of treatments per day was comparable

to these peer centers. However, by month 18 treatments per day delivered by the Center surpassed all but

The University of Florida Proton Treatment Center.

65

Exhibit 24: MPTC Ramp-up Performance vs. Other Proton Centers – Initial 18 Months

Conclusion

The Center is strategically located in downtown Baltimore close to UMMC and several other affiliates,

thereby enabling the delivery of all forms of oncology care within walking distance. With the latest

ProBeam® proton treatment technology and approximately 150 FTE clinical staff, the Center’s annual

targeted treatment volume is expected to be about 1,350 patients once fully operational at a steady state.

Patient volume is primarily driven by the minutes per fraction and the number of clinical operating hours

per room per day. Data to date provided by MPTC management shows steady improvement in efficiency

evidenced by the decrease in average minutes per fraction and the current upward trend of treatments

per day/month with four rooms in operation. It is anticipated that once the fifth room becomes fully

operational, a further increase in efficiency and volume will be seen.

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8. ASSESSMENT OF MPTC SERVICE DEMAND

In this section, the MPTC service area is defined, Center patient capacity estimates during the ramp-up

years are reviewed, and estimates of patient demand are presented under three sets of methods and

assumptions. In this discussion, it is important to emphasize that other factors reviewed elsewhere in this

study can affect the number of patients treated. The objective of this section is to empirically assess, based

on research, estimates, and assumptions available at this time, the estimated size of the pool of patients

to which MPTC potentially has access.

Expected MPTC Service Area

For the purposes of this report, the MPTC service area has been defined using patient origin information

current as of August 2017. The Center’s primary and secondary service areas for the purposes of this study

are defined as follows:

• The primary service area (PSA) is defined as the counties with the shortest driving distance to the

Center, from which the first 75% of all MPTC patients as of August 2017 originate

• The secondary service area (SSA) is defined as the counties with the shortest driving distance to

the Center, which are not included in the PSA, from which the next 15% of patients originate50

This definition of the service area incorporates both geographic proximity to the Center and current patient

origin information for the geography currently served, but attributes a higher weight to counties closer to

the Center. An alternate service area definition might have favored defining patient origin solely by county

until 90% of total patient origin is reached (PSA=75%, SSA=15%) irrespective of the distance from MPTC.

This approach, however, has disadvantages, including: (1) MPTC has a limited operating history and is not

yet operating at levels close to full Center capacity, so the current patient origin distribution may be

affected by issues related to small sample size; and (2) Other centers will be opening in the region in the

50 If the above criteria result in any counties which do not border another county in the service area, this county is removed from the definition of the service area. If a county is surrounded by other counties in the service area, this county will be included in the definition of the service area. These situations may arise due to the relatively small sample size of past and current MPTC patients.

67

future, which may influence future MPTC market share in counties farther from the Center. Thus, we favor

the approach which assigns greater weight to counties closer to MPTC.

The primary and secondary service areas for MPTC include the counties and county equivalents as

summarized in Exhibit 25 and account for 90% of MPTC’s patients to date. The remaining 10% of patients

have come from other locations, including states outside the Mid-Atlantic region and international

locations. A map illustrating MPTC primary and secondary service areas is depicted in Exhibit 26 below.

Exhibit 25: MPTC 2017 Estimated Primary and Secondary Service Areas



Service Area

Maryland Baltimore (city) NA 12% Primary Maryland Baltimore 16.3 26% Primary Maryland Howard 24.4 30% Primary Maryland Anne Arundel 28.5 39% Primary Maryland Harford 35.5 45% Primary District of Columbia District of Columbia 37.9 47% Primary Maryland Carroll 41.8 50% Primary Maryland Prince George's 43.3 57% Primary Virginia Arlington 43.9 58% Primary Maryland Montgomery 45.3 63% Primary Virginia Fairfax 49.3 68% Primary Virginia City of Alexandria 49.8 69% Primary Virginia Falls Church (city) 51.6 69% Primary Pennsylvania York 52.1 72% Primary Maryland Cecil 53.2 74% Primary Maryland Frederick 53.8 75% Primary Maryland Queen Anne's 54.3 76% Secondary Virginia Fairfax (city) 56.5 76% Secondary Pennsylvania Adams 62.8 77% Secondary Maryland Caroline 69.2 77% Secondary Virginia Manassas (city) 69.2 78% Secondary Maryland Charles 71.1 78% Secondary Maryland Talbot 71.2 79% Secondary Virginia Prince William 73.2 80% Secondary Maryland Washington 74.3 81% Secondary Maryland Calvert 75.8 82% Secondary Virginia Loudoun 79.6 83% Secondary Maryland Kent 79.9 84% Secondary

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Service Area

Pennsylvania Chester 80.7 84% Secondary Virginia Fauquier 83.8 84% Secondary Pennsylvania Lancaster 84 85% Secondary Virginia Stafford 86.7 85% Secondary Maryland Dorchester 98.4 85% Secondary Pennsylvania Franklin 100 85% Secondary Maryland St. Mary's 101 87% Secondary Pennsylvania Perry 101 87% Secondary Pennsylvania Cumberland 102 87% Secondary Delaware Sussex 103 87% Secondary Pennsylvania Lebanon 107 89% Secondary Virginia Spotsylvania 107 89% Secondary Maryland Wicomico 111 89% Secondary Virginia Fairfax (city) 56.5 89% Secondary* Virginia Fredericksburg (city) 96.4 89% Secondary* Virginia Frederick 121 90% Removed

*MPTC had no current or past patients from these counties or county equivalents as of August 2017, but they have been added to the service area since they are surrounded by other counties in the MPTC service area which suggests future patients will likely originate in these counties as Center marketing activities and patient volume grow.

69

Exhibit 26: County-Level Distribution of MPTC Primary and Secondary Service Areas

MPTC Demand Projections

Patient demand for MPTC services is presented using several different approaches, each following different

methodologies and compared to future expected Center capacity. These approaches include: (1) A state of

Maryland needs analysis; (2) A “Top-Down” calculation of patient demand in which the number of patients

potentially eligible for proton therapy is calculated based on population characteristics at varying radii from

MPTC; (3) A “Bottom-Up” analysis developed by MPTC Staff, which estimates the number of patient

referrals coming from MPTC affiliate partners and other sources based on clinical practice guidelines; and

(4) A treatment site-level analysis which aggregates cancer incidence rates by treatment site in nearby

counties and projects future demand by disease site based on population growth and aging.

70

The Center expects to continue improving its operational efficiency and increase expected patient

throughput over the next 15+ years. Center management developed projected estimates of patient volume

(Exhibit 27). By 2032, Center targeted treatment volume is expected to be about 1,350 patients.51 At

steady-state, annual patient volume and projected throughput may vary slightly from year to year based

on the projected number of days of Center operation in each year.

Exhibit 27: MPTC Projected Ramp-up Schedule

Year Projected Annual Patients52 2016 226 (started), 181 completed

2017 552 (started), 525 completed 2018 709 2019 842 2020 917 2021 982 2022 1,041 2023 1,099 2024 1,145 2025 1,171 2026 1,197 2027 1,222 2028 1,243 2029 1,273 2030 1,298 2031 1,324 2032 1,355


52 A “patient” is defined as an individual who has completed or is in the process of completing treatment, having

undergone at least one session of proton therapy (e.g. CPT codes 77522, 77523, 77525, 77373).

71

State of Maryland Needs Analysis

To develop an estimate of need for proton treatment in the Center’s immediate surrounding area, this

approach follows a three-step calculation, starting with the number of 2014 cancer cases reported in

Maryland. The second step applies an estimate of the rate in which cancer patients receive some form of

radiation treatment, and the third step applies an estimate of the proportion of radiation-eligible patients

who might be eligible for proton therapy.

The latest estimates of the percentage of cancer patients receiving some type of radiation treatment

sourced from the National Cancer Institute and the American Society for Radiation Oncology are 60% and

“nearly two-thirds” of patients, respectively.53,54 For the purposes of this analysis, we adopt the slightly

more conservative 60% rate of cancer patients receiving some form of radiation.

A 2005 study from Sweden estimated that about 14-15% of patients receiving radiation therapy are eligible

for proton therapy.55 The University of Maryland Radiation Oncology Associates estimates that the

proportion of radiation patients eligible for treatment with proton therapy is up to 33%. Past internal MPTC

estimates of the proportion of radiation patients eligible for proton therapy were in the 20-25% range,

which is in line with the 20% eligibility rate estimated by IBA.56 Based on Maryland-specific cancer incidence

estimates from the American Cancer Society, Exhibit 28 presents statewide estimates of 2016 proton

therapy eligibility with “14% proton eligibility” and “20% proton eligibility” representing the Swedish and

the more conservative set of MPTC staff assumptions, respectively.

53 National Cancer Institute. (2016). Radiation Therapy and You: Support for People with Cancer (Publication No. 17-7157). Retrieved from: https://www.cancer.gov/publications/patient-education/radiationttherapy.pdf 54 American Society for Radiation Oncology. (2015). Radiation Therapy for Cancer. Retrieved from: http://www.rtanswers.org/uploadedFiles/Patient_Materials/RadiationTherapyForCancer.pdf 55 Glimelius, Bengt, et al. "Number of patients potentially eligible for proton therapy." Acta Oncologica 44.8 (2005): 836-849. 56 IBA: “20% of radiation therapy patients could benefit from proton therapy.” https://iba-worldwide.com/proton-

therapy/why-proton-therapy

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Exhibit 28: Estimated Maryland 2016 Proton Therapy Eligible Cases Under Two Alternative Scenarios

14% Proton Eligibility 20% Proton Eligibility Estimated new Maryland cancer cases (2016)57 29,912 29,912

Percent of cancer cases appropriate for radiation therapy58 59 60% 60%

Number of 2016 radiation therapy cases 29,912 x 60% = 17,947 29,912 x 60% = 17,947

Percent of radiation cases eligible for proton therapy 14%60 20%61

Number of potential Maryland proton therapy cases (2016)* 17,947 x 14% = 2,512 17,947 x 20% = 3,589

Note: The number of potential Maryland proton therapy cases represents potential population demand within the state of Maryland and does not assume any MPTC capture rate for these patients.

This analysis suggests that roughly 2,512 to 3,589 Maryland patients were potential candidates for proton

therapy in 2016 based on the two sets of eligibility assumptions. These estimates more than cover the

Center’s anticipated annual targeted steady-state patient count of 1,350. Moreover, this analysis covers

only need originating within Maryland, and, as discussed below, the Center has and will continue to treat

out-of-state and international patients and plans to expand outreach to these groups. Further, these 2016

estimates will likely increase over time as the number of new cancer cases grows due largely to an aging

white population and a growing black population.62

“Top-Down” Service Demand Projections by Geographic Proximity to MPTC

The “top-down” analysis of area service demand assesses the number of cancer patients eligible for proton

therapy by geographic proximity to Baltimore. The calculation begins with estimates of the total population

57 Maryland Department of Health. (2017). 2017 Cancer Data. Retrieved from: https://phpa.health.maryland.gov/cancer/SiteAssets/Pages/surv_data-reports/2017_CRF_Cancer_Report_(20170827).pdf 58 National Cancer Institute. (2016). Radiation Therapy and You: Support for People with Cancer (Publication No. 17-7157). Retrieved from: https://www.cancer.gov/publications/patient-education/radiationttherapy.pdf 59 American Society for Radiation Oncology. (2015). Radiation Therapy for Cancer. Retrieved from: http://www.rtanswers.org/uploadedFiles/Patient_Materials/RadiationTherapyForCancer.pdf 60 Glimelius, Bengt, et al. "Number of patients potentially eligible for proton therapy." Acta Oncologica 44.8 (2005): 836-849. 61 IBA: “20% of radiation therapy patients could benefit from proton therapy.” https://iba-worldwide.com/proton-therapy/why-proton-therapy 62 Accessed at https://www.cdc.gov/cancer/dcpc/research/articles/cancer_2020.htm

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within 50, 100, 150, and 200 mile radii from MPTC (Exhibit 29). Estimates of the 2016 population within

these radii come from a tool which aggregates the population of each county within a specified geographic

radius.63

While this analysis does not attribute a capture rate for the number of patients coming from each radius,

it is important to note that MPTC’s capture rate is likely to diminish as the distance from MPTC increases.

Thus, the number of patients within the radii closer to the Center (e.g. 50 miles and 100 miles) carry more

significance than those in the farther radii. Additionally, having a high-quality referral network is likely to

be a more significant driver of patient capture than patient proximity to the Center alone.

For example, Washington, D.C. and many of its suburbs are included in the 50-mile radius from MPTC.

Philadelphia, PA is captured within the 100-mile radius, Richmond, VA and most of New Jersey is captured

within the 150-mile radius, and New York City, most of the state of Pennsylvania (including Pittsburgh),

most of Virginia, and all of Maryland, Washington, D.C., Delaware, and New Jersey are captured within 200

miles of the Center. While these radii from MPTC cover a densely-populated region of the United States,

as discussed elsewhere, there are several Centers within these radii, currently operating and under

construction, with which MPTC potentially may compete.

63 “Big Radius Tool.” Big Radius Tool: StatsAmerica, accessed at www.statsamerica.org/radius/big.aspx

74

Exhibit 29: MPTC Catchment Area 200 Mile Radius from Baltimore

Source: "Map Developers." Draw a Circle with a Radius on a Map. Map Developers, n.d. Web. 21 Aug. 2017. Accessed at: https://www.mapdevelopers.com/draw-circle-tool.php.

To estimate the number of cancer cases within the radii, the National Cancer Institute’s 2010-2014 county-

level incidence rates for counties within each radius were aggregated to create an incidence rate specific

to the geographic radius.64 Incidence rates were then multiplied by the size of the population within the

radius, yielding the number of cancer cases in the area. Exhibit 30 shows the variation in weighted

incidence rates as distance from Baltimore increases. It is then assumed, following the NCI and ASTRO

standard, that 60% of these cases will be treated using radiation therapy.65 66 Estimated numbers of

64 State Cancer Profiles. National Cancer Institute. Bethesda, MD, https://www.statecancerprofiles.cancer.gov/incidencerates/index.php 65 National Cancer Institute. (2016). Radiation Therapy and You: Support for People with Cancer (Publication No. 17-7157). Retrieved from: https://www.cancer.gov/publications/patient-education/radiationttherapy.pdf 66 American Society for Radiation Oncology. (2015). Radiation Therapy for Cancer. Retrieved from: http://www.rtanswers.org/uploadedFiles/Patient_Materials/RadiationTherapyForCancer.pdf

75

patients eligible for proton therapy under alternative “14% proton” and “20% proton” eligibility scenarios

are also presented.

Exhibit 30: Estimated Number of Patients Eligible for Proton Therapy by Distance from Baltimore

Radius 2016 Population Size

Weighted Cancer Incidence Rate per 100,000 Population

Estimated 2016 Number of Cancer Patients

Estimated 2016 Number of Radiation Patients

Estimated 2016 number of Proton Patients (14%)*

Estimated 2016 Number of Proton Patients (20%) **

50 miles 6,770,954 442.1 29,932 17,959 2,514 3,592

100 miles 16,012,829 466.6 74,713 44,828 6,276 8,966

150 miles 24,257,041 472.2 114,531 68,718 9,621 13,744

200 miles 45,239,905 465.8 210,723 126,434 17,701 25,287

*Assumes 14% of all radiation therapy patients are potentially eligible for proton therapy; **Assumes 20% of all radiation therapy patients are potentially eligible for proton therapy

Estimates of numbers of 2016 cancer patients in each radius were then projected into the future based on

county-specific projections of population growth for each county in each radius. These county-specific

projections were rolled into radius-average projected population growth based on each county’s share of the

total population in the radius. Exhibit 31 shows in percentage terms the expected growth in population size

for each radius relative to the 2016 population size.

Exhibit 31: Projected Population Growth Rates by Distance from Baltimore, relative to 2016 (2020-2030)

Radius 2020 2025 2030 50 103% 107% 109%

100 103% 107% 110%

150 103% 106% 109%

200 102% 105% 107%

76

Estimates of population growth alone are likely to yield conservative estimates of growth in cancer incidence,

as cancer disproportionately affects individuals in older age groups, and the proportion of the population in

those age cohorts is expected to continue to increase over time. Recent studies suggest that the number of

patients seeing radiation oncologists in the US will increase by 19% between 2015 and 2025 and demand for

haematology/oncology physicians will increase by about 23% during that period.67 68

For comparison, projections of annual increase in cancer cases based on population growth only within these

radii range between 0.5% and 0.7%. Projections of the number of patients potentially eligible for treatment

with proton therapy within each geographic radius from Baltimore are presented in Exhibit 32.

67 Pan, H. Y., Haffty, B. G., Falit, B. P., Buchholz, T. A., Wilson, L. D., Hahn, S. M., & Smith, B. D. (2016). Supply and demand for radiation oncology in the United States: Updated projections for 2015 to 2025. International Journal of Radiation Oncology* Biology* Physics, 96(3), 493-500. 68 U.S. Department of Health and Human Services, Health Resources and Services Administration, National Center for Health Workforce Analysis. 2016. Supply and Demand Projections for Internal Medicine Subspecialties: 2013-2025. Rockville, Maryland.

77

Exhibit 32: MPTC Projected Proton Eligible Cancer Cases by Geographic Radius (2016 – 2030)

14% Proton Eligibility

Radius(miles) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

0-50 2,514 2,536 2,557 2,578 2,598 2,614 2,630 2,646 2,662 2,678 2,692 2,707 2,721 2,735 2,750

0-100 6,276 6,327 6,377 6,427 6,477 6,524 6,571 6,618 6,664 6,709 6,752 6,794 6,837 6,879 6,923

0-150 9,621 9,688 9,755 9,821 9,886 9,951 10,015 10,079 10,143 10,204 10,262 10,320 10,377 10,435 10,506

0-200 17,701 17,802 17,903 18,003 18,095 18,180 18,265 18,350 18,435 18,518 18,595 18,671 18,747 18,823 18,923

20% Proton Eligibility

Radius(miles) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

0-50 3,592 3,623 3,653 3,682 3,711 3,735 3,758 3,781 3,803 3,826 3,846 3,867 3,887 3,908 3,928

0-100 8,966 9,038 9,110 9,181 9,253 9,320 9,387 9,454 9,520 9,585 9,646 9,706 9,767 9,827 9,890

0-150 13,744 13,840 13,935 14,030 14,123 14,216 14,308 14,399 14,490 14,577 14,660 14,743 14,825 14,907 15,009

0-200 25,287 25,432 25,576 25,719 25,850 25,972 26,093 26,215 26,335 26,454 26,564 26,673 26,781 26,890 27,033

78

The top down projections of patient demand suggest that there are more patients potentially eligible for

proton treatment relative to the Center’s expected steady-state volume. under all combinations of

geographic radius, year, and proton eligibility rates. Under the more conservative 14% proton eligibility

assumption, the 50-mile radius from Baltimore contains 2,514 patients in 2016, an excess of 1,164

patients relative to the Center’s targeted steady-state patient count of 1,350 patients. By 2030, the

projected number of eligible patients within 50 miles will be about 2,750. Under the 20% proton eligibility

rate assumption, the number of projected proton-eligible patients within 50 miles from Baltimore in 2016

would be 3,592 patients, increasing to 3,928 by 2030. These projections represent population demand

and do not assume a specific MPTC capture rate.

“Bottom-Up” Demand Forecasting Approach

MPTC staff have recently developed a Marketing Plan that includes projections of the Center’s patient

volumes by referral channel and marketing strategy to 2021.69 Referral channels include MPTC affiliates,

sources within the University of Maryland network, international sources, and non-University of Maryland

sources. Marketing strategies considered include physician liaisons, MPTC physicians, digital marketing,

alumni physicians, alumni patients, press releases, and direct to consumer marketing.

MPTC expects that deploying physician liaisons will be the strategy yielding the most patient candidate

referrals, with 762 patients expected in 2021, followed by MPTC physicians who are expected to provide

the center with 341 candidates during that year (Exhibit 33).70 Two hundred and sixty-two candidates are

expected from digital marketing activities in 2021, 118 are expected to come from alumni physicians, and

89 are expected to come from alumni patients.

69 Source: MPTC Marketing Action Plan (version 2.0) 70 Note: Per MPTC management, referrals may not convert 1 to 1 to patients under treatment. They represent an earlier stage of the patient acquisition cycle

79

Exhibit 33: Estimated MPTC Referred Candidates by Marketing Strategy (2017-2021)

Marketing Strategy 2017 2018 2019 2020 2021 Liaisons 250 456 588 670 762

MPTC Physicians 125 198 259 301 341

Digital Marketing 100 153 201 233 262

Alumni Physicians 42 69 89 104 118

Alumni Patients 34 50 65 78 89

Press Releases 29 43 56 67 76

Direct to Consumer 20 31 40 47 53

Totals 600 1,000 1,300 1,500 1,700

As depicted below, under this growth strategy MPTC anticipates that by 2021, patient referrals will grow

to about 1,700 with the majority coming from the University of Maryland.

Exhibit 34: Projected Trends in Proton-Eligible Referred Candidates to MPTC by Source (2017-2021)

Source 2017 2018 2019 2020 2021

Affiliates 75 150 202 227 261

UM 220 473 591 662 762

International 25 38 49 61 73

Non-UM 280 339 458 550 605

Totals 600 1,000 1,300 1,500 1,700

Projected patient volumes are based on certain assumptions, including: 1) physician liaison patient counts

are scheduled to increase over time; 2) no employee turnover; and 3) liaisons become increasingly familiar

with their territories over time. In addition, MPTC physician patient counts are expected to increase based

on MPTC physicians continued outreach to their peers to expand their comfort and broaden their

knowledge with proton therapy to increase yearly average numbers of referrals. Alumni physicians who

completed a residency or fellow-ship at UM Department of Radiation Oncology are assumed likely to

continue referring patients to MPTC. Similarly, alumni patients may spread the value of proton treatment

80

to others in their community. Finally, digital marketing, mass media, and press releases are expected to

have a cumulative impact which will lead to inbound inquiries and patients.

Projected IHS County-Level Demand Estimates for Select Cancer Sites

Using county-level estimates of cancer incidence by treatment site, IHS developed treatment site-level

estimates of potential demand in the Center’s primary and secondary service areas. This approach

projects demand to 2030 for most sites that the Center expects to initially treat. The most common

cancers to be treated include prostate, left-sided breast cancer, skull base tumors, brain tumors,

sarcomas, para-spinal tumors, head and neck cancer, pediatric cancer, and re-treatment cases. In time,

the expectation is that these will be expanded to include upper GI tumors, non-prostate pelvic

malignancies, lymphomas, and lung cancer.

Estimates of incidence by treatment site were obtained from the National Cancer Institute, which

produces county-level 2010-2014 average incidence estimates. 71 These estimates were obtained for

counties in the Center’s primary and secondary service areas, for age groups above and below 65, and

were then projected into the future based on projected county-level population growth and aging of the

population cohorts above and below 65. Incidence rates for the age 0-14 population were used to define

pediatric cancers, and population growth for the 0-14 age group was used to project these rates into the

future.

Projections of population growth and aging relative to 2016 in the Center’s primary and secondary service

areas are presented in Exhibit 35 and Exhibit 36, respectively. By 2030, the primary service area population

size is expected to grow 10% relative to the 2016 population. Growth for the population age 65 and above

between 2016 and 2030 is expected to be 47%, while growth for the age 15-64 and under 15 populations

is expected to be 3% and 7%, respectively. The population in the secondary service area is expected to

grow by about 18% between 2016 and 2030, with the 65 and older population growing by 62%, the

population age 15-64 growing 9%, and the under 15 population growing by 17% over this period.

71 State Cancer Profiles, National Cancer Institute. (2017, February 9). State Cancer Profiles. https://www.statecancerprofiles.cancer.gov/incidencerates/index.php?stateFIPS=13&cancer=055&race=00&age=001&type=incd&sortVariableName=count&sortOrder=desc%20-%20results

81

Exhibit 35: MPTC Primary Service Area Population Growth Projections by Age Group (2016-2030)

Exhibit 36: MPTC Secondary Service Area Population Growth Projections by Age Group (2016-2030)

0%

10%

20%

30%

40%

50%

60%

70%

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Perc

ent C

hang

e (R

elat

ive

to 2

016)

Year

65+

PSA Total

Under 15

15-64

0%

10%

20%

30%

40%

50%

60%

70%

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Perc

ent C

hang

e (R

elat

ive

to 2

016)

Year

65+

SSA Total

Under 15

15-64

82

Exhibit 37 Presents MPTC’s distribution of patients by age cohort as of the end of 2017. Over half (56%)

of patients were age 60 and above, while children below age 20 represented only about 7% of the patient

population. If this age distribution holds constant in the future along with other variables (e.g., cancer

incidence rates, radiation therapy and proton treatment rates, etc.), the Center will likely have a growing

patient pool due to high projected service area population growth for older age groups.

Exhibit 37: MPTC Patient Age Distribution as of mid-June 2018

Projections of the total number of cancer cases by treatment site within the MPTC primary and

secondary service areas are presented in Exhibit 38. Estimates of the number of radiation cases by

treatment site and service area are presented at the bottom of the table, assuming 31%72 73 of pediatric

cases will be treated with radiation, and 60% of the remaining categories will be treated with

radiation.74 75

72 Source: District of Columbia STATE HEALTH PLANNING AND DEVELOPMENT AGENCY: Sibley Memorial Hospital Certificate of Need Application for the Establishment of Proton Therapy Service: October 2012. 73 Glimelius, Bengt, et al. "Number of patients potentially eligible for proton therapy." Acta Oncologica 44.8 (2005): 836-849. Table 1. 74 National Cancer Institute. (2016). Radiation Therapy and You: Support for People with Cancer (Publication No. 17-7157). Retrieved from: https://www.cancer.gov/publications/patient-education/radiationttherapy.pdf 75 American Society for Radiation Oncology. (2015). Radiation Therapy for Cancer. Retrieved from: http://www.rtanswers.org/uploadedFiles/Patient_Materials/RadiationTherapyForCancer.pdf

1027

46

100

165140

11310182

58373940

262019231713

<100<90<85<80<75<70<65<60<55<50<45<40<35<30<25<20<15<10<5

≥90≥85≥80≥75≥70≥65≥60≥55≥50≥45≥40≥35≥30≥25≥20≥15≥10≥5≥0

1%3%4%9%15%13%11%9%8%5%3%4%4%2%2%2%2%2%1%

56%44%

Age of Patients

83

Literature on percentages of patients eligible for proton therapy by treatment site is scarce, so this

analysis makes no attempt to convert the number of radiation cases to the number of potential proton

therapy cases. It should be noted, however, that these treatment sites represent a sample of sites for

which proton treatment has been shown to have higher efficacy, so one may expect proton eligibility rates

for these treatment sites to be higher than the 14-20% range across all cancer cases referenced earlier in

this section. The primary and secondary service areas referenced in the table are defined in the previous

section entitled “Expected MPTC Service Area.”

84

Exhibit 38: Projected MPTC Proton Therapy-Eligible Demand by Service Area and Site (2016-2030)

Cases (2016) Cases (2020) Cases (2025) Cases (2030) Site PSA SSA Total PSA SSA Total PSA SSA Total PSA SSA Total

All Cancer Cases

Prostate 4,448 2,427 6,875 4,812 2,696 7,509 5,267 3,052 8,319 5,664 3,404 9,068

Lung &

Bronchus 3,926 2,621 6,547 4,306 2,949 7,255 4,795 3,393 8,188 5,218 3,833 9,051

Pediatrics

(age <15) 220 111 331 224 115 339 229 121 350 237 131 368

Oral &

Pharynx 800 497 1,297 855 543 1,398 921 601 1,522 979 658 1,636

Breast 5,383 3,004 8,387 5,735 3,294 9,028 6,161 3,663 9,824 6,531 4,031 10,562

Brain & ONS 497 287 784 529 311 840 567 340 907 601 370 971

Total* 15,274 8,948 24,222 16,461 9,908 26,369 17,940 11,171 29,111 19,231 12,426 31,656

Radiation Cases**

Prostate 2,669 1,456 4,125 2,887 1,618 4,505 3,160 1,831 4,991 3,399 2,042 5,441

Lung &

Bronchus 2,355 1,573 3,928 2,584 1,769 4,353 2,877 2,036 4,913 3,131 2,300 5,431

Pediatrics

(age <15) 68 34 103 70 36 105 71 38 109 73 41 114

Oral &

pharynx 480 298 778 513 326 839 553 360 913 587 395 982

Breast 3,230 1,802 5,032 3,441 1,976 5,417 3,697 2,198 5,894 3,919 2,418 6,337

Brain & ONS 298 172 470 317 187 504 340 204 544 361 222 582

Total* 9,101 5,336 14,437 9,811 5,912 15,723 10,697 6,667 17,365 11,470 7,417 18,887

*Total represents sums across treatment sites presented in the table, which is not an exhaustive list of cancer types. ** Assumes that 31% of pediatric patients will receive radiation and 60% of non-pediatric patients will receive radiation.

In 2016, there were an estimated 14,437 radiation cases between both the primary and secondary service

areas with 9,101 coming from the PSA and 5,336 coming from the SSA. By 2030, the total number of

radiation cases is expected to grow more than 30 percent to 18,887, with 11,470 coming from the PSA

85

and 7,417 coming from the SSA. Breast, prostate, and lung & bronchus cancers are the sites with the

highest incidence within this service area, with 6,337, 5,441, and 5,431 radiation cases, respectively,

projected in 2030. Pediatric cancers are expected to have the lowest projected incidence in the service

area, with 114 cases projected in 2030.

These projections apply only to patients from within the surrounding area and do not include patients

coming from outside of the immediate region or international locations. Additionally, these projections

include only cancer types that have been identified as being high-likelihood targets for proton therapy,

and may omit some cancer types that the center may potentially treat in the future.

Summary Assessment of MPTC Service Demand

The UMMC and affiliate network puts MPTC in a strong position to meet projected demand, especially if

the Center follows through on proposed marketing and operations strategies.

Demand for proton therapy within the Center’s service area currently exceeds capacity. In the future,

several new proton treatment facilities will open in the region, and may potentially compete with the

Center for patients. Despite this fact, the number of eligible patients within the MPTC service area is

projected to exceed the treatment capacity of the centers in the region, given the most recent data on

proton treatment efficacy and eligibility, and proposals for new centers in the surrounding area.

Review of alternative estimates of current and projected patient demand also suggest that Baltimore and

the surrounding region currently have sufficient demand for proton therapy services to meet projected

Center capacity regardless of which forecasting methodology is adopted. Demand also is expected to

increase over time due to the region’s growing and aging population and growing evidence about the

types of cases that would benefit from this specialized service.

9. MPTC FINANCIAL INFORMATION

The financial information below includes, to the best knowledge and belief of Center management, the

anticipated financial condition, results of operations, staffing and expense and revenue positions for the

forecast periods. The underlying assumptions are conservative and reasonable, but note that they are

86

subject to risks, uncertainties and judgments, many of which were referenced previously in the section

titled “Significant Risk Areas.”

Financial Projections

Exhibit 39 shows MPTC monthly average numbers of treatments per day compared to growth projections

developed by MPTC management, from January 2017 to June 2018. Between January and July 2017,

numbers of treatments per day by and large trended at levels close to MPTC management’s projections.

Between August and December 2017, actual numbers of treatments consistently fell below growth

projections. While for any given month average numbers of treatments per day may have fallen above or

below growth projections, in total the 2017 growth projections were about 11% above the actual

treatments per day.

Exhibit 39: Comparison of MPTC 2017 Average Treatments per Day vs. Projections

Exhibit 40 summarizes Forward Financial Information and projected Center operating performance for

annual periods ending December 31, 2018 through December 31, 2047. These include annual projected

patient volume, cash collections, operating expenses, net income, senior debt service, and senior debt

service coverage. Projected patient volume is based on annual volume of 1,350 patients at steady-state.

Also included in the exhibit is the patient volume at which the Center would break even in each year.

Based upon assumptions described below, excluding debt service the Center approached operating cash

flow break-even in 2017, and anticipates remaining positive past 2046, the final year of these projections.

Projected net income is anticipated to peak in 2033 at about $45.4 million, and during that year under the

projected financial performance of the Center is forecast to treat about 1,350 patients, collecting

50 52 55 57 60 62 65 68 71 74

78 71 73 75 77 79 81 83

56 51

66 60 57

72 67

55

66 68

76 73

69

49

80 77 80

89

1/2017 3/2017 5/2017 7/2017 9/2017 11/2017 1/2018 3/2018 5/2018

Budget vs. Actual Average Treatments per Day

Budget (2017 as of 1/2017, 2018 as of 12/2017) Actual

87

approximately $71,400 per patient, on average. Interest income received is not included in the following

projections.

88

Exhibit 40: Projected Financial Performance – Cash Basis (2018-2047)

201876 201977 2020 2021 2022 2023

Revenue

Annual Patients Treated 709 842 917 982 1,041 1,099

Collection per Patient $31,099 $68,369 $69,240 $69,727 $70,351 $70,520

Cash Collections $22,049,157 $57,566,907 $63,492,732 $68,471,810 $73,235,132 $77,501,034

Operating Expenses $14,749,345 $36,121,240 $37,614,375 $39,288,771 $40,835,154 $42,907,806

Net Income $7,299,810 $21,445,667 $25,878,357 $29,183,038 $32,399,979 $34,593,228

Senior Debt Service $0 $2,306,708 $18,052,500 $18,052,500 $18,052,500 $19,157,500


9.30x 1.43x 1.62x 1.79x 1.81x

Breakeven Patients Treated 554 802 824 842 888

2024 2025 2026 2027 2028 2029

Revenue

Annual Patients Treated 1,145 1,171 1,197 1,222 1,243 1,273




Net Income $36,091,071 $37,113,734 $38,208,700 $39,124,758 $40,380,488 $41,092,487

Senior Debt Service $20,036,200 $20,638,200 $21,271,700 $21,797,200 $22,514,200 $22,914,050

Senior Debt Service Coverage 1.80x 1.80x 1.80x 1.79x 1.79x 1.79x

Breakeven Patients Treated 922 940 961 982 1,007 1,024

76 2018 based on Aug – Dec estimated cashflows; Capitalized interest is utilized for debt service is 2018 and 2019.

89

2030 2031 2032 2033 2034 2035

Revenue





Net Income $42,016,856 $43,383,155 $44,761,706 $45,439,824 $44,999,209 $44,670,808



Breakeven Patients Treated 1,042 1,060 1,080 1,091 1,094 1,096

2036 2037 2038 2039 2040 2041

Revenue





Net Income $44,695,659 $44,445,673 $44,249,151 $44,212,493 $44,104,176 $43,066,836



Breakeven Patients Treated 1,097 1,096 1,097 1,101 1,107 1,105

90

2042 2043 2044 2045 2046 2047

Revenue





Net Income $42,570,625 $42,082,701 $41,948,597 $41,260,321 $40,719,749 $65,012,062



Breakeven Patients Treated 1,109 1,112 1,119 1,120 1,124 394

Financial Assumptions

The summary of projected financial performance depicted above is based on assumptions and data inputs

pertaining to projected Center operations, including:

• Center ramp-up period

• Annual patient revenue estimates

• Annual estimates of operating expenses

• Annual principal and interest expense repayments

Center Ramp-Up Period

MPTC currently has four gantry rooms open and expects the final treatment room – a fixed beam room –

scheduled to begin treating patients in January 2019. In addition, MPTC management expects that Center

operations will continue to become more efficient as more patients are treated and staff become more

experienced. Currently, the Center takes roughly 28 minutes to provide one treatment on average, a rate

91

slightly faster than two treatments per hour, and management expects that this number will drop to 25

minutes per treatment by 2030.

Financial forecasts are conservative in estimates of treatments per hour, forecasting 30 minutes on

average per treatment each year until 2021, when the rate gradually begins to improve. In addition, MPTC

plans to increase the number of hours per day the treatment rooms are available. Currently, each gantry

is available for approximately 12 hours per day, and this figure is expected to gradually increase to 16

hours per day by 2023.

MPTC financial projections assume gantries are currently open for 12 hours per day and model the gradual

increase to 16 hours per day by 2023 as a conservative estimate to account for potential Center

inefficiencies in its first years of operation. The fixed beam room, once online, is expected to be available

for at least 8 hours per day. Exhibit 41 outlines MPTC’s ramp-up timeline as expressed in the MPTC

financial projections.

Exhibit 41: Projected MPTC Operational Phase-In Forecast77

Year Minutes per Treatment Fraction

Clinical Hours per Day (per Gantry)*

2016 40 10 2017 30 10 2018 30 12 2019 30 12 2020 30 13 2021 29.5 14 2022 29.0 15 2023 28.5 16 2024 28 16 2025 27.5 16 2026 27 16 2027 26.5 16 2028 26 16 2029 25.5 16 2030 25 16


92

Projected Center Revenues

The Center generates revenue from several sources, including third-party and private payer

reimbursement for proton therapy services, delivery of ancillary services and patient co-payments. Exhibit

42 summarizes expected total Center annual net revenue, and net revenue per patient upon steady state

in 2033. Other revenue related factors described in this section include assumptions and projections

pertaining to payer mix, insurance coverage and reimbursement rates. Based on performance to date,

MPTC has collected a weighted average across treatment sites of about $2,250 per treatment fraction.

Average collections per treatment fraction range from about $1,750 for prostate cancer to about $2,600

for brain cancer.78


93

Exhibit 42: Projected MPTC Net Revenue upon Center Steady-State (2032+)

Measure Inputs/Totals

Daily available hours per gantry room 16

Daily available hours per fixed beam room 8

Minutes per treatment (best case) 25

Minutes per hour 60

Daily treatment capacity per gantry room (16 x 60 / 25) 38

Daily treatment capacity per fixed beam room (8 x 60 / 25) 19

Number of gantry rooms 4

Number of fixed beam rooms 1

Daily facility treatment capacity 173

Days per year 255

Treatments per year 44,115

Average Fractions per treatment course 30

Total annual patient capacity 1,471

Total annual patients treated adjusted for 91.7% combined facility utilization and equipment efficiency 1,350

Average net revenue per treatment fraction $2,250-$2,350

Average net revenue per patient $67,500-$70,500

Total annual net revenue assuming 1,350 patients $91,125,000-$95,175,000

Note: Totals may not sum due to rounding.

Collections by Payer and Treatment Mix Assumptions

The mix of MPTC collections by payer as of June 2018 is depicted in the Exhibit below. Commercial payers

account for about 64 percent of collections. Public payers including Medicare, Medicaid and Military

payers account for about an additional 29%. This payer mix forms the basis for the Center’s current level

94

of collections. This payer mix could potentially change if payers change reimbursement or coverage

policies for proton therapy treatments. However, small shifts in the mix are not likely to result in

significant changes to Center collections and revenue.

Exhibit 43: Distribution of MPTC Collections by Payer (as of June 2018)

MPTC management also does not anticipate material changes in payer mix across the individual treatment

sites summarized in the following exhibit.

95

Exhibit 44: MPTC Collections by Payer and Treatment Site (as of June 2018)

Treatment Site Medicare/Medicaid

Commercial Including

Tricare and VA Self-Pay

Genitourinary 38% 57% 5% Brain 12% 83% 5% Head & Neck 23% 68% 10% Lung 44% 55% 2% Breast 14% 85% 1% Endocrine 13% 81% 6% Gastrointestinal 35% 65% 0% Lymph 16% 84% 0% Soft Tissue 18% 62% 21% Other 8% 87% 5% Gynecologic 37% 58% 5% Skin 46% 53% 1% Liver 32% 68% 0% Total 24% 70% 6%

Note: Percentages may not add to 100% due to rounding.

Reimbursement and Coverage Assumptions and Projections

Third-party reimbursement rates and service coverage levels for proton therapy treatment vary between

public and private payers who make individual market determinations of what cancer types they will pay

to have treated with proton therapy. As described below, Medicare, through the local CMS fiscal

intermediary, as well as most commercial payers have established payment rates for proton therapy

treatment. Medicare has reimbursed for proton therapy treatment since 1991.

Exhibit 45 summarizes by treatment site estimated collections, numbers of patients and treatment

fractions and collections per fraction. These are based on the combination of expected payer mix,

Medicare free-standing facility payment rates, assumptions regarding expected managed care and self-

pay rates and estimated revenue from ancillary services and patient co-payments. Weighted average

collections per patient were about $64,500 as of June 2018, and ranged from about $34,000 for liver

cancer to about $81,000 for head and neck cancer.

96

Exhibit 45: MPTC Proton Therapy Patient Revenue by Treatment Site (As of mid-June 2018)

Total Expected Payments

Patients Treatments Treatments/ Patient

Collections/ Patient

Disease Site Mix

Collections / Fraction

Genitourinary $12,141,917 195 6,928 35.5 $62,266 22% $1,753

Brain $12,849,558 174 4,917 28.3 $73,848 16% $2,613

Head & Neck $7,528,364 93 3,265 35.1 $80,950 11% $2,306

Lung $5,235,988 104 2,665 25.6 $50,346 9% $1,965

Breast $6,939,338 112 2,878 25.7 $61,958 9% $2,411

Endocrine $3,842,605 51 1,393 27.3 $75,345 4% $2,759

Gastrointestinal $5,835,930 104 2,771 26.6 $56,115 9% $2,106

Lymph $2,395,345 47 908 19.3 $50,965 3% $2,638

Soft Tissue $6,210,360 92 2,632 28.6 $67,504 8% $2,360

Other $3,202,403 36 1,131 31.4 $88,956 4% $2,831

Gynecology $1,311,027 26 667 25.7 $50,424 2% $1,966

Skin $1,046,317 18 554 30.8 $58,129 2% $1,889

Liver $812,397 24 332 13.8 $33,850 1% $2,447

Total $69,351,550 1,076 31,041 28.8 $64,453 100% $2,234 Notes: 1) Several treatment sites have been excluded from this table due to small numbers of patients receiving treatment (i.e., two CNS, one HO and one Neuro-endocrinology patient). 2) Totals may not sum to 100% due to rounding.

Medicare Reimbursement

Medicare is anticipated to provide significant patient volume. Medicare covers treatments for most

localized tumor sites. MPTC is a free-standing facility and therefore not subject to the Medicare hospital

outpatient payment methodology. Instead, Novitas Solutions, the local Medicare intermediary for the

Mid-Atlantic region, sets the payment fee schedule and develops local coverage decisions on behalf of

CMS.

97

Current financial projections reflect the calendar year (CY) 2017 published fee schedule and assume

average Medicare revenue per treatment of approximately $1,100 and a projected average of about 30

fractions per treatment course. Novitas’ CY 2017 Medicare proton rates per treatment fraction are about

$1,224 for complex treatments, $1,084 for intermediate treatments, and about $944 for simple

treatments (Exhibit 46).79

The Center anticipates a patient treatment mix consisting of 88% intermediate, 10% simple and 2%

complex treatment fractions.80 While the final 2018 Medicare Part B payment rates for Maryland

freestanding facilities increased modestly compared to 2016 (1.0%), it is worth noting that intermediate

and complex treatments are paid at rates about 3% and 16% higher, respectively, than under the 2018

Medicare hospital-based fee schedule.81

Exhibit 46: Medicare Freestanding Facility Proton Therapy Payment Rates by Fraction (2016-2018)

CPT Code

Descriptor 2016 Final Medicare Rate

2017 Final Medicare Rate

2018 Final Medicare rate

Change 2016 vs 2018

77522 Proton treatment simple w/ compensation

$935 $939 $944 1.0%

77523 Proton treatment (intermediate)

$1,073 $1,079 $1,084 1.0%

77525 Proton treatment (complex)

$1,212 $1,218 $1,224 1.0%

79 Source: Novitas Fee Schedule, Jurisdiction JL, Physician Fee Schedule, Baltimore locality. Accessed at: http://www.novitas-solutions.com/webcenter/portal/MedicareJL/FeeLookup?_afrLoop=82412154432231#!%40%40%3F_afrLoop%3D82412154432231%26_adf.ctrl-state%3D118oj7gssc_90 80 Source: MPTC management

81 https://www.varian.com/sites/default/files/resource_attachments/ReimbursementBulletin_RAD10422B_December2017.pdf

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Managed Care Payers and International Self-Pay Patients

As discussed above, projected pricing for proton therapy treatment for the next three years is expected

to be cost neutral to managed care payers under the Maryland all-payer system. Pricing is based upon the

average 2016 U.S. managed care net charge per fraction for Blue Cross/Blue Shield, AETNA, CIGNA and

United Healthcare.82

As of June 2018, there is a range of pricing based upon contracts with specific entities or pre-existing

relationships for the relatively small international self-pay patient market. Discounted pricing will be

maintained for those parties with pre-existing relationships who have referred patients to MPTC.83

Possible implications of decisions by several major commercial payers (e.g., UnitedHealth Care) in 2013

to no longer cover proton therapy nationally as a treatment option for prostate cancer have been followed

closely within the industry. While these coverage changes may not be favorable for proton therapy

providers whose patient mix includes a significant volume of this disease site, these changes likely will not

significantly impact MPTC. Prostate cancer is only expected to be about 20% of patient volume (Exhibit

45) and likely will continue to be covered by Medicare and other commercial payers who continue to

maintain favorable coverage policies. In addition, since incidence of prostate cancer is highest among the

nation’s rapidly growing elderly age cohorts, Medicare will likely remain a primary and growing payer in

the foreseeable future.

Operating Expenses

The Center projects incurring substantial ongoing operating costs. Operating costs consist primarily of

salaries, wages and benefits for physicians and other clinical and non-clinical staff, equipment and facility

maintenance, professional services, supplies, utilities, insurance and other general costs. Salaries, wages

and benefits represent the largest single component of operating costs.

82 Note: Pricing excludes anesthesia, chemotherapy and personal services. 83 Source: MPTC management internal memorandum.

99

Most expense assumptions are based on known and anticipated contractual commitments summarized

above, such as the UMROA Clinical Management and Professional Services Agreement, the Varian

Operations and Maintenance Agreements and the Siemens Equipment Lease Agreement.

Total operating costs are projected to grow from about $27.7 million in 2017 to about $51.4 million in

2033. 84 Under the current staffing model, it is estimated that University of Maryland direct labor expenses

will increase from about $16.5 million in 2017 to about $29.3 million in 2033 as the full complement of

treatment rooms are opened, staffing is ramped up, and treatment capacity expands.85 The MPTC direct

staffing expenses grow from about $1.8 million to $2.4 million over the same time period. By 2033 the

UM and MPTC direct compensation expenses are projected to represent about 60% of total operating

expenses.

Annual maintenance costs for proton and other related equipment is anecdotally quoted by industry

sources to be about 10-15% of the equipment cost.86 The Center estimates that the annual maintenance

cost for Varian proton and related medical equipment at full ramp up in 2033 will be about $8 million.87

Center management has embarked on an ambitious integrated marketing, communications and outreach

plan to build brand awareness and increase patient volumes. Incremental staffing and funding will be

required to support these efforts. Under current assumptions projected marketing costs will vary from

about $2.0 million to $2.7 million between 2017 and 2033.88 Marketing costs have the potential to

increase if the Center elects to pursue a more aggressive marketing strategy. Expense estimates also

currently assume that by 2019 the Center will be exempt from local property taxes.

Principal and Interest Expense

Maryland Proton Treatment Holdings, LLC intends to sell MPTC to the Public Finance Authority which

proposes to purchase the assets with the proceeds of approximately $278.6 million senior lien fixed rate

tax exempt bonds issued through a public offering. In addition, there will also be up to $90 million in

84 Source: MPTC Budget. 85 Source: MPTC Budget 86 Source: Sibley Memorial Hospital CON application for establishment of a proton therapy service, dated 10/22/2012. 87 Source: MPTC Budget. 88 Source: MPTC Budget

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subordinate lien convertible capital appreciation bonds and approximately $6 million in junior

subordinate lien capital appreciation bonds raised. The Center assumes it will repay interest on its

indebtedness as it becomes due, and will commence repayment of senior principal on January 1, 2024.

Reserve and Replacement

Over time on-going capital maintenance and replacement will be required for both the building and

equipment. The MPTC capital expenditure forecast to 2021 is presented in Exhibit 47.89 In order to meet

anticipated capital expenses, annual set-asides ranging from about $3.0 - $4.0 million are forecast. These

consist largely of treatment planning software and hardware upgrades, advanced technology accessories

and Siemens MRI/CT lease and warranty costs.

Exhibit 47: Estimated Capex Expenditure Forecast (2018-2021) 2018 2019 2020 2021

Capex Treatment Planning and Oncology Hardware $100,000 $100,000 $100,000 $100,000

Treatment Planning and Oncology Software $600,000 $400,000 $200,000 $200,000

Advanced Technology Accessories $500,000 $500,000 $500,000 $500,000 Uninterrupted Power Supply $328,961 $156,538 $156,538 $156,538 QA Equipment / Replacement / Upgrades $0 $100,000 $100,000 $100,000

Computer Upgrades / Replacements $13,763 $15,296 $16,166 $17,140 Siemens MRI/CT Initial Lease / Warranties $721,837 $726,539 $731,334 $736,225

Varian Hardware & Software Upgrades $500,000 $500,000 $500,000 $500,000

Varian O&M and Other Expenses $0 $500,000 $500,000 $500,000 Furniture & Fixtures $100,000 $100,000 $100,000 $100,000

Siemens Advanced Imaging Replacements

$0 $0 $500,000 $500,000

Total Growth Capex $2,900,000 $3,100,000 $3,400,000 $3,400,000


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Summary Assessment of Projected MPTC Financial Performance

The financial information and projections reviewed, including underlying assumptions and data inputs

pertaining to MPTC financial condition, results of operations, and expense and revenue positions appear

reasonable. As noted above, based on three separate studies there is a high probability that demand for

proton therapy services, a key driver of financial performance exceeds anticipated MPTC capacity both

currently and will do so in the foreseeable future. In addition, the Center is implementing an ambitious

marketing action plan to channel patient demand into increased use of the Center. These findings reduce

the probability of potential future revenue shortfalls associated with low utilization.

Notwithstanding decisions by several major payers to no longer cover proton therapy as a treatment

option for prostate cancer, this likely will not have a significant impact on total reimbursement available

to MPTC due to the diversity of its projected patient and payer mix. Similarly, although the projected

number of international self-pay patients is small there is potential for additional growth and the

anticipated price point should prove to be profitable for MPTC. Finally, management’s operating expense

assumptions, based largely on known and anticipated contractual commitments appear reasonable,

although benchmarking the Center’s financial model against other comparable proton therapy was

challenging as publicly available information was limited.

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10. MPTC FEASIBILITY CONCLUSIONS

Change is a constant in oncology care. Further complicating future predictions is the position of the proton

therapy industry, and by extension MPTC, within a healthcare environment that prioritizes cost

containment yet increasingly views proton therapy as a natural extension of the current culture of

precision therapy that has developed over the last several decades.

A number of factors support industry growth. These include rising demand for this technology stemming

from a growing and rapidly aging population, growing evidence of clinical efficacy, generally adequate

public and private third-party reimbursement to support efficiently delivered care and rapid technological

advances making proton therapy centers more scalable and cost efficient. Potential future areas of

uncertainty include the competitive environment, potential long-term technology obsolescence and

shifting physician preference patterns.

Looking to the future, the evolution of proton therapy appears to be moving in a positive direction as

evidenced by the growing number of centers being planned and implemented. Well-designed centers

incorporating advanced technology and operating efficiencies that are affiliated with reliable patient

referral sources such as academic medical centers with strong oncology programs and affiliate networks

should be well positioned for sustainable growth.

This feasibility study considered the possible implications of changing external factors and dynamics

within the anticipated market to be served by MPTC as well as internal operating characteristics of the

Center. Examples of external factors assessed included implications of increasing service demand from a

growing and aging population, patient referral patterns, Center affiliations, third-party coverage and

payment policies and potential future competition. Internal operating characteristics examined included

patient case mix, financial performance, technology features, operating efficiency, and strategic

relationships.

Taking the totality of these factors into account, MPTC appears favorably positioned for future success

and sustainability. Although operating in a cost-adverse healthcare landscape, this well-designed center

incorporates advanced technology features and operating efficiencies. Equally important for long-term

sustainability is its affiliation with the University of Maryland and affiliates through agreements that

provide patients, staffing and treatment guidelines. As discussed above, this affiliation positions MPTC to

benefit from a robust and reliable patient referral source and nationally recognized oncology program.

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Summary Assessment of Factors Influencing Feasibility

This assessment of overall MPTC feasibility weighed numerous factors. The Exhibit below summarizes

factors we believe are relevant to the future success of the Center, and the extent to which each

contributes to an outlook that appears favorable, unfavorable, or unclear.

104

Exhibit 48: Summary of Key Factors Influencing MPTC Feasibility Outlook

Key Factor Outlook Comments

Population demand for proton therapy

Favorable More than adequate projected demand in the Center’s service area to fill future capacity due to population growth and aging.

Proton center case mix Favorable Center projected case mix is well diversified across cancer sites and should be sustainable.

Overall financial viability Favorable Projected revenue growth plus operating efficiencies and lower financing costs should positively impact financial health.

Reimbursement environment

Unclear Current reimbursement levels by commercial payers are generous compared to other Maryland payers and states. However, Medicare payment levels are well below those of other payers. This is a potential risk if the Medicare payer mix continues to increase while the more richly reimbursed commercial payer mix continues to decline. Conversely, although the future payment environment is unpredictable, Maryland’s all-payer system has successfully surpassed CMS Medicare savings targets, and renewal is viewed favorably by CMS.

Capital cost structure Favorable Lower financing costs through recapitalization should improve cash flow and liquidity.

Future efficacy of proton treatment

Favorable Growing uptake and evidence of clinical efficacy, with data increasingly suggesting the treatment is appropriate and effective for many cancer types.

Strength of the UMMS affiliation

Favorable The UMMS affiliation is among the most important future success factors as a primary patient referral source. Being associated with the UMMS brand allows MPTC to capitalize on the system’s strong regional market presence and complement UM’s already strong oncology service offerings.

Strength of other strategic partnerships

Favorable Strategic partners, including non-UMMS affiliates, Varian, Siemens and others have deep experience and expertise with Proton center technology, design, construction, and development.

Ability of facility layout and technology to optimize patient throughput

Favorable Size, optimal design of treatment rooms, efficient facility layout and advanced technology features facilitate shorter treatment times, more rapid throughput and potential future economies of scale.

105

Key Factor Outlook Comments

Facility staffing model Favorable Ability to attract and retain sufficient numbers of highly

specialized staff is strengthened under affiliation with UMROA and other UMMS affiliated entities.

Technology obsolescence and physician preferences

Unclear Although current proton technology has a projected useful life of 25-30 years, future sustainability may be complicated by events that cannot currently be forecast, such as shifts in technology and physician care delivery preferences.

Potential competition

Favorable MPTC is the largest treatment center in the region and affiliation with UMMS and other entities should strengthen its market position. Future Sibley impacts are unclear but likely limited due to capacity constraints and a Johns Hopkins system oriented referral network. Maryland as a CON state also presents barriers to entry for potential competitors. In addition, any new technologies, e.g., carbon, will be subject to years of clinical research and scrutiny by payers, clinicians and regulators.

Unanticipated negative economic conditions

Unclear Like all ventures MPTC will be subject to systemic risk, including fluctuating local, national, and global economic conditions and events.

In addition to the success factors summarized above, MPTC also is producing a positive economic impact

on the greater region in terms of generating jobs, income, business and consumer spending, and tax

revenues. From a consumer perspective, it also helps address a geographic barrier to care. The Center’s

location alleviates the need for Maryland and District of Columbia residents to out-migrate for care to

other states. Given that a typical proton therapy treatment course necessitates 22-38 sessions over the

course of a number of weeks, an extended out of town stay may have significant financial, logistic and

time considerations for patients.

11. STUDY LIMITATIONS

To a significant extent study limitations stem from a paucity of reliable information on how the future

proton therapy market generally and MPTC specifically might change in response to evolving market

factors and influence. Many of the data inputs and assumptions used to develop this feasibility study were

based on future business assumptions subject to uncertainties. Examples include introduction of new and

106

competing technologies, trends in MPTC service demand and reimbursement and the effects of future

economic conditions.

Another study limiting factor is a shortage of publicly available performance indicators from comparable

large U.S. proton therapy treatment centers against which to benchmark MPTC operating characteristics

and performance (e.g., average minutes per treatment fraction, percentage of time proton therapy

equipment is available for patient treatment, staffing models). However, it is worth noting that although

benchmarking may unearth useful information, due to the unique characteristics of the different markets

within which proton therapy centers operate, predicting the long-term performance of MPTC based on

the performance of similar centers is challenging.

12. IHS OVERVIEW AND RELEVANT EXPERIENCE

IHS Global, Inc. (IHS) was founded in 1959 and became a publicly traded company on the New York Stock

Exchange in 2005. In July 2016, IHS Inc. and Markit Ltd. merged to form IHS Markit Ltd. (NASDAQ: INFO),

a world leader in critical information, analytics and solutions for major industries and markets that drive

economies worldwide. The company delivers next-generation information, analytics and solutions to

customers in business, finance and government, improving their operational efficiency and providing deep

insights that lead to well-informed decisions.

IHS team members have extensive experience conducting feasibility studies on behalf of proton treatment

centers, healthcare systems and other health care and life sciences organizations. In addition to the

current study other recent examples include the following:

• For the Emory Proton Treatment Center in Atlanta, Georgia, IHS developed a comprehensive

feasibility study assessing the pros and cons of financing development of the first proton therapy

treatment center in the metropolitan Atlanta area. The feasibility study captured and assessed

key future considerations in the industry as well as those specific to the proton treatment center

and local market.

• For a regional for-profit healthcare system, IHS assessed the feasibility of acquiring a hospital in

Minot, North Dakota. This study considered factors influencing future local population service

demand through 2025. These included demographic shifts and projected effects of alternative

shale oil prices on temporary and permanent local employment and hospital use by product line.

107

Based on projected low shale oil prices and resulting flat employment and service demand, IHS

recommended extreme caution in finalizing the hospital acquisition.

• For a healthcare system in eastern Alabama, IHS developed hospital service demand forecasts

projecting numbers of staffed beds by product line through 2025 under alternative scenarios to

assess the feasibility of establishing a new medical center. Forecasts reflected changing market

share, inpatient occupancy rates, seasonality, and local population demographic characteristics.

IHS feasibility study findings validated conclusions of earlier system planning efforts regarding the

probable success of a new medical center in that local market.

• For the San Francisco Department of Public Health and Controller’s Office, assessed San

Francisco’s current healthcare market and benchmarked San Francisco General Hospital’s (the

General) efficiency and effectiveness against other comparable local, regional and national safety-

net providers to help assess its ability to provide quality healthcare to San Franciscans as the City

implements the Healthy San Francisco initiative and plans the rebuild of the General. The

assessment found that despite an aging physical plant the General has high staff productivity and

is financially effective compared to most benchmark hospitals.

IHS has also conducted due diligence for several medical device and pharmaceutical companies to assist

go/no-go decisions at development milestones. Our assessments involved comparing the value

proposition of the new health technology versus an existing treatment that is less expensive, and reaching

conclusions about its pricing and reimbursement outlook in the competitive environment. Our research

analyzed the commercial potential of the new technology from multiple angles, such as target market

size, pricing forecast, reimbursement potential, and patients’ ability to pay.

APPENDIX C

CONSOLIDATED FINANCIAL STATEMENTS OF MARYLAND PROTON TREATMENT HOLDINGS, LLC AND SUBSIDIARIES FOR THE FISCAL YEARS ENDED DECEMBER 31, 2017 AND 2016

Maryland Proton Treatment Holdings, LLC and Subsidiaries Consolidated Financial Statements Years Ended December 31, 2017 and 2016

Maryland Proton Treatment Holdings, LLC and Subsidiaries

Consolidated Financial Statements Years Ended December 31, 2017 and 2016


Contents Independent Auditor’s Report 1-2 Consolidated Financial Statements

Consolidated Balance Sheets 3

Consolidated Statements of Operations 4

Consolidated Statements of Changes in Members’ Deficit 5

Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements

6

7-38

Independent Auditor’s Report

Board of Managers Maryland Proton Treatment Holdings, LLC Baltimore, Maryland

We have audited the accompanying consolidated financial statements of Maryland Proton Treatment Holdings, LLC and Subsidiaries, which comprise the consolidated balance sheets as of December 31, 2017 and 2016 and the related consolidated statements of operations, changes in members’ deficit, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

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

Auditor’s Responsibility

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

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

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

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Maryland Proton Treatment Holdings, LLC and its

1

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

8401 Greensboro Drive Suite 800 McLean, VA 22102

Tel: 703-893-0600 Fax: 703-893-2766 www.bdo.com

subsidiaries as of December 31, 2017 and 2016, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter - Restatement

As described in Note 2, the consolidated financial statements for prior years have been restated to reflect the correct accounting treatment as it relates to debt financing costs, revenue share arrangements, debt modifications and extinguishments, the capitalization of interest, treatment of imputed interest, and incorrect recognition of certain prior period expenses. Our opinion on the 2017 and 2016 consolidated financial statements is not modified with respect to this matter.

Emphasis of Matter - Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3, the Company has suffered recurring losses from operations and lacks the funding necessary to service outstanding debt requirements and fund normal operations for the foreseeable future, raising substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

Other Matter

The 2015 consolidated financial statements of Maryland Proton Treatment Holdings, LLC and Subsidiaries before the restatement for the matters described in the Emphasis of Matter - Restatement paragraph above, were audited by other auditors, whose report dated July 27, 2016 expressed an unqualified opinion on those statements.

As part of our audits of the 2017 and 2016 consolidated financial statements, we also audited the adjustments described in Note 2 that were applied to restate prior years’ consolidated financial statements through accumulated deficit. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the prior years’ consolidated financial statements of Maryland Proton Treatment Holdings, LLC and Subsidiaries other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on any such consolidated financial statements as a whole.

July 19, 2018

2

Consolidated Financial Statements

As of December 31, 2017 2016

Assets

Current assets Cash and cash equivalents 6,660,665$ 18,891,792$ Restricted cash 16,236,008 5,360,274 Patient accounts receivable, net 5,580,464 3,073,813 Other operating accounts receivable, net 67,320 - Prepaid expenses and other assets 412,307 721,551

Total current assets 28,956,764 28,047,430

Certificates of deposit 225,471 225,357 Long-term restricted cash - 16,171,927 Deferred financing fees - offering 1,311,283 - Property, plant and equipment, net 229,614,873 234,717,369

Total assets 260,108,391$ 279,162,083$

Liabilities and members' deficit

Current liabilities Accounts payable 12,940,296$ 3,698,123$ Accrued expenses 2,110,710 566,620 Current obligations under capital leases 1,473,383 761,338 Deferred revenue 303,580 318,955 Current accrued proton equipment tax 5,805,986 - Current accrued proton equipment and interest 31,697,252 - Current accrued interest on debt 13,344,500 - Current notes payable due to related party 14,200,000 - Current notes payable, net 193,200,333 -

Total current liabilities 275,076,040 5,345,036

Long-term liabilities Obligations under capital leases 3,023,764 2,336,651 Due to related parties 5,561,388 5,348,413 Long-term accrued expenses - 352,000 Long-term accrued proton equipment tax - 5,805,986 Long-term accrued proton equipment and interest - 23,637,619 Long-term accrued interest on debt - 6,156,866 Revenue share liability 43,223,236 39,987,263 Long term notes payable due to related party - 14,200,000 Long-term notes payable, net 52,646,676 231,911,805

Total long-term liabilities 104,455,064 329,736,603

Total liabilities 379,531,104 335,081,639

Commitments and contingenciesMembers’ deficit

Membership interest, $0 par value:Class A-1, 227 units authorized, 217 and 227 units issued and outstanding in 2017 and 2016, respectively 18,112,295 19,112,295 Class A-2, 429 units authorized, issued and outstanding 38,482,515 38,482,515 Class B, 99,999 units authorized, 50,000 issued and outstanding - -Class C, 429 units authorized, issued and outstanding 682,223 682,223 Additional paid-in capital 561,370 561,370 Accumulated deficit (177,261,116) (114,757,959)

Total members' deficit (119,422,713) (55,919,556)

Total liabilities and members’ deficit 260,108,391$ 279,162,083$


Consolidated Balance Sheets

See accompanying notes to consolidated financial statements.

3

Years Ended December 31, 2017 2016

Patient service revenue, net of contractual allowances 38,969,566$ 15,608,258$ and discountsProvision for bad debts (3,973,565) (393,296)

Net patient service revenue, less provision for bad debts 34,996,001 15,214,962 Other operating revenue 128,172 -

Total revenue 35,124,173 15,214,962

Operating expensesSalaries and wages 15,042,713 10,593,700 Employee benefits 1,390,727 1,303,005 Professional fees 5,648,038 4,492,210 Supplies 237,595 188,394 Depreciation and amortization 13,057,536 10,875,583 Other expenses 12,690,910 9,010,505

Total operating expenses 48,067,519 36,463,397

Loss from operations (12,943,346) (21,248,435)

Other expenses, netInterest income 81,042 61,457 Interest expense (50,640,853) (52,191,147)

Total other expenses, net (50,559,811) (52,129,690)

Net loss (63,503,157)$ (73,378,125)$


Consolidated Statements of Operations


4

Additional TotalClass A-1 Class A-2 Class B Class C Paid-In Accumulated Members’Amount Amount Amount Amount Capital Deficit Deficit

Balance as of January 1, 2016 (restated) 19,112,295$ 38,482,515$ -$ 682,223$ 561,370$ (41,379,834)$ 17,458,569$

Net loss - - - - - (73,378,125) (73,378,125)

Balance as of December 31, 2016 19,112,295 38,482,515 - 682,223 561,370 (114,757,959) (55,919,556)

Abandonment of Class A-1 shares (1,000,000) - - - - 1,000,000 -

Net loss - - - - - (63,503,157) (63,503,157)

Balance as of December 31, 2017 18,112,295$ 38,482,515$ -$ 682,223$ 561,370$ (177,261,116)$ (119,422,713)$

Units issued and outstanding as of January 1, 2016 and December 31, 2016 227 429 50,000 429 51,085

Abandonment of Class A-1 shares (10) - - - (10)

Units issued and outstanding as of December 31, 2017 217 429 50,000 429 51,075


Consolidated Statements of Changes in Members’ Deficit


5

Years Ended December 31, 2017 2016

Cash flows from operating activitiesNet loss (63,503,157)$ (73,378,125)$

Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 13,057,536 10,875,583 Provision for bad debts 3,973,565 393,296 Interest amortization 16,869,046 19,896,402 Changes in operating assets and liabilities:

Patient accounts receivable (6,480,215) (3,464,602) Other operating accounts receivable (67,320) - Prepaid expenses and other assets 309,244 585,578 Accounts payable 9,242,173 899,579 Accrued expenses 801,094 326,972 Deferred revenue (15,375) 318,955 Accrued interest on proton equipment 4,059,633 2,663,502 Accrued interest due to related party 1,706,010 1,280,327 Accrued interest on debt 5,481,623 4,638,820

Net cash flows used in operating activities (14,566,143) (34,963,713)

Cash flows from investing activitiesPurchases of property, plant and equipment (896,786) (1,208,686)Interest income reinvested (115) (357)

Net cash flows used in investing activities (896,901) (1,209,043)

Cash flows from financing activitiesPayment of capital lease obligations (1,446,119) (868,965)Deferred financing fees - offering (618,157) -Proceeds received from long-term debt - 39,800,000

Net cash flows (used in) provided by financing activities (2,064,276) 38,931,035

Net (decrease) increase in cash, cash equivalents and restricted cash (17,527,320) 2,758,279 Cash, cash equivalents and restricted cash, beginning of year 40,423,993 37,665,714

Cash, cash equivalents and restricted cash, end of year 22,896,673$ 40,423,993$

Supplemental disclosures of cash flow information:Purchases of property, plant and equipment included in accrued expenses or due to related party 4,212,976$ 12,898,449$

Capitalized taxes included in property, plant and equipment -$ 415,302$Property, plant and equipment acquired under capital lease obligations 2,845,278$ 3,667,248$Deferred financing fees included in accrued expenses 693,126$ -$

Cash paid for:Interest 22,052,296$ 23,801,375$


Consolidated Statements of Cash Flows


6

Maryland Proton Treatment Holdings, LLC and Subsidiaries Notes to Consolidated Financial Statements

7

1. Description of Business and Significant Accounting Policies

Nature of business

Maryland Proton Treatment Holdings, LLC (“MPTH”) was formed in January 2010 and is registered as a limited liability company under the laws of the state of Delaware. MPTH’s purpose is to design, finance, construct and manage a licensed, freestanding healthcare center (“the Center”) in Baltimore, Maryland, providing proton radiation therapy services for patients with cancerous solid tumors.

MPTH’s wholly owned subsidiary, Maryland Proton Treatment Center, LLC (“MPTC”), was formed in 2011 for the specific purpose of developing, owning and operating the Center. MPTC’s wholly owned subsidiary, Maryland Contract Holding Company, LLC was formed in July 2015 to hold the rights to the Proton Therapy Services Supplement Agreement. Such rights include a patient guarantee receivable of up to $15.0 million from obligated parties University of Maryland Faculty Physicians Inc. and the University of Maryland Medical Systems in the case that less than 3,600 patients are treated between January 2018 and December 2020.

The consolidated financial statements include the accounts of Maryland Proton Treatment Holdings, LLC and its wholly owned subsidiaries, Maryland Proton Treatment Center, LLC, and Maryland Contract Holding Company (collectively, “the Company”). All intercompany accounts and transactions have been eliminated in consolidation as of December 31, 2017 and 2016.

The construction of the Center was completed in November 2015 and the first patient was treated in February 2016. The clinical availability of the Center’s first four treatment rooms occurred in February 2016, May 2016, July 2016 and January 2017. The clinical availability of the fifth and final treatment room occurred in April 2018.

Basis of preparation

The Company’s consolidated financial statements are prepared on the accrual basis of accounting in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Areas where these estimates and assumptions may have the most significant impact on the consolidated financial statements include the collectability of accounts receivable, including the estimation of allowances for contractual adjustments and doubtful accounts; the estimated useful lives and recoverability of property and equipment; accruals for expenditures where invoices have not been received; and the fair value of revenue sharing arrangements (at inception) and the subsequent accretion thereof. The Company bases its estimates on historical experience, market conditions, and various other assumptions that are believed to be reasonable under the circumstances; the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent


Notes to Consolidated Financial Statements

8

from other sources. The recorded balances reflect management’s best estimates; however, actual results may differ from such estimates. Cash, cash equivalents and restricted cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents. Restricted cash is cash restricted for the benefit of the Senior Lender (Deutsche Bank), as required pursuant to the Credit Agreement (Note 6). Restricted cash includes bank deposits and government bonds, may vary or fluctuate in the period, and are reflected in the consolidated balance sheet at the market value as of December 31, 2017 and 2016. Funds released by our Senior Lender to satisfy obligations on the debt (Note 6 and Note 10) are classified as a current asset on the consolidated balance sheet. The following table provides a summary of cash, cash equivalents, and restricted cash reported within the statement of financial position and reflected in the Company’s statement of cash flows as of: December 31, 2017 2016 Cash and cash equivalents $ 6,660,665 $ 18,891,792 Restricted cash, current 16,236,008 5,360,274 Restricted cash, long-term - 16,171,927 Total cash, cash equivalents and restricted cash $ 22,896,673 $ 40,423,993

The Company maintains cash accounts with financial institutions with funds insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At times, funds held with these institutions may exceed FDIC-insured limits. The Company held approximately $22.4 million and $39.6 million for the years ended December 31, 2017 and 2016, respectively, in excess of the FDIC-insured limits, spread across various deposit accounts, and has not experienced any losses in such accounts. Certificate of deposit A certificate of deposit of $225,000 was issued in February 2014 that bears interest at an annual rate of 0.05%. This certificate of deposit originally matured in June 2016, has been extended annually through June 2018, and is expected to expire in February 2019 unless extended. The certificate of deposit serves as collateral for an irrevocable letter of credit issued to the Maryland Department of Environment. Patient accounts receivable, net Patient accounts receivable are stated at their outstanding balances, net of contractual adjustments and provision for bad debts. Balances outstanding include amounts due from Medicare and Medicaid, managed care insurance companies, affiliates and patients or patient representatives.



9

Patient accounts receivable are non-interest bearing and the Company generally does not require collateral when extending credit. The Company maintains allowances to reflect the expected collectability of accounts receivable based on past collection history and specific risks identified among outstanding patient accounts. The Company’s allowance for doubtful accounts was approximately $4.2 million and approximately $0.4 million as of December 31, 2017 and 2016, respectively. Contractual adjustments are based on terms defined in payor agreements. The following table includes gross patient accounts receivable from third-party payors as a percentage of accounts receivable before contractual adjustments and allowances as of December 31, 2017 and 2016: December 31, 2017 2016 Managed Care 45% 55% Medicare and Medicaid 24% 28% Other third-party payors 22% 8% Self-Pay 8% 8% Tricare 1% 1% Total 100%

100%

Property, plant and equipment, net Property, plant and equipment are recorded at cost, and subsequently measured at cost less accumulated depreciation and amortization and net of any accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset to prepare the asset for its intended use. Borrowing costs attributable to the acquisition or construction of capital assets that take a substantial amount of time to prepare for their intended use are capitalized to the cost of those assets. These costs primarily include interest incurred and eligible for capitalization pursuant to Accounting Standard Codification (“ASC”) 835-20, Capitalization of Interest Costs. The commencement date for capitalization of costs occurs when the Company first incurs expenditures for the qualifying assets and undertakes the required activities to prepare the assets for their intended use. On November 1, 2015, the Company placed the building and related furniture and equipment in service. During 2016, and through the beginning of 2017, the cyclotron and the four treatment rooms were placed in service which allowed patient treatment per the following schedule: Treatment Room #1 - February 2016; Treatment Room #2 - May 2016; Treatment Room #3 - July 2016 and Treatment Room #4 - January 2017. Construction of the fifth and final treatment room began in 2017 and became ready for use in April 2018. Depreciation commences when the assets are available for use and are placed into service. Depreciation is expensed on a straight-line basis as part of operating expenses to decrease the overall book value of the assets. Depreciation methods, useful lives and residual values are reviewed periodically, and are adjusted if deemed appropriate. Expenditures for repairs and



10

maintenance costs are expensed as incurred, whereas major betterments are capitalized as additions to property and equipment. When assets are retired or disposed of, the assets and related accumulated depreciation and amortization are eliminated from the accounts and any resulting gain or loss is included in the determination of net income or loss. Estimated useful lives of the assets are as follows: Building 5 – 40 years Proton equipment 5 – 30 years Medical equipment 5 - 10 years Computer equipment and software 3 – 7 years Furniture and fixtures 5 - 10 years

Leasehold improvements are amortized over the shorter of the remaining lease term or the useful life of the asset. In accordance with the requirements within ASC 360, Property, Plant and Equipment, the Company’s review of its long-lived assets (including property, plant and equipment) for impairment is performed when events or changes in circumstances indicate the carrying value of such assets may not be recoverable. Recoverability of assets held and used is measured by comparing the carrying amount of the asset to the future undiscounted cash flows expected to be generated by that asset. If such assets are considered to be impaired, the amount of impairment recognized is measured by taking the excess of the carrying amount of the asset over its respective fair value. No impairment was recorded for the years ended December 31, 2017 and 2016. Patient service revenue Patient service revenue is recorded when healthcare services are performed. The Company records amounts billed at their expected net realizable value based on reimbursement agreements with third-party payors and historical experience. The following table represents the Company’s gross patient service revenue mix by payor type (Patient service revenue, net of contractual allowances, but before provision for bad debts recognized from major payor sources): For the year ended December 31, 2017. 2016. Managed Care $ 46,575,183. $ 21,020,308. Medicare and Medicaid 42,107,265. 14,298,416. Self-Pay 2,531,056. 1,430,322. Tricare 3,998,456. 698,898. Other third-party payors 3,333,457. 1,354,096. 98,545,417. 38,802,040. Less: contractual allowances and discounts

(59,575,851)

(23,193,782)

Patient service revenue, net of contractual allowances and discounts

$ 38,969,566.

$ 15,608,258.



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The following tables represents the Company’s gross patient service revenue mix by payor type (as a percentage of annual revenue): For the year ended December 31, 2017 2016 Managed Care 47% 54% Medicare and Medicaid 42% 37% Self-Pay 3% 4% Tricare 3% 2% Other third-party payors 5% 3% Total

100%

100%

The Company estimates that contractual adjustments represent approximately 60% of the gross patient service revenue for the years ended December 31, 2017 and 2016, respectively. Contractual adjustments are based on terms defined in payor agreements. Deferred financing costs Deferred financing costs represent fees paid to lenders and other third parties to secure financing, are capitalized as incurred, and are recognized to interest expense over the life of the debt using the effective interest method. The Company considers ASC 470-50, Debt – Modification and Extinguishments, when evaluating the impact of amendments to the Company’s debt arrangements to determine the treatment for cost previously capitalized and fees incurred to secure the new financing. As of December 2015, the Company adopted Accounting Standard Update (“ASU”) 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Cost. The adoption of this ASU required that debt financing costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. Deferred financing fees directly related to the potential funding described in Note 3 shall be capitalized and presented in the balance sheet as deferred financing fees – offering. Deferred revenue share Certain debt agreements include provisions providing lenders the right to a portion of the Company’s future earnings. The provisions were included as incentives to the lender, vary in nature, and primarily include the lender’s right to a fixed or prorated percentage of revenue and/or Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) over a specified term which extends beyond maturity of the debt. Collectively, these arrangements are referred to as deferred revenue shares (Note 6). At the inception of the original agreement or when the provision was added to the lending arrangement, the Company recorded the fair value of the revenue share arrangement as a discount or loss on extinguishment, subject to the conclusion of the Company’s ASC 470-50 analysis. The off-set resulted in the recognition of a revenue share liability which is accreted to interest expense



12

using the effective interest method based on the forecasted future cash flows of the revenue share arrangement. The Company applies the prospective method to adjust for changes in anticipated cash flows. Changes are assessed periodically as significant changes in forecasted cash flows become known and are reflected in interest expense over the remaining term of the obligation. Amounts recorded as a debt discount are amortized to interest expense over the term of the debt using the effective interest method. Distributions by the Company to the lenders for revenue share accrued are subject to certain provisions in the agreements, are based on the seniority of the lender, and are not anticipated to occur in the near term. As such, the total value recorded for these arrangements as of December 31, 2017 and 2016 is classified as a long-term liability. Any payments made in the future will be recorded as they occur and reduce the outstanding liability. Advertising and marketing costs Costs incurred for advertising and marketing are expensed as incurred and are included in the Company’s operating expenses as general and administrative expenses. Advertising and marketing expenses was approximately $1.1 million and $1.6 million for the years ended December 31, 2017 and 2016, respectively. Income taxes The Company is organized as a limited liability company and MPTH has elected to be taxed as a partnership for U.S. federal income tax purposes. Accordingly, for federal and state income taxes, income is taxed to Members based on their allocated share of taxable income or loss. Certain states tax the income of limited liability companies at the entity level. Provision for such state income taxes has not been material. The Company did not make any distributions to its Members for income taxes during the years ended December 31, 2017 and 2016. Fair value measurements The estimated fair values of the Company’s short-term financial instruments, including cash and cash equivalents, accounts receivable and accounts payable arising in the ordinary course of business, approximate their individual carrying amounts due to the relatively short period of time between their origination and expected realization. For liabilities such as notes payable and long-term debt not accounted for at fair value and without quoted market prices, fair value is based upon estimated cash flows adjusted for credit risk, which are discounted using an interest rate appropriate for the maturity of the applicable loans. The fair value of notes payable and long-term debt approximates their carrying value. The estimated fair values of the Company’s revenue share liabilities were determined using an appropriate discount rate based on the relative borrowing risk of the Company, and the fair value approximates carrying value. Debt modification and extinguishments Any reacquisition, retirement, modification or exchange of debt instruments is subject to specific accounting treatment under ASC 470-50. A debt extinguishment is recognized if the modification or exchange of debt instruments has substantially different terms or has been significantly modified. An exchange or modification is considered substantial when the present value of the cash flows



13

under the new note is at least 10% different from the present value of the remaining cash flows under the terms of the original note using the effective interest rate of the original note as the discount rate. Cash flows can be affected by changes in principal amounts, interest rates, maturity, option features, revenue share interests and additional fees exchanged between parties. Upon extinguishment, the carrying value of the original debt is derecognized and the fair value of the new debt is recognized. The difference between the fair value of the new debt and the carrying value of the original debt is recorded as a gain or loss and recognized in the period in which the extinguishment took place. Debt extinguishment gains and losses are not recognized as extraordinary items as they are not considered both unusual and infrequently occurring. Interest expense is recorded based on the effective interest rate of the new debt. Any unamortized premium or discounts and issuance costs are amortized prior to the extinguishment and determination of the gain or loss. Recently adopted accounting pronouncement In August 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-15, requiring management to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern. The update became effective for the annual period ending after December 15, 2016, and for annual periods ending thereafter. The Company has adopted this ASU for the years ended December 31, 2017 and 2016, and management has concluded that there is substantial doubt as to the Company’s continuation as a going concern within one year after the issue date of the consolidated financial statements if the Company is unable to execute a certain transaction (Note 3). Recently issued accounting pronouncements not yet adopted In May 2014, the FASB issued a new comprehensive revenue recognition standard, ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASU 2014-09”), which will apply to virtually all industries. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies the performance obligation. The new standard will be effective for nonpublic entities for annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact that ASU 2014-09 will have on its consolidated financial statements. In February 2016, the FASB issued new accounting guidance related to leases. This update, effective for the Company beginning January 1, 2020, will replace existing guidance in GAAP and will require lessees to recognize lease assets and lease liabilities on the balance sheet for all leases and disclose key information about leasing arrangements. When implemented, lessees and lessors will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the effects of this guidance on the consolidated financial statements.



14

2. Restatement In February 2018, and after the issuance of the Company’s consolidated financial statements for the year ended December 31, 2015, management concluded that the previously issued consolidated financial statements for prior years should not be relied upon due to errors identified in the referenced financial statements. The errors identified primarily related to the Company incorrectly accounting for capitalized interest, debt issuance costs and the accretion of revenue share arrangements related to the Company’s debt issuances, in addition to modification accounting for amendments made to the Company’s existing debt arrangements. The Company has restated its previously reported consolidated financial statements and has reflected the correction of the errors in the Company’s opening accumulated deficit at January 1, 2016. The conclusion to restate the Company’s consolidated financial statements followed an internal review of the Company’s consolidated financial statements and accounting records. The review identified an overstatement of the Company’s consolidated net assets and errors in cumulative earnings through December 31, 2015. The effects of the restatement, including the correction of all errors identified by management, were deemed to be material to the previously issued consolidated financial statements, and are reflected in the Company’s accompanying consolidated financial statements and notes. In addition, the Company also recorded other miscellaneous adjustments as part of this restatement that are either related to the above or were previously identified but determined to be immaterial. The total cumulative impact of the restatement on the Company’s accumulated deficit as of December 31, 2015 was as follows (the income tax effects were not material):

Accumulated deficit, December 31, 2015 (original) $ 33,084,372 Cumulative misstatement 8,295,462 Accumulated deficit, January 1, 2016 (restated) $ 41,379,834

The corrections, net of any income tax effects as applicable, relate to:

(a) Improper application of the interest method

Management determined that the Company failed to properly apply the interest method, as outlined in ASC 835-30, Interest—Imputed Interest. The error impacts the amortization of deferred financing costs and debt discounts, as well as the subsequent measurement of the Company’s revenue share arrangements—discussed further below. The result was an understatement of interest expense in periods prior to the year ended December 31, 2016.

(b) Improper treatment of debt financing costs

Management identified errors in the treatment of incremental costs incurred in connection with the Company’s lending arrangements, including fees paid to lenders and third parties as a result of the issuance of new debt and/or the amendment of pre-existing debt arrangements. The Company incorrectly capitalized certain costs not eligible under the guidance, and incorrectly applied the interest method to recognize the deferred cost to interest expense over the life of the note.



15

(c) Improper treatment of revenue share arrangements

Management identified errors in the initial measurement and subsequent treatment of certain incentives provided to the lender(s) in exchange for either the issuance of or amendment of the Company’s debt arrangements.

More specifically, management determined (i) the day-one fair value of the revenue share incentive was not properly calculated, (ii) the financial models used by the Company incorrectly accounted for changes in anticipated cash flows, (iii) the amortization of the debt discount was not recorded correctly; and (iv) the Company improperly deferred interest expense associated with the revenue share arrangements until earned, failing to accrete the liability in accordance with ASC 835-30.

(d) Improper treatment of debt modification—extinguishment accounting

The Company reviewed its accounting for amendments entered into with its various lenders during fiscal years 2012 through 2015, and determined that the Company had improperly executed the troubled debt restructuring analysis pursuant to ASC 470-60, Troubled Debt Restructuring, and failed to perform an appropriate concession analysis which includes comparing the effective borrowing rate of the original debt at the date of the modification against the effective borrowing rate of the amended debt immediately after the modification date. Additionally, the Company inappropriately analyzed and accounted for the debt modification pursuant to ASC 470-50 and did not apply the appropriate analysis to conclude on debt modification versus extinguishment and assessing whether the present value of the cash flow under the terms of the new debt instrument is at least 10% different from the present value of the remaining cash flows under the terms of the original instrument.

Moreover, the Company did not properly consider the day one fair value of the revenue share offered to the lender as a result of an amendment to the debt, as a fee paid to the lender, therefore incorrectly recording the revenue share arrangement as a debt discount rather than recognizing the cost as a loss on extinguishment, when the Company concluded an amendment constituted an extinguishment.

(e) Improper treatment of capitalization of interest

Management determined interest expense was incorrectly capitalized in prior periods due to the misapplication of ASC 830-20. Specifically, the Company (i) incorrectly computed the capitalization rate (weighted average interest rate or borrowing rate) used in the calculation to determine eligible capitalized interest; and (ii) incorrectly computed the average accumulated expenditures. Before considering the implications of errors discussed in (a) through (d) above, the impact of these errors was an understatement of expense (overstatement of cost capitalized). The corrections reflected above are net of the other restatement adjustments noted, and in turn impact the depreciation expense originally recorded.

(f) Improper recognition of prior period expenses and other miscellaneous errors

Certain prior period amounts related to IT maintenance services and property taxes were included within the incorrect period. The Company adjusted for these errors to properly reflect the timing of services rendered in the statement of operations.



16

3. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis which contemplates the continuity of operations and assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for twelve months from the issuance date of these consolidated financial statements. The Company incurred losses of approximately $63.5 million and $73.4 million, and recorded net cash used in operating activities of approximately $14.6 million and $35.0 million for the years ended December 31, 2017 and 2016, respectively. In 2016, 2017 and first half of 2018, the Company defaulted on several of the outstanding debt agreements and worked with its creditors to obtain waivers to remedy these defaults. Cash flows from operations have not been sufficient to service ongoing commitments related to the Company’s debt obligations or expenditures for certain third-party services rendered in the normal course of business. The Company expects to continue the practice of deferring payments and does not anticipate cash flows from operations to be sufficient to service operations and outstanding debt for the foreseeable future. Substantial doubt exists as to whether the Company will continue as a going concern within the next twelve months. Management believes that the actions discussed below will mitigate the concern raised by the Company’s historical operating results and satisfy estimated liquidity needs for twelve months from the issuance of the consolidated financial statements. As of June 30, 2018, the Company had $9.9 million (unaudited) cash on hand and expected to generate sufficient cash flows from operations to meet its projected cash outflow through July 31, 2019, while continuing its current practice of deferring payments on certain operating and interest expenses. In May 2018, the Company successfully secured an extension to its financing agreement with Deutsche Bank, which was scheduled to mature on May 13, 2018. The extension extended the due date of the note to September 13, 2018 and resulted in an additional financing fee of approximately $3.4 million. Planned sale and lease of assets In July 2017, the Company engaged two leading national underwriters to co-lead the Company’s pursuit of new sources of funding. Also, during that time, the Company engaged two financial advisors to serve as the independent registered municipal advisors and several other parties to help successfully secure new funding. The planned funding will initiate from, and be wholly dependent upon, the issuance of tax-exempt revenue bonds in the amounts of up to $365.0 million (the “Bonds”) issued by the Public Finance Authority (“PFA”), a unit of government of the State of Wisconsin. The contemplated transactions are as follows. The Company, as lessor, and PFA, as lessee, will enter into a ground lease of its land and improvements (the “Ground Lease”), currently owned and operated by the Company, in conjunction with a sale of personal property from the Company to PFA. Contemporaneously with the issuance of the Bonds, the Company and PFA will enter into a Facility Operating Agreement (“FOA”) establishing the Company as the operator of the Center. The Bonds will be secured by PFA’s leasehold interest in the land and the building, PFA’s interest in the equipment, security interest in


17

the FOA, the funds established in accordance with the FOA, and the various funds held under the Trust Indenture. Substantially all the rent to be paid to the Company under the Ground Lease will be paid at the inception of the lease, as discussed further below. The proceeds of the Bonds will be used to make the rent payment, purchase the personal property, fund various reserve accounts, and pay certain costs of issuances. Issuance of the Bonds is anticipated to occur during the third quarter of 2018.

Lease Agreement

In accordance with the terms of the Ground Lease, the Company will lease its land and improvements to PFA for a term of 80 years. Proceeds of the Bonds will be used to finance an upfront lease payment to the Company, expected to be comprised of one lump sum payment of $221 million on the lease commencement date. PFA will pay 79 subsequent annual fixed rent payments of $1. As the tenant, PFA would be responsible for all real estate taxes and certain other costs as defined in the lease agreement.

Sale of Personal Property

Effective on the date of issuance of the Bonds, PFA will enter into a contract to purchase from the Company certain furniture and equipment for approximately $8.0 million with the proceeds from the Bonds.


Effective on the date of issuance of the Bonds, PFA and the Company will enter into a long-term FOA with respect to all decisions affecting the operation, maintenance, and management of the Center. The term of the FOA would be for an initial 18-year period, with an automatic 15-year renewal term, unless notice of termination is given by either party.

The Company will be required to establish an Operating Account to collect all Gross Operating Revenues and Professional Fee Revenues and pay all Operating Expenses that have been approved by the Operating Plan and Budget, as defined by the FOA. The Company will retain certain contracts in its name including its Medicaid permit to continue to collect government receivables. At the end of each month, the Company will be required to transfer all moneys in the Operating Account above $4.7 million into the Revenue Fund held by the trustee. Under the terms of the FOA, the Company will not be required to advance any of its own funds for the benefit of the Center, provide any financial support for the Center, or lend its credit for the Center.

Donative Transfer

Immediately after the execution of the Ground Lease, the Company will donate the reversionary interest in the land to the UMB Health Sciences Research Park Corporation, a Maryland not-for-profit corporation. As a result, all capital assets will be relinquished from the Company.

If issuance of the Bonds is successful, the Company expects the resulting cash inflows and corresponding issuance of new agreements noted above to be sufficient to renegotiate and settle the outstanding debt obligations—including interest and deferred revenue share—related to existing creditors and equity holders, and provide the liquidity necessary to support the Company’s



18

operations for twelve months from the issuance of the consolidated financial statements, thereby alleviating the conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern. The Company cannot provide assurances that these plans will not change, that changes in circumstances will not result in the depletion of the Company’s capital resources more rapidly than currently anticipated, or that the Company will be successful in securing additional liquidity. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, but due to the Company’s future liquidity needs, history of net losses, and negative cash flows from continuing operations, as well as the maturity of existing loans on September 13, 2018, there is substantial doubt about the Company’s ability to continue as a going concern should the issuance of the Bonds be delayed into the fourth quarter of 2018 or not be successful. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 4. Property, Plant and Equipment The Company’s property, plant and equipment consist of the following as of: December 31, Useful lives (years) 2017 2016 Building 5 - 40 $ 115,260,155. $ 115,260,155. Proton equipment 5 - 30 102,774,649. 90,278,452. Construction in progress N/A 11,938,076. 18,855,281. Land N/A 14,144,240. 14,144,240. Medical equipment 5 - 10 4,713,541. 4,362,904. Computer equipment and software 3 - 7 3,890,514. 1,874,812. Furniture and fixtures 5 - 10 1,803,171. 1,793,462. Property, plant and equipment - cost 254,524,346. 246,569,306. Less: accumulated depreciation and amortization (24,909,473)

(11,851,937)

Property, plant and equipment, net $ 229,614,873. $ 234,717,369.

Total additions during the years ended December 31, 2017 and 2016, including construction in progress were approximately $8.0 million and $18.1 million, respectively. As of December 31, 2017, the total cost recorded for assets under capital lease approximated $7.0 million. Depreciation and amortization expense for the years ended December 31, 2017 and 2016, respectively, was approximately $13.1 million and $10.9 million. Construction in progress as of December 31, 2017 and 2016 primarily relates to the construction and buildout of the Company’s proton treatment rooms. Construction of the fifth and final treatment room began in 2017 and became ready for use in April 2018.


19

Medical equipment, computer equipment and software acquired under capital leases totaled approximately $2.8 million and $3.7 million during the years ended December 31, 2017 and 2016, respectively. Amortization expense under capital leases is included in depreciation and amortization expense in the consolidated statement of operations. Accumulated amortization was approximately $0.3 million and $0.4 million for the years ended December 31, 2017 and 2016 respectively. The assets under lease are treated as capital leases because they contain a bargain purchase option to acquire the leased assets at the end of the lease term with the respective vendor.

Interest expense on debt issued for construction projects is capitalized until the projects are placed into service and depreciated over the estimated useful life of the asset. Capitalized interest expense included in the cost basis of building and equipment as of December 31, 2017 and 2016 is approximately $47.5 million. No interest was capitalized for the years ended December 31, 2017 or 2016.

5. Equipment Purchase Agreement

In June 2011, the Company entered into a Proton System Purchase Agreement (“the Initial System Agreement”) with Varian Medical Systems, Inc. (“Varian”) to acquire for the Center the Varian Proton System and Proton System Components (collectively, “the Proton System”). The agreement underwent amendments in May 2013, July 2013, January 2014, September 2014 and April 2015. Varian provided the Company with the equipment, hardware, firmware and software for the Proton System and performed installation services relating to the Company’s development and construction of the proton treatment and research facility. Subject to the terms of the Amended System Agreement as of April 14, 2015, the Company will pay a total of approximately $86.6 million for the Proton System and related services based upon the achievement of various milestones.

The Company paid approximately $0.2 million and $0.5 million for the years ended December 31, 2017 and 2016, respectively of the outstanding amount due under the Proton System Agreement, bringing the total amount paid to Varian under the agreement to approximately $61.4 million. As of December 31, 2017, and 2016 respectively, the balance incurred but unpaid approximated $31.6 million and $23.6 million and is classified as a current liability on the balance sheet, all of which are due at the end of September 2018 and is subordinate only to Deutsche Bank. All note payments made to Varian are based on paid-in-kind interest at 15% and are non-refundable.



20

6. Notes Payable and Revenue Share Liability The Company’s notes payable, excluding revenue share liability, consists of the following as of: December 31, 2017. 2016.

Deutsche Bank (a) Principal amount $ 172,000,000. $ 172,000,000. Less: Unamortized debt discount (1,117,459) (3,922,282) Less: Unamortized revenue share discount (2,121,746) (7,388,268)

168,760,795. 160,689,450.

Single Investor - Varian - Series A (b) Principal amount 43,668,084. 38,753,209. Less: Unamortized debt discount (113,079) (132,987) Less: Unamortized revenue share discount -. -.

43,555,005. 38,620,222.

Single Investor - Lulu Ltd (c) Principal amount 25,000,000. 25,000,000. Less: Unamortized debt discount -. -. Less: Unamortized revenue share discount (560,362) (1,190,447)

24,439,638. 23,809,553.

Series A/B notes Non-Varian - Reg D (d) Principal amount 9,500,000. 9,500,000. Less: Unamortized debt discount (293,757) (508,864) Less: Unamortized revenue share discount (114,672) (198,556)

9,091,571. 8,792,580.

Total notes payable, net 245,847,009. 231,911,805.

Less: Current portion of notes payable, net 193,200,333. -.

Long term notes payable, net $ 52,646,676. $ 231,911,805. The Company historically entered into several note payable agreements (the “Notes” or “debt”) with various lenders. Many of these arrangements have been amended with the principal objective of extending the maturity dates related to the respective Notes. Due to the extension of the maturity dates of the Notes, the Company incurred additional financing fees payable to the lender, and other third-parties, which also included granting new or additional revenue share inducements.


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The Company’s lending arrangements, detailed in order of seniority, include the following:

(a) Deutsche Bank Trust Company Americas

On May 13, 2015, MPTC entered into a Credit Agreement (“Deutsche Bank Note”) withDeutsche Bank Trust Company Americas (“Agent”) and Deutsche Bank Securities(“Arranger”), collectively referred to as the Lenders. The Credit Agreement provides for amaximum aggregate loan to the Company in the principal amount of $172.0 million subjectto two tranches equal to $155.0 million and $17.0 million. On May 13, 2015, the Companydrew down the initial term loan in an aggregate amount equal to $155.0 million and on April19, 2016, the Company received an additional $17.0M. The Deutsche Bank Note bearsinterest of 12.5% per annum payable quarterly in arrears and was set to mature on May 13,2018 but was amended to extend the maturity date to September 13, 2018. Interest iscomputed on the basis of a 365-day or 366-day year, as the case may be, for the actualnumber of days elapsed in the period for which it accrues. The Company may prepay all ora portion of the loan at any time in an aggregate minimum amount of $5.0 million andintegral multiples of $1.0 million in excess of that amount.

Under the terms of the Credit Agreement and at inception of the arrangement, the Companyestablished and deposited $21.4 million into a twelve-month debt service reserve account,only to be used at the discretion of the lender. During 2017, $5.3 million of the funds in thisaccount were used for payment of the 2017 fourth quarter interest payment in December2017.

The Company incurred interest expense of approximately $21.5 million and $21.8 million forthe years ended December 31, 2017 and 2016 respectively, which included approximately$1.0 million in default interest accrued at an interest rate of 14.5% per annum for the yearended December 31, 2016. In May 2018, the Company’s Senior Lender agreed to waive alldefault interest incurred for the year ended December 31, 2017, and through May 10, 2018as part of an amendment to the Deutsche Bank Note. If default interest associated with theDeutsche Bank Note was not waived, the Company would have incurred approximately $3.4million of additional interest expense for the year ended December 31, 2017. After May 10,2018, default interest shall continue to accrue at an interest rate of 14.5% per annum.Except for approximately, $0.1 million and $0.6 million recorded in accrued expenses as ofDecember 31, 2017 and 2016 respectively, all other interest expense was paid in the period.

The Deutsche Bank Note is secured by a first lien on substantially all assets of the Company,and senior in right of payment to the subordinated obligations. The Deutsche Bank Note isguaranteed by APT per the Sponsor Guarantee and Security Agreement. As consideration forthe Deutsche Bank Note made under the Credit Agreement in May 2015, the Company agreedto pay the Lender an upfront fee of $4.3 million due upon close, and an incremental fee(“revenue share”). The incremental fee, is discussed further below, and shall continuethrough the nineteenth (19) anniversary of the Agreement, is calculated based on an amountequal to 5% of MPTC’s annual gross cash receipts and is payable quarterly in arrears.Excluding the revenue share, the total fees incurred and capitalized by the Company as adiscount on the debt related to this arrangement totaled approximately $7.5 million. As ofDecember 31, 2017, and 2016, the cumulative unamortized balance approximated $1.1million and $3.9 million, respectively.


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(b) Varian

On May 7, 2013, the Company executed an agreement with Varian Medical SystemsInternational AG (“Varian”) for a principal balance of $10.0 million, subject to an interestrate of 10.0% per annum, due upon maturity, and computed for each payment period basedon the actual number of days outstanding over a year of 360 days. The note was scheduledto mature on the earlier of November 7, 2013 or when the Company received $25.0 millionin new financing. From May 7, 2013 to September 26, 2014, the agreement underwent sixamendments extending the date of maturity and charging incremental fees to the Company.

On September 26, 2014, the bridge financing arrangement converted to a Series A SecuredNote, extending the maturity date of the note from September 30, 2014 to March 31, 2018.In return for the extension, the amendment increased the annual interest rate to 12.0% perannum, computed on the basis of a 360-day year of twelve 30-day months, and granted thelender rights to future earnings; hereby referred to as the “Revenue Fee” and discussed inthe section labeled “Revenue Fee - Intercreditor Agreement” below.

On May 13, 2015, in connection with the lending arrangement executed with Deutsche Bank,the Company executed a seventh amendment with Varian. The Amendment extended thematurity of the debt to July 15, 2022, rolled the accrued and unpaid interest expense intothe existing principal balance (new principal balance of $12,326,422), and transitioned thenote to paid-in-kind interest computed monthly at a rate of 12.00% per annum, computedon the basis of a 360-day year of twelve 30-day months. In addition, Varian committed topurchasing $22.8 million of additional Series A Notes, anticipated to be made in fourseparate, but equal installments. In July and October 2016, Varian exercised theircommitment and funded the remaining $22.8 million commitment in two equal installmentsof $11.4 million. The changes in the timing of the additional commitments were evaluatedfor modification-extinguishment treatment in accordance with ASC 470-50 and determinedto be modifications.

On July 31, 2015, an eighth amendment was executed, changing the maturity date of theSeries A Notes to July 15, 2020, July 15, 2021 and July 15, 2022 with amounts due equal to33%, 50% and 100% of the then outstanding principal balance.

Series A Notes are secured on a third priority basis by liens on substantially all assets of theCompany, and junior and subordinated in right of payment to Senior Obligations per theAgreement. For the years ended December 31, 2017 and 2016, the Company incurredinterest expense of approximately $4.9 million and $2.6 million, respectively, all of whichis included in the outstanding principal balance as of the years then ended.

(c) Lulu Limited

On August 31, 2012, the Company executed an agreement with three lenders aggregating toan outstanding principal balance of $25.0 million. The notes were scheduled to mature onAugust 31, 2013 and accrued interest at an annual rate of 12.0% per annum, computed basedon a 360-day year and 30-day month. Over the course of the next two years, thearrangements were subject to several assignments and amendments, consolidating the debtto one lender from three, extending the maturity date of the note, and increasing theapplicable interest rate to 15.0% per annum, computed based on the actual number of dayselapsed in a 360-day year.



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On August 15, 2014, the note was amended and converted to a Senior Secured Promissory Note with the maturity date extended to September 30, 2017, secured on a second priority basis by liens on substantially all assets of the Company, and junior and subordinated in right of payment to Senior Obligations per the Intercreditor agreement. In addition, the amendment provided for a most favored nations provision, and granted Lulu the right to 1.6667% of gross cash receipts collected by the Company during each calendar month through perpetuity. The modification was accounted for as an extinguishment of the debt, and the value of the revenue share interest determined at inception of approximately $4.0 million was immediately expensed and recorded as a loss on extinguishment at the debt modification date.

On May 13, 2015, the arrangement was amended again, extending the maturity of the debt to September 30, 2018 and adding an additional revenue share fee equal to 0.7% of gross cash receipts collected by the Company during each calendar month through the nineteenth (19th) anniversary of the agreement. The Company concluded the modification was not an extinguishment and recorded an additional revenue share liability and corresponding discount of approximately $1.9 million at the time of the amendment.

Both revenue fees (1.6667% and 0.7%) are subject to the payment provisions discussed below and outlined in the Intercreditor Agreement.

The Company incurred approximately $4.7 million and $4.3 million in interest expense for the years ended December 31, 2017 and 2016, respectively, of which approximately $8.0 million is accrued for as of December 31, 2017. Subsequent to the year ended December 31, 2015, under Amendment No. 4 to the Credit Agreement with Deutsche Bank, regularly scheduled interest payments to subordinated debt holders cannot be made until certain milestones have been met.

(d) Series A/B notes - Various Non-Varian Reg D Lenders

In May 2013, three Series A Senior Secured Promissory Notes were executed with separate lenders. The Notes aggregated to $7.5 million, were subject to interest of 10.0% per annum computed based on a 30-day month and 360-day year, payable monthly, and scheduled to mature on March 31, 2018, subject to a one-year optional extension. On September 26, 2014, the agreements were amended, increasing the stated interest rate from 10.0% to 12.0%, and on May 13, 2015, amendments were executed extending the maturity date to March 31, 2019.

Cumulative costs capitalized over this period approximated $1.3 million, of which approximately $0.3 million and $0.5 million remained unamortized as of December 31, 2017 and 2016, respectively.

The Series A notes were granted a pro-rata revenue fee, computed in accordance with the Intercreditor Agreement, as defined further below. Senior Secured notes are secured on a second priority basis by liens on substantially all assets of the Company, and junior and subordinated in right of payment to Senior Obligations per the Agreement.

On May 21, 2014, the Company executed a Series B Senior Secured Promissory Note for $1.0 million, due March 31, 2018, subject to a one-year optional extension. The note accrued interest at a rate of 12.0% per annum prior to increasing to 13.25% per annum, when amended on September 26, 2014. On October 17, 2014, the principal balance was extended



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to $2.0 million, without any changes to maturity or the interest rate. On May 13, 2015, an amendment was executed extending the maturity date to March 31, 2019.

The Company incurred approximately $1.1 million and $1.3 million in interest expense for the years ended December 31, 2017 and 2016, respectively, of which approximately $2.1 million is accrued for as of December 31, 2017. Subsequent to the year ended December 31, 2015, under Amendment No. 4 to the Credit Agreement with Deutsche Bank, regularly scheduled interest payments to subordinated debt holders cannot be made until certain milestones have been met.

(e) Kelcy Warren

The preexisting note with Kelcy Warren was extinguished prior to January 1, 2016; however, included a provision providing the lender the right to 1.0% of the Company’s cash collections through perpetuity. The provision continues despite settlement of the debt and is subject to the same payment provisions discussed below.

Related to all the Company’s notes there are no subjective acceleration clauses that would cause a material change in the estimation or actual future payments. Deferred financing costs Deferred financing costs are reported net of notes payable on the accompanying consolidated balance sheet and represent the costs incurred to obtain financing which include legal fees, loan fees related to loan extensions and commissions paid to secure debt financing. The debt discount associated with deferred financing costs is amortized over the life of the note using the effective interest method, and for the years ended December 31, 2017 and 2016 approximately $3.1 million and $2.5 million was recorded to interest expense, respectively. The cumulative unamortized debt discount as of December 31, 2017 and 2016 was approximately $1.5 million and $4.6 million, respectively. Deferred revenue share liability As noted above, certain note purchase agreements and related promissory notes include revenue share obligations provided to the lenders as inducements to enter into the loan agreement. The Company accounts for these obligations at their fair value as determined upon inception of the agreement using a discount rate reflective of the Company’s financial position and borrowing capacity. The fair value is recorded as a discount to the associated debt and a long-term liability for future expected revenue payments to the respective lender. The debt discount is amortized to interest expense over the term of the debt arrangement, using the effective interest method, and the deferred revenue share liability is released as payments are made to the lender. The long-term liability is accreted to expected future revenue payments using the effective interest method, is adjusted prospectively for changes in anticipated cash flows, and the accretion is recorded as interest expense. Additionally, any revenue share inducements that were granted together with the debt extinguishment described above, were immediately expensed and accordingly, did not result in the Company recording a debt discount.



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For revenue share arrangements that extend perpetually, the Company used a discount period through December 31, 2045, which is based on the period over which the Company expects to benefit from its revenue generating capital assets. The Company’s deferred revenue share liability and related interest expense consist of the following:

Balance as of

December 31, 2016 2017 accretion Balance as of

December 31, 2017 Deutsche Bank $ 21,313,705 $ 1,755,167 $ 23,068,872 Varian 2,878,656 571,303 3,449,959 Lulu 10,322,605 567,474 10,890,079 Series A/B 1,066,494 73,267 1,139,761 Kelcy Warren 4,405,803 268,762 4,674,565 Total $ 39,987,263 $ 3,235,973 $ 43,223,236

Initial fair value

recorded

Balance as of January 1, 2016

(restated) 2016 accretion Balance as of

December 31, 2016 Deutsche Bank $ 13,864,873 $ 16,387,079 $ 4,926,626 $ 21,313,705 Varian 2,175,266 1,581,673 1,296,983 2,878,656 Lulu 5,909,441 7,969,817 2,352,788 10,322,605 Series A/B 483,732 881,493 185,001 1,066,494 Kelcy Warren 2,081,658 3,407,095 998,708 4,405,803 Total

$ 24,514,970

$ 30,227,157

$ 9,760,106

$ 39,987,263

The deferred liability will be reduced as required minimum payments are made over the term of the revenue share arrangement and interest expense shall accrete over the same term using the effective interest method. As of December 31, 2017, no revenue share payments against the revenue share liability have been made, or are expected to be made, and the balance is classified as a long-term liability on the consolidated balance sheet. Revenue Fee – Intercreditor Agreement Under the terms of the various arrangements and in accordance with the provisions in the Intercreditor Agreement, unless otherwise indicated above, the Revenue Fee shall accrue and be payable to the holders of the Series A Notes as long as the corresponding note remains outstanding. During this period, the Revenue Fee should be calculated as the Company’s anticipated gross cash receipts multiplied by the Applicable Revenue Fee Percentage (defined below). Beginning on the first day immediately succeeding the payment of all of the outstanding Series A Notes in full in cash



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and ending on the ten (10) year anniversary of said payment, an amount equal to the sum of the Monthly EBITDA Amount multiplied by the Applicable EBITDA Percentage (defined below).

The payment of these fees are due quarterly; however, to the extent that the difference between the gross receipts collected by the Company for the most recent fiscal quarter ended and the Company expenditures for the same period (“Excess Gross Receipt Amount”) are less than the Revenue Fee, the Company shall not be required to pay the Revenue Fee. Rather the unpaid portion of the Revenue Fee will accrue, and any subsequent payment will be applied against the earliest unpaid portion of the Revenue Fee.

The Applicable Revenue Fee Percentage and the subsequent Applicable EBITDA Percentage are defined as follows:

Applicable Revenue Fee Percentage – the product of (a) one percent (1.0%) multiplied by (b)

the result of (i) an amount equal to the outstanding principal amount of Series A Notes determined as the day immediately preceding the first day of the Subject Period (without giving effect to any prepayments of principal made by the Company on or prior to such date) divided by (ii) $25,000,000.

Applicable EBITDA Percentage - the product of (a) two percent (2.0%) multiplied by (b) the

result of (i) an amount equal to the outstanding principal amount of Series A Notes determined as the day immediately preceding the first day of the Subject Period (without giving effect to any prepayments of principal made by the Company on or prior to such date) divided by (ii) $25,000,000.

7. Related-Party Transactions Advanced Particle Therapy Advanced Particle Therapy (“APT”) was Sponsor of the Company and had representatives serving as officers of the Company and on the Company’s Board of Managers through March 2017. APT provided the Company with development and management services under the Project Development and Management Services Agreement. Effective August 31, 2016, APT’s only representative on the Company’s Board of Managers was removed as both an officer of the Company and his role on the Board. APT was originally issued 100% of Class B Units of which 10% was allocated to Signet Development, LLC, a joint venture partner which has significant experience and expertise in real estate development and construction management. Separately APT transferred 3.4% to a private party. Under the terms of the Project Development and Management Services Agreement, as amended in February 2013, APT provided certain services with respect to the development, financing, construction and operation of the Center. In consideration for these services, the Company paid APT a fee equal to 5% of building construction, architectural and engineering, and proton equipment and subsystems costs, exclusive of any capitalized interest recorded in building costs. As a result of this arrangement, approximately $4.9 million and $4.7 million are included in due to related parties at December 31, 2017 and 2016, respectively, and is being negotiated for settlement.



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Under the amended Project Development and Management Services Agreement, the fee due to Signet will no longer be paid by APT and is the responsibility of the Company. As of December 31, 2017, and 2016, a fee of $0.6 million remained unpaid and accrued by the Company. The balance is recorded as due to related parties and is classified as a long-term liability. In addition to this fee and in accordance with the agreement with APT, APT allocated shared expenses among several proton treatment centers managed by their organization. In May 2016, APT terminated all of its employees and APT negotiated a new agreement with the Company to transition shared Sponsor services to the Center. The Project Development and Management Services Agreement was replaced by a revised proposal on June 27, 2016. Under the new agreement APT was to be paid for the services on a scaled down basis from June 2016 through March 2017. During the year ended December 31, 2016, the Company incurred costs related to these arrangements of approximately $0.6 million, which was settled by alleviating the Company’s pre-existing prepaid balance of approximately $0.5 million and an additional cash outlay of approximately $0.1 million. As of December 31, 2017, MPTC had an aggregate amount of $14.2 million outstanding under the APT Promissory Notes bearing interest at an annual rate of 12%. The amount remains outstanding and is recorded as part of Notes payable due to related party in the Company’s consolidated balance sheet. Relative to these agreements, the Company incurred interest expense of approximately $1.7 million and $1.7 million for the years ended December 31, 2017 and 2016 respectively, and paid interest of approximately $0.4 million during the year ended December 31, 2016. Under Amendment No. 4 to the Credit Agreement with Deutsche Bank, dated July 6, 2016, regularly scheduled interest payments on the note payable from the Company to APT cannot be made until certain milestones have been met. Unpaid regularly scheduled interest payments accrued as of December 31, 2017 and 2016 was approximately $2.9 million and $1.2 million, respectively. In connection with the Company’s Agreement with Deutsche Bank, APT entered into a Guarantee and Security Agreement with Deutsche Bank. APT agreed to guarantee the obligations owed to the Lenders and grant a security interest in the collateral. The Administrative Agent under the Credit Agreement may make demands on the guarantee at any time on or after the earlier of (i) the date that is six months after the occurrence of an Event of Default, as defined in the Credit Agreement, unless the default is waived by the Lenders or is cured by the Credit Parties and (ii) the date that all, or substantially all tangible collateral is sold or otherwise disposed in connection with foreclosure. CPR Advisors, LLC During September 2016, the Company engaged CPR Advisors, LLC d/b/a Victory Partners (“CPR”) to provide business and financial advisory services to the Center. The arrangement required an initial retainer of $35,000 and a recurring monthly engagement fee of $35,000, plus out-of-pocket expenses, payable in two equal monthly installments, and was for an initial term of six months subject to automatic monthly renewals. As part of the agreement, CPR provided executive leadership to the Company, including but not limited to, the duties and services of Board Member, President, Treasurer and other management responsibilities. In connection with this arrangement, the Center also executed separate consulting agreements with representatives and affiliates of CPR, including the founder and managing partner of Victory Partners who served as the Center’s



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President, Chief Executive Officer, and Chairman until November 2017 when the arrangement was terminated (see Note 10 - Subsequent Events). Other key positions serviced in 2016 by representatives or affiliates of CPR included the Company’s Chief Vice President (VP) of Finance and Accounting; VP of Corporate Development; VP of Investor Relations; and Treasurer. In 2017, the Company continued to execute consulting arrangements with representatives and affiliates of CPR, fulfilling key leadership roles at the Center. In total, five new arrangements were executed and several of the arrangements (new and pre-existing) were either formally or informally amended, expanding the terms of the agreements and increasing the monthly rates due to each individual. In November 2017, Members of the Board voted to terminate the agreements with CPR and several of its affiliates, including the contract with the prior MPTH board member who served as President, Chief Executive Officer, and Chairman, and several other members of the executive suite. The terminations were effective immediately. Total expenditures incurred for the years ended December 31, 2017 and 2016 for services rendered by CPR Advisors and representatives or affiliates thereof, were approximately $1.7 million and $0.4 million, respectively. Two independent contractors previously affiliated with CPR continue to be engaged by the Company. Antson Advisors In April 2017, Antson Advisors was engaged to lead the development of a strategic growth and execution plan for both the marketing and business development efforts of the Company. In May 2017, the Company expanded Antson Advisors’ scope of work to include operational management. In June 2017, the Company replaced its Antson Advisors marketing engagement with a direct agreement with an Antson Advisors Managing Partner, contracted as a Director of Strategic Growth. In July 2017, the Company amended its operational management engagement to engage an Antson Advisors Managing Partner as a Managing Director of the Company. In November 2017, the Company replaced prior consulting agreements with Antson Advisors and its partners with a new management agreement. In addition, the Company expanded the scope of their engagement with Antson Advisors, LLC, to provide interim leadership to the Center until the hiring of a new Chief Executive Officer. The engagement contracted one Antson Advisors Managing Partner as acting CEO and President for the Center, another Antson Advisors Managing Partner as Vice President of Marketing and an Antson Advisors Executive Assistant to serve in a similar capacity at the Company. Total expenditures incurred for the year ended December 31, 2017 for services rendered by Antson Advisors were approximately $0.3 million.



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8. Commitments and Contingencies The aggregate minimum future lease commitments at December 31, 2017 which are all related to the Company’s capital leases, are as follows: December 31, 2017. 2018 $ 1,756,175. 2019 1,055,752. 2020 615,752. 2021 615,752. 2022 and after 1,216,346. Total future minimum lease payments $ 5,259,777. Less: imputed interest (762,630) Present value of future minimum lease payments $ 4,497,147.

Clinical management and administrative services agreement On January 9, 2012, MPTC entered into clinical management and administrative services agreements (CMASA) with the University of Maryland Radiation Oncology Associates, P.A. (“UMROA”) and the University of Maryland Medical Center (“UMMC”) for UMROA and UMMC to provide clinical management and administrative services at the Center, which included recommending an executive director, and establishing and implementing clinical policies and procedures. Professional services agreements On January 12, 2012, and later amended in May 2015, MPTC entered into two separate professional services agreements (“PSA”) with UMROA and UMMC, respectively, for UMROA and UMMC to provide physician services, medical direction, clinical support personnel and other related services. MPTC is responsible for compensation, building of the Center, appointment of an executive director, equipment, maintenance and billing. The PSA fees are based upon future payroll of the Company. UMROA currently requires MPTC to maintain a letter of credit to secure payment of fees. The amount of the letter of credit is determined prior to each fiscal year which begins July 1 and ends on June 30. The initial measurement period started on the first patient treatment (“Commencement Date”) and continue through June 30 following the Commencement Date. Each subsequent measurement period will be for the twelve-month period beginning July 1 and ending on June 30. The letter of credit is calculated based upon twelve months of base compensation for a proton therapy radiation oncologist, inclusive of employment-related expenses, multiplied by the number of full-time oncologists, plus the base compensation and benefits for the medical director. The amount calculated is then multiplied by a discount factor of 75%. As amended in May 2015, the Company is not required to fund the first $2.5 million of the calculated annual funding requirement until the obligations of the Company to Deutsche Bank, and its lending group are extinguished.



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The first patient was treated in February 2016, and the Company currently projects the letter of credit to be approximately $1.3 million, net of the $2.5 million waiver as of December 31, 2017 and 2016 respectively, assuming MPTC leases 5 oncologists employed by UMROA. Employee leasing agreement On March 29, 2012, MPTC entered into an employee leasing agreement (ELA) with UMMC which was later amended on September 23, 2014 and May 13, 2015. Pursuant to the amended terms of the ELA, UMMC leases to MPTC certain non-physician personnel to perform services such as dosimetry, physics, radiation therapy, nursing, administration, etc. and to direct such leased employees on behalf of MPTC. The initial term of the ELA is for 20 years from the date the Center was licensed for operation or the date the Center is ready to receive patients for consultation services, whichever is earlier, with automatic five-year renewals. The agreement may be terminated by either party with a twelve-month written notice. The future obligations are based upon projected future budgets. UMMC currently requires MPTC to maintain an Escrow Account to secure payment of fees. As amended in May 2015, the Company is not required to fund the initial $2.5 million of the calculated annual funding requirement until the obligations on the Company to Deutsche Bank and its lending group are extinguished. MPTC currently projects the funding for the UMMC Escrow Account to be approximately $1.0 million, net of the $2.5 million waiver. Total fees incurred related to the PSA, CMASA and ELA incurred for the years ended December 31, 2017 and 2016 approximated $14.9 million and $10.1 million, respectively. As of December 31, 2017, and 2016 respectively, approximately $2.0 million and $0.5 million was unpaid and included in accounts payable and accrued expenses. Land common area maintenance Under the land purchase and sale agreement, MPTC is required to pay approximately $0.4 million per year toward Common Area Maintenance and the Community Fund beginning the year that operations of the Center commence. Proton equipment operating and maintenance (O&M) agreement In connection with the Proton Purchase and Sale Agreement, MPTC entered into an agreement for support services. Under the terms of the agreement, Varian shall provide preventative maintenance, curative maintenance and technical operation services (the “Support Services”) beginning on acceptance of the first treatment room (October 2015) with fees due quarterly. Total Support Services fees incurred for the years ended December 31, 2017 and 2016 were approximately $6.4 million and $3.8 million, respectively. As of December 31, 2017 and 2016, respectively, approximately $6.7 million and $2.1 million was unpaid and included in accounts payable. Effective one year after the commencement date, Support Service fees shall be adjusted annually by an amount equal to the net percentage change in the Consumer Price Index (“CPI”) multiplied by the fees in effect for the immediately preceding year. Support Services fees for Year 6 shall be negotiated during Year 5 of the Support Services which shall not exceed $8.2 million. Support



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Services fees for all years following Year 6 shall be adjusted annually by an amount equal to the CPI multiplied by the fees in effect for the immediately preceding year. In June 2017, the Company experienced power supply concerns which led to the Company incurring additional Varian O&M costs of approximately $0.4 million for the installation of additional equipment in March 2018. Uninterrupted power source The Center has been experiencing power interruptions since commencement of operations in 2016. MPTC contracted to have an uninterrupted power source (“UPS”) installed on the incoming power lines that serve the proton treatment equipment. The installation was completed in March 2018. The UPS includes a battery system that will streamline power generation, in addition to eliminate volatility in the voltage which have caused power supply failures and many other issues for the Company’s proton equipment. The project cost was approximately $0.8 million of which approximately $0.6 million relates specifically to equipment and is being financed through Constellation Energy, the electricity provider to the Center. Related to this arrangement, the Company entered into a 5-year installment purchase of the UPS system which concludes in January 2023 whereby the Company pays approximately $13,000 per month which is at an effective interest rate of 6.49%. As of December 31, 2017, assets related to the UPS equipment included in construction in progress was approximately $0.8 million. RaySearch Americas The Company initially contracted with RaySearch for use of its RayStation software and hardware treatment planning system in 2016. The Company expanded its treatment planning capacity by purchasing an additional ten (10) software licenses in March 2017. The $3.4 million installment purchase includes approximately $2.2 million for licenses and associated hardware and approximately $1.2 million for a service and maintenance contract to the software and hardware through October 1, 2021. The annual obligations per the contract for 2017 through 2021 is $0.8 million, $1.0 million, $0.8 million, $0.6 million and $0.2 million respectively. Litigation The Company is subject to certain legal actions and regulatory investigation arising in the ordinary course of business. No such legal proceedings are, in the opinion of management, expected to have a material adverse effect on the financial position, results of operations or liquidity of the Company. HIPAA Compliance and Professional liability insurance The Health Insurance Portability and Accountability Act (“HIPAA”) assures health insurance portability, reduces healthcare fraud and abuse, guarantee security and privacy of health information, and enforces standards for health information. The Health Information Technology for Economic and Clinical Health Act (“HITECH Act”) imposes notification requirements in the event of certain security breaches relating to protected health information. Organizations are subject to significant fines and penalties if found not to be compliant with the provisions outlined in the



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regulations. Company management believes the Company is in compliance with applicable regulations. Professional liability insurance covers Physician services with coverage in the minimum amounts of $1.0 million per occurrence and $3.0 million aggregate per year through the Maryland Medicine Comprehensive Insurance Program (“MMCIP”). Legislation The healthcare industry is subject to numerous laws and regulations of federal, state and local governments. These laws and regulations include, but are not necessarily limited to, matters such as licensure, accreditation, government healthcare program participation requirements, reimbursement for patient services, and Medicare and Medicaid fraud and abuse. Government activity has continued with respect to investigations and allegations concerning possible violations of fraud and abuse status and regulations by healthcare providers. Violations of these laws and imposition of significant fines and penalties, as well as significant repayments for patient services previously billed. The Company believes that it is compliant with fraud and abuse regulations as well as other applicable government laws and regulations. Compliance with such laws and regulations can be subject to future government review and interpretation as well as regulatory actions unknown or unasserted at this time. SEC Investigation In June 2016, Maryland Proton Treatment Holdings, LLC received a subpoena from the Securities and Exchange Commission (“SEC”) “In the Matter of Advanced Particle Therapy, LLC (FW-4039)”. The SEC has requested the production of documents and communications that, among other things, relate to fundraising and development activities of APT and APT’s proton center development projects. The Company continues to cooperate with the investigation, and there have not been any recent requests from the SEC of the Company. As of the date of the consolidated financial statements, any adverse outcome remains indeterminable. MPTC expects to incur legal costs and other expenses in connection with responding to the investigation. Bonds In July 2017, the Company engaged two leading national underwriters to co-lead the Company’s pursuit of a new sources of funding, and in the months subsequent thereto, the Company also engaged two financial advisors to serve as the independent registered municipal advisors and several other third-parties to help successfully secure new funding. Relating to the issuance of the Bonds (Note 3), the Company incurred third-party costs of approximately $1.3 million which is capitalized and included within deferred financing fees - offering as of December 31, 2017. Of the $1.3 million capitalized, approximately $0.6 million were paid during the year ended December 31, 2017. These fees include services rendered and the Company’s estimate of reimbursable third-party costs. In aggregate, the Company expects to incur approximately $11.6 million in total costs related to issuance of the Bonds and securing new funding. Of this total, the Company has contingent fee arrangements primarily with the two leading underwriters whereby the Company will incur contingent fees of approximately $5.6 million upon the successful issuance of the Bonds and securing new funding.



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9. Members’ Deficit Class A units The Company authorized $68.0 million of Class A equity units comprised of voting Class A-1 and non-voting Class A-2 units. The Company paid selected brokers over the course of two years from March 2011 through April 2013, as compensation for their services, commissions and due diligence allowances of up to 8% and 12% of the gross equity proceeds from the equity capital raise for sales of Class A-1 and Class A-2 units, respectively. In 2014, the Company closed its equity offering having issued 656 units of Class A units for an aggregate amount of approximately $65.8 million. Class A-1 units issued and outstanding at December 31, 2017 and 2016 was approximately 217 and 227, respectively. Class A-2 units issued and outstanding at December 31, 2017 and 2016 was approximately 429. Of all Class A-1 units outstanding, 82.5 such units are held by parties which are also Lenders to the Company. All transfers of membership interests must be approved by the Company’s Board. The Class A-1 units were sold to investors at a price of up to $100,000 per unit, with a minimum investment of ten (10) Class A-1 units. The Company had issued an aggregate of $21.2 million Class A-1 units as of December 31, 2013. Fees incurred in connection with the Class A-1 offering were approximately $2.1 million based on the then determined fair value. The Company had the right to issue to one or more persons that agreed to act as the initial investor in the Class A-1 units a discount to the $100,000 price per Class A-1 unit. The initial investor contributed $9.0 million and received approximately 104 Class A-1 units in March 2011. In December 2017, one of the Company’s Class A-1-unit investors entered into an agreement to surrender all 10 units that had been previously acquired for a total of $1.0 million. No consideration was provided by the Company to the investor for the surrender of the units, and the surrender of the units resulted in a reduction in membership interest class A-1 and accumulated deficit of $1.0 million. The Class A-2 units were sold at a minimum investment of $104,550 per unit, subject to the right of the Company in its sole discretion to sell Class A-2 units in fractional units. The Company issued an aggregate of $44.6 million of Class A-2 units as of December 31, 2013. Fees incurred in connection with the Class A-2 offering were approximately $6.1 million. Additional paid-in capital In October and December 2010, the Company borrowed $0.5 million (“Bridge Note A”) and $1.0 million (“Bridge Note B”), respectively, under the terms of note purchase agreements and related promissory notes (“the Bridge Notes”) from two third parties (“the Bridge Lenders”) and were repaid in full in 2011. The Bridge Lenders had the option to convert the entire principal amount of such Bridge Notes, and all accrued and unpaid interest thereon, into Class A-2 Units at a per-unit price equal to 75% of the market rate. As a result of the reduced price upon the future potential conversion, a beneficial conversion feature was identified. A beneficial conversion feature is



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required to be valued separately at its commitment date and allocated to additional paid-in-capital (“APIC”). As such, the Company recorded a credit to APIC in the amount of $561,370 which represented the intrinsic value of the beneficial conversion feature as of the commitment date. Class B units The Company issued to APT all outstanding Class B Units equal to 50,000 units, subject to future minority issuances of Class B Units to persons approved by the Company’s Board. A private party was granted a 3.4% interest and as part of APT’s Joint Venture and Exclusive Master Agreement with Signet, Signet is entitled to 10% of APT’s ownership. Class C units The Company’s Board is authorized to issue to any one or more persons a profit interest designated as a Class C Unit, which will entitle the holders to 5% of the distribution made to persons holding Class A-2 Units once those investors have reached the Capital Return Threshold, as defined below. As of December 31, 2016, WFG Health Ventures (“WFG”) had earned approximately 429 Class C Units under the selling agreement between MPTH and WFG. Prior to January 1, 2016, management recorded the fair value of Class C Units upon issuance as $682,224. The units are not subject to annual remeasurement and no additional units are expected to be earned by WFG. Rights to distributions Until all Members holding Class A Units receive in the form of distributions an aggregate amount equal to $100,000 per unit or, in the event of a sale of the Company or other Capital Transaction, an aggregate amount equal to $100,000 per unit (“the Capital Return Threshold”), any and all distributions will be delivered to the Members holding Class A-1 and Class A-2 Units, as a single class, in proportion to their respective membership interests. After the Capital Return Threshold is reached, for every $1.00 of distributions:

The Members holding Class B Units will receive $0.30;

The Members holding Class A Units will receive $0.70 based upon the pro rata proportional basis of Class A-1 and Class A-2 Unit ownership outstanding; and

To the extent that the Company’s Board may issue Class C Units, the Class C Unit holders will be entitled to 5% of the distribution made to persons holding Class A-2 Units once those investors have reached the Capital Return Threshold.

Voting rights and management of the Company The Company’s Board is responsible for and has sole authority for the management of the Company. The unit holders (“the Members”) have no approval rights over borrowings by the Company and the determination of the availability of cash for distribution to the Members. The Company’s Board shall be composed of that number of Managers determined by Members representing a Majority of the Class B Units. The Managers shall be elected by the Members holding a Majority of the Class B Units. Each Manager will hold office until that Manager’s death, resignation or removal. Any Manager may



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be removed only by Members representing a Majority of the Class B Units or at a meeting of Members duly called for the purpose of such removal upon approval by Members holding Supermajority (one or more members of the group holding more than 75%) of Class A-1 Units. Upon the occurrence of a vacancy in the Company’s Board, a replacement shall be appointed by the Company’s Board or in the absence of such action by the Company’s Board, by the Members holding a Majority of the Class B Units. Only the Class A-1 Members of the Company are entitled to vote, including with respect to fundamental decisions such as a sale of the Company, and the vote of a majority of such Class A-1 Units will constitute the act of all Members. Other than the right to elect Managers discussed above, the Members will have no rights to participate in the management or control of the Company’s business. However, the LLC Agreement does give the Members certain rights upon the approval of the Class A-1 Units and Class B Membership Interest, including, but not limited to, (a) a change of control transaction; (b) a dissolution of the Company; (c) a bankruptcy filing; (d) a change in the status of the Company from one in which management is reserved to the Managers to one in which management is vested in one or more Members, or vice versa; (e) any action that would result in the Company being classified as a “corporation” for federal income tax purposes; and (f) the issuance or permitting any transfer of any equity securities of any Operating Subsidiary. The Class A-2 Units and the Class C Units are nonvoting. 10. Subsequent Events Events of defaults The Company failed to meet certain technical and financial covenants associated with their lending agreement. Each event of default was later waived. Reasons for default included:

(a) Audited consolidated financial statements for the period ended December 31, 2016 were not issued and provided to the Senior Lender as of April 30, 2017, January 31, 2018, or July 13, 2018. Audited consolidated financial statements for the period ended December 31, 2017 were not issued and provided to the Senior Lender as of April 30, 2018 or July 13, 2018.

(b) The Company was unable to complete a tax-exempt bond offering by March 31, 2018 to pay in full, Deutsche Bank and its Lenders as stipulated in Amendment No. 7 of the Credit Agreement.

(c) For the quarters ended December 2016, March 2017, June 2017, September 2017, December 2017, March 2018 and June 2018, the Company did not meet the required level of quarterly net cash receipts, which were originally estimated in May 2015.

(d) The Company did not initially enter into a control agreement that covers its investment account when it closed its preceding investment account in California.

(e) The Company did not notify the Senior Lender of a default with Siemens triggered by a cross default with the Senior Lender.

(f) The Company missed handovers of its fourth and fifth treatment rooms in 2016 which were postponed to December 2017 and January 2019.



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(g) The Company failed to issue original executed promissory notes by Georgia Proton Treatment Center, LLC in favor of Advanced Particle Therapy, pledged as collateral to the Senior Lender.

(h) The Company delivered its annual 2018 operating and capital budget on January 5, 2018 rather than on October 1, 2017.

(i) The Company exceeded its maximum level of quarterly capital expenditures for the quarters ended March 2017, June 2017, September 2017, December 2017, March 2018 and June 2018.

(j) The Company entered into an Amendment with Varian regarding Proton System Operations and Maintenance dated February 1, 2018 without prior Senior Lender consent.

(k) The Company agreed to a Letter of Direction dated January 4, 2016 with Dallas Proton Treatment Center (DPTC) without prior Senior Lender consent.

(l) The Company entered into a Settlement Agreement with Stifel dated January 31, 2018 without prior Senior Lender consent.

On May 11, 2018, the Company executed Waiver and Amendment No. 8 to the Credit Agreement which extended the maturity date of the note with the Senior Lender to September 13, 2018. As a result of entering into Amendment No. 8, the Loan now bears an interest rate that is 2% per annum in excess of the interest rates otherwise applicable under the Credit Agreement. Additionally, the Company incurred an extension fee payable to the Company’s Senior Lender of approximately $3.4 million. Amendment No. 8 also extended the due date for the 2016 and 2017 audited consolidated financial statements to July 13, 2018 (which was not met) and extended the requisite date for completion of the tax exempt bond-offering to August 22, 2018. In addition, the Company’s Senior Lender agreed to waive default interest on the Company’s Notes through May 10, 2018. After May 10, 2018, interest shall continue to accrue at 14.5% per annum. The Company would have incurred approximately $1.2 million of additional interest expense through such date had the waiver not been executed. On July 19, 2018, the Company’s Senior Lender executed Waiver, Consent and Amendment No. 4 to Guarantee and Security Agreement. The amendment waived existing defaults and extended the due date for the 2016 and 2017 audited consolidated financial statements to July 20, 2018. No fees or penalties were incurred as a result of this waiver. Change in management In May 2018, the Company terminated its Chief Financial Officer (“CFO”) and appointed its VP of Corporate Development as Interim CFO. In June 2018, the Company hired a new CEO and President, and promoted its prior Interim CEO and President to the position of Executive Chairman of the Board. Establishment of executive committees In January 2018, the Board of Members established an Audit Committee and a Compensation Committee. The Audit Committee shall serve as an independent and objective party to monitor the Company’s financial reporting process and internal control systems. The primary function of the



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Compensation Committee is to discharge the Board’s responsibilities relating to compensation and benefits of the Company’s executive officers and members of the Board. Each committee shall comprise of two or more Managers as determined by the Board. As of June 2018, the Board of Members was composed of seven members. Debt refinancing The Credit Agreement with Deutsche Bank for a loan of $172.0 million entered on May 13, 2015 was set to mature on May 13, 2018. In May 2018, the Company successfully secured an extension to its financing agreement with Deutsche Bank extending the due date of the note by three months to September 13, 2018. The Company incurred approximately $3.4 million in additional financing fees because of the extension. Varian Equipment Purchase Agreement Construction of the fifth and final treatment room began in 2017 and became ready for use in April 2018. Amendment 2 to the Proton System Operations and Maintenance Agreement dated February 1, 2018 modifies the price, terms and measurement criteria for Varian’s support for the maintenance and operation of the Proton System. The Agreement obligates Varian for a revised annual fix service fee to provide maintenance and support services as well as guaranteed treatment room availability on Rooms 1, 2, 3 and 4. Varian shall provide maintenance and support services as well as guaranteed treatment room availability on Treatment Room 5 should the Company elect to request such a service for an additional fee. Stifel settlement In February 2016, the Company entered into an exclusive financing agent agreement with Stifel, Nicolaus & Company, Incorporated (“Stifel”). Stifel was engaged by the Company to assist in obtaining financing commitments from one or more financial institutions or other sources, and payment to Stifel was contingent upon the Company entering into a financing arrangement with a financial institution or investor. In January 2018, the Company and Stifel entered into a settlement agreement for services rendered relating to the financing agent agreement. The settlement agreement requires the Company to pay to Stifel $0.5 million within fifteen days of the completion of the Offering (Note 3). The Company has not accrued any amounts related to the Stifel settlement as of December 31, 2017. Offering Related to the issuance of the Bonds and securing of new funding expected to close during the third quarter of 2018, the Company has incurred third-party costs of approximately $2.1 million subsequent to the year ended December 31, 2017, which has been capitalized and included within deferred financing costs – offering. Of the approximately $2.1 million that have been capitalized, approximately $1.2 million has been paid subsequent to December 31, 2017. On June 21, 2018, the University of Maryland Faculty Physicians Inc. and the University of Maryland, Baltimore issued a Letter of Intent to purchase $8.25 million of PFA Series A revenue bonds. Also, on July 9, 2018, the University of Maryland Medical System issued a letter of intent to purchase $1.75 million of PFA revenue bonds.



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The Company evaluated subsequent events through July 19, 2018, which is the date the consolidated financial statements were issued. No other subsequent events were noted that required disclosure in the consolidated financial statements.

APPENDIX D

PROPOSED FORM OF MASTER GLOSSARY OF TERMS

MASTER GLOSSARY OF TERMS FOR (MARYLAND PROTON THERAPY CENTER)

BOND TRANSACTION

Dated as of August 1, 2018

DEFINITIONS

“Account” or “Accounts” means any one or more of the accounts from time to time created in any of the Funds established by the Indenture or by any Supplemental Indenture.

“Accountant” or “accountant” means any certified public accountant or firm of certified public accountants or accounting corporation selected by the Authority.

“Accredited Investor” has the meaning given to an “accredited investor” in Regulation D of the Securities Act of 1933.

“Accreted Value” means, as of any date of computation with respect to any Capital Appreciation Bond or Convertible Capital Appreciation Bond prior to the Conversion Date, an amount equal to the initial principal amount of such Capital Appreciation Bond or Convertible Capital Appreciation Bond at original issuance plus the interest accruing at the Compounding Rate, compounded semi-annually on each Compounding Date. Accreted Value between Compounding Dates shall be determined using linear interpolation.

“Act” means Sections 66.0301, 66.0303 and 66.0304 of the Wisconsin Statutes, as amended.

“Additional Bonds” means any additional Bonds issued pursuant to Section 3.02 of the Indenture; provided that the Additional Bonds shall not constitute Series 2018 Bonds.

“Additional Indebtedness” means any notes, debentures or similar instruments or letters of credit, which have a lien on Revenues on a parity basis with the lien of the Bonds and which are issued or delivered by the Authority pursuant to Section 3.02 of the Indenture.

“Additional Junior Bonds” means any additional Bonds issued as Junior Bonds pursuant to Section 3.02 of the Indenture; provided that the Additional Bonds shall not constitute Series 2018 Bonds.

“Additional Senior Bonds” means any additional Bonds issued as Senior Bonds pursuant to Section 3.02 of the Indenture; provided that the Additional Bonds shall not constitute Series 2018 Bonds.

“Additional Subordinate Bonds” means any additional Bonds issued as Subordinate Bonds pursuant to Section 3.02 of the Indenture; provided that the Additional Bonds shall not constitute Series 2018 Bonds.

“Additional Subordinate B-1 Bonds” means any additional Bonds issued as Subordinate B-1 Bonds pursuant to Section 3.02 of the Indenture; provided that the Additional Bonds shall not constitute Series 2018 Bonds.

“Additional Subordinate B-2 Bonds” means any additional Bonds issued as Subordinate B-2 Bonds pursuant to Section 3.02 of the Indenture; provided that the Additional Bonds shall not constitute Series 2018 Bonds.

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“Administrative Expenses” means the fees and expenses of the Authority (including, without limitation, the Authority’s Annual Fee), the Trustee, the Operator, the Insurance Consultant, the Designated Agent, the arbitrage rebate consultant, or the Medical Consultant in any way related to the Bonds or the Project, provided that such fees and expenses are included in Budgeted Operating Expenses and paid in accordance with the Operating Agreement.

“Affiliation Agreements” means, collectively, each as amended from time to time, (i) the Proton Therapy Physician Affiliation Agreement dated as of February 1, 2017, between the Operator and Radiation Oncology Associates, PC, (ii) the Proton Therapy Professional Services Agreement dated as of April 25, 2016, between the Operator and MedStar-Georgetown Medical Center, Inc. d/b/a MedStar Georgetown University Hospital, (iii) the Proton Therapy Physician Affiliation Agreement dated as of July 5, 2016, between the Operator and WellSpan Medical Group, (iv) the Proton Therapy Physician Affiliation Agreement dated as of March 1, 2017, between the Operator and Chesapeake Oncology Hematology Associates, P.A., and (v) the Professional Services Agreement dated as of February 29, 2016, between the Operator and University of Maryland Anesthesia Associates, P.A.

“ALTA” means the American Land Title Association.

“Applicable Law” means all laws, statutes, acts, rules, regulations, permits, licenses, authorizations, directives, orders and requirements of all Governmental Authorities, that now or hereafter may be applicable to the Operator, the Operator’s Clinical Partners, the Authority and/or the Project and the acquisition, maintenance, use and operation thereof, including those relating to employees, zoning, building, health, safety, hazardous materials, natural resources, licensing, and environmental matters, and accessibility of public facilities.

“Approvals” means licenses, approvals, permits, authorizations, registrations and the like required by any Governmental Authority having jurisdiction over the Authority or the Project.

“Arbitration Request” means a written notice of requirement for arbitration initiated by either the Operator, the Authority or the Trustee delivered to the others.

“Assigned Authority Documents” means the Ground Lease, the Operating Agreement or other agreement entered into pursuant to the Operating Agreement and the Purchase Agreement.

“Authority” means the Public Finance Authority, its successors and assigns.

“Authority Documents” means any and all contracts, instruments and agreements to which the Authority is a party, now existing or hereafter arising, in connection with the acquisition, equipping, operation, use or occupancy of the Project, including the financing and refinancing thereof.

“Authorized Authority Representative” means the Chair, Vice-Chair, or Secretary of the Authority and any other Person authorized by resolution of the Authority to act as an Authorized Signatory under the Indenture or any Supplemental Indenture or otherwise with respect to the Bonds or the Project, which Person(s) shall be acting solely in its representative capacity on behalf of the Authority and not individually; provided, however, that “Authorized Authority Representative” shall not include the Designated Agent.

“Authority’s Annual Fee” means the annual administration fee determined and payable to the Authority in the amount of $250,000 payable each January 1, commencing January 1, 2019 until January 1, 2024 and increasing to $500,000 payable each January 1 thereafter until all of the principal of the Bonds has been paid in full.

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“Authorized Denominations” means, (i) with respect to the Series 2018A Bonds, $25,000 principal amount and integral multiples of $5,000 in excess thereof; (ii) with respect to the Series 2018B Bonds, prior to the Conversion Date, the denominations of current Accreted Value as to which the initial principal amount equals $25,000 and integral multiples of $5,000 in excess thereof, and from and after the Conversion Date, $25,000 principal amount and integral multiples of $5,000 in excess thereof; (iii) with respect to the Series 2018C-1 Bonds, the denominations of current Accreted Value as to which the initial principal amount equals $25,000 and integral multiples of $5,000 in excess thereof; and (iv) with respect to the Series 2018C-2 Bonds, denominations of current Accreted Value as to which the initial principal amount equals $250 and integral multiples of $0.01 in excess thereof, and with respect to all other Bonds, such amount as otherwise provided in a Supplemental Indenture; provided that if and after the Series 2018A Bonds, Series 2018B Bonds or Series 2018C-1 Bonds have received an investment grade rating by a nationally recognized ratings company, the Authorized Denominations of such Series may, if so provided in a Supplemental Indenture, be converted to integral multiples of $5,000.

“Authority Indemnified Person(s)” means, individually or collectively, as applicable, (i) the Sponsors, (ii) the Members, and (iii) each and all of the Authority’s, the Sponsors’ and the Members’ respective past, present and future directors, board members, governing members, trustees, commissioners, elected or appointed officials, officers, employees, Authorized Signatories, attorneys, contractors, subcontractors, agents and advisers (including the Designated Agent and including counsel and financial advisers), and each of their respective heirs, successors and assigns.

“Authorized Signatory” means any officer, director or other person designated by resolution of the Board of Directors of the Authority (whether such resolution is adopted in connection with the issuance of the Bonds or otherwise) or by the Authority’s Bylaws as an “Authorized Signatory” empowered to, among other things, execute and deliver on behalf of the Authority the Indenture, the Authority Documents and the Bonds.

“Available Amount” has the meaning assigned to such term in Section 7.17(a) of the Indenture.

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended, (11 U.S.C. Section 101, et seq.).

“Beneficial Owner” means any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including Persons holding Bonds through nominees, depositories or other intermediaries).

“Billing Agreement” means the Billing Management and Consultant Services Agreement, dated as of March 25, 2015 (as amended from time to time), between the Operator and MMBC, LLC.

“Bond” or “Bonds” means the Series 2018 Bonds and all Additional Bonds.

“Bond Counsel” means a firm of attorneys, selected by the Authority, whose experience in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized.

“Bond Documents” means the Indenture, the Ground Lease, the Purchase Agreement, the Operating Agreement, the Leasehold Mortgage and the Bond Purchase Agreement.

“Bondholder,” “Holder,” “Owner” or “Registered Owner” means the person in whose name any of the Bonds are registered on the books kept and maintained by the Trustee as bond registrar. The initial Bondholder of the Series 2018 Bonds is Cede & Co., as nominee of The Depository Trust Company.

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“Bond Obligations” means the indebtedness, obligations and liabilities payable under the Bonds and the Indenture.

“Bond Purchase Agreement" means the Bond Purchase Agreement, dated ______, 2018, by and between the Authority and the Representative of the Underwriters.

“Bond Resolution” means the resolution adopted by the Authority authorizing the issuance of the Series 2018 Bonds.

“Budget” means either the Operating Plan and Budget or the Capital Budget for an applicable Operating Year.

“Budgeted Operating Expenses” means the Operating Expenses set forth in the Operating Plan and Budget delivered pursuant to Section 7.19 of the Indenture (including any permitted deviations therefrom).

“Building” means the improvements located at 850 West Baltimore Street, Baltimore, Maryland.

“Business Day” means any day other than a Saturday, Sunday, or national holiday recognized by commercial banks located in Baltimore, Maryland, or a legal holiday in the State of Maryland.

“Business Interruption Account” means the segregated Account within the Insurance and Condemnation Proceeds Fund in which the proceeds of business interruption insurance maintained are to be deposited by the Trustee when and as received, which Account shall be established by the Trustee upon receipt of notice that the carrier of such insurance will be paying claims thereon to the Trustee.

“Business Interruption Insurance” means business interruption insurance maintained pursuant to the Indenture and the Operating Agreement.

“Business Interruption Proceeds” means any proceeds of Business Interruption Insurance.

“Capital Appreciation Bonds” means any bonds as to which accruing interest is not paid prior to maturity and the Accreted Value for such bonds is compounded on each of the applicable Compounding Dates designated for compounding.

“Capital Budget” means the approved annual plan and budget setting forth all approved Capital Improvements and Capital Expenses for the Project for the relevant Operating Year, prepared in accordance with the terms of the Operating Agreement.

“Capital Expense” means any item of expense that, according to Generally Accepted Accounting Principles, is not properly deducted as a current expense on the books of the Project, but rather should be capitalized.

“Capital Improvement” means an item of any nature incorporated into the Project, the cost of which is a Capital Expense.

“Cash and Investments” means the sum of cash and Investment Securities held in the Liquidity Reserve Fund.

“Casualty” means, for the purposes of the Operating Agreement, the damage or destruction of the Project at any time or times during the Term by fire or other casualty.

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“Casualty Proceeds” means, for the purposes of the Operating Agreement, the proceeds (excluding Business Interruption Proceeds) paid under any casualty and property insurance policy maintained by the Operator or the Authority with respect to the Project, in accordance with the terms of the Operating Agreement, as a result of damage to or destruction of the Project arising as a result of a fire or other casualty.

“Cede & Co.” means the nominee of DTC.

“Certificate,” “Request,” “Direction,” or “Order” means, when used with reference to the Authority, a written certificate, statement, request, direction, requisition or order signed on behalf of the Authority by an Authorized Authority Representative (or, if required by the express provisions of the Indenture to be made by the Operator, then by an officer or employee authorized to sign on its behalf). Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.

“Clinical Partners” means University of Maryland Radiation Oncology Associates, PC and University of Maryland Medical System Corporation.

“Clinical Services Agreement” means the Clinical Management & Administrative Services Agreement, dated as of January 9, 2012 (as amended from time to time), between the Operator and University of Maryland Radiation Oncology Associates, P.A.

“Closing” or “Closing Date” means _______, 2018.

“Code” means the Internal Revenue Code of 1986, as amended, and the United States Treasury Regulations proposed or in effect with respect thereto.

“Collateral Agent” means the Trustee, acting as collateral agent pursuant to the terms of the Indenture.

“Collateral Agent Indemnified Person(s)” means, individually or collectively, as applicable, the Collateral Agent and its officers, directors, employees, and agents, and its successors and assigns.

“Collection Account” means a deposit account (and the related lockbox, if any) established by the Operator that is pledged to the Collateral Agent to secure such Person’s obligations to remit Gross Operating Revenues, and is subject to an account control agreement meeting the requirements of Section 9-104 or 9-106 of the applicable Uniform Commercial Code in accordance with the requirements of the Operating Agreement and the Bond Documents.

“Compounding Dates” means each January 1 and July 1, commencing January 1, 2019.

“Compounding Rate” means seven and one half percent (7.5%) per annum with respect to the Series 2018B-1 Bonds, eight and one half percent (8.5%) per annum with respect to the Series 2018B-2 Bonds, and twelve percent (12%) per annum with respect to the Junior Bonds.*

“Consultant” means any Person at the time employed by or on behalf of the Authority (or, to the extent specifically provided in the Indenture or in any Supplemental Indenture, by or on behalf of the


D-6

Trustee) to carry out the duties imposed by or pursuant to the Indenture or a Supplemental Indenture, which Person shall be experienced, have a favorable reputation in the matters for which such Person is so employed, and be independent of the Operator and the Authority.

“Continuing Disclosure Agreement” means the Continuing Disclosure Agreement, dated as of August 1, 2018, executed and delivered by the Trustee, as dissemination Agent, and the Operator, or any other continuing disclosure agreement entered into with respect to the Series 2018 Bonds.

“Controlling Party” means (a) so long as any Senior Bonds are Outstanding, the Registered Owners of a majority in aggregate principal amount of the Senior Bonds then Outstanding; (b) while any Subordinate B-1 Bonds are Outstanding and no Senior Bonds are Outstanding, the Registered Owners of a majority in aggregate principal amount of the Subordinate B-1 Bonds, (c) while any Subordinate B-2 Bonds are Outstanding and no Senior Bonds or Subordinate B-1 Bonds are Outstanding, the Registered Owners of a majority in aggregate principal amount of the Subordinate B-2 Bonds, and (d) while any Junior Bonds are Outstanding and no Senior Bonds or Subordinate Bonds are Outstanding, the Registered Owners of a majority in aggregate principal amount of Junior Bonds then Outstanding.

“Conversion Date” means July 1, 2021 with respect to the Series 2018B-1 Bonds and January 1, 2022 with respect to the Series 2018B-2 Bonds.

“Convertible Capital Appreciation Bonds” means any bonds as to which accruing interest is not paid prior to the Conversion Date and the Accreted Value for such bonds is compounded on each of the applicable Compounding Dates designated for compounding prior to the Conversion Date for such bonds.

“Costs of Issuance” means the items of expense relating to the authorization, sale and issuance of Bonds, which items of expense may include, without limitation: travel expenses; printing costs; costs of reproducing documents; computer fees and expenses; filing and recording fees; initial and first year administrative fees and charges of the Trustee, Consultants, Registrar and any paying agent; initial fees and charges of banks, insurers or other parties pursuant to guarantees or bond insurance policies; bond discounts; legal fees and charges; consulting fees and charges; auditing fees and expense; financial advisor’s fees and charges; escrow agent fees and charges, title company fees and charges, costs of credit ratings; insurance premiums; fees and charges for the execution, transportation and safekeeping of Bonds; and any other administrative or other costs of issuing, carrying and repaying such Bonds and investing the Bond proceeds.

“Costs of the Project” means all costs and expenses of acquisition of the Project by the Authority.

“Days Cash on Hand” means, as of the date of calculation, the amount determined by dividing: (a) the amount of unrestricted Cash and Investments on such date by (b) one day of Operating Expenses plus one day of interest on the Senior Bonds.

“Debt Service” means, as of any date of calculation, with respect to any particular period and with respect to all Bonds, all Bonds of any Series or any portion thereof as the context requires, an amount equal to the sum of (a) interest accruing during such period on such Outstanding Bonds and (b) that portion of each Principal Payment and Mandatory Sinking Fund Installment for such Outstanding Bonds which would accrue during such period if each such Principal Payment and Mandatory Sinking Fund Installment for such Bonds were deemed to accrue daily in equal amounts from the next preceding Principal Payment Date for such Bonds (or, if there shall be no such preceding date, from a date one year preceding such Principal Payment Date or from the date of issuance of the such Bonds, whichever date is later). Such interest, principal and Mandatory Sinking Fund Installment payments for the Outstanding Bonds shall be calculated on the assumption that no Bonds Outstanding at the date of calculation shall

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cease to be Outstanding except by reason of the payment of scheduled principal and Mandatory Sinking Fund Installments on the due dates thereof and on the basis of the actual number of days within the relevant period.

“Debt Service Coverage Ratio” means a fraction calculated by dividing the Total Net Revenues for a particular period of time by the Net Debt Service for the Outstanding Bonds or Series of Bonds, as applicable, for the same period of time.

“Debt Service Coverage Requirement” means for each Operating Year, a Debt Service Coverage Ratio which is not less than: (i) 1.25x on the Senior Bonds with respect to the 2019, 2020, 2021 and 2022 Operating Years, and (ii) 1.30x on the Senior Bonds with respect to the 2023 Operating Year and each Operating Year thereafter.

“Debt Service Fund” means the Debt Service Fund established by Section 5.02 of the Indenture, together with the Accounts established therein.

“Defeasance Investment Securities” means:

(a) Cash deposits (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in the next paragraph).

(b) Direct obligations of (including obligations issued or held in book entry form on the books of the Department of Treasury) the United States of America. In the event these securities are used for defeasance, they shall be non-callable and non-prepayable.

(c) 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 (in the event these securities are used for defeasance, they shall be non-callable and non-prepayable):

U.S. Export-Import Bank (Eximbank)

Rural Economic Community Development Administration

Federal Financing Bank

U.S. Maritime Administration

U.S. Department of Housing and Urban Development (PHAs)

General Services Administration

Small Business Administration

Government National Mortgage Association (GNMA)

Federal Housing Administration

Farm Credit System Financial Assistance Corporation

“Depository” means initially DTC, or any other securities depository selected as set forth in Section 3.13 of the Indenture with respect to the Series 2018 Bonds.

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“Designated Agent” has the meaning assigned to such term in Section 1.05 of the Indenture.

“DTC” means The Depository Trust Company, or any successor securities depository thereto.

“Effective Date” means the Closing Date.

“Emergency” means a situation imminently threatening life, health, or safety.

“Emergency Expenses” means the expenses incurred to remove the existence of an Emergency.

“Environmental Regulations” means all legal requirements governing or relating to the protection of the environment, natural resources or human health concerning (i) activities at the Project, (ii) repairs or rehabilitation of the Project, (iii) handling of any materials at the Project, (iv) releases into or upon the air, soil, surface water or ground water from the Project, and (v) storage, distribution, use, treatment, transport or disposal of any waste at or connected with any activity at the Project, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 42 U.S.C. §§ 9601 et seq., as amended from time to time; the Hazardous Materials Transportation Act 49 U.S.C. §§ 5101 et seq., as amended from time to time; the Resource Conservation and Recovery Act 42 U.S.C. §§ 6901 et seq., as amended from time to time; the Federal Water Pollution Control Act 33 U.S.C. §§ 1251 et seq., as amended from time to time; and comparable State statutes.

“Equipment” means the following radiation therapy cancer treatment equipment located in the Building, together with any replacements and additions thereto: Medical Equipment, Therapy Equipment, Physics Equipment, Furniture and Fixtures, Computer – Hardware, Computer – Software, Thermal Therapy Equipment and Power Supply Equipment.

“Excess Revenue Fund” means the Excess Revenue Fund established by Section 5.02 of the Indenture.

“Excluded Taxes and Other Charges” means any (a) Gross Receipts Taxes; (b) withholding tax or other employment related taxes; or (c) wage, child support or spousal support garnishments.

“Execution Date” means the date upon which the Operating Agreement is signed by both the Operator and the Authority.

“Extraordinary Costs and Expenses” means the Liabilities, including but not limited to indemnification, which are not included as Operating Expenses and are due and owing to (i) the Authority or any Authority Indemnified Person arising out of any matter enumerated or referred to or necessarily implied from, the matters enumerated in Sections 13.07(a) through 13.07(h) of the Indenture, excepting only to the extent that indemnification is unavailable to the Authority or any Authority Indemnified Person pursuant to Section 13.07 of the Indenture, (ii) the Trustee, (iii) the Collateral Agent or (iv) the Operator provided that, in the event of a dispute between the Operator and the Authority, the Liabilities incurred by the Operator in respect of such dispute shall not be included in Extraordinary Costs and Expenses unless the Operator is the prevailing party in such dispute.

“Extraordinary Expense Fund” means the Extraordinary Expense Fund established by Section 5.02 of the Indenture.

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“Extraordinary Expense Fund Reserve Requirement” means (i) initially, $2,500,000, (ii) in Fiscal Year 2019, $2,833,333, (iii) in Fiscal Year 2020, $3,166,667, (iv) and thereafter, $3,500,000.

“Fiscal Year” means the twelve (12) month period terminating on December 31 of each year, or any other annual accounting period hereafter selected and designated by the Authority as its Fiscal Year.

“Fund” or “Funds” means any one or more, as the case may be, of the separate special funds established by the Indenture or by any Supplemental Indenture.

“Generally Accepted Accounting Principles” means those conventions, rules, procedures and practices, consistently applied, affecting all aspects of recording and reporting financial transactions which are generally accepted by major independent accounting firms in the United States.

“Glossary” or “Master Glossary” means this Master Glossary of Terms, dated as of August 1, 2018.

“Governmental Authority” means any agency, authority, board, branch, division, department or similar unit of any federal, state, county, city, town, district, or other governmental entity or unit having jurisdiction over or validly imposing requirements on the applicable Person or the Project, but excludes the Authority.

“Gross Operating Profit” means for any period of time, the amount by which Gross Operating Revenue properly attributable to such period exceeds Operating Expenses for the same period.

“Gross Operating Revenues” means all revenue and income of any kind derived directly or indirectly from operations at the Project, properly attributable to the period under consideration, determined in accordance with Generally Accepted Accounting Principles and a uniform system of accounts (except that in determining the amount deposited into the Revenue Fund, such determination shall be made on a cash basis and except that revenues paid with respect to use of any part of the Project with respect to particular months or other period will be considered properly attributable to those months or other period even if received by the Trustee before or after), except that the following shall not be included in determining Gross Operating Revenues:

(a) Professional Fee Revenues;

(b) Excluded Taxes and Other Charges;

(c) receipts from the financing, sale or other disposition of capital assets and other items not in the ordinary course of the Project’s operations and income derived from securities and other property acquired and held for investment;

(d) receipts from awards or sales in connection with any Taking, from other transfers in lieu of and under the threat of any Taking, and other receipts in connection with any Taking, but only to the extent that such amounts are specifically identified as compensation for alterations or physical damage to the Project;

(e) proceeds of any insurance, including the proceeds of any Business Interruption Insurance;

(f) proceeds of any financing; and

(g) interest earned on funds held in any Fund or Account.

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“Gross Receipts Taxes” means applicable excise, sales, occupancy and use taxes, or similar government taxes, duties, levies or charges collected directly from patrons or guests, or as a part of the sales price of any goods, services, or displays, such as gross receipts, admission, including, but not limited to, any transaction tax, resale of electricity tax, soft drink tax, public utility tax, and/or new service tax.

“Ground Lease” means the Ground Lease, dated as of August 1, 2018, between the Landlord, as lessor, and the Authority, as lessee, as such may be amended or supplemented from time to time.

“Hazardous Substances” means any petroleum or petroleum products and their by-products, flammable explosives, radioactive materials, toxic chemicals and substances, radon, asbestos in any form that is or could become friable, urea formaldehyde foam insulation and polychlorinated biphenyls (PCB), asbestos-containing materials (ACMs), lead-containing or lead-based paint (LBP), radon, Mold, medical waste and other bio-hazardous materials and any chemicals, pollutants, materials or substances defined as or included in the definition of “hazardous substances” as defined pursuant to the federal Comprehensive Environmental Response, Compensation and Liability Act, “regulated substances” within the meaning of subtitle I of the federal Resource Conservation and Recovery Act and words of similar import under applicable Environmental Regulations.

“Improvements” means the Building and all other structures, buildings, pavement, fencing, landscaping, plumbing, electrical and telephone lines and computer cables and man-made objects of every type, existing or to be placed on the Land.

“Indenture” means the Trust Indenture, dated as of August 1, 2018, by and between the Authority and the Trustee, as originally executed and as it may from time to time be amended, modified and supplemented in accordance with the terms thereof.

“Information Services” means Financial Information, Inc.’s “Daily Called Bond Service,” 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Service’s “Called Bond Service,” 65 Broadway, 16th Floor, New York, New York 10006; Moody’s “Municipal and Government,” 99 Church Street, 8th Floor, New York, New York 10007, Attention: Municipal News Reports; and Standard & Poor’s “Called Bond Record,” 25 Broadway, 3rd Floor, New York, New York 10004; or, in accordance with then-current guidelines of the Securities and Exchange Commission, to such other addresses and/or such other services providing information with respect to called bonds, or no such services, as the Authority may designate in a certificate of the Authority delivered to the Trustee.

“Indemnified Party” and “Indemnified Parties” mean, individually and collectively, the Authority Indemnified Person(s), the Collateral Agent Indemnified Person(s), and the Collateral Agent Indemnified Person(s).

“Insurance and Condemnation Proceeds Fund” means the Insurance and Condemnation Proceeds Fund established pursuant to Section 5.15 of the Indenture.

“Insurance Consultant” means an independent insurance consultant retained by the Authority.

“Insurance Costs” means insurance premiums relating to liability and casualty coverage and Business Interruption Insurance policies and other insurance policies and coverages maintained with respect to the Project or the Authority pursuant to the Indenture.

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“Insurance Proceeds” means any and all proceeds received by the Trustee from an insurance company as a result of a casualty loss in connection with the Project.

“Interest Payment Date” means, January 1 and July 1, commencing January 1, 2019.

“Investment Securities” means:

1. Defeasance Investment Securities.

2. 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:

(a) Senior debt obligations rated in one of the two highest long-term rating category by at least two nationally recognized rating agencies issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC).

(b) Senior debt obligations of the Federal Home Loan Bank System.

(c) Senior debt obligations of other U.S. government sponsored agencies.

3. U.S. dollar denominated deposit accounts, certificates of deposit, federal funds and bankers’ acceptances with domestic commercial banks which either (a) 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 nationally recognized rating agencies, (b) are insured at all times by the Federal Deposit Insurance Corporation, or (c) are collateralized with direct obligations of the United States of America at one hundred two percent (102%) valued daily. All such certificates must mature no more than three hundred sixty (360) days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank.)

4. Commercial paper which is rated at the time of purchase A2, P2, F2, or above by at least two of the three nationally recognized rating agencies, and which matures not more than two hundred seventy (270) days after date of purchase.

5. Investments in (a) money market funds subject to SEC Rule 2a-7 and rated in the highest short-term rating category of at least two nationally recognized rating agencies.

6. Pre-refunded municipal obligations defined as follows: Any bonds 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,

(a) 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

(b) (i) 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 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

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(ii) 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 or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate.

7. General obligations of states with a short-term rating in the highest rating category and a long-term rating in one (1) of the two (2) 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.

8. Bonds, notes, debentures, or other evidences of indebtedness issued or guaranteed by a corporation which are, at the time of purchase, rated either AAA, AA, or A by any nationally recognized rating agency (without regard to any refinement or gradation of rating agency by numerical modifier or otherwise);

9. Investment agreements with banks or non-bank financial institutions that at the time such agreement is executed, are rated by at least one rating agency in one of the three highest rating categories assigned by such rating agency (without regard to any refinement or gradation of rating category by numerical modifier or otherwise); provided that if at any time after purchase the provider of the investment agreement drops below one of the three highest rating categories assigned by all Rating Agencies then rating such non-bank financial institution, the investment agreement must, within 30 business days, either (x) be assigned to a provider rated in one of the three highest rating categories or (y) be secured by the provider with collateral securities the fair market value of which, in relation to the amount of the investment agreement, including principal and interest, is equal to at least 102%; investment agreements with banks or non-bank financial institutions shall not be permitted if no rating is available with respect to debt of the investment agreement provider or the related guarantor of such provider;

10. Repurchase agreements with respect to and secured by Defeasance Obligations or by obligations described in clauses (2) and (7) above, which agreements may be entered into with a bank (including, without limitation, the Trustee), a trust company, a financial services firm or a broker dealer which is a member of the Securities Investors Protection Corporation, provided that (i) a master repurchase agreement or specific written repurchase agreement governs the transaction, (ii) the collateral securities are valued no less frequently than monthly and (iii) the fair market value of the collateral securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 102%;

11. Other forms of investments approved in writing by the Authority; in the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less frequently than annually.

The value of the above investments, other than cash, shall be determined as follows:

“Value,” which shall be determined as of the end of each month, means that the value of any investments shall be calculated as follows:

1. As to investments the lesser of the face value or the amortized cost;

2. As to certificates of deposit and bankers acceptances, the face amount thereof, plus accrued interest; and

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3. As to any investment not specified above, the value thereof established by prior agreement between the Authority and the Trustee.

“Investor Letter” means the form of letter attached to the Official Statement as Appendix J or the Purchase Agreement as Exhibit G, as applicable.

“Issuing Instrument” means any indenture, trust agreement, loan agreement or other agreement pursuant to which Additional Indebtedness is issued by the Authority.

“Joint Exercise Agreement” means the Amended and Restated Joint Exercise of Powers Agreement Relating to the Public Finance Authority, dated September 28, 2010, by and among Adams County, Wisconsin, Bayfield County Wisconsin, Marathon County, Wisconsin, Waupaca County Wisconsin and the City of Lancaster, Wisconsin, as such agreement may be amended from time to time.

“Junior Bonds” means the Series 2018C Bonds and any Additional Junior Bonds.

“Junior Debt Service Account” means the account by that name established within the Debt Service Fund pursuant to Section 5.02 of the Indenture.

“Junior Redemption Account” means the account by that name established within the Debt Service Fund pursuant to Section 5.02 of the Indenture

“Land” means the real property located at 850 West Baltimore Street, Baltimore, Maryland legally described on Exhibit A of the Ground Lease.

“Landlord” means Maryland Proton Treatment Center, LLC, as lessor under the Ground Lease.

“Leasehold Mortgage” means the Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Leasehold) dated as of August 1, 2018 executed by the Authority, as mortgagor, in favor of the Trustee, as mortgagee, on behalf of the Registered Owners, as amended.

“Letter of Instructions” means a written directive and authorization executed by an Authorized Authority Representative and delivered to the Trustee in connection with the defeasance of any of the Bonds under the Indenture.

“Liabilities” means any and all fees, costs and charges, losses, damages, claims, actions, liabilities and expenses of any conceivable nature, kind or character (including, without limitation, reasonable fees and expenses of attorneys, accountants, consultants and other experts, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) in any way related to the Bonds or the Project to which the Indemnified Parties, or any of them, may become subject under any statutory law or regulation (including federal or state securities laws and regulations and federal tax laws or regulations) or at common law or otherwise, and specifically including Extraordinary Costs and Expenses.

“Liquidity Reserve Fund” means the Liquidity Reserve Fund established by Section 5.02 of the Indenture.

“Liquidity Requirement” shall have the meaning set forth in Section 7.20 of the Indenture.

“Mandatory Sinking Fund Installment” means with respect to any Series of Bonds, the amount required to be paid as the Redemption Price of Bonds subject to mandatory sinking fund redemption on

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any Principal Payment Date prior to maturity pursuant to the Indenture or the Supplemental Indenture for such Series, as such Mandatory Sinking Fund Installment has been previously reduced by the principal amount of any Bonds of such Series of the maturity in respect of which such Mandatory Sinking Fund Installment is payable which are purchased or redeemed by the Trustee in accordance with the provisions of Section 4.03 of the Indenture or of any Supplemental Indenture, other than by the prior payment of a Mandatory Sinking Fund Installment.

“Material Adverse Effect” means (a) if a Person other than the Authority is referenced (i) a material adverse effect upon the business, operations, properties, assets or condition (financial or otherwise) of such other Person, or (ii) the impairment of the ability of the Authority or such other Person to perform its non-monetary obligations under any Bond Document, or (b) if the Project is referenced, a material adverse effect upon the business, operations, assets or condition (financial or otherwise) of the Project, or upon the ability of the Project to be in compliance with the terms of the Bond Documents. In determining whether any individual event would result in a Material Adverse Effect, notwithstanding that such event does not of itself have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event and all other then-occurring events and existing conditions would result in a Material Adverse Effect.

“Maximum Annual Senior Debt Service” means, as of the date of calculation, Debt Service for the Senior Bonds as calculated for the next ensuing Operating Year and any future Operating Year in which such sum is largest.

“Medical Consultant” means a Person having the experience and qualifications necessary to review and make recommendations regarding the operation, management, marketing, improvement, condition or use of the Project.

“Member” means the parties to the Joint Exercise Agreement and any political subdivision designated in the past, or from time to time in the future is designated, as a member of the Authority pursuant to the Joint Exercise Agreement.

“Monthly Transfer Date” means the first Business Day of each month (commencing with the first month immediately after the Closing Date).

“Mortgagee” means any holder or beneficiary of the Leasehold Mortgage or any other Mortgage including, initially, the Trustee.

“National Repository” means any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule.

“Net Debt Service” means Debt Service on the applicable Series of Bonds less actual and anticipated investment earnings on amounts held in the applicable account of the Debt Service Fund and, with respect to the Senior Bonds only, the Senior Debt Service Reserve Fund.

“Operating Account” means the Project Operating Account and, for any Revenue Contractor, one or more deposit accounts from which such Person pays vendors, suppliers, service providers, employees or other accounts payable.

“Operating Agreement” means the Facility Operating Agreement, dated as of August 1, 2018, by and between the Authority and the Operator, or any other operating agreement entered into by the Authority with respect to the operation and management of the Project.

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“Operating Expenses” means all those ordinary and necessary expenses incurred in the operation of the Project or the Bonds, including, without limitation, Administrative Expenses, Insurance Costs, Taxes, the Operating Fee (but expressly excluding the Subordinated Operator Fee), the cost of maintenance and utilities, the costs of advertising, marketing, and business promotion and lease payments for equipment to be installed and utilized at the Project. Notwithstanding the foregoing description, unless expressly made an Operating Expense under a specific provision of the Operating Agreement, the following shall not constitute Operating Expenses: (a) Excluded Taxes and Other Charges (save and except for payroll taxes included in Excluded Taxes and Other Charges); (b) depreciation and amortization on capitalized assets; (c) payments of principal and interest related to any financing of the Project; (d) costs paid or reimbursed by and pursuant to the Operator’s indemnity, hold harmless and defense agreements contained in the Operating Agreement, all of which shall be funded out of the Operator’s own funds (from whatever source, including Insurance Proceeds to the extent paid to the Operator); (e) costs incurred by the Operator to perform obligations, duties, covenants, agreements and responsibilities which, under the express terms of the Operating Agreement, are to be funded from the Operator’s own funds; and (f) Capital Expenses.

“Operating Fee” means the operating fee paid pursuant to the Operating Agreement.

“Operating Plan and Budget” means an annual marketing and operating plan and budget for the Project prepared by the Operator and approved by the Authority, all in accordance with the terms of the Operating Agreement.

“Operating Year” means the twelve (12) month period terminating on December 31 of each year, or any other annual accounting period hereafter selected and designated by the Authority as the Operating Year.

“Operator” means Maryland Proton Treatment Center, LLC, its successors and assigns.

“Operator Collateral” has the meaning assigned to such term in the Operating Agreement.

“Operator Fee Fund” means the Operator Fee Fund established by Section 5.02 of the Indenture.

“Operator’s Monthly Financial Report” has the meaning assigned to such term in the Operating Agreement.

“Opinion of Bond Counsel” means a written opinion of Bond Counsel.

“Other Project Documents” means, collectively, each as amended from time to time, (i) the Employee Leasing Agreement dated as of March 29, 2012, between the Operator and University of Maryland Medical System Center, a health care facility owned and operated by the University of Maryland Medical System Corporation, (ii) the IT Services Agreement dated as of November 30, 2015, between the Operator and University of Maryland Medical System Corporation, and (iii) the Co-Branding Agreement dated as of February 12, 2016, between the Operator and University of Maryland Medical System Corporation d/b/a the University of Maryland Marlene and Stewart Greenebaum Cancer Center.

“Outstanding” means, with respect to any Bonds as of any date, Bonds theretofore or thereupon being authenticated and delivered under the Indenture except:

(a) Bonds canceled or delivered for cancellation at or prior to such date;

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(b) Bonds in lieu of or in substitution for which other Bonds has been authenticated and delivered pursuant to the Indenture; and

(c) Bonds deemed to have been paid, redeemed, purchased or defeased as provided in the Indenture, in any Supplemental Indenture, as applicable, or as provided by law.

“Owner” means (i) when used with reference to the book entry only system, the person who is considered the Beneficial Owner of the Bonds and, with respect to the Bonds, pursuant to the arrangements for book entry determination of ownership applicable to the Depository and, (ii) for purposes of continuing disclosure, 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 such through nominees, depositories or other intermediaries) or (b) is treated as the owner of any Bonds for federal income tax purposes.

“Participant” means those broker-dealers, banks and other financial institutions from time to time for which DTC holds Series 2018 Bonds as securities depository.

“Permits” means licenses, approvals, permits, certificates, variances, authorizations, entitlements, registrations, and the like required by any Governmental Authority having jurisdiction over the Authority or the Project.

“Permitted Debt” means and includes:

(a) indebtedness incurred under the Bond Documents, including Working Capital Loans and Additional Bonds, including indebtedness of the Authority permitted to be issued to refund outstanding Senior Bonds;

(b) purchase money obligations to the extent incurred to finance the acquisition or licensing of intellectual property or discrete items of equipment or other property not comprising an integral part of the Project; provided, that (i) if such obligations are secured, they are secured only by Liens upon the equipment or intellectual or other property being financed and (ii) do not require payments in excess of $250,000 in any year and together with other such obligations in excess of $500,000 in any year, such amount to be adjusted annually on each anniversary of the Closing Date by the increase in the consumer price index from the prior year;

(c) current or trade accounts payable arising, and accrued expenses incurred, in the ordinary course of business which are payable in accordance with customary practices that are not overdue by more than 60 days (unless being contested in good faith);

(d) reimbursement obligations with respect to letters of credit arising and other financial obligations or amounts under Bond Documents or the Project Documents (to the extent the same constitute indebtedness); and

(e) permitted investments (to the extent the same constitute indebtedness).

“Permitted Encumbrances” with respect to the property of the Authority, means and includes:

(a) any liens existing or encumbrances existing on the Closing Date;

(b) liens specifically permitted by, or created by, the Indenture, the Operating Agreement, the Leasehold Mortgage or any other Bond Document;

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(c) liens, deposits or pledges incurred or created in accordance with the approved Operating Plan and Budget and in the ordinary course of business in connection with or to secure the performance of bids, tenders, contracts, leases, statutory obligations, surety bonds or appeal bonds;

(c) after the Closing Date, mechanics’, materialmen’s, workers’, repairmen’s, employees’, warehousemen’s, carriers’ or other like liens arising in the ordinary course of business securing obligations incurred in connection with the Project which are not yet due, or which are fully bonded and which are being contested;

(d) liens for taxes, assessments or governmental charges which are not yet due or which are being contested;

(e) liens arising out of judgments or awards fully covered by insurance or with respect to which an appeal or proceeding for review is being prosecuted and a bond or cash reserves have been provided;

(f) liens securing Permitted Debt;

(g) such minor defects, irregularities, encumbrances, easements, rights of way and clouds on title existing on the Closing Date or as normally exist with respect to properties similar in character and location to the Project and as do not materially impair the use of property affected thereby for the purpose for which it was acquired or to which the Controlling Party shall consent (which consent shall be deemed given if the Authority notifies the Bondholders that it intends to take such action and the Controlling Party does not object within 30 days of such notice);

(h) any liens incidental to the conduct of the Authority’s business or the Project (other than borrowed money) that would not reasonably be expected to have a Material Adverse Effect

(i) liens on receivables and inventory of the Authority securing obligations of the Authority with respect to Working Capital Loans as set forth in the Leasehold Mortgage, and the proceeds thereof;

(j) any exceptions to title that contained in the title insurance policy delivered to the Trustee on the Closing Date;

(k) any liens on Operator Collateral for the benefit of Senior Bonds on a pari passu basis, the enforcement of which governed by the Collateral Documents; and

(l) the Ground Lease.

“Person” means any individual, public or private corporation, partnership, limited liability company, county, district, authority, municipality, political subdivision or other entity of any state or the United States of America, and any partnership, association, firm, trust, estate or any other entity or organization whatsoever.

“Principal Office” or “Principal Corporate Trust Office” with respect to the Trustee means the principal corporate trust office of the Trustee located at the address set forth in Section 13.09 of the

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Indenture, or at such other place as the Trustee shall designate by notice given under said Section 13.09, or such other office designated by the Trustee from time to time.

“Principal Payment” means with respect to any Principal Payment Date for any Series of Bonds, an amount equal to the sum of (a) the aggregate principal amount of Outstanding Bonds of such Series which mature on such Principal Payment Date, reduced by the aggregate principal amount of such Outstanding Bonds of such Series which are scheduled to be retired prior to such date as a result of Mandatory Sinking Fund Installments in accordance with the Indenture or a Supplemental Indenture; plus (b) the aggregate amount of any Mandatory Sinking Fund Installment payable on such Principal Payment Date for the retirement of any Outstanding Bonds of such Series.

“Principal Payment Date” means with respect to any Series of Bonds a date on which principal of or a Mandatory Sinking Fund Installment on such Series of Bonds is due and payable.

“Professional Fee Revenues” means amounts received from Medicare, Medicaid, commercial insurance, managed care payors, patients, and other persons remitting payment for services rendered that are identified on the relevant invoice, bill or explanation of benefits as the professional fee component of the services provided to the applicable patient; and shall not include the technical services component identified on the relevant invoice, bill or explanation of benefits. For the avoidance of doubt, “Professional Fee Revenues” that are excluded from "Gross Operating Revenues" shall be limited to professional fees for physicians, and shall not include technical charges related to facility staff (including nurses, physician’s assistants, nurse practitioners, or technicians) of the type whose services or salaries that are included in Budgeted Operating Expenses.

“Professional Services Agreement” means the Professional Services Agreement, dated January 9, 2012 (as amended from time to time), between the Operator and University of Maryland Radiation Oncology Associates, P.A.

“Project” means the radiation therapy cancer treatment center located at 850 West Baltimore Street, Baltimore, Maryland known as “Maryland Proton Treatment Center”.

“Project Documents” means the Service Agreement, the Billing Agreement, the Affiliation Agreements, the Clinical Services Agreement and the Other Project Documents.

“Project Operating Account” means the Operating Account maintained by the Operator in accordance with the Operating Agreement.

“Proposed Budget Documents” means the proposed Capital Budget and the Operating Plan and Budget for any Operating Year.

“Purchase Agreement” means the Asset Purchase Agreement dated as of August 1, 2018 by and between the Authority and Maryland Proton Treatment Center, LLC.

“Qualified Institutional Buyer” has the meaning set forth in Rule 144A under the Securities Act of 1933, as amended.

“Qualified Management Agreement” has the meaning set forth in Section 141 of the Code and Rev. Proc. 97-13, 1997-1 C.B. 632.

“Rebate Analyst” means a certified public accountant, financial analyst or bond counsel, or any firm of the foregoing, or financial institution (which may include the Trustee) experienced in making the

D-19

arbitrage and rebate calculations required pursuant to Section 148 of the Code and retained by the Authority to make the computations required under the Indenture or any Supplemental Indenture.

“Rebate Fund” means the Rebate Fund established by Section 5.02 of the Indenture, and includes any separate accounts or subaccounts established by the terms of any Supplemental Indentures or any agreement pursuant thereto.

“Record Date” means the close of business on the fifteenth day of the calendar month (whether or not a Business Day) preceding such Interest Payment Date; provided that the Record Date for any Series of Additional Bonds, if different, means the date designated in any Supplemental Indenture as the record date for the payment of interest on such Series of Additional Bonds.

“Redemption Date” means the date upon which any Bonds are to be redeemed prior to their respective fixed maturities pursuant to the mandatory or optional redemption provision of the Indenture or any Supplemental Indenture.

“Redemption Price” means, with respect to any Bond, the amount, including any applicable premium, payable upon the mandatory or optional redemption thereof, as provided in the Indenture or any Supplemental Indenture.

“Refunding Bonds” means all Bonds, whether issued in one or more Series, issued for the purpose of refunding a like or different principal amount of Bonds, and hereafter authenticated and delivered pursuant to the Indenture.

“Register” means the register maintained by the Registrar for each Series of Bonds which shows ownership of Bonds in accordance with Section 3.08 of the Indenture.

“Registered Owner” means Bondholder.

“Registrar” means, with respect to the Series 2018 Bonds, the Trustee, and the successor or successors appointed pursuant to and meeting the requirements of Article X of the Indenture.

“Repair and Replacement Fund” means the Repair and Replacement Fund established by Section 5.02 of the Indenture.

“Repair and Replacement Requirement” means an amount equal to the sum of the following:

(a) an initial deposit of $2,000,000;

(b) from January 1, 2019 through December 31, 2021, all net income for the Project, less any amounts transferred to the Extraordinary Expense Fund, once the Liquidity Requirement is met; and

(c) from January 1, 2022 and thereafter, an amount equal to or greater than $9,000,000.

“Repository” means each National Repository.

“Representative” means Citigroup Global Markets Inc.

“Reserve Fund” means the Senior Debt Service Reserve Fund.

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“Responsible Officer” means, when used with respect to the Trustee, the chairman or vice chairman of the board of directors of the Trustee, the chairman or vice chairman of the executive committee of said board, the president or any vice president, the secretary or any assistant secretary, the treasurer or any assistant treasurer, the cashier or any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer of the Trustee to whom such matter is referred because of that officer’s knowledge of and familiarity with the particular subject.

“Revenue Contractor” means each Person that from time to time, in accordance with the requirements of the Operating Agreement and the Bond Documents, may be authorized by contract to conduct operations generating fees or revenues that fall within the definition of “Gross Operating Revenues” at the Project.

“Revenue Fund” means the Revenue Fund established by Section 5.02 of the Indenture.

“Revenues” means the Gross Operating Revenues and all amounts received by the Authority or the Trustee pursuant to the Leasehold Mortgage and the Assigned Authority Documents and all proceeds of any collateral thereunder, including, without limiting the generality of the foregoing, Insurance Proceeds, condemnation proceeds, and all interest, profits or other income derived from the investment of amounts in any fund or account established pursuant to the Indenture (except the Rebate Fund).

“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934.

“Securities Depositories” means the following registered securities depositories: (a) The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax: (516) 227-4039 or 4190; (b) Midwest Securities Trust Company, Capital Structures-Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax: (312) 663-2343; and (c) Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Fax: (215) 496-5058; or, (d) in accordance with then-current guidelines of the Securities and Exchange Commission, to such other addresses and/or such other securities depositories, as the Securities and Exchange Commission may designate from time to time.

“Senior Bonds” means the Series 2018A Bonds and all Additional Senior Bonds.

“Senior Debt Service Account” means the account by that name established within the Debt Service Fund pursuant to Section 5.02 of the Indenture.

“Senior Debt Service Reserve Fund” means the Senior Debt Service Reserve Fund established by Section 5.02 of the Indenture.

“Senior Redemption Account” means the account by that name established within the Debt Service Fund pursuant to Section 5.02 of the Indenture.

“Senior Reserve Fund Requirement” means, so long as the Series 2018A Bonds are the only Senior Bonds Outstanding, an amount equal to the least of (i) 10% of the issue price of the Senior Bonds, (ii) 125% of the average annual Debt Service for the Senior Bonds, and (iii) 100% of the Maximum Annual Senior Debt Service.

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“Series” means Bonds identified as a separate series which are authenticated and delivered on original issuance and any Bonds thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to the Indenture or any Supplemental Indenture.

“Series 2018A Bonds” means the $__________ aggregate principal amount of Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center) and $__________ aggregate principal amount of Public Finance Authority Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Treatment Center).

“Series 2018B Bonds” means the $__________ aggregate initial principal amount of Public Finance Authority Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Treatment Center) and $__________ aggregate principal amount of Public Finance Authority Senior Revenue Bonds, Series 2018B-2 (Maryland Proton Treatment Center).

“Series 2018B-1 Debt Service Account” means the account by that name established within the Debt Service Fund pursuant to Section 5.02 of the Indenture.

“Series 2018C Bonds” means the $__________ aggregate initial principal amount of Public Finance Authority Junior Revenue Bonds, Series 2018C-1 (Maryland Proton Treatment Center) and $__________ aggregate initial principal amount of Public Finance Authority Junior Revenue Bonds, Series 2018C-2 (Maryland Proton Treatment Center).

“Series 2018 Bonds” means, collectively, the Series 2018A Bonds, the Series 2018B Bonds and the Series 2018C Bonds.

“Series 2018 Costs of Issuance Account” means the account by that name within the Project Fund established and designated as such by Section 5.02 of the Indenture.

“Service Agreement” means the Proton System Operations and Maintenance Agreement, dated as of July 24, 2012 (as amended from time to time), between the Operator and Varian Medical Systems, Inc.

“Sponsor” means the National League of Cities, the National Association of Counties, the Wisconsin Counties Association, the League of Wisconsin Municipalities, and any other Person that holds itself out, or is identified by the Authority, as an organization sponsoring the Authority.

“Subaccount” means any one or more of the subaccounts from time to time created in any of the Accounts established by Section 5.02 of the Indenture or by any Supplemental Indenture.

“Subordinate Bonds” means the Series 2018B Bonds and any Additional Subordinate Bonds.

“Subordinate B-1 Bonds” means the Series 2018B-1 Bonds and any Additional Subordinate B-1 Bonds.

“Subordinate B-2 Bonds” means the Series 2018B-2 Bonds and any Additional Subordinate B-2 Bonds.

“Subordinate Debt Service Account” means the account by that name established within the Debt Service Fund pursuant to Section 5.02 of the Indenture.

“Subordinate Redemption Account” means the account by that name established within the Debt Service Fund pursuant to Section 5.02 of the Indenture.

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“Subordinated Operator Fee” means that portion of the Operator Fee noted as subordinate on Schedule C attached to the Operating Agreement.

“Supplemental Indenture” means any Indenture supplemental to or amendatory of the Indenture, entered into by the Authority and the Trustee in accordance with Article XI thereof.

“Systems” include all fixtures, equipment, pipes, lines, wires, ducts, vents, computer cables, security system cables, monitoring system cables, conduits, and other systems and facilities used in the production, heating, cooling and/or transmission of air, water, gas, electricity, communications, waste water, sewage, and audio and video signals, elevators and escalators.

“Taking” or “Taken” means a taking as a result of compulsory purchase or acquisition of all or part of the Project, any taking by any Governmental Authority (or any authority or entity acting on behalf of or purporting to act on behalf of any Governmental Authority) for any purpose whatsoever or a conveyance in lieu thereof.

“Tax Certificate” means the Tax Certificate dated the Closing Date executed by the Authority.

“Taxes” means all taxes, including ad valorem taxes on real property, lease-hold excise taxes, personal property taxes and other, if any, governmental assessments relating to or assessed in connection with the ownership or operation of the Project, except for Excluded Taxes and Other Charges.

“Term” means the period set forth in Article 2 of the Operating Agreement.

“Termination” means the expiration or sooner cessation or termination of the applicable agreement.

“Title Company” means Stewart Title Guaranty Company.

“Title Policy” means a mortgagee policy of title insurance to be issued by the Title Company in accordance with Applicable Law and ALTA standards. The Title Policy must have a liability in the amount of the aggregate principal amount of the Bonds insuring, as of the Closing Date, that the leasehold interest in the Project is vested in the Authority, and insuring Trustee that the lien of the Leasehold Mortgage constitutes a first and valid lien upon the leasehold interest in the Project.

“Total Net Revenues” means Gross Operating Profit plus any earnings deposited into the Revenue Fund not otherwise included in the definition of Gross Operating Profit.

“Trustee” means U.S. Bank National Association, as trustee under the Indenture, together with any successors or assigns.

“Trustee Indemnified Person(s)” means, individually or collectively, as applicable, the Trustee and its officers, directors, employees and agents, and its successors and assigns.

“Turbo Redemption Account” means the account by that name established within the Debt Service Fund pursuant to Section 5.02 of the Indenture.

“Unassigned Rights” means the rights of the Authority under the Indenture, and to the extent not expressly provided in the Indenture, the Authority’s rights under the other Bond Documents to (i) inspect books and records; (ii) give or receive notices, and other communications, and prior to foreclosure, the appointment of any receiver or trustee for the Project, or an exercise of remedies under the Bond

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Documents, to give approvals or consents or make requests; (iii) receive payment or reimbursement for expenses, including without limitation Administrative Expenses, Extraordinary Costs and Expenses due to the Authority; (iv) immunity from and limitation of liability; (v) indemnification by the Operator or any other Person; and further, to enforce, in its own name and on its own behalf, the foregoing rights and those provisions of the Indenture and any other document, instrument or agreement entered into with respect to the Bonds that provides generally for the foregoing enumerated rights or any similar rights of the Authority or any Authority Indemnified Person. For the avoidance of doubt, the “Unassigned Rights” referenced in clauses (iv), (v), and (vi), above shall include (but are not limited to) the rights of the Authority Indemnified Persons to immunity from and limitation and indemnification by the Operator and the right of any such Authority Indemnified Person to enforce such rights in his, her or its own name.

“Underwriters” means Citigroup Global Markets Inc. and Raymond James & Associates, Inc.

“Unpaid Operator Fees” has the meaning assigned to such term in the Operating Agreement.

“Working Capital Loans” means working capital loans which are payable as Operating Expenses and secured by the Authority’s receivables and inventories; provided that the Working Capital Loans must not exceed 30 days of operating expenses and must be paid down to a zero balance for five consecutive days at least once every 365 days.

APPENDIX E

PROPOSED FORM OF THE INDENTURE

4133-8091-3168.14

TRUST INDENTURE

between

PUBLIC FINANCE AUTHORITY

and

U.S. BANK NATIONAL ASSOCIATION, as Trustee

Relating to

Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center), Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Treatment Center),

Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Treatment Center), Subordinate Revenue Bonds, Series 2018B-2 (Maryland Proton Treatment Center), Junior Revenue Bonds, Series 2018C-1 (Maryland Proton Treatment Center), and

Junior Revenue Bonds, Series 2018C-2 (Maryland Proton Treatment Center)

Dated as of August 1, 2018

TABLE OF CONTENTS

Page

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ARTICLE I DEFINITIONS AND INTERPRETATION .............................................................. 3

Section 1.01. Definitions ............................................................................................... 3 Section 1.02. Table of Contents, Titles and Headings .................................................. 3 Section 1.03. Interpretation and Construction ............................................................... 4 Section 1.04. Content of Certificates and Opinions ...................................................... 4 Section 1.05. Appointment of Designated Agent .......................................................... 5

ARTICLE II LIMITED OBLIGATIONS ...................................................................................... 6

Section 2.01. Limited Obligations of the Authority ...................................................... 6 ARTICLE III AUTHORIZATION AND ISSUANCE OF BONDS, GENERAL TERMS

AND PROVISIONS OF THE BONDS .............................................................. 6

Section 3.01. Authorization of Bonds. .......................................................................... 6 Section 3.02. Provisions for Issuance of Bonds. ........................................................... 7 Section 3.03. Application of Bond Proceeds and Other Funds. .................................. 12 Section 3.04. Medium of Payment; Form and Date; Letter and Numbers. ................. 14 Section 3.05. Legends .................................................................................................. 18 Section 3.06. Execution and Authentication. .............................................................. 18 Section 3.07. Exchange of Bonds ................................................................................ 19 Section 3.08. Negotiability, Transfer and Registry ..................................................... 19 Section 3.09. Exchanges and Transfers ....................................................................... 20 Section 3.10. Bonds Mutilated, Destroyed, Stolen or Lost ......................................... 20 Section 3.11. Temporary Bonds .................................................................................. 21 Section 3.12. Cancellation and Destruction of Bonds ................................................. 22 Section 3.13. Depository for Series 2018A Bonds, Series 2018B Bonds and

Series 2018 C-1 Bonds .......................................................................... 22 ARTICLE IV REDEMPTION OF BONDS ................................................................................ 23

Section 4.01. Privilege of Redemption and Redemption Price ................................... 23 Section 4.02. Redemption at the Option of the Authority. .......................................... 24 Section 4.03. Redemption Otherwise Than at the Option of the Authority. ............... 25 Section 4.04. Selection of Series 2018 Bonds to be Redeemed .................................. 30 Section 4.05. Notice of Redemption. ........................................................................... 31 Section 4.06. Payment of Redeemed Bonds ................................................................ 32 Section 4.07. Modification by Supplemental Indenture .............................................. 32

ARTICLE V PLEDGE AND ASSIGNMENT; ESTABLISHMENT OF FUNDS AND APPLICATION THEREOF .............................................................................. 32

Section 5.01. Security for Bonds; Deposits of Gross Operating Revenues and Other Amounts ...................................................................................... 32

Section 5.02. Establishment of Funds and Accounts .................................................. 34 Section 5.03. Project Fund. .......................................................................................... 35 Section 5.04. Flow of Funds ........................................................................................ 36

TABLE OF CONTENTS (continued)

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Section 5.05. Transfers to the Debt Service Fund ....................................................... 38 Section 5.06. Debt Service Fund. ................................................................................ 39 Section 5.07. Senior Debt Service Reserve Fund. ....................................................... 41 Section 5.08. Liquidity Reserve Fund. ........................................................................ 41 Section 5.09. Operator Fee Fund ................................................................................. 42 Section 5.10. Repair and Replacement Fund ............................................................... 42 Section 5.11. Excess Revenue Fund ............................................................................ 42 Section 5.12. Rebate Fund ........................................................................................... 43 Section 5.13. Extraordinary Expense Fund ................................................................. 43 Section 5.14. Reserved. ............................................................................................... 43 Section 5.15. Insurance and Condemnation Proceeds Fund. ....................................... 43 Section 5.16. Right of Access to Funds by Operator and Authority. .......................... 45

ARTICLE VI MONEYS HELD IN TRUST, SECURITY FOR DEPOSITS, AND INVESTMENT OF FUNDS ............................................................................. 45

Section 6.01. Moneys Held in Trust ............................................................................ 45 Section 6.02. Deposits and Transfers. ......................................................................... 45 Section 6.03. Investment of Funds. ............................................................................. 46 Section 6.04. Valuation and Sale of Investments. ....................................................... 47

ARTICLE VII PARTICULAR COVENANTS AND REPRESENTATIONS OF THE AUTHORITY .................................................................................................... 47

Section 7.01. Payment of Bonds .................................................................................. 47 Section 7.02. Access to the Project ............................................................................. 47 Section 7.03. [Reserved]. ............................................................................................. 47 Section 7.04. Power to Enter Into Indenture, Issue Bonds and Pledge Revenues

and Other Assets .................................................................................... 47 Section 7.05. Maintenance of Existence of the Authority ........................................... 48 Section 7.06. Limitation on Encumbrances ................................................................. 48 Section 7.07. Limitation on Undertakings ................................................................... 48 Section 7.08. Tax Covenant ......................................................................................... 48 Section 7.09. Limitation on Disposition of Assets ...................................................... 48 Section 7.10. Continuing Disclosure Agreement ........................................................ 49 Section 7.11. Maintenance of the Project .................................................................... 49 Section 7.12. Compliance With Law; Maintenance of Permits. ................................. 49 Section 7.13. Taxes, Assessments, Governmental Charges and Adverse

Judgments .............................................................................................. 49 Section 7.14. Insurance ................................................................................................ 50 Section 7.15. Workers Compensation and Insurance Law .......................................... 50 Section 7.16. Insurers; Policy Forms and Loss Payees ............................................... 50 Section 7.17. Disposition of Insurance and Condemnation Proceeds. ........................ 51 Section 7.18. Operation of the Project. ........................................................................ 52


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Section 7.19. Budgets. ................................................................................................. 53 Section 7.20. Liquidity Covenant ................................................................................ 54 Section 7.21. [Reserved] .............................................................................................. 55 Section 7.22. [Reserved]. ............................................................................................. 55 Section 7.23. Further Assurances; Enforcement of Assigned Authority

Documents ............................................................................................. 55 Section 7.24. Rate Covenant; Reports ......................................................................... 55

ARTICLE VIII DISCHARGE AND DEFEASANCE ................................................................ 56

Section 8.01. Discharge of Indenture .......................................................................... 56 Section 8.02. Defeasance ............................................................................................. 57

ARTICLE IX DEFAULT AND REMEDIES .............................................................................. 58

Section 9.01. Rights and Remedies, Generally ........................................................... 58 Section 9.02. Events of Default ................................................................................... 58 Section 9.03. Notice of Default; Cure ......................................................................... 59 Section 9.04. Specific Remedies. ................................................................................ 60 Section 9.05. Application of Proceeds ........................................................................ 61 Section 9.06. Trustee May Act Without Possession of Bonds .................................... 64 Section 9.07. Trustee as Attorney-in-Fact ................................................................... 64 Section 9.08. Remedies Not Exclusive ........................................................................ 65 Section 9.09. Limitation on Suits ................................................................................ 65 Section 9.10. Right of Controlling Party to Direct Proceedings ................................. 66 Section 9.11. Restoration of Rights and Remedies ..................................................... 66 Section 9.12. Waiver of Stay or Extension Laws ........................................................ 66 Section 9.13. Delay or Omission Not Waiver ............................................................. 66

ARTICLE X CONCERNING THE TRUSTEE AND THE COLLATERAL AGENT .............. 67

Section 10.01. Trustee; Appointment and Acceptance of Duties .................................. 67 Section 10.02. Collateral Agent; Appointment and Acceptance of Duties ................... 67 Section 10.03. Registrars and Other Agents; Appointment and Acceptance of

Duties. .................................................................................................... 67 Section 10.04. Responsibilities of the Trustee. ............................................................. 68 Section 10.05. Evidence on Which the Trustee May Act. ............................................. 69 Section 10.06. Certain Permitted Acts .......................................................................... 70 Section 10.07. Resignation of Trustee ........................................................................... 71 Section 10.08. Removal of Trustee ............................................................................... 71 Section 10.09. Appointment of Successor Trustee. ....................................................... 71 Section 10.10. Transfer of Rights and Property to Successor Trustee .......................... 71 Section 10.11. Merger or Consolidation ........................................................................ 72 Section 10.12. Adoption of Authentication ................................................................... 72 Section 10.13. Resignation or Removal of Agents and Appointment of

Successors. ............................................................................................. 72


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ARTICLE XI SUPPLEMENTAL INDENTURES AND AMENDMENT OF BOND DOCUMENTS .................................................................................................. 73

Section 11.01. Supplemental Indentures and Amendments of Bond Documents Effective Without Consent of Owners .................................................. 73

Section 11.02. Supplemental Indentures and Amendments to Bond Documents Requiring Owner Consent ..................................................................... 74

Section 11.03. Consent of Owners ................................................................................ 75 Section 11.04. Amendment of Particular Bonds ........................................................... 76 Section 11.05. Exclusion of Bonds ................................................................................ 76 Section 11.06. General Provisions. ................................................................................ 76 Section 11.07. Notation on Bonds ................................................................................. 77 Section 11.08. Mailing .................................................................................................. 77

ARTICLE XII [RESERVED] ...................................................................................................... 77

ARTICLE XIII MISCELLANEOUS .......................................................................................... 77

Section 13.01. Evidence of Signatures of Owners and Ownership of Bonds. .............. 77 Section 13.02. Money Held for Particular Bonds .......................................................... 78 Section 13.03. Preservation and Inspection of Documents ........................................... 79 Section 13.04. Failure to Present Bonds ........................................................................ 79 Section 13.05. Parties Interested Herein ........................................................................ 79 Section 13.06. No Recourse on the Bonds .................................................................... 79 Section 13.07. No Authority or Individual Liability ..................................................... 79 Section 13.08. Indenture and Supplemental Indentures to Constitute Contracts .......... 81 Section 13.09. Notice .................................................................................................... 81 Section 13.10. Governing Law ...................................................................................... 82 Section 13.11. Severability of Invalid Provisions ......................................................... 82 Section 13.12. Successors .............................................................................................. 83 Section 13.13. Business Days ........................................................................................ 83 Section 13.14. Execution in Several Counterparts ........................................................ 83 Section 13.15. Non-Liability of Authority .................................................................... 83 Section 13.16. No Obligation to Enforce Assigned Rights ........................................... 83 Section 13.17. Authority’s Performance ....................................................................... 83 Section 13.18. No Impairment of Rights ....................................................................... 84

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EXHIBITS EXHIBIT A MASTER GLOSSARY OF TERMS ................................................................. A-1 EXHIBIT B FORM OF SERIES 2018A BONDS ................................................................. C-1 EXHIBIT C FORM OF SERIES 2018B BONDS ................................................................. D-1 EXHIBIT D FORM OF SERIES 2018C BONDS ................................................................. D-1 EXHIBIT E FORM OF LIQUIDITY RESERVE FUND REQUEST ................................... E-1 EXHIBIT F FORM OF EXTRAORDINARY EXPENSE FUND REQUEST ..................... F-1 EXHIBIT G FORM OF REPAIR AND REPLACEMENT FUND REQUEST .................... G-1 EXHIBIT H FORM OF EXCESS REVENUE FUND REQUEST ........................................ H-1

4133-8091-3168.14

TRUST INDENTURE

This TRUST INDENTURE, dated as of August 1, 2018 (this “Indenture”), between PUBLIC FINANCE AUTHORITY, a joint powers commission and a political subdivision and body corporate and politic of the State of Wisconsin (including its successors and assigns the “Authority”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, which is authorized by law to accept and exercise the trust powers set forth herein, and its successors in trust and assigns (the “Trustee”);

W I T N E S S E T H:

WHEREAS, the Authority was created under Sections 66.0301, 66.0302 and 66.0304 of the Wisconsin Statutes (the “Act”); and

WHEREAS, the Authority is authorized and empowered under the Act and by the Joint Exercise Agreement to, among other things, acquire, buy, sell, lease, encumber, mortgage, hypothecate, pledge, assign, or transfer any property or interest in property that is located within or outside of the State of Wisconsin and to issue bonds, notes or other evidences of indebtedness to finance certain costs of acquiring the Project, paying certain costs of issuance, working capital and funding certain reserves in connection therewith; and further to enter into contracts related to the issuance of bonds; and

WHEREAS, the Authority desires to issue its revenue bonds pursuant to and in accordance with the provisions of the Act, for the purpose of financing costs of acquiring the Project, working capital, paying costs of issuance and funding certain reserves in connection therewith; and

WHEREAS, the Authority will acquire the Project with a portion of the proceeds of the Series 2018 Bonds; and

WHEREAS, the Maryland Proton Treatment Center, LLC will lease the land, the improvements thereon and the fixtures thereto to the Authority pursuant to that certain Ground Lease, dated as of August 1, 2018 (the “Ground Lease”); and

WHEREAS, the Authority and the Trustee are entering into this Indenture for the purpose of authorizing six series of bonds: Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center) (the “Series 2018A-1 Bonds”), Public Finance Authority Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Treatment Center) (the “Series 2018A-2 Bonds”, and together with the Series 2018A-1 Bonds, the “Series 2018A Bonds”), Public Finance Authority Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Treatment Center) (the “Series 2018B-1 Bonds”), Public Finance Authority Subordinate Revenue Bonds, Series 2018B-2 (Maryland Proton Treatment Center) (the “Series 2018B-2 Bonds”, and together with the Series 2018B-1 Bonds, the “Series 2018B Bonds”), Public Finance Authority Junior Revenue Bonds, Series 2018C-1 (Maryland Proton Treatment Center) (the “Series 2018C-1 Bonds”), Public Finance Authority Junior Revenue Bonds, Series 2018C-2 (Maryland Proton Treatment Center) (the “Series 2018C-2 Bonds”, and, together with the Series 2018C-1 Bonds, the “Series 2018C Bonds” and, collectively with the Series 2018A Bonds and Series 2018B Bonds, the “Series 2018 Bonds”), the net proceeds of which shall be used to (1) finance the acquisition of the Project, (2) fund capitalized interest, (3) fund a debt service reserve fund, (4) fund an

2

4133-8091-3168.14

extraordinary expense fund, (5) fund a liquidity reserve fund, (6) fund a repair and replacement fund, and (7) pay certain costs of issuance of the Series 2018 Bonds; and

WHEREAS, it is intended that the Series 2018A Bonds shall be secured under this Indenture on a senior basis to the Series 2018B Bonds, and the Series 2018B Bonds shall be secured under this Indenture on a subordinate basis to the Series 2018A Bonds; and

WHEREAS, it is intended that the Series 2018B-1 Bonds shall be secured under this Indenture on a senior basis to the Series 2018B-2 Bonds, and the Series 2018B-2 Bonds shall be secured under this Indenture on a subordinate basis to the Series 2018B-1 Bonds; and

WHEREAS, it is intended that the Series 2018A Bonds and Series 2018B Bonds will be secured under this Indenture on a senior basis to the Series 2018C Bonds, and the Series 2018C Bonds shall be secured under this Indenture on a subordinate basis to the Series 2018A Bonds and Series 2018B Bonds;

WHEREAS, the Authority is authorized to issue bonds in the future, at its sole and exclusive discretion, in compliance with the provisions of this Indenture which will be secured on a parity with the Series 2018A Bonds (the “Additional Senior Bonds” and, together with the Series 2018A Bonds, the “Senior Bonds”); and

WHEREAS, the Authority is authorized to issue bonds in the future, at its sole and exclusive discretion, in compliance with the provisions of this Indenture which will be secured on a parity with the Series 2018B-1 Bonds (the “Additional Subordinate B-1 Bonds” and, together with the Series 2018B-1 Bonds, the “Subordinate B-1 Bonds”); and

WHEREAS, the Authority is authorized to issue bonds in the future, at its sole and exclusive discretion, in compliance with the provisions of this Indenture which will be secured on a parity with the Series 2018B-2 Bonds (the “Additional Subordinate B-2 Bonds” and, together with the Series 2018B-2 Bonds, the “Subordinate B-2 Bonds” and, collectively with the Subordinate B-1 Bonds, the “Subordinate Bonds”); and

WHEREAS, the Authority is authorized to issue bonds in the future, at its sole and exclusive discretion, in compliance with the provisions of this Indenture which will be secured on a parity with the Series 2018C Bonds (the “Additional Junior Bonds” and, together with the Series 2018C Bonds, the “Junior Bonds”); and

WHEREAS, the Senior Bonds, the Subordinate Bonds and the Junior Bonds are together referred to herein as the “Bonds”; and

WHEREAS, the Bonds are further secured by a Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Leasehold), dated as of August 1, 2018 (the “Leasehold Mortgage”), executed by the Authority granting a lien on its leasehold interest in the Property, subject to Permitted Encumbrances, to the Trustee for the benefit of the Owners from time to time of the Bonds; and

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WHEREAS, the Project will be operated by the Operator pursuant to the terms and provisions of the Operating Agreement, and the Operator has granted to the Collateral Agent a security interest in the Operator Collateral described in the Operating Agreement, to secure its obligations to the Authority under the Project Documents; and

WHEREAS, the Trustee has the power to enter into this Indenture and to execute the trust hereby created and has accepted the trust created hereby; and

WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, Redemption Price, if any, and interest thereon, the Authority has authorized the execution and delivery of this Indenture; and

WHEREAS, all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal limited obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Indenture have been in all respects duly authorized;

NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of, Redemption Price, if any, and interest on, all Bonds at any time issued and Outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable consideration, the receipt of which is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the Owners from time to time of the Bonds, as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.01. Definitions. Except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms have the meanings assigned to such terms in the Master Glossary of Terms, dated as of August 1, 2018, attached hereto as Exhibit A and by this reference incorporated herein.

Section 1.02. Table of Contents, Titles and Headings. The table of contents, titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Indenture or any provision hereof or in ascertaining intent, if any question of intent should arise.

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Section 1.03. Interpretation and Construction. For purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(a) All references in this Indenture to designated “Exhibits,” “Articles,” “Sections,” “subsections,” “paragraphs,” “clauses” and other subdivisions are to the designated Exhibits, Articles, Sections, subsections, paragraphs, clauses and other subdivisions of this Indenture. The words “herein,” “hereof,” “hereto,” “hereby,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

(b) The terms defined in Exhibit A have the meanings assigned to them in Exhibit A and include the plural as well as the singular.

(c) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with Generally Accepted Accounting Principles as in effect from time to time.

(d) The term “money” includes any cash, check, deposit, Investment Security or other form in which any of the foregoing are held hereunder.

(e) The term “including” means “including without limitation.”

(f) Every “request,” “order,” “demand,” “application,” “appointment,” “notice,” “statement,” “certificate,” “consent” or similar action hereunder by the Operator, the Trustee or any other agent (excluding the Authority and any Authorized Authority Representative) shall, unless otherwise specifically provided, be in writing signed by an officer or other agent of such party authorized to sign the same on behalf of the applicable entity (and not individually).

(g) In the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and each of the words “to” and “until” means “to but excluding.”

(h) This Indenture and all terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein to sustain the validity of this Indenture.

(i) To the extent any inconsistencies exist between any of the provisions contained in this Indenture, the more specific provisions shall control over the more general provisions.

Section 1.04. Content of Certificates and Opinions. Every certificate or opinion (other than legal opinions) provided for in this Indenture with respect to compliance with any provision hereof shall be made on behalf of the entity named therein and not made individually by the person signing such certificate and shall include (1) a statement that the person making or giving such certificate or opinion, on behalf of the entity named therein and not individually, has read such provision and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the entity’s certificate or opinion is based; (3) a statement that the entity has made or caused to be made such examination or investigation as is necessary to enable the entity to express an informed opinion with respect to the subject matter referred to in the certificate or opinion which such entity is delivering; and (4) a statement as to whether, in the opinion of such person, such provision has been complied with.

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Notwithstanding any provision hereof to the contrary, whenever any certificate or opinion is required by the terms of this Indenture to be given by the Authority on its own behalf, any such certificate or opinion may be made or given by an Authorized Authority Representative (and in no event individually) and may be based (i) insofar as it relates to factual matters, upon a certificate of or representation by the Trustee, the Medical Consultant, the Insurance Consultant, or the Operator; and (ii) insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an accountant, in each case under clauses (i) and (ii) without further investigation or inquiry by such Authorized Authority Representative or otherwise on behalf of the Authority.

Any such certificate, opinion or representation made or given pursuant to this Indenture may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an accountant, unless (except as provided in the immediately preceding paragraph) the Person giving the certificate, opinion or representation knows that the certificate, opinion or representation with respect to the matters upon which such certificate or statement may be based, as aforesaid, is erroneous in any material respect. Any such certificate or opinion made or given by counsel or an accountant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the Authority) upon a certificate or opinion of or representation by an Authorized Authority Representative on behalf of the Authority (and not individually), unless such counsel or accountant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such Person’s certificate or opinion or representation may be based, as aforesaid, is erroneous. The same Authorized Authority Representative or officer of the Operator, or the same counsel or accountant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Indenture, but different representatives of such parties may certify to different matters.

Section 1.05. Appointment of Designated Agent. The Authority hereby appoints GPM Municipal Advisors, LLC (“Designated Agent”) as its sole and exclusive agent empowered and authorized, in the name of the Authority and on its behalf, to give or receive notices required or permitted by this Indenture, to give or withhold any consents or approvals required or permitted hereby or to impose conditions upon any such consent or approval, to employ Consultants, legal counsel and other professionals and otherwise to charge and incur Administrative Expenses and/or Extraordinary Costs and Expenses; provided, that the Designated Agent shall have no power or authority to (i) amend this Indenture or any Bond Document; (ii) enter into any Supplemental Indenture under either Section 11.01 or 11.02 hereof; (iii) direct the redemption of Bonds; or (iv) commence or institute any action to enforce this Indenture against the Trustee, all of which rights shall be reserved to the Board of Directors of the Authority. The Authority may revoke the designation of the Designated Agent or change and appoint a new Designated Agent at any time in its sole discretion. In the event of a revocation or change in the Designated Agent, the Authority shall provide notice to the Operator and the Trustee; provided, that until the Operator or the Trustee, as the case may be, has received actual notice of any change in the Designated Agent, the Operator or the Trustee, as the case may be, shall be entitled to rely on any consents or approvals given by the previously designated Designated Agent.

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ARTICLE II

LIMITED OBLIGATIONS

Section 2.01. Limited Obligations of the Authority. Notwithstanding any other provision hereof, Bonds issued hereunder and any other obligations of the Authority under this Indenture shall be limited obligations of the Authority payable only from moneys available therefor under and in accordance with this Indenture and any applicable Supplemental Indenture.

THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM FUNDS PLEDGED FOR THEIR PAYMENT IN ACCORDANCE WITH THE INDENTURE AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY MEMBER, ANY SPONSOR, ANY AUTHORITY INDEMNIFIED PERSON, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE BONDS ARE NOT A DEBT OF THE STATE OF WISCONSIN OR THE MEMBERS AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY OR OF ANY SPONSOR OR AUTHORITY INDEMNIFIED PERSON, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

ARTICLE III

AUTHORIZATION AND ISSUANCE OF BONDS, GENERAL TERMS AND PROVISIONS OF THE BONDS

Section 3.01. Authorization of Bonds.

(a) The Authority hereby authorizes the issuance of Bonds, to be designated “Public Finance Authority Revenue Bonds.” The aggregate principal amount of the Bonds which may be executed, authenticated and delivered under this Indenture is not limited except as may be provided herein or in any Supplemental Indenture or as may be limited by law.

(b) The Bonds may, as provided herein and in one or more Supplemental Indentures, be issued in one or more Series, and the designation thereof, in addition to the name “Public

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Finance Authority Revenue Bonds,” and an identification of whether such Bonds are secured as Senior Bonds, Subordinate B-1 Bonds, Subordinate B-2 Bonds, or Junior Bonds under this Indenture, shall include such further appropriate particular designation added to or incorporated in such title for the Bonds of any particular Series, as the Authority may determine. Each Bond shall bear upon its face the designations so determined for the Series to which it belongs and whether such Bond constitutes a Senior Bond, Subordinate B-1 Bond, Subordinate B-1 Bond, or Junior Bond.

(c) The Bonds shall be issued in such form as may be provided herein or by Supplemental Indenture, and each Bond issued hereunder shall contain a statement to the effect set forth in Section 2.01 together with any restrictions on transfer as required by Section 3.08.

(d) There are hereby authorized to be issued and shall be issued under and secured by this Indenture a Series of Bonds designated as “Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center)” in an aggregate principal amount of $_________, a Series of Bonds designated as “Public Finance Authority Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Treatment Center)” in an aggregate principal amount of $_________, a Series of Bonds designated as “Public Finance Authority Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Treatment Center)” in an aggregate original principal amount of $__________, a Series of Bonds designated as “Public Finance Authority Subordinate Revenue Bonds, Series 2018B-2 (Maryland Proton Treatment Center)” in an aggregate original principal amount of $__________, a Series of Bonds designated as “Public Finance Authority Junior Revenue Bonds, Series 2018C-1 (Maryland Proton Treatment Center)” in an aggregate original principal amount of $__________, and a Series of Bonds designated as “Public Finance Authority Junior Revenue Bonds, Series 2018C-2 (Maryland Proton Treatment Center)” in an aggregate original principal amount of $__________.

Section 3.02. Provisions for Issuance of Bonds.

(a) All (but not less than all of) the Bonds of each Series shall be executed by the Authority for issuance under this Indenture and delivered to the Trustee and thereupon shall be authenticated by the Trustee and by it delivered upon the Order of the Authority in Authorized Denominations, but only upon the receipt by the Trustee of the following items (which upon receipt the Trustee may conclusively rely):

(i) With respect to the Series 2018 Bonds, an executed copy of this Indenture;

(ii) an opinion of Bond Counsel in customary form to the effect that, as of its date (A) this Indenture and, with respect to Additional Bonds, the Supplemental Indenture authorizing such Additional Bonds, constitutes a valid and binding obligation of, the Authority; (B) such Bonds constitute valid and binding limited obligations of the Authority; and (C) if applicable, interest on such Bonds is excludible from gross income for federal income tax purposes;

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(iii) a certificate of an Authorized Authority Representative, upon which the Trustee may conclusively rely, to the effect that all conditions precedent for the issuance and authentication of such Series of Bonds have been satisfied;

(iv) in the case of Additional Bonds, an executed copy of the Supplemental Indenture authorizing such Bonds which shall, among other provisions, specify:

(A) the authorized principal amount;

(B) the dated date and the maturity date or dates of such Additional Bonds;

(C) the interest rate or rates, if any, or the manner of determining such interest rate or rates, on such Additional Bonds and the Interest Payment Date or Dates thereof;

(D) whether such Additional Bonds are issued as Senior Bonds, Subordinate B-1 Bonds, Subordinate B-2 Bonds, or Junior Bonds;

(E) the denominations of and the manner of dating, numbering and lettering of such Additional Bonds;

(F) any capitalized interest requirements (or the method of determining the same) for such Additional Bonds;

(G) the Redemption Prices, if any, and the redemption or purchase terms, for such Additional Bonds;

(H) the amount and due date of each Mandatory Sinking Fund Installment, if any, for such Additional Bonds of like maturity;

(I) the form of such Additional Bonds and whether or not such Bonds are subject to the book-entry system;

(J) the purpose for which such Additional Bonds are being issued, which shall be solely for the purpose of (I) providing repairs or additional Improvements to the Project, (II) refunding one or more Series of Bonds or portion thereof, (III) payment of costs incidental to or connected with any Additional Bond authorized in clauses (I) or (II) above or refunding of any Bonds to be refunded, (IV) making deposits into the applicable reserve fund or funds, and/or (V) making any deposits into the funds and accounts required by the provision of the Supplemental Indenture authorizing such Additional Bonds;

(K) the application of the proceeds of the sale of such Additional Bonds including the amount, if any, to be deposited in the funds and accounts established hereunder;

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(L) if such Additional Bonds are Senior Bonds to be secured by a debt service reserve fund, such Supplemental Indenture shall provide for the establishment of a separate and distinct account within the Senior Debt Service Reserve Fund to secure such Additional Senior Bonds, which account shall be segregated from the Senior Debt Service Reserve Fund securing the Series 2018A Bonds; and

(M) any other provisions deemed advisable by the Authority and not in conflict with the provisions of this Indenture;

(v) a certified copy of the resolution adopted by the Board of Directors of the Authority authorizing the issuance and delivery of such Bonds;

(vi) a certificate of an Authorized Authority Representative dated as of the date of issuance of such Series of Additional Bonds stating that there exists no Event of Default hereunder or event which would constitute an Event of Default upon notice and failure to cure pursuant to Section 9.02; and

(vii) such further opinions and instruments as are required by or pursuant to the provisions of this Indenture or any Supplemental Indenture.

(b) Provided that no Default or Event of Default under this Indenture has occurred and is continuing, Additional Bonds may be issued under this Indenture as follows:

(i) One or more Series of Refunding Bonds may, in the Authority’s sole discretion, be issued, authenticated and delivered to refund all or a portion of Outstanding Bonds of one or more Series. Each Series of Refunding Bonds shall be issued in a principal amount sufficient, together with other moneys available therefor, to accomplish such refunding, including providing amounts for the costs incidental to or connected therewith, and the making of any deposits into a reserve fund and any of the funds and accounts required by the provisions of the Supplemental Indenture authorizing such Series of Refunding Bonds. Refunding Bonds of each Series shall be executed by the Authority for issuance under this Indenture and delivered to the Trustee and thereupon shall be authenticated by the Trustee upon the Order of the Authority, but only upon the receipt by the Trustee (in addition to the opinions, certificates and instruments required by subsection (a) of this Section) of the following items (upon which receipt the Trustee may conclusively rely):

(A) documents required by Section 8.02 with respect to the Bonds to be refunded by the Refunding Bonds;

(B) written certificate of an Accountant to the effect that the Debt Service requirements (by lien) in any Fiscal Year over the remaining term of the outstanding Debt (by lien) after giving effect to the refinancing will not exceed 100% of the Debt Service requirements (by lien) in such year over the term of the Debt (by lien) prior to the refinancing;

(C) an opinion of counsel to the effect that no amendments or supplements will be made to this Indenture in connection with the issuance of the

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Refunding Bonds that would otherwise require the prior written consent of any of the Owners of any Bonds to remain Outstanding after the issuance of such Refunding Bonds, under Article XI or, if any such amendments or supplements requiring such consents are being made to this Indenture, such prior written consents of the Owners; and

(D) such further opinions and instruments as are required by the provisions of Article XI or by the provisions of any Supplemental Indenture.

(ii) With the written consent of the Controlling Party, at the sole and exclusive discretion of the Authority, one or more Series of Additional Bonds may be issued, authenticated and delivered upon original issuance for the purpose of financing or refinancing (including Refunding Bonds not meeting the requirements of clause (i) above) the construction, installation and equipping of additions, renovation, betterments, extensions, expansions, repairs or improvements to the Project, but only upon the receipt by the Trustee (in addition to the opinions, certificates and instruments required by subsection (a) of this Section) of the following items (upon which receipt the Trustee may conclusively rely):

(A) a written certificate of an Accountant evidencing that the Debt Service Coverage Ratio, taking into account the proposed Additional Bonds to be incurred as if such Additional Bonds had been incurred at the beginning of such period, for the two Fiscal Years immediately preceding the issuance of the proposed Additional Bonds was not less than 1.5x with respect to Senior Bonds 1.1x, with respect to the Subordinate Bonds and 1.05x with respect to the Junior Bonds; and

(B) forecasted financial statements (accompanied by a written report or opinion of an Accountant) evidencing that for the three Fiscal Years immediately following the date of issuance of the Additional Bonds, the Debt Service Coverage Ratio is not projected to be less than 1.5x with respect to the Senior Bonds, 1.1x with respect to the Subordinate Bonds and 1.05x with respect to the Junior Bonds.

Additional Bonds of each Series that do not otherwise constitute Refunding Bonds under subsection (b)(i) of Section 3.02 shall be executed by the Authority for issuance under this Indenture and delivered to the Trustee and thereupon shall be authenticated by the Trustee upon the Order of the Authority, upon the receipt by the Trustee of the opinions and instruments required by subsection (a) of Section 3.02. Refunding Bonds of each Series shall be executed by the Authority for issuance under this Indenture and delivered to the Trustee and thereupon shall be authenticated by the Trustee upon the Order of the Authority, upon the receipt by the Trustee (in addition to the opinions, certificates and instruments required by subsection (a) of this Section) of the items (upon which receipt the Trustee may conclusively rely) listed in subsections (b)(i)(A) and (D) of Section 3.02.

(iii) At the sole and exclusive discretion of the Authority, without the written consent of the Controlling Party, one or more Series of Additional Senior Bonds may be issued, authenticated and delivered upon original issuance for the purpose of financing or refinancing (excluding Refunding Bonds) the construction, installation and equipping of additions, renovation, betterments, extensions, expansions, repairs or improvements to the Project (hereinafter

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“Additions or Alterations”), but only upon the receipt by the Trustee (in addition to the opinions, certificates and instruments required by subsection (a) of this Section) of the following items (upon which receipt the Trustee may conclusively rely):

(A) (i) a written certificate of an Accountant evidencing that the Debt Service Coverage Ratio, taking into account the proposed Additional Bonds to be incurred as if such Additional Bonds had been incurred at the beginning of such period, for the two Fiscal Years immediately preceding the issuance of the proposed Additional Bonds was not less than 1.5x with respect to Senior Bonds, 1.1x with respect to the Subordinate Bonds and 1.05x with respect to the Junior Bonds and (ii) forecasted financial statements (accompanied by a written report or opinion of an Accountant) evidencing that for the three Fiscal Years immediately following the date of issuance of the Additional Bonds, the Debt Service Coverage Ratio is not projected to be less than 1.5x with respect to the Senior Bonds, 1.1x with respect to the Subordinate Bonds and 1.05x with respect to the Junior Bonds; or

(B) a certificate of authorized representative of the Operator to the effect that such Additions or Alterations were ordered by a governmental body or required by a health care accrediting agency, and such Additional Bonds are not in an amount greater than necessary to comply with such order.

Additional Senior Bonds of a Series issued for such purposes shall be issued in a principal amount not to exceed, together with other moneys available therefor, the Authority’s estimate of the reasonable costs of the Project to be financed or refinanced with the proceeds of the sale of such Series of Additional Senior Bonds, including providing amounts for the costs incidental to or connected with any such Bonds and the making of any deposits into the applicable reserve fund and any of the funds and accounts required by this Indenture and the Supplemental Indenture authorizing such Series of Additional Senior Bonds. Additional Senior Bonds of each Series that do not otherwise constitute Refunding Bonds under subsection (b) of Section 3.02 shall be executed by the Authority for issuance under this Indenture and delivered to the Trustee and thereupon shall be authenticated by the Trustee upon the Order of the Authority, upon the receipt by the Trustee of the opinions and instruments required by subsection (a) of Section 3.02.

(iv) At the sole and exclusive discretion of the Authority, without the consent of the Controlling Party one or more Series of Additional Subordinate B-1 Bonds or Additional Subordinate B-2 Bonds (together, the “Additional Subordinate Bonds”) or Additional Junior Bonds may be issued, authenticated and delivered upon original issuance for the purpose of financing or refinancing (excluding Refunding Bonds) Additions or Alterations to the Project; but only upon the receipt by the Trustee (in addition to the opinions, certificates and instruments required by subsection (a) of this Section) of the following items (upon which receipt the Trustee may conclusively rely):

(A) (i) a written certificate of an Accountant evidencing that the Debt Service Coverage Ratio, taking into account the proposed Additional Bonds to be incurred as if such Additional Bonds had been incurred at the beginning of such period, for the two Fiscal Years immediately preceding the issuance of the proposed Additional Bonds was

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not less than 1.5x with respect to Senior Bonds, 1.1x with respect to the Subordinate Bonds and 1.05x with respect to the Junior Bonds and (ii) forecasted financial statements (accompanied by a written report or opinion of an Accountant) evidencing that for the three Fiscal Years immediately following the date of issuance of the Additional Bonds, the Debt Service Coverage Ratio is not projected to be less than 1.5x with respect to the Senior Bonds, 1.1x with respect to the Subordinate Bonds and 1.05x with respect to the Junior Bonds; or

(B) a certificate of authorized representative of the Operator to the effect that such Additions or Alterations were ordered by a governmental body or required by a health care accrediting agency, and such Additional Bonds are not in an amount greater than necessary to comply with such order.

Additional Subordinate Bonds or Additional Junior Bonds of a Series issued for such purposes shall be issued in a principal amount not to exceed, together with other moneys available therefor, the Authority’s estimate of the reasonable costs of the Project to be financed or refinanced with the proceeds of the sale of such Series of Additional Subordinate Bonds or Additional Junior Bonds, including providing amounts for the costs incidental to or connected with any such Bonds and the making of any deposits into the applicable reserve fund and any of the funds and accounts required by this Indenture and the Supplemental Indenture authorizing such Series of Additional Subordinate Bonds or Additional Junior Bonds. Additional Subordinate Bonds or Additional Junior Bonds of each Series that do not otherwise constitute Refunding Bonds under subsection (b) of Section 3.02 shall be executed by the Authority for issuance under this Indenture and delivered to the Trustee and thereupon shall be authenticated by the Trustee upon the Order of the Authority, upon the receipt by the Trustee of the opinions and instruments required by subsection (a) of Section 3.02.

(c) At the sole and exclusive discretion of the Authority, Additional Indebtedness may be issued by the Authority for the purpose of financing working capital related to the Project. Additional Indebtedness may be issued by the Authority subject to the following conditions:

(A) The outstanding amount of Additional Indebtedness shall not exceed 1/12th of the then-current annual Budgeted Operating Expenses; and

(B) Additional Indebtedness shall be paid down to a zero balance for five consecutive days at least once every 365 days.

Section 3.03. Application of Bond Proceeds and Other Funds.

(a) The Trustee shall apply the net proceeds from the sale of the Series 2018A-1 Bonds in the amount of $__________ (consisting of $__________ aggregate principal amount of the Series 2018A-1 Bonds, less an original issue discount of $__________ for the Series 2018A-1 Bonds and less the Underwriters’ discount of $__________ for the Series 2018A-1 Bonds) as follows:

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(i) $__________, representing [a portion of] the Senior Reserve Fund Requirement shall be deposited into the Senior Debt Service Reserve Fund;

(ii) $__________ shall be deposited into the Capitalized Interest Subaccount of the Senior Debt Service Account and applied to pay a portion of the interest on the Series 2018A-1 Bonds through November 1, 2019;

(iii) $__________ shall be deposited into the Series 2018 Costs of Issuance Account of the Project Fund and applied to the payment of Costs of Issuance;

(iv) $__________ shall be deposited into the Project Acquisition Account of the Project Fund;

(v) $__________ shall be deposited into the Repair and Replacement Fund;

(vi) $__________ shall be deposited in the Liquidity Reserve Fund;

(vii) $__________ shall be deposited in the Extraordinary Expense Fund; and

(viii) $__________ shall be transferred to the Operator for deposit in the Operating Account established under the Operating Agreement.

(b) The Trustee shall apply the net proceeds from the sale of the Series 2018A-2 Bonds in the amount of $__________ (consisting of $__________ aggregate principal amount of the Series 2018A-2 Bonds, less an original issue discount of $__________ for the Series 2018A-2 Bonds, and less the Underwriters’ discount of $__________ for the Series 2018A-2 Bonds) as follows:

(i) $__________, representing [a portion of] the Senior Reserve Fund Requirement shall be deposited into the Senior Debt Service Reserve Fund;

(ii) $__________ shall be deposited into the Capitalized Interest Subaccount of the Senior Debt Service Account and applied to pay a portion of the interest on the Series 2018A-2 Bonds through November 1, 2019;

(iii) $__________ shall be deposited into the Project Acquisition Account of the Project Fund;

(iv) $__________ shall be deposited into the Series 2018 Costs of Issuance Account of the Project Fund and applied to the payment of Costs of Issuance;

(v) $__________ shall be deposited into the Repair and Replacement Fund;

(vi) $__________ shall be deposited in the Liquidity Reserve Fund;

(vii) $__________ shall be deposited in the Extraordinary Expense Fund; and

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(viii) $__________ shall be transferred to the Operator for deposit in the Operating Account established under the Operating Agreement.

(c) The proceeds, including accrued interest, if any, of Additional Bonds together with any other moneys provided by the Authority, shall be applied by the Trustee simultaneously with the delivery of such Bonds in the manner provided in the Supplemental Indenture authorizing such Series of Additional Bonds.

Section 3.04. Medium of Payment; Form and Date; Letter and Numbers.

(a) The Bonds shall be payable, as to principal and interest in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Interest on the Series 2018 Bonds shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Interest on any Series of Additional Bonds shall be computed as provided in the Supplemental Indenture authorizing such Series of Additional Bonds.

(b) Each Series 2018 Bond shall be issued only as a fully registered Bond. Each Series 2018A Bond shall be substantially in the form of Exhibit B hereto, with such changes therein that are not inconsistent with this Indenture. Each Series 2018B Bond shall be substantially in the form of Exhibit C hereto, with such changes therein that are not inconsistent with this Indenture. Each Series 2018C Bond shall be substantially in the form of Exhibit D hereto, with such changes therein that are not inconsistent with this Indenture. Additional Bonds may be issued in such form or forms as shall be provided in the Supplemental Indenture authorizing such Series of Additional Bonds.

(c) The Series 2018A-1 Bonds shall be numbered consecutively from RA-1-1 upward, the Series 2018A-2 Bonds shall be numbered consecutively from RA-2-1 upward, the Series 2018B-1 Bonds shall be numbered consecutively from RB-1-1 upward, the Series 2018B-2 Bonds shall be numbered consecutively from RB-2-1 upward, the Series 2018C-1 Bonds shall be numbered consecutively from RC-1-1 upward, and the Series 2018C-2 Bonds shall be numbered consecutively from RC-2-1 upward, or in such other manner as the Authority, with the concurrence of the Trustee, shall determine. The Trustee shall insert the date of authentication of each Bond in the place provided for such purpose in the form of certificate of authentication of the Trustee to be printed on each Bond. If interest on the Bonds shall be in default, Bonds issued in exchange for Bonds surrendered for transfer or exchange shall be dated as of the date to which interest has been paid in full on the Bonds surrendered. Each Additional Bond shall be lettered and numbered as provided in this Indenture or the Supplemental Indenture authorizing the Series of which such Additional Bond is a part and so as to be distinguished from every other Bond.

(d) The Series 2018A-1 Bonds shall be dated the Closing Date, shall be current interest bonds issued as [term] [serial] bonds in Authorized Denominations, shall be issued at the annual interest rates set forth below, payable each January 1 and July 1, commencing January 1, 2019, and shall mature, subject to prior redemption, on January 1 in each of the years set forth below.

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Maturity Date Principal Amount Interest Rate

___________ * Term bond

(e) The Series 2018A-2 Bonds shall be dated the Closing Date, shall be current interest bonds issued as [term] [serial] bonds in Authorized Denominations, shall be issued at the annual interest rates set forth below, payable each January 1 and July 1, commencing January 1, 2019, and shall mature, subject to prior redemption, on January 1 in each of the years set forth below.

Maturity Date Principal Amount Interest Rate

___________ * Term bond

(f) The Series 2018B-1 Bonds shall be dated the Closing Date, shall be Convertible Capital Appreciation Bonds issued as [term] [serial] bonds in Authorized Denominations, shall be issued at the annual rates set forth below, and shall mature, subject to prior redemption, on January 1 in each of the years set forth below.

Maturity Date

Aggregate Initial

Principal Amount

Conversion Date

Stated Accreted Value at

Conversion Date

Interest Rate

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July 1, 2021

___________ * Term bond

Interest on such Series 2018B-1 Bonds shall be compounded from the Closing Date at the respective rates set forth above on each January 1 and July 1, commencing January 1, 2019 (each, a “Compounding Date”) as set forth in the Accreted Value Table attached hereto as Exhibit J and shall be treated as accruing in equal daily amounts between Compounding Dates, payable at maturity or earlier redemption. On January 1, 2021, the Series 2018B-1 Bonds will convert to current interest bonds with interest payable on July 1, 2021 and each January 1 and July 1 thereafter (on the basis of a 360-day year composed of twelve thirty (30)-day months). The Accreted Value for each Series 2018B-1 Bond shall be determined by reference to the Accreted Value Table attached hereto as Exhibit J and the interest rate set forth above is for illustrative purposes only prior to conversion.

(g) The Series 2018B-2 Bonds shall be dated the Closing Date, shall be Convertible Capital Appreciation Bonds issued as [term] [serial] bonds in Authorized Denominations, shall be issued at the annual rates set forth below, and shall mature, subject to prior redemption, on January 1 in each of the years set forth below.

Maturity Date

Aggregate Initial

Principal Amount

Conversion Date

Stated Accreted Value at

Conversion Date

Interest Rate

July 1, 2021

___________ * Term bond

Interest on such Series 2018B-2 Bonds shall be compounded from the Closing Date at the respective rates set forth above on each Compounding Date as set forth in the Accreted Value Table attached hereto as Exhibit J and shall be treated as accruing in equal daily amounts between Compounding Dates, payable at maturity or earlier redemption. On January 1, 2021, the Series 2018B-2 Bonds will convert to current interest bonds with interest payable on July 1, 2021 and each January 1 and July 1 thereafter (on the basis of a 360-day year composed of twelve thirty (30)-day months). The Accreted Value for each Series 2018B-2 Bond shall be determined by reference to the Accreted Value Table attached hereto as Exhibit J and the interest rate set forth above is for illustrative purposes only prior to conversion.

(h) The Series 2018C-1 Bonds shall be dated the Closing Date, shall be Capital Appreciation Bonds issued as [term] [serial] bonds in Authorized Denominations, shall be issued at the annual rates set forth below and shall mature, subject to prior redemption, on January 1 in each of the years set forth below ow.

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Maturity Date

Aggregate Initial Principal Amount

Maturity Value

Interest Rate

___________ * Term bond

Interest on the 2018C-1 Bonds shall be compounded at the respective rates set forth above on each Compounding Date and shall be treated as accruing in equal daily amounts between Compounding Dates and shall be payable on their maturity date or redemption prior thereto as part of the final Accreted Value for the Series 2018C-1 Bonds (as set forth in the Accreted Value Table attached hereto as Exhibit K). The Accreted Value for each Series 2018C-1 Bond shall be determined by reference to the Accreted Value Table attached hereto as Exhibit K and the interest rate set forth above is for illustrative purposes only.

(i) The Series 2018C-2 Bonds shall be dated the Closing Date, shall be Capital Appreciation Bonds issued as [term] [serial] bonds in Authorized Denominations, shall be issued at the annual rates set forth below and shall mature, subject to prior redemption, on January 1 in each of the years set forth below ow.

Maturity Date

Aggregate Initial Principal Amount

Maturity Value

Interest Rate

___________ * Term bond

Interest on the Series 2018C-2 Bonds shall be compounded at the respective rates set forth above on each Compounding Date and shall be treated as accruing in equal daily amounts between Compounding Dates and shall be payable on their maturity date or redemption prior thereto as part of the final Accreted Value for the Series 2018C-2 Bonds (as set forth in the Accreted Value Table attached hereto as Exhibit K). The Accreted Value for each Series 2018C-2 Bond shall be determined by reference to the Accreted Value Table attached hereto as Exhibit K and the interest rate set forth above is for illustrative purposes only.

(j) The following provisions apply to the Series 2018 Bonds except as otherwise provided in any arrangements with DTC as set forth in Section 3.13 and all Additional Bonds, unless with respect to any Additional Bonds the Supplemental Indenture authorizing such Additional Bonds provides otherwise:

(i) interest on Bonds other than interest payable at maturity or on a Redemption Date shall be paid to the Person in whose name such Bond is registered on the Register at the close

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of business on the Record Date for such Interest Payment Date; payment of interest on Bonds other than interest payable at maturity or on a Redemption Date shall be made by check of the Trustee mailed to the Owners thereof at their addresses set forth in the Register as of the Record Date, or by wire transfer to Owners of $1,000,000 or more in aggregate principal amount of Bonds at such wire transfer address in the United States as such Owner shall specify in writing requesting payment by wire transfer delivered to the Trustee prior to the Record Date;

(ii) payment of principal of Bonds at maturity or on a Redemption Date shall be paid upon presentation and surrender of such Bonds at the Trustee’s Principal Office; and

(iii) no payment of principal shall be made on any Bond unless and until such Bond is tendered to the Trustee for cancellation; provided, that the Trustee may agree with any Owner that such Owner may, in lieu of surrendering the same for a new Bond, endorse on such Bond a record of partial payment of the principal of such Bond and the Trustee will pay the principal of such Bond by wire transfer to such Owner in accordance with the wire transfer instructions provided to the Trustee from time to time. The Trustee shall maintain a record of each such partial payment made in accordance with the foregoing agreement and such record shall be conclusive. Such partial payment shall be valid upon payment of the amount thereof to the Owner of such Bond, and the Authority and the Trustee shall be fully released and discharged from all liability to the extent of such payment irrespective of whether such endorsement shall or shall not have been made upon such Bond by the Owner thereof and irrespective of any error or omission in such endorsement.

Section 3.05. Legends. The Bonds of each Series may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions of this Indenture as may be necessary or desirable to comply with custom, the rules of any securities exchange or commission, brokerage board, municipal securities rulemaking board, the Act, the policies and procedures of the Authority, or otherwise, including without limitation a legend setting forth the restrictions on transfer under Section 3.08.

Section 3.06. Execution and Authentication.

(a) The Bonds shall be signed in the name of the Authority by an Authorized Signatory or by his or her manual or facsimile signature. In case any such Authorized Signatory which shall have signed any of the Bonds shall cease to hold such office before the Bonds so signed shall have been authenticated and delivered by the Trustee, such Bonds may, nevertheless, be authenticated and delivered as herein provided, and may be issued as if the persons who signed such Bonds had not ceased to hold such offices. Any Bond of a Series may be signed on behalf of the Authority by such persons who at the time of the execution of such Bonds shall be duly appointed as Authorized Signatories, although at the date borne by or of delivery of the Bond or Bonds of such Series such persons may not have been so appointed.

(b) Only such Bonds as shall have endorsed thereon a certificate of authentication, substantially in the form set forth in Exhibit B hereto with respect to the Series 2018A Bonds, Exhibit C hereto with respect to the Series 2018B Bonds or Exhibit D hereto with respect to the Series 2018C Bonds, or in the form set forth in the Supplemental Indenture authorizing Additional

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Bonds with respect to such Additional Bonds, dated as of the date of authentication and duly authenticated by the Trustee shall be entitled to any right, security or benefit under this Indenture. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Trustee, and such executed certificate upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Indenture and that the Owner thereof is entitled to the benefits of the trust hereby created. The Trustee’s certificate of authentication on any Bond shall be deemed to have been duly executed by it if (i) signed by an authorized officer or signatory of the Trustee, but it shall not be necessary that the same officer or signatory sign the certificate of authentication on all of the Bonds or on all of the Bonds of any Series issued hereunder and (ii) the date of authentication of the Bond is inserted in the place provided therefor on the certificate of authentication.

Section 3.07. Exchange of Bonds. Unless otherwise provided in any Supplemental Indenture, Bonds, upon surrender thereof at the designated office of the Registrar, when surrendered with a Request satisfactory to the Registrar duly executed by the Owner or the Owner’s duly authorized attorney, may, at the option of the Owner thereof, and upon payment by such Owner of any charges which the Registrar or the Authority may make as provided in Section 3.09, be exchanged for an equal aggregate principal amount of Bonds of the same Series, lien priority and maturity and in any Authorized Denomination.

Section 3.08. Negotiability, Transfer and Registry. Unless otherwise provided in any Supplemental Indenture, Bonds shall be transferable only upon the Register, which shall be kept for that purpose at the designated office of the Registrar for such Series of Bonds, by the Owner thereof, in person or by the Owner’s attorney duly authorized in writing, upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the Owner or the Owner’s duly authorized attorney.

The Registrar shall keep or cause to be kept, on behalf of the Authority, the Register, in which, subject to such reasonable regulations as the Authority, the Trustee, and the Registrar may prescribe, the Registrar shall cause Bonds to be registered and shall transfer Bonds as in this Article provided. The Register shall contain the name and address of the Owner of each Bond as well as the name and address of each Beneficial Owner to the extent such Beneficial Owner provides such information in writing to the Registrar. Upon the transfer of any such Bond and payment of any required fees, the Registrar shall issue in the name of the transferee a new fully registered Bond or Bonds of the same aggregate principal amount, Series, lien priority and maturity as the surrendered Bond.

The Authority and the Trustee may deem and treat the person in whose name any Bond shall be registered in the Register as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal and Redemption Price of and interest on such Bond and for all other purposes, and all such payments so made to any such Owner or upon the Owner’s order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and the Authority and the Trustee shall not be affected by any notice to the contrary.

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Notwithstanding any provision of this Indenture to the contrary, each initial Beneficial Owner of the Series 2018A Bonds shall be a Qualified Institutional Buyer or a Beneficial Owner otherwise approved by the Authority, and each initial Beneficial Owner of the Series 2018B Bonds and Series 2018C Bonds shall be a Qualified Institutional Buyer or an Accredited Investor, which initial Beneficial Owner has provided an Investor Letter, to the Trustee and Authority upon its initial purchase of any Series 2018 Bond. Such Investor Letter shall (i) with respect to the Series 2018A-1 Bonds, be substantially in the form set forth in the Official Statement; and (ii) with respect to the Series A-2 Bonds, the Series 2018B, the Series 2018C-1 Bonds and the Series 2018C-2 Bonds, shall be in the forms, and accompanied by such other and further documentation, as are prescribed in the Purchase Agreement.

Thereafter, (i) the Series 2018A Bonds may only be sold or transferred in Authorized Denominations to Qualified Institutional Buyers, (ii) the Series 2018B Bonds and Series 2018C-1 Bonds may only be sold or transferred in Authorized Denominations to Qualified Institutional Buyers or Accredited Investors, and (iii) the Series 2018C-2 Bonds may only be transferred by the Owner thereof in Authorized Denominations to Qualified Institutional Buyers or Accredited Investors and may be transferred to such Persons only on the Register only after presentation to the Trustee of an investor letter from the transferee in substantially the form of Exhibit G of the Purchase Agreement as provided in this Section 3.08. Notice of the foregoing restrictions shall be printed on each Series 2018 Bond.

Any purported transfer of a Series 2018 Bond in violation of the foregoing restrictions shall be void ab initio.

Section 3.09. Exchanges and Transfers. Except as otherwise provided in any Supplemental Indenture, in all cases in which the privilege of exchanging or transferring Bonds is exercised, the Authority shall execute and the Trustee shall authenticate and deliver Bonds in accordance with the provisions of this Indenture. All registered Bonds surrendered in any exchange or transfer shall forthwith be canceled by the Trustee. For every such transfer of Bonds pursuant to Section 3.08, whether temporary or definitive, the Authority, the Trustee or the Registrar may make a charge sufficient to reimburse it or them for any expense, tax, fee or other governmental charge required to be paid with respect to such transfer. In addition, for every exchange of Bonds (other than the exchange of temporary Bonds for definitive Bonds), the Authority, the Trustee or the Registrar may make reasonable charges to cover the costs of printing Bonds including any Trustee’s or Registrar’s charges in connection therewith. The payment of the sum or sums provided in this Section shall be made by the Owner requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. Except as may be otherwise provided in a Supplemental Indenture, the Registrar shall not be required to transfer or exchange Bonds for a period from the 15th day of the month next preceding any Interest Payment Date or Principal Payment Date of such Bond through such Interest Payment Date or Principal Payment Date nor to transfer or exchange any Bond after notice calling such Bond or portion thereof for redemption has been given as herein provided nor during the period of 15 days next preceding the giving of such notice.

Section 3.10. Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bonds shall become mutilated or be destroyed, stolen or lost, the Authority shall execute, and thereupon the

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Trustee shall authenticate and deliver, a new Bond of like Series, lien priority, maturity date, principal amount and interest rate as the Bond so mutilated, lost, stolen or destroyed, provided that (a) in the case of any mutilated Bond, such Bond is first surrendered to the Trustee, (b) in the case of any lost, stolen or destroyed Bond, there is first furnished evidence of such loss, theft or destruction satisfactory to the Trustee together with indemnity satisfactory to the Trustee, (c) all other reasonable requirements of the Authority and the Trustee are complied with, and (d) expenses in connection with such transaction are paid by the Owner. Except as provided in Section 3.09, all Bonds so surrendered to the Trustee shall be canceled by it. Any such new Bonds issued pursuant to this Section in substitution for Bonds alleged to be destroyed, stolen or lost shall constitute original additional contractual obligations on the part of the Authority, whether or not the Bonds alleged to be destroyed, stolen or lost be at any time enforceable by anyone, and shall be equally secured by and entitled to equal and proportionate benefits in the Revenues and other assets pledged under this Indenture with all other Bonds issued under this Indenture, to the same extent provided herein and subject to the terms and priority set forth herein. If, after the delivery of such new Bond, a bona fide purchaser of the original Bond in lieu of which such new Bond was issued presents for payment or registration such original Bond, the Trustee shall be entitled to recover such new Bond from the Person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Authority or the Trustee in connection therewith.

Section 3.11. Temporary Bonds. Until the definitive Bonds of any Series are prepared, the Authority may execute, in the same manner as is provided in Section 3.06, and, upon the Request of the Authority, the Trustee shall authenticate and deliver, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds except as to denomination, one or more temporary Bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in Authorized Denominations as provided herein or in a Supplemental Indenture, and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Authority at its own expense shall prepare and execute and, upon the surrender of such temporary Bonds, the Trustee shall authenticate and, without charge to the Owner thereof, deliver in exchange therefor, definitive Bonds of the same aggregate principal amount and Series and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds authenticated and issued pursuant to this Indenture.

If the Authority shall authorize the issuance of temporary Bonds in more than one denomination, the Owner of any temporary Bond or Bonds may, at said Owner’s option, surrender the same to the Trustee in exchange for another temporary Bond or Bonds of like aggregate principal amount, Series, lien priority and maturity of any other Authorized Denomination or Denominations, and thereupon the Authority shall execute and the Trustee shall authenticate and, in exchange for the temporary Bond or Bonds so surrendered and upon payment of the taxes, fees and charges as provided for in Section 3.09, shall deliver a temporary Bond or Bonds of like aggregate principal amount, Series and maturity in such other Authorized Denomination or Denominations as shall be requested by such Owner.

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All temporary Bonds surrendered in exchange either for another temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith canceled by the Trustee.

Section 3.12. Cancellation and Destruction of Bonds. Except as otherwise provided in this Indenture or any Supplemental Indenture, all Bonds paid in full, either at or before maturity, shall be delivered to the Trustee when such payment or purchase is made, and such Bonds shall thereupon be promptly canceled. Bonds so canceled shall thereafter be treated in accordance with the Trustee’s document retention policies.

Section 3.13. Depository for Series 2018A Bonds, Series 2018B Bonds and Series 2018 C-1 Bonds. (a) The Series 2018A Bonds, Series 2018 B Bond and Series 2018 C-1 Bonds (collectively, the “Series 2018 DTC Bonds”) shall be initially executed and delivered in the form of a separate, single, authenticated, fully registered bond for each separate stated maturity of each series of the Series 2018 DTC Bonds, each such bond to be in the full principal amount of such series of Series 2018 DTC Bonds with such stated maturity. Upon initial execution, authentication and delivery, the ownership of such Series 2018 DTC Bonds shall be registered in the bond register in the name of Cede & Co., as nominee of DTC, the Depository for the Series 2018 DTC Bonds. The Series 2018C-2 Bonds shall be initially executed and delivered in paper certificated form in a single denomination equal to the principal amount of Series 2018C-2 Bond authorized by Section 3.01(d) hereof and upon any subsequent transfer thereof shall be executed and delivered in paper certificated form in Authorized Denominations; provided, however, that if authorized by a Supplemental Indenture, said certificated Series 2018C-2 Bonds may be exchanged in whole (but not in part) for Series 2018C-2 Bonds registered in the name of Cede & Co., as nominee of DTC (upon which the Series 2018C-2 Bonds will be treated as Series 2018 DTC Bonds). The Trustee and the Authority may treat DTC (or its nominee) as the sole and exclusive Owner of the Series 2018 DTC Bonds registered in its name for the purposes of payment of the principal of and interest on the Series 2018 DTC Bonds, selecting the Series 2018 DTC Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Owners of Series 2018 DTC Bonds under this Indenture, registering the transfer of Series 2018 DTC Bonds, obtaining any consent or other action to be taken by the Owner of Series 2018 DTC Bonds and for all other purposes whatsoever, and neither the Trustee nor the Authority shall be affected by any notice to the contrary. Neither the Trustee nor the Authority shall have any responsibility or obligation to any Participant, any Person claiming a beneficial ownership interest in the Series 2018 DTC Bonds under or through DTC or any Participant, or any other Person, with respect to the accuracy of any records maintained by DTC or any Participant; the payment by DTC or any Participant of any amount in respect of the principal of or interest on the Series 2018 DTC Bonds; any notice that is permitted or required to be given to the Owners of the Series 2018 DTC Bonds under this Indenture; the selection by DTC or any Participant of any Person to receive payment in the event of a partial redemption of the Series 2018 DTC Bonds; or any consent given or other action taken by DTC (or its nominee) as the Owner of the Series 2018 DTC Bonds. So long as DTC (or its nominee) is the Owner of all Series 2018 DTC Bonds, the Trustee shall pay all principal of, and interest on, the Series 2018 DTC Bonds only to DTC, and all such payments shall be valid and effective to fully satisfy and discharge the Authority’s obligations with respect to the principal of and interest on the Series 2018 DTC Bonds to the extent of the sum or sums so paid and all notices required to be sent to the Owners may be sent by electronic means. Except under the conditions specified in subsection (b) of this Section, no Person other than DTC or its nominee shall receive

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authenticated Series 2018 DTC Bonds. Upon delivery by DTC to the Trustee of written notice to such effect, DTC may substitute a new nominee in place of Cede & Co., or any successor nominee, and subject to the provisions herein with respect to record dates, the term “Cede & Co.” in this Indenture shall refer to such new nominee of DTC.

(b) If (i) DTC or any successor as Depository for the Series 2018 DTC Bonds determines not to continue to act as Depository for such Bonds or (ii) the Authority determines that the incumbent Depository for the Series 2018 DTC Bonds shall no longer so act, and the Authority delivers a Certificate of an Authorized Authority Representative to the Trustee to that effect, then the Authority shall discontinue the book-entry system with the incumbent Depository for the Series 2018 DTC Bonds. If the Authority determines to replace the incumbent Depository for the Series 2018 DTC Bonds with another Depository, the Authority shall prepare or direct the preparation of a new single, separate fully registered Series 2018 DTC Bond for the aggregate outstanding principal amount of Series 2018 DTC Bonds of each maturity to be registered in the name of such successor Depository, or its nominee, or make such other arrangements acceptable to the Authority, the Trustee and the successor Depository for the Series 2018 DTC Bonds as are not inconsistent with the provisions of this Indenture. If the Authority fails to identify a successor Depository for the Series 2018 DTC Bonds to replace the incumbent Depository, then the Series 2018 DTC Bonds shall no longer be restricted to being registered in the bond register in the name of the incumbent Depository or its nominee, but shall be registered in whatever name or names the incumbent Depository for the Series 2018 DTC Bonds, or its nominee, shall designate in accordance with the provisions of subsection (a) of this Section. In such event the Authority shall, at its expense, prepare, execute and deliver a sufficient quantity of Series 2018 DTC Bonds to the Trustee for authentication and delivery at the Authority’s Direction to carry out the transfers and exchanges provided in this Section and Section 3.09. All such Series 2018 DTC Bonds shall be in fully registered form in Authorized Denominations.

(c) Notwithstanding any other provision of this Indenture to the contrary, so long as any Series 2018 Bond is registered in the name of DTC, or its nominee, all payments with respect to principal of and interest on, such Series 2018 Bond, and all notices with respect to such Series 2018 Bond, shall be made and given, respectively, as appropriate or necessary with respect to the arrangements made with DTC relating to the Series 2018 Bonds.

(d) In connection with any notice or other communication to be provided to Owners of the Series 2018 DTC Bonds pursuant to this Indenture by the Authority or the Trustee with respect to any consent or other action to be taken by Owners of the Series 2018 DTC Bonds, the Authority or the Trustee, as the case may be, shall establish a record date for such consent or other action and give DTC notice of such record date not less than 15 calendar days in advance of such record date to the extent practicable.

ARTICLE IV

REDEMPTION OF BONDS

Section 4.01. Privilege of Redemption and Redemption Price. Bonds subject to redemption prior to maturity shall be redeemable, upon notice as provided in this Article unless a

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different notice provision is provided for in a Supplemental Indenture, at such Redemption Dates, at such Redemption Prices and upon such terms in addition to the terms contained in this Article, as may be specified herein with respect to the Series 2018 Bonds or in the Supplemental Indenture authorizing Additional Bonds with respect to such Additional Bonds.

Section 4.02. Redemption at the Option of the Authority.

(a) The Series 2018A-1 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, 202_, from any legally available funds, at a Redemption Price equal to 100% of the principal amount of Series 2018A-1 Bonds called for redemption, without premium, plus accrued interest with respect thereto to the date fixed for redemption.

(b) The Series 2018A-2 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, 202_, from any legally available funds, at a Redemption Price equal to 100% of the principal amount of Series 2018A-2 Bonds called for redemption, without premium, plus accrued interest with respect thereto to the date fixed for redemption

(c) The Series 2018B-1 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, ____, from any legally available funds, at a Redemption Price equal to 100% of the Accreted Value or principal amount, as applicable, of Series 2018B Bonds called for redemption, without premium, plus, from and after the Conversion Date, accrued interest with respect thereto to the date fixed for redemption.

(d) The Series 2018B-2 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, ____, from any legally available funds, at a Redemption Price equal to 100% of the Accreted Value or principal amount, as applicable, of Series 2018B Bonds called for redemption, without premium, plus, from and after the Conversion Date, accrued interest with respect thereto to the date fixed for redemption.

(e) The Series 2018C-1 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, 2028, from any legally available funds, at a Redemption Price equal to 100% of the Accreted Value of Series 2018C-1 Bonds called for redemption, without premium.

(f) The Series 2018C-2 Bonds shall be subject to redemption at the sole option of the Authority, in whole or in part on any date on or after January 1, 2028, from any legally available funds, at a Redemption Price equal to 100% of the Accreted Value of Series 2018C-2 Bonds called for redemption, without premium.

(g) In the case of any redemption of Bonds at the sole option of the Authority, an Authorized Authority Representative shall give written notice to the Trustee of the Authority’s Direction so to redeem, of the Redemption Date, of the Series, and of the principal amounts (or Accreted Value) of the Bonds of each maturity of such Series to be redeemed (which Series, maturities, and principal amounts thereof to be redeemed shall be determined by the Authority in

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its sole discretion, subject to any limitations with respect thereto as are contained in Section 4.04). Such notice shall be given at least ten Business Days prior to the date on which notice of redemption is required to be given to the Owners of the Bonds to be redeemed or within such shorter period as shall be provided by Supplemental Indenture or consented to by the Trustee. On or prior to any Redemption Date, there shall be paid to the Trustee for deposit into the appropriate Redemption Account an amount which, in addition to other moneys, if any, available therefor held by the Trustee, will be sufficient to redeem on the Redemption Date at the Redemption Price, plus interest accrued and unpaid to the Redemption Date, all of the Bonds called for redemption.

Section 4.03. Redemption Otherwise Than at the Option of the Authority.

(a) Mandatory Redemption.

(i) The Series 2018A-1 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018A-1 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the tables below, except that the Mandatory Sinking Fund Installments of Series 2018A-1 Bonds shall be reduced in chronological order by the principal amount of any Series 2018A-1 Bonds redeemed pursuant to any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:

(A) The Series 2018A-1 Term Bond maturing on January 1, 20__ is subject to mandatory redemption from Mandatory Sinking Fund Installments in the following amounts on January 1 of the following years on and after January 1, 20__:

Year (January 1)

Mandatory Sinking Fund Installment

(ii) The Series 2018A-2 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018A-2 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the tables below, except that the Mandatory Sinking Fund Installments of Series 2018A-2 Bonds shall be reduced in chronological order by the principal amount of any Series 2018A-2 Bonds redeemed

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pursuant to any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:

(A) The Series 2018A-2 Term Bond maturing on January 1, 20__ is subject to mandatory redemption from Mandatory Sinking Fund Installments in the following amounts on January 1 of the following years on and after January 1, 20__:

Year (January 1)

Mandatory Sinking Fund Installment

(iii) The Series 2018B-1 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018B-1 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the table below, except that the Mandatory Sinking Fund Installments of Series 2018B-1 Bonds shall be reduced in chronological order by the principal amount of any Series 2018B-1 Bonds redeemed pursuant to any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:

Year (January 1)

Mandatory Sinking Fund Installment*

* Mandatory Sinking Fund Installments reflect the Accreted Value of the Series 2018B-1 Bonds at conversion.

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(iv) The Series 2018B-2 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018B-2 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the table below, except that the Mandatory Sinking Fund Installments of Series 2018B-2 Bonds shall be reduced in chronological order by the principal amount of any Series 2018B-2 Bonds redeemed pursuant to any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:

Year (January 1)


* Mandatory Sinking Fund Installments reflect the Accreted Value of the Series 2018B-2 Bonds at conversion.

(v) The Series 2018C-1 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018C-1 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the table below, except that the Mandatory Sinking Fund Installments of Series 2018C-1 Bonds shall be reduced in chronological order by the principal amount of any Series 2018C-1 Bonds redeemed pursuant to any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:

Year (January 1)


* Mandatory Sinking Fund Installments reflect the Accreted Value of the Series 2018C-1 Bonds at maturity.

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(vi) The Series 2018C-2 Bonds are subject to mandatory redemption, at a Redemption Price equal to the principal amount of the Series 2018C-2 Bonds being redeemed, together with accrued interest thereon to the Redemption Date, pursuant to Mandatory Sinking Fund Installments on January 1 in each of the years and principal amounts set forth in the table below, except that the Mandatory Sinking Fund Installments of Series 2018C-2 Bonds shall be reduced in chronological order by the principal amount of any Series 2018C-2 Bonds redeemed pursuant to any other optional or mandatory redemption provision on or before the date on which any such Mandatory Sinking Fund Installment is due:

Year (January 1)


* Mandatory Sinking Fund Installments reflect the Accreted Value of the Series 2018C-2 Bonds at maturity.

(b) Extraordinary Mandatory Redemption. The Bonds shall be subject to extraordinary mandatory redemption at the Direction of the Authority pursuant to Section 7.17, in whole or in part on the earliest date following the date for which notice of redemption can be given as provided in this Indenture, at a Redemption Price equal to the principal amount or Accreted Value of Bonds to be redeemed plus interest accrued thereon, if applicable, to the date fixed for redemption, without premium, from proceeds of insurance (including any title insurance), or condemnation awards permitted or required to be applied to such redemption under Section 7.17; provided, that no Subordinate B-1 Bonds shall be redeemed pursuant to this subsection until no Senior Bonds remain Outstanding, that no Subordinate B-2 Bonds shall be redeemed pursuant to this subsection until no Senior Bonds and Subordinate B-1 Bonds remain Outstanding, and no Junior Bonds shall be redeemed pursuant to this subsection until no Senior Bonds and Subordinate Bonds remain Outstanding.

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(c) Mandatory Redemption Following a Determination of Taxability. The Series 2018 Bonds are subject to mandatory redemption following a Determination of Taxability at a Redemption Price equal to the principal amount or Accreted Value of the Bonds to be redeemed or ___% of said principal amount or Accreted Value if the redemption is prior to January 1, 20__, plus interest accrued thereon, if applicable, to the date fixed for redemption. A “Determination of Taxability” with respect to the Series 2018 Bonds shall occur upon receipt by the Trustee of a statutory notice of deficiency by the Internal Revenue Service, a ruling from the National Office of the Internal Revenue Service, or a final decision of a court of competent jurisdiction which holds in effect that interest payment on the Series 2018 Bonds is includable for federal income tax purposes in the gross income of an owner of any Series 2018 Bond; provided, however, that the Authority shall have an opportunity for no more than 180 days after receipt by the Trustee to contest any such statutory notice, ruling or final decision and that no such statutory notice, ruling or final decision shall be deemed a “Determination of Taxability” if the Authority is contesting the same during such 180-day period in good faith until the earliest of (i) abandonment of such contest by the Authority, (ii) the date on which such statutory notice, ruling or final decision becomes final, or (iii) the 181st day after the initial receipt by the Trustee of such statutory notice, ruling or final decision; and provided further that no Determination of Taxability shall arise from the interest on the Series 2018 Bonds being included (1) as a specific “tax preference” item for individual or corporate taxpayers in computing the alternative minimum tax; (2) in income for purposes of calculating alternative minimum taxable income of any corporation pursuant to Section 55 of the Code; (3) in a corporation’s modified alternative minimum taxable income for calculating the taxes imposed under the Superfund Amendments and Regulations Act of 1986; (4) in earnings and profits of branches of foreign corporations for purposes of calculating the “branch profits” tax; (5) within gross income of certain recipients of social security and railroad retirement benefits; (6) as passive investment income to certain subchapter S corporations that have subchapter C earnings and profits; or (7) as a result of changes to income tax rates or limitation on the maximum income tax rate for exclusion of interest. The Authority shall give written notice to the Trustee of any Determination of Taxability of which it has actual knowledge but shall have no liability for its failure to deliver such notice in a timely manner.

Within 30 days after the Trustee receives notice from the Authority of a Determination of Taxability, the Trustee shall give written notice to the Authority stating the date upon which all Outstanding Series 2018 Bonds will be redeemed, which date shall be not less than 45 days nor more than 60 days subsequent to the date of said notice by the Trustee, and the Trustee shall make all necessary arrangements for giving the notice of redemption requirement pursuant to Section 4.05 hereof.

Neither the Authority nor any owner of the Series 2018 Bonds shall be required to contest or appeal any notice of deficiency, ruling, decision or legislative enactment which may give rise to a Determination of Taxability, and the expenses of any such contest or appeal shall be paid by the party initiating the contest or appeal (except, in the case of the Authority’s expenses, to the extent that provision for payment thereof shall be made from the Extraordinary Expense Fund).

(d) Turbo Redemption. Provided that (1) there is no Event of Default, and (2) the Debt Service Reserve Fund, the Extraordinary Expense Fund, the Liquidity Reserve Fund and the Repair and Replacement Fund are each funded at their respective required amounts:

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(i) the Series 2018A-1 Bonds are subject to redemption prior to maturity, pro rata, to the extent funds are available in the Turbo Redemption Account, without further direction by the Authority, in whole or in part, annually on January 1 of each year, at a Redemption Price equal to 100% of the principal amount of the Series 2018A-1 Bonds to be redeemed in order of maturity and proportionately among Series 2018A-1 Bonds of the same maturity or sinking fund redemption (hereinafter referred to as the “Turbo Redemptions”).

(ii) Following payment in full of the Series 2018A-1 Bonds, the Series 2018B-1 Bonds are subject to redemption prior to maturity, pro rata, to the extent funds are available in the Turbo Redemption Account, without further direction by the Authority, in whole or in part, annually on January 1 of each year, at a Redemption Price equal to 100% of the Accreted Value or principal amount, as applicable, of the Series 2018B-1 Bonds to be redeemed in order of maturity and proportionately among Series 2018B-1 Bonds of the same maturity or sinking fund redemption.

(iii) Following payment in full of the Series 2018A-1 Bonds and the Series 2018B-1 Bonds, the Series 2018B-2 Bonds are subject to redemption prior to maturity, pro rata, to the extent funds are available in the Turbo Redemption Account, without further direction by the Authority, in whole or in part, annually on January 1 of each year, at a Redemption Price equal to 100% of the Accreted Value or principal amount, as applicable, of the Series 2018B-2 Bonds to be redeemed in order of maturity and proportionately among Series 2018B-2 Bonds of the same maturity or sinking fund redemption.

(iv) Following payment in full of the Series 2018A-1 Bonds, the Series 2018B-1 Bonds and the Series 2018B-2, the Series 2018C Bonds are subject to redemption prior to maturity, pro rata, to the extent funds are available in the Turbo Redemption Account, without further direction by the Authority, in whole or in part, annually on January 1 of each year, at a Redemption Price equal to 100% of the Accreted Value of the Series 2018C Bonds to be redeemed in order of maturity and proportionately among Series 2018C Bonds of the same maturity or sinking fund redemption.

Such turbo redemptions may be in amounts less than $25,000 maturity amounts, but following redemption in part, Series 2018 Bonds remaining Outstanding shall be in Authorized Denominations

(e) Whenever by the terms of this Indenture or any Supplemental Indenture the Trustee is required or authorized to redeem Bonds other than at the option of the Authority, the Trustee shall select the Bonds to be redeemed by lot, give the notice of redemption and pay, out of moneys available therefor, the Redemption Price thereof, plus interest accrued and unpaid to the Redemption Date, to the Authority and to the Owners of Bonds to be redeemed in accordance with the terms of this Indenture and any Supplemental Indenture.

Section 4.04. Selection of Series 2018 Bonds to be Redeemed. If less than all of the Series 2018 Bonds subject to optional redemption are called for redemption, such redemption shall be applied first to the principal amount of all Outstanding Series 2018A-1 Bonds, then to the principal amount of all Outstanding Series 2018A-2 Bonds, then to the principal amount of all Outstanding

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Series 2018B-1 Bonds, then to the principal amount of all Outstanding Series 2018B-2 Bonds, then to the principal amount of all Outstanding Series 2018C Bonds, without differentiation by maturity or within a maturity. If less than all of the Bonds of a single maturity within the same Series are to be redeemed, the Bonds of such Series to be redeemed will be selected by lot or other random method by the Trustee in such a manner as the Trustee may determine unless otherwise provided by the Supplemental Indenture authorizing that Series of Additional Bonds; provided, that the portion of any Bond of a Series of a denomination greater than the minimum Authorized Denomination for the Bonds of such Series to be redeemed shall be redeemed in part only in an Authorized Denomination and that, in selecting portions of Bonds of a Series for redemption, the Trustee shall treat each Bond of such Series as representing that number of Bonds of the minimum Authorized Denomination for such Series which is obtained by dividing the principal amount of such Bond to be redeemed in part by the minimum Authorized Denomination for such Series.

Section 4.05. Notice of Redemption.

(a) Notice of mandatory and optional redemption of Bonds shall be given in accordance with this Section. When the Trustee shall have received from the Authority a Direction to redeem Bonds, the Trustee shall give notice, in the name of the Authority, of the redemption of such Bonds, which notice shall specify the Series and maturities of the Bonds to be redeemed, the Redemption Date and the place or places where amounts due upon such Redemption Date will be payable and, if less than all of the Bonds of any like Series and maturity are to be redeemed, the letters and numbers or other distinguishing marks of such Bonds so to be redeemed, and, in the case of Bonds to be redeemed in part only, such notices shall also specify the respective portions of the principal amounts thereof to be redeemed. Such notice shall further state that on such Redemption Date there shall become due and payable upon each Bond to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portions of the principal thereof, in the case of Bonds to be redeemed in part only, together with interest accrued to the Redemption Date, and that from and after such date interest thereon shall cease to accrue and be payable. The Trustee shall mail a copy of such notice, first class mail postage prepaid, not less than 30 days nor more than 60 days before the Redemption Date (or such shorter period as shall be provided by Supplemental Indenture), to the Owners of any registered Bonds, or portions of registered Bonds that are to be redeemed, at their last addresses, if any, appearing upon the Register.

(b) In addition to the notice of redemption required pursuant to the preceding paragraph, upon the Request of the Authority received at least 40 days before the date fixed for redemption, the Trustee shall also give redemption notice at least 30 days before the date fixed for redemption, by (i) registered or certified mail, return receipt requested, postage prepaid, (ii) telephonically confirmed facsimile transmission, or (iii) overnight delivery service, to the Securities Depositories and/or Information Services specified by the Authority.

(c) The Authority may, at its option at least 5 days prior to the date fixed for redemption in any notice of redemption, rescind and cancel such notice of redemption by Request to the Trustee and the Trustee shall distribute, in the same manner as the original notice, notice of such cancellation to the recipients of the notice of redemption being cancelled.

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(d) Failure to give the notices described in this Section, or any defects therein, shall not in any manner affect the validity of any proceedings for redemption of any other Bonds for which such notice has been duly given, or for the rescission of such redemption notice. Neither the Authority nor the Trustee shall have any responsibility for any defect in the CUSIP number that appears on any Bonds or in any redemption notice with respect thereto, and any such redemption notice may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Authority nor the Trustee shall be liable for any inaccuracy in such numbers.

Section 4.06. Payment of Redeemed Bonds. Notice having been given in the manner provided in Section 4.05, the Bonds or portions thereof so called for redemption shall become due and payable on the Redemption Date so designated at the Redemption Price, plus interest accrued and unpaid to the Redemption Date, and upon presentation and surrender thereof at the office specified in such notice. If there shall be called for redemption less than all of the principal of any Bond, the Authority shall execute and the Trustee shall authenticate, upon the surrender of such Bond, without charge to the Owner thereof, for the unredeemed balance of the principal amount of the Bond so surrendered, Bonds of like Series and maturity in any Authorized Denomination. If, on the Redemption Date, moneys for the redemption of all the Bonds or portions thereof of any like Series and maturity to be redeemed, together with interest to the Redemption Date, shall be held by the Trustee so as to be available therefor on said date and if notice of redemption shall have been given as aforesaid, then, from and after the Redemption Date interest on the Bonds or portions thereof of such Series and maturity so called for redemption shall cease to accrue and become payable. If such moneys shall not be so available on the Redemption Date, such Bonds or portions thereof shall continue to bear interest until paid at the same rate as they would have borne interest at had they not been called for redemption.

Section 4.07. Modification by Supplemental Indenture. The provisions of this Article may be modified by any Supplemental Indenture in respect of any Series of Additional Bonds authorized thereby, and in the event of any conflict with the provisions hereof the provisions of such Supplemental Indenture shall control in respect of any Series of Additional Bonds authorized thereby.

ARTICLE V

PLEDGE AND ASSIGNMENT; ESTABLISHMENT OF FUNDS AND APPLICATION THEREOF

Section 5.01. Security for Bonds; Deposits of Gross Operating Revenues and Other Amounts. (a) Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, there are hereby pledged to secure the payment of the principal of, Redemption Price, if any, and interest on the Senior Bonds, and subject to the priority of the Senior Bonds, to secure the payment of the principal of, Redemption Price, if any, and interest on the Subordinate B-1 Bonds, and subject to the priority of the Senior Bonds and the Subordinate B-1 Bonds, to secure the payment of the principal of, Redemption price, if any, and interest on the Subordinate B-2 Bonds, and subject to the priority of the Senior Bonds and Subordinate Bonds, to secure the payment of the principal of, Redemption Price, if any,

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and interest on the Junior Bonds, in accordance with their terms and the provisions of this Indenture, all of the (i) Revenues and (ii) any other amounts (including proceeds of the sale of Bonds) held by the Trustee in any Fund or Account established pursuant to this Indenture (other than the Rebate Fund). PURSUANT TO THE ACT, SAID PLEDGE SHALL IMMEDIATELY ATTACH THERETO AND SHALL BE EFFECTIVE, BINDING AND ENFORCEABLE FROM AND AFTER THE TIME OF THE DELIVERY BY THE TRUSTEE OF THE FIRST BONDS AUTHENTICATED AND DELIVERED UNDER THIS INDENTURE. FURTHER PURSUANT TO THE ACT, THE SECURITY SO PLEDGED AND ANY ASSIGNMENT THEN OR THEREAFTER RECEIVED BY THE TRUSTEE FROM THE AUTHORITY AS SECURITY FOR THE BONDS SHALL IMMEDIATELY BE SUBJECT TO THE LIEN OF SUCH PLEDGE AND ASSIGNMENT AND THE LIEN OF SUCH PLEDGE AND ASSIGNMENT SHALL BE VALID AND BINDING AGAINST THE AUTHORITY, PURCHASERS THEREOF, CREDITORS AND ALL OTHER PARTIES HAVING CLAIMS AGAINST THE AUTHORITY IRRESPECTIVE OF WHETHER SUCH PARTIES HAVE NOTICE THEREOF AND WITHOUT THE NEED FOR ANY PHYSICAL DELIVERY, RECORDATION, FILING, OR FURTHER ACT.

The pledge to secure the payment of the Senior Bonds is on parity with any pledge and lien to secure the payments of Additional Indebtedness.

(b) (i) The Trustee shall be entitled to and shall collect and receive all of the Revenues, and any Revenues collected or received by, or by a Person other than the Trustee on behalf of, the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee.

(ii) As additional security for the Holders from time to time of the Senior Bonds and subject to the priority of the Senior Bonds in accordance with this Indenture, the Subordinate B-1 Bonds, and subject to the priority of the Senior Bonds and the Subordinate B-1 Bonds in accordance with this Indenture, the Subordinate B-2 Bonds, and subject to the priority of the Senior Bonds and Subordinate Bonds in accordance with this Indenture, the Junior Bonds, the Authority hereby transfers in trust, grants a lien on and security interest in and assigns to the Trustee, all of the right, title and interest of the Authority in the Project and the Assigned Authority Documents, including all proceeds thereof and all security interests provided for therein. Pursuant to the Act, said pledge shall immediately attach thereto and shall be effective, binding and enforceable from and after the time of the delivery by the Trustee of the first Bonds authenticated and delivered under this Indenture. Further pursuant to the Act, the security so pledged and any assignment then or thereafter received by the Trustee from the Authority as security for the Bonds shall immediately be subject to the lien of such pledge and assignment and the lien of such pledge and assignment shall be valid and binding against the Authority, purchasers thereof, creditors and all other parties having claims against the Authority irrespective of whether such parties have notice thereof and without the need for any physical delivery, recordation, filing, or further act. The Trustee shall have the right to exercise any right of the Authority (other than the Unassigned Rights), to give any consent or notice, to take any act or refrain from taking any act, to enforce and otherwise act, in the full place and stead of the Authority in, under or pursuant to the Assigned Authority Documents (and in order to do so, the Authority grants the Trustee an irrevocable power of attorney, coupled with an interest, to use Authority’s name and to so act).

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(c) The Operating Agreement shall require the Operator to (i) transfer to the Trustee for deposit in the Revenue Fund, as long as any of the Bonds remain Outstanding, the Gross Operating Revenues as required by the Operating Agreement and (ii) grant to the Collateral Agent, for the benefit of the Authority, and by the assignment pursuant to Section (a)(ii) above, the further benefit of the Trustee and the Bondholders hereunder, a security interest in the Operator Collateral (as defined therein) to secure the Operator’s obligations under the Project Documents, including the Operating Agreement. All such Gross Operating Revenues deposited with the Trustee in the Revenue Fund and all proceeds of the Operator Collateral shall be held, disbursed, allocated and applied by the Trustee only as provided in this Indenture.

(d) The Collateral Agent shall hold a security interest in each Collection Account and Operating Account established pursuant to the Operating Agreement or any sub-Operating Agreement to, among other things, assure that amounts comprising Gross Operating Revenues deposited therein shall be paid and applied as provided by this Indenture.

(e) As set forth in the Operating Agreement, the Operator shall pay or cause to be paid all Excluded Taxes and Other Charges, Professional Fee Expenses and Operating Expenses in accordance with the provisions of the Operating Agreement.

(f) To secure the payment of Debt Service on the Senior Bonds, and subject to the priority of the Senior Bonds in accordance with this Indenture, the Subordinate B-1 Bonds, and subject to the priority of the Senior Bonds and the Subordinate B-1 Bonds in accordance with this Indenture, the Subordinate B-2 Bonds, and subject to the priority of the Senior Bonds and the Subordinate Bonds in accordance with this Indenture, the Junior Bonds, and the performance by the Authority of its other obligations under this Indenture, the Authority has entered into the Leasehold Mortgage. The Trustee shall also be entitled to and subject to the provisions of this Indenture, may take all steps, actions and proceedings to enforce all of the rights and all of the obligations of the Authority under the Leasehold Mortgage.

(g) The Trustee also may, and shall, at the Direction of the Controlling Party (upon the occurrence and during the continuance of an Event of Default hereunder), subject to the provisions of this Indenture, take all steps, actions and proceedings (including, but not limited to, directing the Collateral Agent) to enforce (i) either jointly with the Authority or separately, all of the rights and all of the obligations of the Authority under this Indenture, and (ii) all rights of the Trustee and the Owners under the Leasehold Mortgage and the Assigned Authority Documents, except in either case, for the Unassigned Rights, the enforcement of which shall be reserved to the Authority or the applicable Authority Indemnified Persons.

Section 5.02. Establishment of Funds and Accounts. The Authority hereby establishes the following Funds and Accounts, all of which shall be held by the Trustee:

(a) “Project Fund,” and within such Fund the “Project Acquisition Account” and the “Series 2018 Costs of Issuance Account”;

(b) “Revenue Fund”;

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(c) “Debt Service Fund,” and within such fund a “Senior Debt Service Account”, including a “Capitalized Interest Subaccount”, a “Senior Redemption Account”, a “Series 2018B-1 Debt Service Account”, a “Subordinate Debt Service Account”, a “Series 2018B-1 Redemption Account”, a “Subordinate Redemption Account”, a “Junior Debt Service Account”, a “Junior Redemption Account” and a “Turbo Redemption Account”,

(d) “Rebate Fund”;

(e) “Extraordinary Expense Fund”;

(f) “Senior Debt Service Reserve Fund”, and within such fund separate accounts as may be established in connection with the issuance of Additional Senior Bonds;

(g) “Repair and Replacement Fund”;

(h) “Operator Fee Fund”;

(i) “Liquidity Reserve Fund”; and

(j) “Excess Revenue Fund.”

At the direction of the Authority, the Trustee may create any other Funds or Accounts hereunder, to be held in trust for the benefit of the Owners of the Bonds, to carry out the purposes of this Indenture; provided, that the creation of any such Funds or Accounts shall not adversely affect the rights of any Owner or affect the rights and obligations of the Trustee or the Authority or Authority Indemnified Persons, without the prior written consent of the Controlling Party or the Authority, as the case may be, and provided that the creation of such Fund or Account will not, in and of itself, cause the interest on any of the tax-exempt Bonds to become includable in gross income for federal income tax purposes.

Not later than the 10th calendar day of each month, the Trustee shall provide the Authority and the Operator with a monthly statement of (i) the amounts on deposit in the Funds and Accounts as of the last calendar day of the prior month and, (ii) if applicable, the amounts of any deficiencies in such Funds and Accounts that are known by the Trustee.

Section 5.03. Project Fund.

(a) The Trustee shall pay into the Project Acquisition Account of the Project Fund the amounts required to be so paid by the provisions of this Indenture and any Supplemental Indenture. The Trustee shall disburse $________ from the Project Acquisition Account on the Closing Date to pay Costs of the Project.

(b) The Trustee shall distribute amounts in the Series 2018 Costs of Issuance Account as directed in writing by the Authority to pay the Costs of Issuance for the Series 2018 Bonds. Upon the earlier to occur of (i) the delivery to the Trustee of a Certificate from the Authority stating that all Costs of Issuance for the Series 2018 Bonds have been paid or duly provided for or (ii)

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December 31, 2018, the Trustee shall close the Series 2018 Costs of Issuance Account and shall transfer all amounts remaining therein to the Revenue Fund.

Section 5.04. Flow of Funds. Except as otherwise provided in Section 9.05, on the first Business Day of each month (commencing with the first month immediately after the Closing Date and each such date, a “Monthly Transfer Date”), the Trustee shall make the deposits, transfers or payments indicated below from amounts then on deposit in the Revenue Fund (provided that, in the event the Trustee has received moneys attributable to more than one Operating Year, the Trustee shall make the transfer in the Operating Year to which such moneys are attributable, as directed by the Operator, in the priority listed below (including curing any existing deficiency in deposits, transfers or payments required in prior months), the requirements of each Fund, deposit, transfer or payment of each priority to be fully satisfied, leaving no deficiencies, prior to any deposit, transfer or payment later in priority, unless as otherwise expressly provided below; provided, however, that all amounts on deposit in the Revenue Fund on each Monthly Transfer Date on or prior to the January 2019 Monthly Transfer Date shall be initially transferred to the Liquidity Reserve Fund and shall not flow through First through Fifth below:

First, to the Senior Debt Service Account of the Debt Service Fund, an amount equal to the quotient obtained by dividing the amount of interest on each Series of Outstanding Senior Bonds Outstanding payable on the first Interest Payment Date, net of any amounts in the Capitalized Interest Subaccount of the Senior Debt Service Account to be used for payment of that interest, by the number of months between the Closing Date and the first Interest Payment Date, and thereafter, one-sixth of any interest to become due and payable within the next six months on each Series of Outstanding Senior Bonds, net of any amounts in the Capitalized Interest Subaccount of the Senior Debt Service Account to be used for payment of that interest, plus an amount equal to any shortfall from prior periods to the extent not made up from another source;

Second, to the Senior Debt Service Account of the Debt Service Fund, an amount equal to the quotient obtained by dividing the amount of principal or Sinking Fund Installments on each Series of Outstanding Senior Bonds Outstanding payable on the first Principal Payment Date, by the number of months between the Closing Date and the first Principal Payment Date, and thereafter, one-twelfth of the principal to become due and payable within the next twelve months, on each Series of Outstanding Senior Bonds, plus an amount equal to any shortfall from prior periods to the extent not made up from another source;

Third, to the Rebate Fund, an amount (as determined by the Authority) which together with moneys on deposit in such Fund, will equal the aggregate amount required to be on deposit therein pursuant to the Tax Certificate delivered in connection with the issuance of each Series of Bonds;

Fourth, to the Senior Debt Service Reserve Fund, an amount which together with moneys on deposit in such Fund will equal the Senior Reserve Fund Requirement, in accordance with the provisions of Section 5.07;

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Fifth, to the Operator Fee Fund, an amount which together with prior deposits to such Fund is equal to the Subordinated Operator Fee for all prior Fiscal Years, including interest thereon pursuant to Section 5.01(c) of the Operating Agreement, as such amount shall be certified to the Trustee by the Operator and approved by the Designated Agent;

Sixth, to the Liquidity Reserve Fund, an amount which together with moneys on deposit in such Fund will equal the Liquidity Requirement;

Seventh, to the Repair and Replacement Fund, an amount which together with moneys on deposit in such Fund will equal the Repair and Replacement Requirement;

Eighth, to the Series 2018B-1 Debt Service Account of the Debt Service Fund:

(A) one-sixth of any interest to become due and payable within the next six months on each Series of Outstanding Subordinate B-1 Bonds, plus an amount equal to any shortfall from prior periods to the extent not made up from another source; plus

(B) one-twelfth of the principal or Accreted Value, as applicable, to become due and payable within the next twelve months, on each Series of Outstanding Subordinate B-1 Bonds, plus an amount equal to any shortfall from prior periods to the extent not made up from another source; and

Ninth, to the Subordinate Debt Service Account of the Debt Service Fund:

(A) one-sixth of any interest to become due and payable within the next six months on each Series of Outstanding Subordinate Bonds (other than the Subordinate B-1 Bonds), plus an amount equal to any shortfall from prior periods to the extent not made up from another source; plus

(B) one-twelfth of the principal or Accreted Value, as applicable, to become due and payable within the next twelve months, on each Series of Outstanding Subordinate Bonds (other than the Subordinate B-1 Bonds), plus an amount equal to any shortfall from prior periods to the extent not made up from another source; and

Tenth, to the Extraordinary Expense Fund, an amount which together with moneys on deposit in such Fund will equal the Extraordinary Expense Fund Reserve Requirement (and, to the extent that amounts have been advanced or paid to the Authority from the Extraordinary Expense Fund to pay Extraordinary Costs and Expenses and such amounts are subsequently recovered by the Authority from any third-person, such amounts shall be deposited to the Extraordinary Expense Fund); and

Eleventh, to the Junior Debt Service Account of the Debt Service Fund:

(A) one-sixth of any interest to become due and payable within the next six months on each Series of Outstanding Junior Bonds, plus an amount equal to any shortfall from prior periods to the extent not made up from another source; plus

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(B) one-twelfth of the principal or Accreted Value, as applicable, to become due and payable within the next twelve months, on each Series of Outstanding Junior Bonds, plus an amount equal to any shortfall from prior periods to the extent not made up from another source; and

Twelfth, all remaining amounts in the Revenue Fund on such Monthly Transfer Date following the distributions in items First through Eleventh shall be deposited seventy-five percent (75%) in the Turbo Redemption Account and twenty-five percent (25%) in the Excess Revenue Fund.

The Trustee shall also, from moneys in the Revenue Fund, pay to the party entitled thereto or transfer or cause to be transferred to any applicable debt service or other payment fund or account for any Additional Indebtedness, without preference or priority between transfers made pursuant to this sentence and the transfers to the Senior Debt Service Account, on the dates specified in the Issuing Instrument relating to such Additional Indebtedness (provided that a certified copy of such Issuing Instrument has been delivered to the Trustee), the sum or sums required to be paid or deposited in such debt service or other payment fund or account with respect to principal, premium, if any, and interest on Additional Indebtedness in accordance with the terms of such Additional Indebtedness.

Section 5.05. Transfers to the Debt Service Fund. Notwithstanding any provision in this Indenture to the contrary, if on the 10th Business Day immediately preceding each Interest Payment Date and Principal Payment Date there are not on deposit in the Senior Debt Service Account on such date amounts sufficient to pay the interest and Principal Payments to become due on the Senior Bonds on such Interest Payment Date or Principal Payment Date (other than Senior Bonds for which moneys have been already set aside and dedicated to the payment of such Senior Bonds as permitted herein), the Trustee shall transfer moneys to the Senior Debt Service Account from the following sources in an aggregate amount which, together with the amount then on deposit in the Senior Debt Service Account, will result in the Senior Debt Service Account having the balance required to be on deposit therein in order to pay interest and Principal Payments to become due and payable on such Interest Payment Date or Principal Payment Date:

First, seventy-five percent (75%) from the Turbo Redemption Account and twenty-five percent (25%) from the Excess Revenue Fund to the extent possible and until both of such funds are depleted in their entirety;

Second, from the Junior Debt Service Account; and

Third, from the Subordinate Debt Service Account; and

Fourth, from the Series 2018B-1 Debt Service Account; and

Fifth, from the Operator Fee Fund; and

Sixth, from the Repair and Replacement Fund; and

Seventh, from the Liquidity Reserve Fund; and

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Eighth, from the Extraordinary Expense Fund; and

Ninth, from the Senior Debt Service Reserve Fund (but only at the end of the Business Day immediately preceding the Interest Payment Date or Principal Payment Date), in accordance with the provisions of Section 5.07.

Section 5.06. Debt Service Fund.

(a) The Trustee shall pay out of the appropriate Account of the Debt Service Fund on or before each Interest Payment Date for any of the Bonds the amount required for the interest payment on such Interest Payment Date, and shall pay out of the appropriate Account of the Debt Service Fund on or before each Principal Payment Date, the amount required for the Principal Payment due on such due date; provided, that if any special fund, account or subaccount has been created for the payment of capitalized interest on the Bonds or any Series thereof, the Trustee shall apply any amounts transferred to the Debt Service Fund from such special fund, account or subaccount to pay such interest prior to the use of any amounts in the Debt Service Fund for such purpose. On or before any Redemption Date for Bonds to be redeemed, the Trustee shall pay out of the appropriate Account of the Debt Service Fund, from available amounts deposited therein from time to time, the Redemption Price of and interest on the Bonds then to be redeemed.

(b) The Trustee shall apply amounts in the appropriate Account of the Debt Service Fund with respect to any Mandatory Sinking Fund Installment (together with amounts in the appropriate Account of the Debt Service Fund with respect to interest on the Bonds for which such Mandatory Sinking Fund Installment was established) to the redemption of Bonds of the Series and maturity for which such Mandatory Sinking Fund Installment was established in an amount not exceeding that necessary to complete the retirement of such Mandatory Sinking Fund Installment as hereinafter provided. Unless otherwise provided in any Supplemental Indenture, as soon as practicable after the 60th day preceding the due date of any such Mandatory Sinking Fund Installment, the Trustee shall proceed to call for redemption, by giving notice as provided in Section 4.05, on such due date Bonds of the Series and maturity for which such Mandatory Sinking Fund Installment was established (except in the case of Bonds maturing on the date a Mandatory Sinking Fund Installment is due) in such amount as shall be necessary to complete the retirement of such Mandatory Sinking Fund Installment; provided, that for this purpose the principal amount of Bonds of such Series and maturity delivered by the Authority to the Trustee for cancellation not less than 60 days prior to such due date, as provided in subsection (c) of this Section, shall be credited against the amount of such Mandatory Sinking Fund Installment.

(c) Except as otherwise provided in Section 5.05, the Trustee shall apply amounts in the Senior Debt Service Account, the Series 2018B-1 Debt Service Account, the Subordinate Debt Service Account and the Junior Debt Service Account of the Debt Service Fund only to the payment of Debt Service on the Bonds of the same Series designation, in each case in the manner and at the times provided in subsections (a) and (b) of this Section. If any amounts remain on deposit in the Senior Debt Service Account when there are no Senior Bonds Outstanding, the Trustee shall transfer such amounts to the Revenue Fund. If any amounts remain on deposit in the Series 2018B-1 Debt Service Account when there are no Subordinate B-1 Bonds Outstanding, the Trustee shall transfer such amounts (i) first to the Senior Debt Service Reserve Fund, to the extent

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additional Senior Bonds are issued to finance the refunding of Subordinate B-1 Bonds and there is a deficiency in the Senior Debt Service Reserve Fund following such issuance, and (ii) second, any remainder to the Revenue Fund. If any amounts remain on deposit in the Subordinate Debt Service Account when there are no Subordinate B-2 Bonds Outstanding, the Trustee shall transfer such amounts (i) first to the Senior Debt Service Reserve Fund, to the extent additional Senior Bonds are issued to finance the refunding of Subordinate B-2 Bonds and there is a deficiency in the Senior Debt Service Reserve Fund following such issuance, and (ii) second, any remainder to the Revenue Fund. If any amounts remain on deposit in the Junior Debt Service Account when there are no Junior Bonds Outstanding, the Trustee shall transfer such amounts (i) first to the Senior Debt Service Reserve Fund, to the extent additional Senior Bonds are issued to finance the refunding of Junior Bonds and there is a deficiency in the Senior Debt Service Reserve Fund following such issuance, and (ii) second, any remainder to the Revenue Fund.

(d) Provided that (i) there is no Event of Default, and (ii) the Senior Debt Service Reserve Fund, the Extraordinary Expense Fund, the Liquidity Reserve Fund and the Repair and Replacement Fund are each funded at their respective required amounts, money in the Turbo Redemption Account shall be used to redeem the Senior Bonds, pro rata by series and annually on each January 1, in the order of maturity and scheduled sinking fund redemption, in accordance with Section 4.03(d)(i). Upon payment in full of the Series 2018A-1 Bonds and any Additional Senior Bonds, money in the Turbo Redemption Account shall be used to redeem the Subordinate B-1 Bonds, pro rata by series and annually on each January 1, in the order of maturity and scheduled sinking fund redemption, in accordance with Section 4.03(d)(ii). Upon payment in full of the Series 2018A-1 Bonds, any Additional Senior Bonds and the Subordinate B-1 Bonds, money in the Turbo Redemption Account shall be used to redeem the Subordinate B-2 Bonds, pro rata by series and annually on each January 1, in the order of maturity and scheduled sinking fund redemption, in accordance with Section 4.03(d)(iii). Upon payment in full of the Series 2018A-1 Bonds, any Additional Senior Bonds and the Subordinate Bonds, money in the Turbo Redemption Account shall be used to redeem the Junior Bonds, pro rata by series and annually on each January 1, in the order of maturity and scheduled sinking fund redemption, in accordance with Section 4.03(d)(iv). The Trustee shall determine the amount available to redeem Bonds immediately following the Monthly Transfer Date occurring in November of each year (each, a “November Monthly Transfer Date”). The Authority hereby authorizes the Trustee, without further direction or instruction, to issue a redemption notice, in the name of the Authority, to effect a special redemption on each January 1 to the extent of funds available in the Turbo Redemption Account immediately following the November Monthly Transfer Date.

Moneys in the Turbo Redemption Account may be applied to pay debt service on the Bonds to the extent funds are not otherwise available in the Revenue Fund and the Debt Service Fund for such purpose.

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Section 5.07. Senior Debt Service Reserve Fund.

(a) On the Closing Date, the Senior Reserve Fund Requirement shall be satisfied by a deposit of $__________ into the Senior Debt Service Reserve Fund pursuant to Section 3.03 of this Indenture. The Trustee shall apply amounts from the Senior Debt Service Reserve Fund to the extent necessary to cure any deficiency in the Senior Debt Service Account pursuant to Section 5.05. Notwithstanding anything herein to the contrary, the Senior Debt Service Reserve Fund shall only secure the Series 2018A Bonds and if Additional Senior Bonds are issued hereunder while the Series 2018A Bonds are Outstanding and such Additional Senior Bonds are to be secured by a debt service reserve fund, the Trustee shall establish a separate and distinct account within the Senior Debt Service Reserve Fund to secure such Additional Senior Bonds.

(b) Subject to the provisions of Sections 6.03 and 6.04 relating to the valuation and application of interest earnings, if on the last Business Day preceding each Interest Payment Date the amount on deposit in the Senior Debt Service Reserve Fund shall exceed the Senior Reserve Fund Requirement, the Trustee shall deposit such amounts in the Senior Debt Service Account.

(c) In the event of a draw on the Senior Debt Service Reserve Fund, the Trustee shall, to the extent of amounts received from the Authority, restore the amount on deposit to equal the Senior Reserve Fund Requirement within 36 months in 36 equal installments. If any such installment payment is missed, it shall be an Event of Default under Section 9.02 of this Indenture.

(d) In the event of the refunding of one or more Series of Senior Bonds (or portions thereof), the Trustee shall, upon the Direction of the Authority, withdraw from the Senior Debt Service Reserve Fund any or all of the amounts on deposit therein with respect to the Senior Bonds being refunded and apply such amounts to the payment of the principal of and interest on the Senior Bonds (or portions thereof) being refunded; provided, that such withdrawal shall not be made unless:

(i) immediately thereafter the Senior Bonds (or portions thereof) being refunded shall be deemed to have been paid or defeased pursuant to Section 8.02, and

(ii) the amount remaining in the Senior Debt Service Reserve Fund after such withdrawal, taking into account any deposits to be made in the Senior Debt Service Reserve Fund in connection with such refunding, shall not be less than the Senior Reserve Fund Requirement.

Section 5.08. Liquidity Reserve Fund.

(a) The Trustee shall apply amounts on deposit in the Liquidity Reserve Fund to the extent necessary to cure any deficiency in the Senior Debt Service Account pursuant to Section 5.05 and to contribute towards the final debt service payments on the Bonds.

(b) If the amount on deposit in the Liquidity Reserve Fund exceeds the Liquidity Requirement, amounts in excess of the Liquidity Requirement shall be deposited into the Revenue Fund.

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(c) The Trustee shall make disbursements of moneys in the Liquidity Reserve Fund pursuant to and in accordance with a Request of the Operator (with the written approval of the Authority) in substantially the form of Exhibit E-1 hereto for the purposes of paying (i) first, Operating Expenses then due (and for funds that have not been made available to the Operator (or applicable Revenue Contractor) in accordance with Section 3.03(b) of the Operating Agreement), (ii) second, any Unpaid Operator Fees, including any Subordinated Operator Fee, then due in accordance with Section 5.01(c) of the Operating Agreement, and (iii) third, Capital Expenses then due. The Trustee may rely upon any Request of the Operator substantially in the form of Exhibit E-1 approved in writing by the Authority and shall have no obligation to determine if the amounts disbursed are properly applied for the purposes set forth herein.

(d) Upon the receipt of a Request of the Operator, the Trustee shall also apply amounts in the Liquidity Reserve Fund as directed by the Operator (i) for repair or replacement of the Project in the event of casualty damage or (ii) for the payment of Emergency Expenses; application of such amounts shall be certified to the Trustee by the Operator and approved by the Designated Representative.

Section 5.09. Operator Fee Fund. The funds held in the Operator Fee Fund shall be distributed to the Operator annually each January 1.

Section 5.10. Repair and Replacement Fund. Upon the receipt of a Request of the Operator, the Trustee shall apply amounts in the Repair and Replacement Fund as directed by the Operator and, unless otherwise approved by the Authority, in accordance with the Capital Budget, for (i) repair and replacement of the Project, (ii) Capital Expenses to further improve the operations of the Project, and (iii) payments to Varian Medical Systems, Inc. under the Service Agreement in addition to the base payments due to Varian Medical Systems, Inc. thereunder. The Trustee shall calculate the amount on deposit in the Repair and Replacement Fund as of the last day of each Fiscal Year. Beginning Fiscal Year 2019, to the extent there are amounts on deposit in the Repair and Replacement Fund in excess of $9,000,000 as of the last day of the prior Fiscal Year (such excess amounts, hereinafter referred to as the “R&R Excess”), the Trustee shall transfer annually the following amounts from the R&R Excess to the Extraordinary Expense Fund until the Extraordinary Expense Fund Reserve Requirement is met: $333,333.33 (“R&R Excess Requirement”), or the full amount of the R&R Excess if the R&R Excess is less than the R&R Excess Requirement, plus any amounts necessary to remedy any shortfalls from the R&R Excess Requirement in the previous Fiscal Year.

Section 5.11. Excess Revenue Fund. Upon the receipt of a Request of the Operator, with the approval of the Authority, the funds in the Excess Revenue Fund shall be applied by the Trustee to remedy any shortfalls in the transfers in accordance with Section 5.05. The funds held in the Excess Revenue Fund shall be distributed annually each January 1 in the following order of priority: (1) payment to the University of Maryland, Baltimore of 2.5% of the funds held in the Excess Revenue Fund at the time of distribution; (2) payment of deferred compensation to University of Maryland Radiation Oncology Associates, P.A. and to other University of Maryland clinical providers of amounts due under Section 5 of the Clinical Services Agreement pending performance of the Project, which amounts shall be set forth in the Request of the Operator; (3) payment to Varian Medical Systems, Inc. for non-budgeted payment obligations, which amounts

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shall be set forth in the Request of the Operator; (4) in the amounts set forth in the Request of the Operator, for transfer to the Operating Account to be used as (i) payment for optional patient transportation not budgeted as Operating Expenses; (ii) payment for patient thermal therapy equipment upgrades not budgeted as Capital Expenses; (iii) payment for private patient integrative medicine not budgeted as Operating Expenses; (iv) payment for patient accommodations not budgeted as Operating Expenses; and (v) payment for other expenses not budgeted as Operating Expenses or Capital Expenses.

Section 5.12. Rebate Fund. The Trustee shall deposit amounts into the Rebate Fund pursuant to Section 5.04 in the amount required pursuant to the Tax Certificate delivered in connection with the issuance of the Series 2018 Bonds and pursuant to any similar instrument or certificate delivered by the Authority in connection with the issuance of any Additional Bonds (each, a “Tax Certificate,” and collectively, the “Tax Certificates”). Notwithstanding any other provision hereof, moneys on deposit in the Rebate Fund shall not be part of the Revenues or other assets pledged under this Indenture and, except as otherwise provided in this Section, moneys on deposit in the Rebate Fund shall be used solely for the purpose of paying amounts due to the United States of America with respect to the Bonds pursuant to Section 148(f) of the Code. Moneys on deposit in the Rebate Fund shall be remitted to the United States Treasury by the Trustee at the times and in the amounts set forth in the Tax Certificates. If the moneys on deposit in the Rebate Fund are insufficient for the purpose thereof, the Trustee shall transfer moneys in the amount of the insufficiency to the Rebate Fund from any amounts in any of the Funds and Accounts in excess of the amount necessary to be on deposit therein and otherwise from amounts then on deposit in the Funds and Accounts described in clauses First through Twelfth of Section 5.04 in inverse order of priority; provided, that such transfer shall not be made from the Senior Debt Service Account if such transfer would result in a shortfall in the amount on deposit therein to pay Debt Service on any Senior Bonds then due.

Section 5.13. Extraordinary Expense Fund. Amounts on deposit in the Extraordinary Expense Fund shall be used only for the purpose of paying (i) first, deficiencies in the Debt Service Fund but only as and to the extent provided in Section 5.05 of this Indenture, and (ii) second, Extraordinary Costs and Expenses. The Trustee will disburse moneys from the Extraordinary Expense Fund to the Authority or as designated by the Authority upon receipt by the Trustee of a Request of the Authority pursuant to Section 5.16. Except in the case of its willful misconduct, the Authority shall not be liable or obligated to account to any Person, for the amounts it requisitions from the Extraordinary Expense Fund either before or after discharge of the Indenture or the nature of purpose for which such funds are expended, which shall be in the Authority’s sole discretion. After discharge of the Indenture, the Authority shall retain any monies in the Extraordinary Expense Fund, unless a different arrangement is agreed to, at the Authority’s discretion.

Section 5.14. Reserved.

Section 5.15. Insurance and Condemnation Proceeds Fund.

(a) The Authority hereby establishes an Insurance and Condemnation Proceeds Fund, which shall be held by the Trustee. The Trustee shall deposit the proceeds of insurance with

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respect to the Project maintained or caused to be maintained by the Authority against loss or damage by fire, lightning, and all other risks covered by the extended coverage insurance endorsement, as required pursuant to Section 7.14, the proceeds of any title insurance with respect to the Project obtained pursuant to this Indenture, and the proceeds of any Taking with respect to the Project, immediately upon receipt by the Trustee, as assignee of the Authority, in the Insurance and Condemnation Proceeds Fund; provided, that if such amount is less than $500,000, then, subject to Section 7.17, such amount shall be distributed immediately to or at the Direction of the Operator (with the written approval of the Authority) and shall be applied to the cost of the repair or replacement of the property damaged, destroyed or taken. After deducting therefrom the reasonable charges and expenses of the Trustee in connection with the collection of such moneys, moneys in the Insurance and Condemnation Proceeds Fund shall be disbursed or applied by the Trustee in accordance with and subject to Section 7.17.

(b) If pursuant to Section 7.17, the Available Amount (as such term is defined in Section 7.17(a)) is not to be applied to repair or replace the property damaged, destroyed or taken, the Trustee, upon a Request of the Authority, shall transfer amounts in the Insurance and Condemnation Proceeds Fund on account of such damage, destruction or condemnation to the Debt Service Fund in order to redeem the Bonds in accordance with the provisions of Section 4.03(b).

(c) After completion of the repairs or replacement of the property damaged, destroyed or taken, and after all costs associated therewith have been paid, the Trustee shall deposit any amounts remaining in the Insurance and Condemnation Proceeds Fund into the Revenue Fund for application on the first Business Day of the next succeeding month in the manner set forth in Section 5.04.

(d) Notwithstanding Section 5.16(a), the proceeds of business interruption insurance maintained pursuant to Section 7.14(a)(ii) shall be deposited by the Trustee when and as received in a segregated account (the “Business Interruption Account”) within the Insurance and Condemnation Proceeds Fund, which Account shall be established by the Trustee upon receipt of notice that the carrier of such insurance will be paying claims thereon to the Trustee. The Trustee shall hold the Business Interruption Account in trust under this Indenture separate and apart from any other Funds and Accounts. Amounts deposited in the Business Interruption Account shall be immediately transferred to the Revenue Fund and applied to make payments and transfers in the order of and subject to the limitations set forth in Section 5.04.

Notwithstanding the foregoing, amounts required to be transferred pursuant to any given order of priority in this subsection (d) shall be reduced to the extent the insurance carrier has directly paid business interruption insurance proceeds to parties other than the Trustee for such purposes. The Trustee shall be entitled to rely on a Direction, Request or Certificate of the Authority or the Operator, as applicable, in making the transfers set forth in this subsection.

(e) Notwithstanding anything herein to the contrary, if proceeds of insurance relate to any loss or damage to any property not constituting the Project, such proceeds shall be disbursed directly to the Persons legally entitled to such insurance proceeds.

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Section 5.16. Right of Access to Funds by Operator and Authority.

(a) Notwithstanding any other provision of this Indenture to the contrary, but nevertheless subject to Subsection (c), below, so long as the Trustee has not received written notice that the Operating Agreement has expired or terminated or that the Operator is in default under the Operating Agreement, the Operator is entitled to submit Requests and receive funds as described elsewhere in this Article for the purposes and in the manner described therein. After the occurrence of an Event of Default, the Operator is entitled to submit Requests and receive funds provided such Requests are approved by the Controlling Party.

(b) If the Operator is in default under the Operating Agreement, or if the Operating Agreement has expired or terminated and a new Operating Agreement has not been entered into, the Authority shall provide written notice of such event to the Trustee, and until the Trustee receives notice from the Authority that a replacement Operator has entered into an Operating Agreement with the Authority, the Authority shall be entitled to submit Requests and receive funds as described elsewhere in this Article as if the Authority were the Operator; provided after the occurrence of an Event of Default, the Authority is entitled to submit Requests and receive funds provided such Requests are approved by the Controlling Party.

(c) Without regard to Subsections (a) and (b), above, and regardless of whether an Event of Default under the Operating Agreement or under this Indenture has occurred and is continuing, the Authority may, on its own volition and without regard to the consent of any other Person (including the Controlling Party), deliver a Request to the Trustee, in substantially the form of Exhibit F hereto, for disbursement of funds from the Extraordinary Expense Fund to pay Extraordinary Costs and Expenses incurred or to be incurred by the Authority or any Authority Indemnified Person.

ARTICLE VI

MONEYS HELD IN TRUST, SECURITY FOR DEPOSITS, AND INVESTMENT OF FUNDS

Section 6.01. Moneys Held in Trust. All moneys deposited with the Trustee under the provisions of this Indenture shall be held by the Trustee in such capacity hereunder. All moneys deposited under the provisions of this Indenture with the Trustee shall be held in trust and applied only in accordance with the provisions of this Indenture, and each of the Funds and Accounts established by this Indenture shall be a trust fund for the purpose of this Indenture subject to application thereof as set forth herein.

Section 6.02. Deposits and Transfers.

(a) All moneys held by the Trustee under this Indenture may be placed in demand deposit, time deposit or money market fund accounts in accordance with Section 6.03, provided that such deposits shall permit the moneys so held to be available for use at the time when needed.

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(b) All moneys held under this Indenture by the Trustee (other than moneys held in the Rebate Fund and other than the Senior Debt Service Reserve Fund which is held solely for the benefit of the Senior Bonds as more particularly described in Section 5.07) shall be held in trust for the benefit of the Authority and the Owners of the Bonds.

(c) All moneys deposited with the Trustee shall be credited to the particular Fund or Account as provided herein.

(d) Except as otherwise provided by Supplemental Indenture, any transfer required to be made from one Fund or Account to another Fund or Account held by the same Person may be made by book transfer of any moneys or investments or portions of investments without liquidating any investments in order to make such transfer unless the funds required to be transferred are needed to make payments out of the Fund or Account to which such funds were transferred at the time of transfer.

Section 6.03. Investment of Funds.

(a) Investments shall be made in accordance with applicable law. Absent an Event of Default hereunder, moneys held in any Fund or Account shall be invested and reinvested by the Trustee as promptly as practicable, in accordance with a written direction of the Authority, in Investment Securities, such written direction being conclusive evidence that such Investment Securities are suitable and legal investments for the Authority. During the continuance of an Event of Default or if the Trustee fails to receive such directions at least one Business Day before the day on which any amounts are required to be invested, the Trustee shall invest such amounts in an Investment Security described in clause 5 of the definition thereof. Notwithstanding any other provision of this Indenture to the contrary, Investment Securities in all Funds and Accounts shall mature, or the principal of and accrued interest on such Investment Securities shall be available for withdrawal without penalty, not later than such times as shall be necessary to provide moneys when needed for payment to be made from such Funds and Accounts. The Trustee shall not be responsible for determining whether or not any Investment Securities are legal investments of the Authority under the laws of the State of Wisconsin. The Trustee shall not be responsible for any loss in any investment in any Fund or Account and is not responsible for monitoring the yield on investments.

(b) Except as otherwise provided in this subsection or by Supplemental Indenture, interest earned or profits realized from investing any moneys deposited in the Funds and Accounts or any subaccount thereof shall be transferred to the Revenue Fund and applied pursuant to Section 5.04. Notwithstanding the foregoing, (i) interest and profits from the Rebate Fund shall be retained in such Fund, and (ii) interest and profits from the Senior Debt Service Reserve Fund shall be retained in such Fund and applied in accordance with Section 5.07.

The Authority acknowledges that to the extent regulations of the Comptroller of the Currency or any other regulatory entity grant the Authority the right to receive brokerage confirmations of the security transactions as they occur, the Authority specifically waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the Authority

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periodic cash transaction statements which include the detail for all investment transactions made by the Trustee hereunder.

Section 6.04. Valuation and Sale of Investments.

(a) Investment Securities acquired as an investment of moneys in any Fund or Account shall be at all times a part of such Fund or Account, and any profit or loss realized from the liquidation of such investment shall be applied as provided in Section 6.03(b).

(b) For the purpose of determining the amount in any Fund, all Investment Securities credited to such Fund shall be valued at the lesser of the face value or the amortized cost. The Trustee shall determine the amortized cost based on accepted industry standards and from accepted industry providers. Certificates of deposit and bankers’ acceptances shall be valued at the face amount thereof, plus accrued interest thereon. Any other investment shall be valued at the value thereof established by prior agreement among the Authority and the Trustee.

(c) Except as otherwise provided in this Indenture, the Trustee shall sell, or present for redemption, any Investment Security purchased as an investment whenever requested in writing by the Authority or whenever it shall be necessary in order to provide moneys to meet any payment or transfer from any Fund or Account. The Trustee shall not be liable or responsible for any loss resulting from any such sale.

(d) The Trustee is required to determine the value of the Senior Debt Service Reserve Fund no less frequently than semi-annually (and monthly from the date of any deficiency until such deficiency is cured).

ARTICLE VII

PARTICULAR COVENANTS AND REPRESENTATIONS OF THE AUTHORITY

Section 7.01. Payment of Bonds. The Authority shall duly and punctually pay or cause to be paid, but solely from the Revenues and other assets pledged therefor by this Indenture, the principal of, Redemption Price, if any, and interest on the Bonds, at the times and in the amounts and in the manner set forth herein and in the Bonds, according to the true intent and meaning thereof.

Section 7.02. Access to the Project. The Authority hereby grants to the Trustee all rights of access to the Project necessary for the Trustee to carry out its obligations and to enforce its rights hereunder.

Section 7.03. [Reserved].

Section 7.04. Power to Enter Into Indenture, Issue Bonds and Pledge Revenues and Other Assets. The Authority is duly authorized under all applicable laws to issue, sell and deliver the Bonds, to enter into this Indenture and to pledge the Revenues and other assets in the manner and to the extent provided in this Indenture and no other authorization or consent is required therefor.

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The Revenues and other assets pledged under this Indenture are and will be free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto granted by the Authority except the pledge granted by this Indenture or the Bond Documents to the extent provided herein or therein, and all action on the part of the Authority to that end has been and will be duly and validly taken. This Indenture has been duly and lawfully entered into by the Authority, is in full force and effect and is valid and binding upon the Authority in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitation on legal remedies against joint powers commissions or governmental units of the State of Wisconsin. The Bonds are and will be the valid and binding obligations of the Authority. The Authority shall at all times, to the extent permitted by law but subject to Section 13.17, defend, preserve and protect its title to the Revenues and other assets pledged under this Indenture and all the rights of the Owners under this Indenture against all claims and demands of all persons whomsoever.

Section 7.05. Maintenance of Existence of the Authority. The Authority covenants pursuant to Section 66.0304(12) of the Act that for so long as any Bond is Outstanding the State of Wisconsin will not limit, impair, or alter the rights and powers vested in the Authority by the Act unless adequate provision is made by law for the protection of the Bondholders.

Section 7.06. Limitation on Encumbrances. The Authority covenants and agrees that it will not knowingly directly or indirectly create, assume or suffer to exist any mortgage, leasehold mortgage, deed of trust, pledge, security interest, encumbrance, lien or charge of any kind (a “security interest”) upon the Project other than (a) the Leasehold Mortgage, (b) Permitted Encumbrances, or (c) to further secure the Senior Bonds, the Subordinate Bonds and the Junior Bonds.

Section 7.07. Limitation on Undertakings. The Authority shall not create, issue, incur, execute, assume or suffer to exist any bonds, notes, loans, installment purchase agreements, lease purchase agreements, certificates of participation, obligations for borrowed money, or other indebtedness secured by a lien on Revenues except as permitted by this Indenture.

Section 7.08. Tax Covenant. Subject to Section 13.17, and any relevant provisions of the Tax Certificate, the Authority shall at all times do and perform all acts and things permitted by law and this Indenture which are necessary or desirable in order to assure that interest paid on the tax-exempt Bonds (or any of them) will be excluded from gross income for federal income tax purposes and will not knowingly take any action that would result in such interest not being excluded from gross income for federal income tax purposes. Without limiting the generality of the foregoing, the Authority shall comply with the provisions of the Tax Certificate. This covenant shall survive payment in full or defeasance of the tax-exempt Bonds.

Section 7.09. Limitation on Disposition of Assets. The Authority shall not cause any sale, lease, transfer or other disposition of the Authority’s right, title and interest in and to the Project or any material part thereof or the transfer of assets related to the Project, except as provided in this Indenture, dispositions of Improvements and Equipment in the ordinary course excepted.

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Section 7.10. Continuing Disclosure Agreement. Upon the termination and replacement of the Operating Agreement, the Authority shall require any replacement Operator to execute and deliver a Continuing Disclosure Agreement in a form substantially similar to the Continuing Disclosure Agreement delivered in connection with the issuance of the Series 2018 Bonds; provided that such continuing disclosure is required at the time of replacement under Securities Exchange Commission Rule 15c2-12, as amended, and provided further that the Authority shall have no responsibility whatsoever for continuing disclosure or compliance with any Continuing Disclosure Agreement.

Section 7.11. Maintenance of the Project. The Operating Agreement will provide that the Operator will maintain the Project in good and substantial repair, working order and condition; provided, that if all or any of the Project shall be destroyed or damaged by fire or other casualty, the money derived from any insurance on the Project shall be applied in accordance with the terms of Section 7.17.

Section 7.12. Compliance With Law; Maintenance of Permits.

(a) The Authority shall not knowingly fail to comply with any Applicable Laws, including the Act, which failure would have a Material Adverse Effect on the Authority’s performance of its obligations hereunder except those that shall be contested in good faith and by appropriate proceedings diligently conducted by the Authority.

(b) The Operating Agreement will provide that the Operator will use commercially reasonable efforts to assist the Authority in (i) maintaining or causing to be maintained in full force and effect all Permits now held or hereafter acquired with respect to the Project, and (ii) performing, observing, fulfilling and complying (or causing the performance, observance, fulfillment and compliance of and with) all of the obligations, covenants and conditions contained in such Permits, provided that the provision for payment of the cost thereof has been made to the Operator’s satisfaction. The Trustee shall not be responsible for the maintenance of, or compliance with the terms of, any such Permits.

Section 7.13. Taxes, Assessments, Governmental Charges and Adverse Judgments. The Operating Agreement will provide, in accordance with its terms, that the Operator shall pay and discharge all taxes, assessments, governmental charges of any kind whatsoever, adverse judgments, utility rates, meter charges and other utility charges (collectively, “Impositions”) that may be or have been assessed or rendered or that have or may become liens upon the Project, and the Operator will furnish to the Trustee receipts for all such payments, provided, that the Authority or Operator shall not be required to pay any Imposition as long as it shall in good faith contest the validity thereof, including all interest, penalties, costs and charges accrued or accumulated thereon; if (a) no risk of sale, forfeiture or loss of any interest in the Project, the Revenues or other assets pledged under this Indenture or any part thereof arises, in Operator’s reasonable judgment, during the pendency of such contest; (b) such contest does not, in Operator’s reasonable judgment, have a Material Adverse Effect; and (c) such contest is based on bona fide, material, and reasonable claims or defenses. The Operating Agreement will provide, in accordance with its terms, that the Operator will promptly pay the amount of such Imposition as finally determined, together with all interest and penalties payable in connection therewith. The Trustee shall have full power and

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authority, but no obligation unless directed in writing to do so by the Controlling Party, to apply any amount deposited with the Trustee under this Indenture and available for such purpose to the payment of any unpaid Imposition to prevent the sale, forfeiture or loss of the Project, the Revenues or other assets pledged under this Indenture or any interest therein or part thereof for non-payment of such Imposition, if the Trustee reasonably believes that such sale, forfeiture or loss is threatened. Notwithstanding any provision of this Section to the contrary, the Operating Agreement will provide, in accordance with its terms, that the Operator will pay any Imposition that it might otherwise be entitled to contest if the Project, the Revenues or other assets pledged under this Indenture or any interest therein or any part thereof is in jeopardy or in danger of being sold, forfeited, foreclosed or otherwise lost. If the Operator fails to pay any such Imposition, the Trustee may (but shall not be obligated to) make such payment from amounts deposited with the Trustee under this Indenture and available for such purpose.

Section 7.14. Insurance. (a) The Operating Agreement will provide that the Operator shall cause the Project and the operation thereof to be insured at all times, in accordance with the Master Insurance Schedule.

(a) Insurance Consultant. The Authority shall employ or cause to be employed an Insurance Consultant to review the insurance requirements of the Authority from time to time (but not less frequently than once every 24 months). As of the Closing Date and thereafter not less than annually, the Insurance Consultant shall be required to provide a certificate to the Authority, Trustee and the Operator certifying that the requirements of Section 7.14 are satisfied. The cost of such Insurance Consultant will be paid as an Operating Expense. If the Insurance Consultant recommends increases in any of the coverages or modifications in any of the terms of such insurance requirements and the Authority approves such increases or modifications, the Authority shall obtain or cause the Operator to obtain the approved increases or modifications, to the extent such insurance is available on commercially reasonable terms. Notwithstanding anything in this Section to the contrary, if the Insurance Consultant recommends any reduction in the insurance coverage required pursuant hereto and the Authority approves such reduction, the Operator shall maintain or cause to be maintained insurance at such reduced coverage; provided, that the Insurance Consultant shall have provided a statement to the Authority and the Operator to the effect that such reduced coverage provides the greatest amount of coverage available, in the judgment of the Insurance Consultant, at commercially reasonable rates and terms or coverage consistent with amounts customarily carried by others in connection with the ownership, maintenance and use of facilities of similar character and size.

Section 7.15. Workers Compensation and Insurance Law. The Operating Agreement shall require that the Operator at all times shall maintain or cause to be maintained insurance against workers’ compensation claims in respect of the Project as required by Applicable Law.

Section 7.16. Insurers; Policy Forms and Loss Payees. Each carrier providing any insurance or portion thereof required by Section 7.14 shall be authorized to do business in the jurisdiction or jurisdictions in which the Project is located. All insurance on the Property carried in accordance with Section 7.14 shall list the Trustee as an additional insured and be payable to the Trustee as a mortgagee and not as a coinsured, and, in the case of all policies of insurance carried by any lessee for the benefit of the Authority, shall be payable to the Trustee as loss payee

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(and such other additional insureds as may be required under the Operating Agreement). All insurance policies and renewals thereof (a) shall provide for a term of not less than one year, provided, that policies may be obtained for a lesser period to the extent necessary for the term thereof to end concurrently with other related coverages, (b) shall include a requirement that the insurer provide at least 30 days’ written notice of cancellation or material change in the terms and provisions of the applicable policy to the Authority and the Trustee, (c) shall include a standard mortgagee endorsement clause in favor of the Trustee, (d) where appropriate and obtainable, shall include insurer’s waiver of subrogation as against the Trustee, and (e) shall be primary and without right of contribution of any other insurance carried by or on behalf of the Authority or the Trustee with respect to their respective interests in the Revenues and the Project.

Section 7.17. Disposition of Insurance and Condemnation Proceeds.

(a) The Operating Agreement will provide, in accordance with its terms, that the Operator will provide the Trustee with immediate written notice of (i) any material loss or damage to the Project or any part thereof, or (ii) any actual or threatened action or proceeding relating to any condemnation or other taking, direct or indirect, or sale or transfer in lieu of a condemnation or taking (each, a “Taking”) of the Project or any part thereof. To the extent of any loss or damage to or Taking of the Project only, the Authority hereby irrevocably authorizes and empowers the Trustee as the Authority’s attorney-in-fact coupled with an interest to make the proof of loss, adjust and compromise any claim under insurance policies and to appear in and prosecute or defend any action arising from such insurance policies or any Taking (provided the Trustee shall have no obligation to take any such action). The Trustee shall be entitled to collect, and the Authority hereby assigns to the Trustee for deposit into the Insurance and Condemnation Proceeds Fund, all insurance proceeds or the proceeds of any award, payment or claim for damages, direct or consequential, in connection with any Taking of the Project and is further entitled to deduct therefrom the Trustee’s reasonable out-of-pocket expenses incurred in the collection of such proceeds (such proceeds after such deductions, the “Available Amount”).

(b) The Trustee shall cause the Available Amount to be disbursed in accordance with Section 5.15 to the cost of restoration and reconstruction of the Project at the Direction of the Operator so long as the Authority has certified in writing that the following conditions have been met: (i) no Event of Default then exists, (ii) the Available Amount together with all investment income earned or expected to be earned thereon and other proceeds deposited with the Trustee will be sufficient to restore the Project to its Pre-Existing Condition (as defined below), (iii) the Project can be restored and repaired as nearly as is reasonably practicable to the condition it was in immediately prior to a casualty in the case of any casualty or to a condition, in the case of any Taking, that permits the Project’s use in the manner contemplated by this Indenture and for which the Project was originally constructed, (the “Pre-Existing Condition”), (iv) the Authority and the Operator shall have each received and approved, in its reasonable judgment, plans and detailed specifications of the contemplated repair or restoration of the Project, together with a statement of an architect that the Project can be restored to its Pre-Existing Condition in the time and for the cost specified in such plans and specifications (provided that, in the event the Authority and the Operator have not both approved plans and detailed specifications, the plans and detailed specifications approved by either the Operator or the Authority and the architect shall be utilized), and (v) if more than 15% of the Project is damaged, destroyed or taken, the Authority shall have

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furnished to the Trustee a guaranteed maximum or fixed price contract for the restoration or repair of the Project to the Pre-Existing Condition for an amount not in excess of the Available Amount together with all investment income earned or expected to be earned thereon (provided the Trustee shall have no obligation to review such contract).

(c) Following a casualty loss or Taking affecting the Project, if the Available Amount together with all investment income earned or expected to be earned thereon is made available to the Authority for repair or restoration and is sufficient for such purpose, the Authority shall cause the restoration of the Project to substantially its Pre-Existing Condition or such other condition as the Controlling Party may acknowledge and consent to in writing, and the Authority shall cause the commencement of such restoration or repair as soon as practicable after the casualty loss or Taking and at all times thereafter the diligent prosecution thereof to completion. Subject to satisfaction of conditions set forth in Section 7.17(b) and provided that there no Event of Default has occurred and is continuing of which the Trustee has notice pursuant to Section 10.04, Trustee will disburse any insurance proceeds or condemnation awards collected by it in accordance with Section 5.15.

(d) Any amount of insurance proceeds remaining in the Trustee’s possession after full and final payment and discharge of all Bonds and this Indenture shall be transferred to the Authority or otherwise paid in accordance with Applicable Law. If the Project is sold at foreclosure or if the Trustee acquires title to the Project, the Trustee shall have all of the right, title and interest of Authority in and to any insurance policies and unearned premiums thereon, any proceeds, awards or damages arising from any Taking and in and to the proceeds resulting from any damage to Authority’s interest therein prior to such sale or acquisition.

(e) Notwithstanding the provisions of Section 7.17(b), all condemnation proceeds resulting from a temporary Taking that are not attributable to compensation for alterations or physical damage to the real or personal property used in the operation of the Project shall be deemed Gross Operating Revenue and deposited in the Revenue Fund.

Section 7.18. Operation of the Project.

(a) Management of the Project. The Authority hereby covenants and agrees that it will at all times cause to be delegated the duties and responsibilities of operating the Project, pursuant to an Operating Agreement, to a management company having the experience and qualifications necessary to operate and manage a radiation cancer therapy center. The Authority shall cause to be in full force and effect at all times an Operating Agreement with respect to the Project with terms and conditions substantially the same as those of the initial Operating Agreement (except any changes required by Bond Counsel in order for Bond Counsel to deliver its opinion required by subsection (d) of this Section, or any changes that do not materially adversely affect the interest of the Owners of the Bonds). The Authority may amend, modify, waive or otherwise alter the Operating Agreement in compliance with the terms of such Operating Agreement without the prior written consent of the Trustee provided such amendment, modification or waiver does not materially adversely affect the interest of the owners of the Bonds. The Operating Agreement or any part thereof shall expressly permit the assignment of rights thereof pursuant to

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Section 5.01(b)(ii) hereof to the Trustee for the benefit of Owners and entitle the Trustee to the benefits thereof upon the occurrence of an Event of Default.

(b) Termination of Operating Agreement. (i) If the Project is foreclosed upon due to an Event of Default as set forth in Article IX hereof, the ability of the Trustee to terminate the Operating Agreement shall be subject to the terms contained in the Operating Agreement; provided the Trustee shall have no obligations with respect to the Operating Agreement and shall not be responsible for the payment of amounts outstanding under the Operating Agreement other than as directed in writing from the Controlling Party from amounts available therefor under the Indenture; and

(i) the Operating Agreement shall provide that it be terminable at the Direction of the Controlling Party, provided that a payment default on the Bonds has occurred and is continuing, and the Controlling Party has identified a replacement Operator acceptable to the Authority.

(c) Bond Opinion. Any Operating Agreement entered into by the Authority after initial issuance of the Series 2018 Bonds shall first require the written opinion of Bond Counsel that such Operating Agreement will not, in and of itself, result in the inclusion of interest on the Series 2018 Bonds in gross income for federal income tax purposes. Any amendment or extension of the Operating Agreement or change in the identity of the Operator shall require the written opinion of Bond Counsel that such amendment or extension of the Operating Agreement will not, in and of itself, cause the interest on any of the Series 2018 Bonds to become includible in gross income for federal income tax purposes.

Section 7.19. Budgets.

(a) Operating Plan and Budget. The Operating Agreement will provide that at least 60 days in advance of the beginning of each Operating Year, the Operator will prepare and deliver to the Trustee and the Authority the Proposed Budget Documents for the next ensuing Operating Year. Such Proposed Budget Documents may be submitted by the Operator in preliminary form so long as the final Proposed Budget Documents for the next ensuing Operating Year are submitted to the Trustee and the Authority no later than the commencement of the applicable Operating Year. The Authority shall promptly notify the Operator and each other in writing as to any objections it may have to the Proposed Budget Documents. The Trustee shall have no obligation to review any such Proposed Budget Documents received. The Authority shall be responsible for approving the Proposed Budget Documents.

(b) Under the Operating Agreement, the Operator (i) shall be required to use commercially reasonable efforts to operate within and in a manner consistent with each approved Operating Plan and Budget and each approved Capital Budget, (ii) shall be prohibited from substantially deviating from the budgeted Capital Expenses in an approved Capital Budget unless the Operator obtains the prior written consent of the Authority (it being agreed that a deviation in excess of ten percent (10%) of the approved Capital Budget is substantial), and (iii) shall be prohibited from substantially deviating from the Budgeted Operating Expenses in an approved Operating Plan and Budget unless the Operator obtains the prior written consent of the Authority

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(it being agreed that a deviation in excess of ten percent (10%) of the approved Operating Plan and Budget is substantial).

(c) The Operator shall file or cause to be filed with the Trustee and the Authority, the Operating Plan and Budget and Capital Budget prior to the commencement of the applicable Operating Year. The Trustee shall be entitled to rely on the Operator’s Direction in making the deposits into the various funds and accounts pursuant to Section 5.04.

Section 7.20. Liquidity Covenant. The Authority covenants that it will maintain or caused to maintained as of December 31 of each Fiscal Year, commencing December 31, 2018 (each such date being a “Testing Date”), the following liquidity requirement (the “Liquidity Requirement”): (i) for the 2018 Testing Date, an initial deposit of $5,000,000 plus all net income for the Project through such Testing Date, and (ii) thereafter, an amount not less than 120 Days Cash on Hand.

The Authority shall deliver a Certificate setting forth the Liquidity Requirement and showing the calculation thereof as of December 31 of each Fiscal Year to the Trustee no later than January 15 of the following Fiscal Year.

If the Liquidity Requirement is not met as of any Testing Date, the Authority shall, within 30 days after delivery of the Certificate disclosing such deficiency, cause the Operator to select and appoint (and, if the Operator fails to do so, the Authority shall select and appoint and authorizes the Trustee to so select and appoint if the Authority fails to do so) with the approval of the Controlling Party, a Medical Consultant to make recommendations with respect to the rates, fees and charges and the Operator’s methods of operation and other factors affecting the financial condition in order to allow the Authority to meet the Liquidity Requirement for future periods. A copy of the Medical Consultant’s report and recommendations, if any, shall be filed with the Trustee and Authority within 60 days after the date such Medical Consultant is retained.

The Person appointing the Medical Consultant shall notify the Operator, the Trustee and the Authority of such appointment, and the Medical Consultant shall deliver its report and findings to the Operator, the Trustee and the Authority. The Operating Agreement shall provide that the Operator and the Authority shall review such report and any written recommendations made by the Medical Consultant. The Operating Agreement shall provide that the Operator shall meet with the Medical Consultant to discuss the Medical Consultant’s reports, findings and written recommendations. The Operating Agreement shall provide that the Operator shall promptly implement all of the Medical Consultant’s written recommendations except those recommendations that (i) require an expenditure of funds greater than the amount available or projected to be available for such purpose under this Indenture, or (ii) that could, based upon the written advice of Bond Counsel, cause interest on the Bonds to be includible in gross income for federal income tax purposes, or (iii) conflict with the Operator’s duties and responsibilities under Applicable Law or the Clinical Partner’s duties and responsibilities under Applicable Law. The fees and expenses of the Medical Consultant shall be paid as an Operating Expense. Each party to the Operating Agreement shall deliver to the other party at no additional charge copies of any information, correspondence or documents delivered to the Medical Consultant contemporaneously with delivering such information, correspondence or documents to the Medical Consultant.

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Except as set forth in Section 9.02(e), failure to achieve the Liquidity Requirement for any Testing Date shall not constitute an Event of Default under this Indenture if the Operator takes all action necessary to comply with the procedures set forth above for retaining a Medical Consultant and follows each recommendation contained in the Medical Consultant’s report to the extent permitted by law.



Section 7.23. Further Assurances; Enforcement of Assigned Authority Documents. Subject to Section 13.17, at any and all times the Authority shall, so far as it may be authorized by law, make, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, assignments, transfers and assurances as may be reasonably necessary or desirable for the assuring, granting, pledging, assigning and confirming the Revenues and other assets pledged under this Indenture, the cash and Investment Securities held in any Fund or Account hereunder, and the Trustee’s right, title and interest in and to the foregoing, and all other moneys, securities and funds hereby pledged or assigned, or which the Authority may become bound to pledge or assign. Subject to Section 13.17, the Authority covenants and agrees that it will cooperate with and assist the Trustee in enforcing, the Assigned Authority Documents in accordance with their respective terms for the benefit of the Bondholders.

Section 7.24. Rate Covenant; Reports. The Operating Agreement shall include the following provisions:

(a) The Operator shall use its commercially reasonable efforts, in consultation with the Authority, to set fees and charges in each Operating Year in amounts reasonably calculated to produce Total Net Revenues in each Operating Year at least sufficient to meet the Debt Service Coverage Requirement for such Operating Year.

(b) If any proposed Operating Plan and Budget is projected to result in a Debt Service Coverage Ratio of less than the Debt Service Coverage Requirement, the Operator shall include in such proposed Operating Plan and Budget a detailed written explanation as to why the Operator has not budgeted to attain such ratio.

(c) The Authority, the Controlling Party and the Trustee shall have the right to object to any part of any proposed Operating Plan and Budget, including but not limited to a proposed Operating Plan and Budget that is projected to result in a Debt Service Coverage Ratio of less than the Debt Service Coverage Requirement (provided the Trustee shall have no obligation to review the Operating Plan and Budget nor to object to the Operating Plan and Budget).

(d) Under each of the following circumstances, the Authority shall cause the Operator to select and appoint (and, if the Operator fails to do so, the Authority shall select and appoint and authorizes the Trustee to so select and appoint if the Authority fails to do so), with the approval of the Controlling Party, a Medical Consultant to make written recommendations as to the operation, management, marketing, improvement, condition or use of the Project or any part thereof that the

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Medical Consultant believes could result in satisfying the Debt Service Coverage Requirement or increasing the Total Net Revenues available to pay Debt Service on the Senior Bonds:

(i) If the proposed Operating Plan and Budget is projected to result in the Debt Service Coverage Requirement not being satisfied; or

(ii) If the financial statement delivered to the Authority pursuant to the Operating Agreement reflects that the Debt Service Coverage Requirement was not satisfied for the year covered by such financial statement.

The Person appointing the Medical Consultant shall notify the Operator, the Trustee and the Authority of such appointment, and the Medical Consultant shall deliver its report and findings to the Operator, the Trustee and the Authority. The Operating Agreement shall provide that the Operator and the Authority shall review such reports and any written recommendations made by the Medical Consultant. The Operating Agreement shall provide that the Operator shall meet with the Medical Consultant to discuss the Medical Consultant’s reports, findings and written recommendations. The Operating Agreement shall provide that the Operator will promptly implement all of the Medical Consultant’s written recommendations except those recommendations that (i) require an expenditure of funds greater than the amount available or projected to be available for such purpose under this Indenture, or (ii) could, based upon the written advice of Bond Counsel, cause interest on the Bonds to be includible in gross income for federal income tax purposes, or (iii) conflict with the Operator’s duties and obligations under Applicable Laws or the Clinical Partners’ duties and obligations under Applicable Laws with respect to patient care. The fees and expenses of the Medical Consultant shall be paid as an Operating Expense. Each party to the Operating Agreement shall deliver to the other party at no additional charge copies of any information, correspondence or documents delivered to the Medical Consultant contemporaneously with delivering such information, correspondence or documents to the Medical Consultant.

ARTICLE VIII

DISCHARGE AND DEFEASANCE

Section 8.01. Discharge of Indenture. If the Authority shall well and truly pay, or cause to be paid, all of the principal and Redemption Price of and interest on the Bonds, at the times and in the manner provided herein and in the Bonds according to the true intent and meaning hereof and thereof, and shall cause the payments to be made into the Funds and Accounts established hereunder and in the amounts required hereby, or shall provide, as permitted hereby, for the payment thereof by depositing with or for the account of the Trustee an amount sufficient to provide for payment of the entire amount due or to become due thereon (including any amount due or to become due with respect to the tax-exempt Bonds under Section 148 of the Code), 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 on or prior to the date such payments are made, and shall pay or cause to be paid to the Trustee and there shall have been paid to the Authority all sums of money due or to become due to it in accordance with the terms and provisions hereof, then, upon such payment and performance, this Indenture and the rights, pledges

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and liens hereby granted shall cease, determine and be void; provided, that the Trustee’s rights and protections hereunder shall survive such discharge; otherwise, this Indenture is to be and shall remain in full force and effect. In the event that this Indenture is discharged as herein provided, the Trustee shall cause an accounting for such period or periods as shall be requested by the Authority to be prepared and filed with the Authority and shall execute and deliver to the Authority all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or transfer and deliver to the Authority all moneys or securities held by it (i) in the Extraordinary Expense Fund; and (ii) in any other Fund or Account pursuant to this Indenture which are not required for the payment of principal or Redemption Price of and interest on the Bonds and other sums due, including the Property free and clear of the Mortgage.

Section 8.02. Defeasance. Any Outstanding Bonds shall, prior to the maturity or Redemption Date thereof, be deemed to have been paid within the meaning and with the effect expressed in Section 8.01 if (a) in case any of such Bonds are to be redeemed on any date prior to their maturity, the Authority shall have given to the Trustee in form satisfactory to it a Letter of Instructions containing irrevocable instructions to give notice of redemption of such Bonds as provided in Article IV, (b) there shall have been deposited with the Trustee, in trust, either money in an amount which shall be sufficient, or Defeasance Investment Securities that are not callable or prepayable prior to maturity the principal of and interest on which without any reinvestment thereof when due will provide money which, together with the money, if any, deposited with the Trustee at the same time for such purposes, shall be sufficient, as verified by an Accountant, to pay when due the principal or Redemption Price of and interest due and to become due on such Bonds on or prior to the Redemption Date or maturity date thereof, as the case may be, (c) in the event such Bonds are not to be redeemed within the next succeeding 60 days, the Authority shall have given the Trustee in form satisfactory to it a Letter of Instructions containing irrevocable instructions to mail, as soon as practicable, notice to the Owners of all such Bonds that the deposit required by clause (b) above has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with this Section and stating such maturity or Redemption Date upon which money is to be made available for the payment of the principal or Redemption Price of and interest on such Bonds, and (d) there shall be delivered to the Trustee a written opinion of Bond Counsel to the effect that (i) the provisions of this Section have been complied with so that such Bonds are no longer entitled to the benefits of this Indenture and (ii) such defeasance will not, in and of itself, result in the inclusion of interest on the tax-exempt Bonds in gross income for federal income tax purposes. Neither Defeasance Investment Securities nor money deposited with the Trustee pursuant to this Section nor principal or interest payments on any such Defeasance Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal or Redemption Price of and interest on such Bonds; provided, that any cash received from such principal or interest payment on such Defeasance Investment Securities, (i) to the extent such cash will not be required at any time for such purpose, shall be paid over to the Authority as received, free and clear of any trust, lien, security interest, pledge or assignment securing such Bonds or otherwise existing under this Indenture, if all Bonds have been redeemed or discharged and if this Indenture is discharged, otherwise such cash shall be deposited as Gross Operating Revenues, and (ii) to the extent such cash will be required for such purpose at a later date, shall, to the extent practicable, be reinvested in the Defeasance Investment Securities maturing at times and in amounts sufficient to pay when due the principal or Redemption Price of

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and interest to become due on such Bonds, on or prior to such Redemption Date or maturity date thereof, as the case may be, and interest earned from such reinvestment shall be paid over to the Authority as received, free and clear of any trust, lien or pledge, if all Bonds have been redeemed or discharged and if this Indenture is discharged, otherwise such cash shall be deposited as Gross Operating Revenues. Bonds defeased hereunder shall no longer be subject to redemption at the option of the Authority, except to the extent that such Bonds are called for redemption at the time provision is made for the defeasance thereof, as provided in this Section.

ARTICLE IX

DEFAULT AND REMEDIES

Section 9.01. Rights and Remedies, Generally. Subject to the provisions of this Indenture (including Sections 9.09 and 13.18), the Owners of the Bonds, and the Trustee acting for all of the Owners of the Bonds shall be entitled to all of the rights and remedies provided or permitted under this Indenture or at law or in equity. The Collateral Agent shall be entitled to all of the rights and remedies provided or permitted by this Indenture, the Operating Agreement or any sub-Operating Agreement or at law or in equity.

Section 9.02. Events of Default. Each of the following events is hereby declared an “Event of Default” under this Indenture:

(a) failure to make due and punctual payment of the principal or Redemption Price of any Bond when and as the same shall become due and payable, whether at maturity or by call for redemption, or otherwise, provided that a default in the payment of principal or Redemption Price of any Subordinate Bond or Junior Bond will not constitute an Event of Default with respect to the Senior Bonds, a default in the payment of principal or Redemption Price of any Subordinate B-2 Bond or Junior Bond will not constitute an Event of Default with respect to the Subordinate B-1 Bonds, and a default in the payment of principal or Redemption Price of any Junior Bond will not constitute an Event of Default with respect to the Subordinate Bonds;

(b) failure to make due and punctual payment of any installment of interest on any Bond or the unsatisfied balance of any Mandatory Sinking Fund Installment therefor (except when such Mandatory Sinking Fund Installment is due on the maturity date of such Bond), when and as such interest installment or Mandatory Sinking Fund Installment shall become due and payable, provided that a default in the payment of any installment of interest on or the unsatisfied balance of any Mandatory Sinking Fund Installment of any Subordinate Bond or Junior Bond will not constitute an Event of Default with respect to the Senior Bonds, a default in the payment of any installment of interest on or the unsatisfied balance of any Mandatory Sinking Fund Installment of any Subordinate B-2 Bond or Junior Bond will not constitute an Event of Default with respect to the Subordinate B-1 Bonds, and a default in the payment of any installment of interest on or the unsatisfied balance of any Mandatory Sinking Fund Installment of any Junior Bond will not constitute an Event of Default with respect to the Subordinate Bonds;

(c) other than as described elsewhere in this Section, failure by the Authority in the performance or observance of any other of the covenants, agreements or conditions on its part

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contained in this Indenture or any Supplemental Indenture, and such failure shall continue for a period of 60 days after written notice thereof to the Authority by the Trustee or to the Authority and the Trustee by the Controlling Party;

(d) the Landlord under the Ground Lease shall have sent notice or taken steps to terminate the Ground Lease;

(e) failure to maintain a minimum of sixty (60) Days Cash on Hand as of any Fiscal Year End; or the failure to maintain a 1.05x Debt Service Coverage Ratio with respect to the Senior Bonds as of any Fiscal Year End;

(f) failure to make any required installment payments into the Senior Debt Service Reserve Fund pursuant to Section 5.07(c); or

(g) if the Authority shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the Authority seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the Authority or of the whole or any substantial part of its property.

ANYTHING IN THIS INDENTURE TO THE CONTRARY NOTWITHSTANDING, UPON THE OCCURRENCE AND CONTINUANCE OF AN EVENT OF DEFAULT AS DEFINED HEREIN, THE CONTROLLING PARTY SHALL BE ENTITLED TO CONTROL AND DIRECT THE ENFORCEMENT OF ALL RIGHTS AND REMEDIES GRANTED TO THE OWNERS OR THE TRUSTEE AND COLLATERAL AGENT UNDER THIS INDENTURE (BUT, FOR AVOIDANCE OF DOUBT, EXCLUDING THE UNASSIGNED RIGHTS), INCLUDING (I) THE RIGHT TO ACCELERATE THE PRINCIPAL OF THE BONDS AS DESCRIBED IN THIS INDENTURE, AND (II) THE RIGHT TO ANNUL ANY DECLARATION OF ACCELERATION, AND THE CONTROLLING PARTY SHALL ALSO BE ENTITLED TO APPROVE ALL WAIVERS OF EVENTS OF DEFAULT (EXCEPT IN RESPECT OF THE UNASSIGNED RIGHTS).

Upon the occurrence of an Event of Default, the Trustee shall promptly provide written notice by first class mail to the Owners of the Bonds then Outstanding and the Beneficial Owners of the Bonds then Outstanding who have provided such information to the Trustee as is reasonably required by the Trustee to enable it to provide such notice to such Beneficial Owners of (i) such Event of Default and (ii) the action or remedy, if any, then proposed to be taken by the Trustee at the Direction of the Controlling Party. The Trustee shall be fully protected in acting in accordance with the directions of the Controlling Party, and shall so act.

Section 9.03. Notice of Default; Cure. Upon obtaining knowledge of the existence of any Event of Default, the Trustee shall notify the Authority, the Controlling Party and the Operator in writing as soon as practicable, but in any event within two (2) Business Days; provided, that the

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Trustee need not provide notice of any Event of Default if the Authority has expressly acknowledged the existence of such Event of Default in a writing delivered to the Trustee and the Controlling Party. The Trustee shall recognize any cure of an Event of Default by the Operator.

Section 9.04. Specific Remedies.

(a) If an Event of Default with respect to the Senior Bonds occurs and is continuing, then, the Trustee shall, upon the Request of the Controlling Party, and may, but only with the prior written consent of the Controlling Party, and having been indemnified to its satisfaction (except with respect to the exercise of the remedy specified in clause (i) of this subsection (a) for which the Trustee shall not be entitled to require indemnification as a precondition to the exercise of such remedy) take any or all or any combination of the following actions or direct the Collateral Agent to take any or all or any combination of the following actions:

(i) declare the principal of the Bonds to be immediately due and payable, whereupon that portion of the principal of the Bonds thereby coming due and the interest thereon accrued to the date of payment shall, without further action, become and be immediately due and payable, anything in this Indenture or in the Bonds to the contrary notwithstanding;

(ii) by mandamus or other suit, action or proceeding at law or in equity require the Authority to perform its covenants and duties with respect to the Bonds under this Indenture;

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

(iv) by action or suit in equity enjoin any acts or things that may be unlawful or in violation of the rights of the Owners of the Bonds;

(v) prohibit the Authority from withdrawing moneys from any Funds or Accounts (except the Extraordinary Expense Fund and the Rebate Fund) without the Controlling Party’s written consent and send a notice of exclusive control with respect to the Collection Accounts;

(vi) request that a court of competent jurisdiction appoint, to the extent permitted by law, a receiver or receivers of the Revenues and other assets pledged under this Indenture, and the income, revenues, profits and use thereof, it being the intent hereof that, to the extent permitted by law, the Trustee shall be entitled to appointment of such a receiver as a matter of right;

(vii) commence foreclosure of the Leasehold Mortgage by private sale or judicial foreclosure; provided, that the Trustee shall first receive the written consent of the Controlling Party;

(viii) take such actions as may be required to enforce all rights of the Trustee, the Collateral Agent or the Owners under the Assigned Authority Documents;

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(ix) exercise the rights given to a Leasehold Mortgagee under the Ground Lease, including actions as may be necessary or desirable to locate a Permitted Replacement for the Tenant thereunder; or

(x) transfer moneys from any Funds or Accounts (other than amounts necessary to pay Operating Expenses and the Rebate Fund), to the Senior Debt Service Account of the Debt Service Fund and cause the transfer of amounts on deposit in the Collection Accounts to the Revenue Fund as provided in the Operating Agreement.

(b) If no Senior Bonds remain outstanding, the same remedies available with respect to Senior Bonds under subsection (a) of this Section 9.03 shall be available with respect to the Series 2018B-1 Bonds. So long as any Senior Bonds remain outstanding, the Owners of the Series 2018B-1 Bonds shall have no right to enforce any Event of Default hereunder, to direct remedies, to waive any Events of Default or to otherwise take any action with respect to any Event of Default.

(c) If no Senior Bonds or Subordinate B-1 Bonds remain outstanding, the same remedies available with respect to Senior Bonds and the Subordinate B-1 Bonds under subsection (a) of this Section 9.03 shall be available with respect to Subordinate B-2 Bonds. So long as any Senior Bonds or Subordinate B-1 Bonds remain outstanding, the Owners of Subordinate B-2 Bonds shall have no right to enforce any Event of Default hereunder, to direct remedies, to waive any Events of Default or to otherwise take any action with respect to any Event of Default.

(d) If no Senior Bonds or Subordinate Bonds remain outstanding, the same remedies available with respect to Senior Bonds under subsection (a) of this Section 9.03 shall be available with respect to Junior Bonds. So long as any Senior Bonds or Subordinate Bonds remain outstanding, the Owners of Junior Bonds shall have no right to enforce any Event of Default hereunder, to direct remedies, to waive any Events of Default or to otherwise take any action with respect to any Event of Default.

(e) Any declaration of acceleration pursuant to clause (a)(i) of this Section 9.04 is subject to the condition that if, at any time after such declaration and before any judgment or decree for the payment of the moneys due shall have been entered, the Authority shall cause to be deposited with the Trustee a sum sufficient to pay all the principal or Redemption Price of and installments of interest on the Bonds, payment of which is overdue, with interest on such overdue principal at the rate borne by the respective Bonds, and the reasonable charges and expenses of the Trustee, including fees and expenses of its attorneys, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision reasonably deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Trustee may, and shall at the Direction of the Controlling Party, on behalf of the Owners of all of the Bonds, rescind and annul such declaration and its consequences and waive such default; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon.

Section 9.05. Application of Proceeds. After (i) first, the payment of the reasonable and proper charges, fees, expenses due and the Extraordinary Costs and Expenses due to the Trustee,

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the Collateral Agent, the Authority or any Authority Indemnified Persons and any other payments due them in respect of the Unassigned Rights (including the Administrative Expenses and Extraordinary Costs and Expenses due to the Authority and any Authority Indemnified Person); and (ii) second, unless any Series of Bonds have been accelerated or the Leasehold Mortgage foreclosed or unless the Trustee has been directed otherwise by the Controlling Party, payment or provision for payment of Operating Expenses then due and payable; and (iii) third, unless any Series of Bonds have been accelerated or the Leasehold Mortgage foreclosed, making the deposits to the Funds and Accounts and such disbursements therefrom as required to be made pursuant hereto, the proceeds received by the Trustee pursuant to the exercise of any right or remedy under this Article, together with all securities and other moneys which may then be held by the Trustee as a part of the Revenues and other assets pledged under this Indenture, subject to the application of amounts in specific Funds and Accounts which are pledged solely to the repayment of Senior Bonds, Subordinate B-1 Bonds, Subordinate B-2 Bonds or Junior Bonds, as applicable, shall be applied in order, as follows:

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

First, to the payment to the Owners entitled thereto of all installments of interest (together with interest due on overdue installments of interest to the extent allowed by law) then due on the Senior Bonds in the order of their due dates, and, if the amount available shall not be sufficient to pay in full any installment or installments due on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Owners of Senior Bonds entitled thereto, without any discrimination or preference;

Second, to the payment to the Owners entitled thereto of the unpaid principal or Redemption Price of the Senior Bonds with respect to which such remedy was exercised which shall have become due, whether at maturity or by call for redemption, in the order of their due dates, and, if the amount available shall not be sufficient to pay in full the unpaid principal or Redemption Price of all the Senior Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date, to the Owners entitled thereto, without any discrimination or preference;

Third, to the payment to the Owners entitled thereto of all installments of interest (together with interest due on overdue installments of interest to the extent allowed by law) then due on the Subordinate B-1 Bonds in the order of their due dates, and, if the amount available shall not be sufficient to pay in full any installment or installments due on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Owners entitled thereto, without any discrimination or preference;

Fourth, to the payment to the Owners entitled thereto of the unpaid principal or Redemption Price of the Subordinate B-1 Bonds with respect to which such remedy was exercised which shall have become due, whether at maturity or by call

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for redemption, in the order of their due dates, and, if the amount available shall not be sufficient to pay in full the unpaid principal or Redemption Price of all the Subordinate B-1 Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date, to the Owners entitled thereto, without any discrimination or preference;

Fifth, to the payment to the Owners entitled thereto of all installments of interest (together with interest due on overdue installments of interest to the extent allowed by law) then due on the Subordinate B-2 Bonds in the order of their due dates, and, if the amount available shall not be sufficient to pay in full any installment or installments due on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Owners entitled thereto, without any discrimination or preference;

Sixth, to the payment to the Owners entitled thereto of the unpaid principal or Redemption Price of the Subordinate B-2 Bonds with respect to which such remedy was exercised which shall have become due, whether at maturity or by call for redemption, in the order of their due dates, and, if the amount available shall not be sufficient to pay in full the unpaid principal or Redemption Price of all the Subordinate B-2 Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date, to the Owners entitled thereto, without any discrimination or preference;

Seventh, to the payment to the Owners entitled thereto of all installments of interest (together with interest due on overdue installments of interest to the extent allowed by law) then due on the Junior Bonds in the order of their due dates, and, if the amount available shall not be sufficient to pay in full any installment or installments due on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Owners entitled thereto, without any discrimination or preference; and

Eighth, to the payment to the Owners entitled thereto of the unpaid principal or Redemption Price of the Junior Bonds with respect to which such remedy was exercised which shall have become due, whether at maturity or by call for redemption, in the order of their due dates, and, if the amount available shall not be sufficient to pay in full the unpaid principal or Redemption Price of all the Junior Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date, to the Owners entitled thereto, without any discrimination or preference.

(b) If the principal of all of the Bonds with respect to which such remedy was exercised shall have become or have been declared due and payable, (i) first, to the payment of the principal or Redemption Price and interest then due and unpaid upon the Senior Bonds, with interest on the overdue principal, Redemption Price and interest (to the extent allowed by law) at the rate borne by the respective Senior Bonds, and, if the amount available shall not be sufficient to pay in full the whole amount so due and unpaid, then to the payment thereof ratably, without preference or

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priority of principal over interest or Redemption Price, or of interest over principal or Redemption Price, or of Redemption Price over principal or interest, or of any installment of interest over any other installment of interest, or of any Senior Bond over any other Senior Bond, according to the amounts due respectively for principal, Redemption Price and interest, to the Owners entitled thereto without any discrimination or preference, (ii) second, to the payment of the principal or Redemption Price and interest then due and unpaid upon the Subordinate B-1 Bonds, with interest on the overdue principal, Redemption Price and interest (to the extent allowed by law) at the rate borne by the respective Subordinate B-1 Bonds, and, if the amount available shall not be sufficient to pay in full the whole amount so due and unpaid, then to the payment thereof ratably, without preference or priority of principal over interest or Redemption Price, or of interest over principal or Redemption Price, or of Redemption Price over principal or interest, or of any installment of interest over any other installment of interest, or of any Subordinate B-1 Bond over any other Subordinate B-1 Bond, according to the amounts due respectively for principal, Redemption Price and interest, to the Owners entitled thereto without any discrimination or preference, (iii) third, to the payment of the principal or Redemption Price and interest then due and unpaid upon the Subordinate B-2 Bonds, with interest on the overdue principal, Redemption Price and interest (to the extent allowed by law) at the rate borne by the respective Subordinate B-2 Bonds, and, if the amount available shall not be sufficient to pay in full the whole amount so due and unpaid, then to the payment thereof ratably, without preference or priority of principal over interest or Redemption Price, or of interest over principal or Redemption Price, or of Redemption Price over principal or interest, or of any installment of interest over any other installment of interest, or of any Subordinate B-2 Bond over any other Subordinate B-2 Bond, according to the amounts due respectively for principal, Redemption Price and interest, to the Owners entitled thereto without any discrimination or preference, and (iv) fourth, to the payment of the principal or Redemption Price and interest then due and unpaid upon the Junior Bonds, with interest on the overdue principal, Redemption Price and interest (to the extent allowed by law) at the rate borne by the respective Junior Bonds, and, if the amount available shall not be sufficient to pay in full the whole amount so due and unpaid, then to the payment thereof ratably, without preference or priority of principal over interest or Redemption Price, or of interest over principal or Redemption Price, or of Redemption Price over principal or interest, or of any installment of interest over any other installment of interest, or of any Junior Bond over any other Junior Bond, according to the amounts due respectively for principal, Redemption Price and interest, to the Owners entitled thereto without any discrimination or preference.

(c) If the principal of all the Bonds has been declared due and payable and if such declaration thereafter is rescinded and annulled under the provisions of this Article, then the moneys will be applied in accordance with the provisions of paragraph (a) of this Section.

Section 9.06. Trustee May Act Without Possession of Bonds. All rights of action under this Indenture or under any Bonds may be enforced by the Trustee without possession of any of the Bonds or the production thereof in any trial or other proceedings relative thereto, and any such suit or proceedings instituted by the Trustee shall be brought in its name, as Trustee for the ratable benefit of the Owners of the Bonds, subject to the provisions of this Indenture.

Section 9.07. Trustee as Attorney-in-Fact. The Trustee is hereby irrevocably appointed (and the Owners of the Bonds, by taking and holding same from time to time, shall be deemed to

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have so appointed the Trustee) the true and lawful attorney-in-fact of the Owners of the Bonds, or on behalf of all Owners of the Bonds as a class, with respect to any proof of debt, amendment to proof of debt, petition or other document, and to do and perform any and all acts and things for and in the name of the Owners of the Bonds against the Authority allowed in any equity receivership, insolvency, liquidation, bankruptcy, reorganization or other proceedings to which the Authority shall be a party and to receive payment of or on account of such claims. Any such receiver, assignee, liquidator or trustee is hereby authorized by each of the Owners of the Bonds 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 of the Bonds, to pay to the Trustee and indemnify the Trustee for any amount due for compensation and expenses of the Trustee, including counsel fees, incurred up to the date of such distribution, and the Trustee shall have full power of substitution and delegation in respect of any such powers.

Section 9.08. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or the Controlling Party 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 hereunder or under the Bonds or now or hereafter existing at law or in equity or by statute, subject to the right of the Controlling Party to direct the remedies and the limitations on remedies for the benefit of the Owners of the Senior Bonds and the Subordinate Bonds set forth in Section 9.04.

Section 9.09. Limitation on Suits. All rights of action in respect of this Indenture shall be exercised only by the Trustee (excepting the Unassigned Rights, which may only be enforced by the Authority or the Authority Indemnified Persons, as the case may be), and the Owner of any Bond shall not have any right to institute any suit, action or proceedings at law or in equity for the appointment of a receiver or for any other remedy hereunder or by reason hereof, unless and until an Event of Default has occurred and is continuing, the Trustee shall have received a Request of the Controlling Party, and shall have been furnished reasonable indemnity and shall have refused or neglected for 30 days thereafter to institute such suit, action or proceedings, and no direction inconsistent with such Request has been given to the Trustee during such 30-day period by the Controlling Party. The making of such request and the furnishing of such indemnity shall in each and every case be conditions precedent to the execution and enforcement by any Owner of any Bond, if such Owners are then the Controlling Party, of the powers and remedies given to the Trustee hereunder and to the institution and maintenance by any such Owner of any action or cause of action for the appointment of a receiver or for any other remedy hereunder, but the Trustee may, in its discretion, and when duly requested in writing by the Controlling Party and when furnished indemnity satisfactory to protect it against expenses, charges and liability shall, subject to Section 9.04(d), take such appropriate action by judicial proceedings otherwise in respect of any existing default on the part of the Authority as the Trustee may deem desirable in the interest of the Controlling Party. The rights of the Owners under this Section are in all events subject to the provisions of Section 9.04.

Nothing contained in this Article shall affect or impair the right of any Owner of any Bonds, which shall be absolute and unconditional, to enforce the payment of the principal of, Redemption Price, if any, and interest on the Bonds of such Owner, but only out of the moneys for such payment as herein provided, or the obligation of the Authority, which shall also be absolute and

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unconditional, to make payment of the principal of, Redemption Price, if any, and interest on the Bonds, but only out of the funds provided herein for such payment, to the respective Owners thereof at the time and place stated herein.

Section 9.10. Right of Controlling Party to Direct Proceedings. Notwithstanding any provision of this Indenture to the contrary other than as specifically set forth in Section 9.02, the Controlling Party shall have the right, at any time, 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 pursuit or exercise of any remedy available to the Trustee or any trust or power conferred on the Trustee or any other proceedings hereunder; provided, that the Trustee shall have been satisfactorily indemnified and that such direction shall not be contrary to law or the provisions of this Indenture, and, unless such direction relates to the acceleration of all or a portion of the Bonds, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall determine that the proceedings so directed would involve it in personal liability for which it has not received adequate indemnity. Anything in this Indenture to the contrary notwithstanding, by their acceptance of the Subordinate Bonds and the Junior Bonds, the Beneficial Owners thereof shall have no right to object to any directions given by the Beneficial Owners of the Senior Bonds in connection with any bankruptcy proceeding, with any exercise of remedies (or lack of exercise of remedies) under this Article IX, or otherwise with respect to actions taken or not taken in response to an Event of Default, without limitation.

Section 9.11. Restoration of Rights and Remedies. If the Trustee, the Controlling Party or any Owner has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee, the Controlling Party or such Owner, then and in every such case, the Authority, the Trustee, the Controlling Party and the Owners shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee, the Controlling Party and the Owners shall continue as though no such proceeding had been instituted.

Section 9.12. Waiver of Stay or Extension Laws. To the extent that it may lawfully do so, the Authority covenants that it will not at any time insist upon, plead or in any manner whatsoever claim or take the benefit or advantage of any stay or extension law, whenever or wherever enacted, which may affect the covenants under or the performance of this Indenture. The Authority also covenants that it will not otherwise hinder, delay or impede the execution of any power herein granted to the Trustee.

Section 9.13. Delay or Omission Not Waiver. No delay or omission of the Trustee, the Controlling Party or of any Owner to exercise any right or remedy accruing upon any Event of Default hereunder shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee, the Controlling Party or to the Owners may be executed from time to time, and as often as may be deemed expedient, by the Trustee, the Controlling Party or by the Owners, as the case may be.

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ARTICLE X

CONCERNING THE TRUSTEE AND THE COLLATERAL AGENT

Section 10.01. Trustee; Appointment and Acceptance of Duties. (a) U.S. Bank National Association, is hereby appointed as Trustee. The Trustee hereby accepts and agrees to execute the trusts hereby created, but only upon the additional terms set forth in this Article, to all of which the Authority agrees and the respective Owners agree by their acceptance of delivery of any of the Bonds. The Trustee shall be deemed to have accepted such trusts with respect to all the Bonds hereafter to be issued, but only upon the terms and conditions set forth in this Indenture. The Trustee may execute any of the trusts or powers set forth herein and perform the duties required of it or imposed on it hereunder by or through attorneys, agents or receivers, and shall be entitled to advice of counsel concerning all matters of trusts and its duties herein. Each of the rights, privileges and immunities provided for in this Article X as to the “Trustee” shall apply equally to the Collateral Agent under any Project Document.

(a) The Trustee shall serve as Paying Agent for the Bonds. As Paying Agent, the Trustee agrees that it will (i) hold all sums held by it for the payment of principal or Redemption Price of or interest on Bonds in trust for the benefit of the Owners entitled thereto, until such sums shall be paid to such Owners or otherwise disposed of as herein provided; and (ii) give the Authority written notice of any default in the making of any such payment of principal or interest.

Section 10.02. Collateral Agent; Appointment and Acceptance of Duties. U.S. Bank National Association is hereby appointed as Collateral Agent for the purpose of holding collateral pledged or required to be pledged under the Operating Agreement and any sub-Operating Agreement. In enforcing any of its rights under the Bond Documents or any sub-Operating Agreement, the Collateral Agent shall have no obligation to take any action absent the receipt of direction from the Trustee (who may rely upon the written direction of the Controlling Party in providing any such direction) or the Controlling Party and shall be entitled to satisfactory indemnity prior to taking any action. The Collateral Agent shall have no obligations hereunder but may take any actions as permitted to enforce its rights through attorneys, agents or receivers, and shall be entitled to advice of counsel concerning all matters of trusts and its duties herein. Each of the rights, privileges and immunities provided for in this Article X as to the “Trustee” shall apply equally to the Collateral Agent under any Bond Document or Project Document, including the right to compensation and reimbursement pursuant to Section 10.05(f) and the right to resign pursuant to Section 10.07.

Section 10.03. Registrars and Other Agents; Appointment and Acceptance of Duties.

(a) The Authority may appoint one or more Registrars or other agents to perform any of the duties and obligations imposed under this Indenture or any Supplemental Indenture, and separate appointments may be made for the Bonds of each Series. The Trustee shall serve as initial Registrar for the Bonds.

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(b) Each Registrar or other agent, other than the Trustee, shall signify its acceptance of the duties and obligations imposed upon it by this Indenture or any Supplemental Indenture by executing and delivering to the Authority and the Trustee a written acceptance thereof.

Section 10.04. Responsibilities of the Trustee.

(a) The recitals of fact herein and in the Bonds contained shall be taken as the statements of the Authority, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of any Bonds issued thereunder or as to the security afforded by this Indenture, and the Trustee shall not incur any liability in respect thereof; provided, however, that the Trustee represents and warrants that this Indenture is the valid and binding legal obligation of the Trustee enforceable against the Trustee in accordance with its terms. The Trustee shall, however, be responsible for its representations contained in any authentication on the Bonds. The Trustee shall not be under any responsibility or duty with respect to the application of any money paid to the Authority or money collected by the Authority prior to the delivery thereof to the Trustee. The Trustee shall not be under any obligation or duty to perform any act, whether requested by the Owners or otherwise, which would involve it in liability or to institute or defend any suit in respect hereof, or to advance any of its own money, unless it has been satisfactorily indemnified against such liability other than liability resulting from its negligence or willful misconduct. Subject to the provisions of subsection (b) of this Section, the Trustee shall not be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct.

(b) 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, and no implied covenants or obligations shall be read into this Indenture against the Trustee. In case an Event of Default has occurred (which has not been cured), 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 an ordinary prudent corporate trustee would exercise or use under the circumstances. Except for a default under Section 9.02(a) or (b), the Trustee shall not be deemed to have notice of any default or Event of Default hereunder absent the receipt of written notice. The Trustee shall not be required to take notice or be deemed to have notice of any default or Event of Default hereunder except a default under Sections 9.02(a) or (b), unless the Trustee is specifically notified in writing of such default by the Authority or by the Owners of at least 25% in aggregate principal amount of all Bonds then Outstanding. All notices or other instruments required by this Indenture to be delivered to the Trustee must, to be effective, be delivered at the Principal Office of the Trustee, and in the absence of the notice so delivered, the Trustee may conclusively assume there is no default except as aforesaid. Any provision of this Indenture relating to action taken or to be taken by the Trustee or the evidence upon which the Trustee may rely shall be subject to the provisions of this Section.

(c) The Trustee is not required to make any inquiry or investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture or other paper or document (other than to establish facial compliance with the format required by this Indenture) but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see

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fit and, if the Trustee determines to make such further inquiry or investigation, it is entitled to examine the books, records and premises of the Authority, in person or by agent or attorney.

(d) To the fullest extent permitted by law, but only from and to the extent of Revenues available therefor under this Indenture, the Authority agrees to indemnify and save harmless the Trustee, against any and all fees, costs, and charges and losses, damages, claims, actions and liabilities and expenses of any conceivable nature from funds available pursuant to the terms and provisions of the Indenture. The Trustee’s immunities and protections from liability and its right to indemnification from the Authority from moneys available therefor under this Indenture in connection with the performance of its duties under this Indenture shall extend to the non-negligent acts and non-willful acts and actions taken on behalf of the Trustee by the Trustee’s officers, directors, agents, attorneys and employees. Such immunities and protections and right to indemnification, together with the Trustee’s right to compensation, shall survive the Trustee’s resignation or removal, the discharge of this Indenture and final payment of the Bonds.

(e) The permissive right of the Trustee to take the actions permitted by this Indenture shall not be construed as an obligation or duty to do so.

(f) Promptly after receiving appropriate notification thereof, at the cost of the Authority, the Trustee shall be responsible for sending notifications required to be sent to the Owners hereunder and requesting consents of the Owners when required hereunder.

(g) Except for information provided by the Trustee concerning the Trustee, the Trustee shall have no responsibility for any information in any offering memorandum or other disclosure material distributed with respect to the Bonds, and the Trustee shall have no responsibility for compliance with any state or federal securities laws in connection with the Bonds.

(h) It is expressly understood and agreed that the Trustee shall be under no liability of any kind or character whatsoever for the payment of any costs of the Project and that all such costs shall be paid from amounts held pursuant hereto for such purpose.

Section 10.05. Evidence on Which the Trustee May Act.

(a) The Trustee, upon receipt of any notice, resolution, request, consent, order, certificate, report, opinion, bond, or other paper or document furnished to it pursuant to any provision of this Indenture, shall be protected in acting in good faith upon any such instrument believed by it to be genuine and to have been signed or presented by the proper party or parties and consented to by such other parties where required. The Trustee may consult with counsel, who may or may not be counsel to the Authority, or any Consultant, and the opinion of such counsel or Consultant, if selected with due care, shall be full and complete authorization and protection in respect of any action taken or suffered by it under this Indenture in good faith and in accordance therewith.

(b) Whenever the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under this Indenture, such matter (unless other evidence in respect thereof be therein specifically prescribed) may be deemed to be conclusively

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proved and established by a Certificate of the Authority, and such shall be full warrant by the Authority (subject to Section 13.17) for any action taken or suffered in good faith under the provisions of this Indenture upon the faith thereof; but in its discretion the Trustee may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as to it may seem reasonable.

(c) Except as otherwise expressly provided in this Indenture, any request, order, notice or other direction required or permitted to be furnished pursuant to any provision hereof by the Authority to the Trustee shall be sufficiently executed if executed in the name of the Authority by an Authorized Authority Representative.

(d) The Trustee may execute any of the trusts or powers hereof and perform any of its duties by or through attorneys, receivers, agents or employees but shall not be answerable for the conduct of attorneys and receivers who have been selected by it with reasonable care, and may in all cases pay reasonable compensation to all attorneys, agents, receivers and employees as may reasonably be employed in connection with the trusts hereof, and the Trustee shall not be responsible for any misconduct or negligence of any agent or attorney appointed with due care by it.

(e) 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.

(f) The Trustee shall be entitled to payment of and/or reimbursement for reasonable fees for its ordinary services rendered hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and all advances, agent and counsel fees, and other ordinary expenses reasonably made or incurred by the Trustee in connection with such ordinary services and, if it should become necessary that the Trustee perform extraordinary services, it shall be entitled to reasonable extra compensation therefor and to reimbursement for reasonable extraordinary expenses in connection therewith; provided that if such extraordinary services or extraordinary costs and expenses are occasioned by the gross negligence or willful misconduct of the Trustee, it shall not be entitled to compensation or reimbursement therefor. Upon an Event of Default, the Trustee shall have a first lien with right of payment before payment on account of principal of or interest on any Bond, upon all moneys in its possession under any provisions hereof for the foregoing reasonable advances, fees, costs and expenses incurred. The Trustee’s right to compensation and indemnification shall survive the satisfaction and discharge of this Indenture or its resignation or removal hereunder and payment in full of the Bonds.

Section 10.06. Certain Permitted Acts. The Trustee may become the Owner of any Bonds with the same rights it would have if it were not the Trustee. To the extent permitted by law, the Trustee may act as depository for, and may permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners or to effect or aid in any reorganization growing out of the enforcement of the Bonds or this Indenture, whether or not any such committee shall represent the Owners of a majority in principal amount of the Bonds Outstanding. The provisions of this Section shall extend to affiliates of the Trustee.

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Section 10.07. Resignation of Trustee. Except as otherwise provided by a Supplemental Indenture, the Trustee may at any time resign and be discharged of the duties and obligations created by this Indenture, by giving not less than 60 days’ written notice to the Authority of the date it desires to resign and mailing written notice to the Owners of all Bonds, and such resignation shall take effect immediately on the appointment and acceptance of a successor Trustee.

Section 10.08. Removal of Trustee. So long as an Event of Default has not occurred and is not continuing, the Trustee may be removed, with or without cause, at any time at the Direction of the Authority, with the consent of the Controlling Party. At any time, the Trustee may be removed, with or without cause, at any time at the Direction of the Controlling Party. Notwithstanding the foregoing, any removal of the Trustee shall not be effective until a successor Trustee has been appointed and has assumed the duties and responsibilities of successor Trustee under this Indenture.

Section 10.09. Appointment of Successor Trustee.

(a) In case at any time the Trustee shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the Trustee, or of its property, shall be appointed, or if any public officer shall take charge or control of the Trustee, or of its property or affairs, a successor may be appointed by the Controlling Party, by an instrument in writing signed and acknowledged by the Controlling Party or by its attorney-in-fact duly authorized and delivered to such successor Trustee, notification thereof being given to the predecessor Trustee. The successor Trustee shall mail notice of the appointment of the successor Trustee to the Authority and the Owners of all Bonds.

(b) If in a proper case no appointment of a successor Trustee shall be made within 45 days after the Trustee shall have given to the Authority written notice as provided in Section 10.07 or after a vacancy in the office of the Trustee shall have occurred by reason of its inability to act, its removal, or for any other reason whatsoever, the Trustee (in the case of a resignation under Section 10.07), or the Authority may apply to any court of competent jurisdiction to appoint a successor Trustee. Such court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Trustee.

(c) Any Trustee appointed under the provisions of this Section in succession to the Trustee shall be a bank or trust company or national or state banking association and duly authorized to exercise trust powers and subject to examination by federal or state authority and having (or whose parent holding company shall have) reported capital and surplus of not less than $50,000,000.

Section 10.10. Transfer of Rights and Property to Successor Trustee. Any successor Trustee appointed under this Indenture shall execute, acknowledge and deliver to its predecessor Trustee and to the Authority an instrument accepting such appointment, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become fully vested with all moneys, estates, properties, rights, powers, duties, and obligations of such predecessor Trustee, with like effect as if originally named as Trustee; but the Trustee ceasing to act shall nevertheless, on the Request of the Authority or of the successor Trustee and on the receipt of its outstanding

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fees and expenses, execute, acknowledge and deliver such instruments of assignment and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor Trustee all rights, powers, duties and obligations in and to any property held by it under this Indenture or any Project Document, and shall pay over, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Should any instrument in writing from the Authority be required by such successor Trustee for more fully and certainly vesting in and confirming to such successor Trustee any such estates, rights, powers and duties, any and all such instruments in writing shall, on request, and so far as may be authorized by law, be executed, acknowledged and delivered by the Authority. Any such successor Trustee shall promptly notify any Registrars and other agents of its appointment as Trustee.

Section 10.11. Merger or Consolidation. Any bank or trust company into which the Trustee may be merged or converted or with which it may be consolidated or any bank or trust company resulting from any merger, conversion or consolidation to which it shall be a party or any bank or trust company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such entity shall be a bank or trust company organized under the laws of any state of the United States or a national banking association, and shall be authorized by law to perform all duties imposed upon it by this Indenture, shall be the successor Trustee without the execution or filing of any paper or the performance of any further act. The successor Trustee shall mail notice to the Owners of all Outstanding Bonds of the successor Trustee.

Section 10.12. Adoption of Authentication. If any of the Bonds contemplated to be issued under this Indenture shall have been authenticated but not delivered, any successor Trustee may adopt the certificate of authentication of any predecessor Trustee so authenticating such Bonds and deliver such Bonds so authenticated; and if any such Bonds shall not have been authenticated, any successor Trustee may authenticate such Bonds in the name of the predecessor Trustee, or in the name of the successor Trustee, and in all such cases such certificate shall be of full force and effect.

Section 10.13. Resignation or Removal of Agents and Appointment of Successors.

(a) Any Registrar or other agent may at any time resign and be discharged of the duties and obligations created by this Indenture or any Supplemental Indenture by giving at least 60 days’ written notice to the Authority, the Trustee and the other agents, if any. Any such agent may be removed at any time by an instrument filed with such agent and the Trustee and signed by the Authorized Authority Representative. Any successor agent shall be appointed by the Authority with the approval of the Trustee and shall be willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it in such capacity by this Indenture.

(b) In the event of the resignation or removal of any agent, such agent shall pay over, assign and deliver any money held by it to its successor, or if there be no successor, to the Trustee. In the event that for any reason there shall be a vacancy in the office of any Registrar appointed by the Authority, the Trustee shall act as such Registrar.

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(c) The provision of this Section may be modified by a Supplemental Indenture in respect of any Series of Bonds, authorized thereby, and in the event of any conflict with the provisions hereof the provisions of such Supplemental Indenture shall control in respect of any Series of Bonds authorized thereby.

ARTICLE XI

SUPPLEMENTAL INDENTURES AND AMENDMENT OF BOND DOCUMENTS

Section 11.01. Supplemental Indentures and Amendments of Bond Documents Effective Without Consent of Owners. The Authority and the Trustee may, as appropriate, from time to time and at any time, without the consent of but with notice to the Owners, enter into Supplemental Indentures or amendments to the Bond Documents as follows:

(a) to cure any formal defect, omission, inconsistency or ambiguity in this Indenture or in the applicable Bond Document;

(b) to insert such provisions clarifying matters or questions arising under this Indenture or in the applicable Bond Document as are necessary or desirable and are not contrary to or inconsistent with this Indenture or the applicable Bond Document as theretofore in effect;

(c) to grant to or confer upon the Trustee for the benefit of the Owners any additional rights, remedies, powers, authority or security which may lawfully be granted or conferred and which are not contrary to or inconsistent with this Indenture or the Bond Documents as theretofore in effect;

(d) to authorize Bonds of a Series and, in connection therewith, to specify and determine the matters and things referred to in Article III and also any other matters and things relative to such Bonds which are not in conflict with this Indenture as theretofore in effect, or to amend, modify, or rescind any such authorization, specification or determination at any time prior to the first delivery of such Bonds; provided, that such supplement or amendment shall be limited to the specific terms of the Additional Bonds and shall not otherwise amend this Indenture;

(e) to provide limitations and restrictions in addition to the limitations and restrictions contained in this Indenture or any Supplemental Indenture or the Bond Documents on the delivery of Bonds or the issuance of other evidences of indebtedness;

(f) to add to the covenants and agreements of the Authority in this Indenture or any Supplemental Indenture or the Bond Documents, other covenants and agreements to be observed by the Authority or the other parties thereto which are not in conflict with this Indenture or the applicable Supplemental Indentures or in the applicable Bond Document as theretofore in effect, provided that such supplement shall not have a material adverse impact on the Bonds;

(g) to add to the limitations and restrictions in this Indenture or any Supplemental Indenture or the Bond Documents other limitations and restrictions to be observed by the Authority or the other parties thereto which are not in conflict with this Indenture or the applicable

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Supplemental Indentures or in the applicable Bond Documents as theretofore in effect, provided that such supplement shall not have a material adverse impact on the Bonds;

(h) to confirm, as further assurance, any pledge under, and the subjection to any lien or security interest created or to be created by, this Indenture or any Supplemental Indenture, of the Revenues and other assets pledged under this Indenture or of any other moneys, securities or funds, or to subject to the pledge, lien and security interest of this Indenture additional revenues, properties or collateral;

(i) to provide for additional duties of the Trustee in connection with the Revenues and other assets pledged under this Indenture or the Project;

(j) to modify, amend or supplement this Indenture or any Supplemental Indenture in such manner as to permit, if presented, the qualification hereof and thereof under the Trust Indenture Act of 1939 or any similar federal statute hereafter in effect or under any state blue sky law;

(k) to surrender any right, power or privilege reserved to or conferred upon the Authority by the terms of this Indenture; provided, that the surrender of such right, power or privilege is not in conflict with the covenants and agreements of the Authority contained in this Indenture;

(l) to designate Registrars and other agents for the Bonds of any Series;

(m) to evidence the appointment or a succession of a new Trustee hereunder;

(n) to modify, amend or supplement this Indenture or any Supplemental Indenture in order to provide for or eliminate book-entry registration of all or any of the Bonds to the extent not inconsistent with the provisions hereof;

(o) to make any change that does not materially adversely affect the rights of any Owner;

(p) to amend a prior Supplemental Indenture in accordance with the provisions thereof; and

(q) to allow for any necessary or appropriate changes to enable the Series 2018C-2 Bonds to be converted to Series 2018 DTC Bonds as defined in accordance with Section 3.13.

Section 11.02. Supplemental Indentures and Amendments to Bond Documents Requiring Owner Consent. Except as provided in Section 11.01 and in the immediately following sentence, any modification or amendment of this Indenture or to any Bond Document and of the rights and obligations of the Authority and of the Owners of the Bonds hereunder or thereunder, in any particular, may only be made by a Supplemental Indenture or an amendment to the applicable Bond Document in each instance with the prior written consent of the Controlling Party. No such modification or amendment shall, without the prior written consent of the Owner of each Bond

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affected thereby, permit (i) a change in the terms of redemption or maturity of the principal of any Outstanding Bond or a reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon, (ii) creation of a lien upon or a pledge of or payment priority from the Gross Revenues ranking prior to or on a parity with the lien or pledge created by this Indenture, (iii) a preference or priority of any Bond or Bonds over any other Bond or Bonds of the same lien priority, (iv) a reduction in the percentages or otherwise affect the classes of Bonds of which the consent of the Owners is required to effect any such modification or amendment, (v) an impairment of the exclusion from gross income for federal income tax purposes of interest on any Bond, (vi) a deprivation to any Owners of the pledge, lien and security interest created by this Indenture or (vii) a change or modification of any of the rights or obligations of any agent without its prior written consent thereto. For the purposes of this Section, a Series of Bonds shall be deemed to be affected by a modification or amendment of this Indenture or an amendment to the applicable Bond Document if the same materially adversely affects or diminishes the rights of the Owners of Bonds of such Series. The Trustee may in its discretion determine whether or not, in accordance with the foregoing powers of amendment, Bonds of any particular Series, lien priority or maturity would be affected by any modification or amendment of this Indenture or an amendment to the applicable Bond Document and any such determination shall be binding and conclusive on the Authority and all Owners. In making any such determination, the Trustee shall be entitled to receive and may conclusively rely upon an opinion of counsel.

Section 11.03. Consent of Owners. The Authority and the Trustee, as applicable, may at any time enter into a Supplemental Indenture or an amendment to the applicable Bond Document making a modification or amendment permitted by the provisions of Section 11.02, to take effect when and as provided in this Section. A copy of such Supplemental Indenture or amendment to a Bond Document (or brief summary thereof or reference thereto), together with a request to Owners for their consent thereto in form satisfactory to the Trustee, shall be mailed to Owners as provided in Section 11.08. Such Supplemental Indenture or amendment to such Bond Document requiring the consent of all or any of the Owners will be effective when: (a) there shall have been filed with the Trustee the written consent of such Owners of the percentages of Outstanding Bonds specified in Section 11.02 required to consent to such amendment, and an opinion of Bond Counsel, to the effect that such Supplemental Indenture has been duly and lawfully entered into by the Authority in accordance with the provisions of this Indenture, is authorized or permitted by this Indenture, is valid and binding upon the Authority, is in accordance with this Indenture and will not, in and of itself, cause interest on any tax-exempt Bonds to be includible in gross income for federal income tax purposes; provided, that such opinion may take exception for limitations imposed by or resulting from bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors’ rights generally and principles of government law and equity; and (b) a notice shall have been mailed as hereinafter in this Section provided. Each such written consent shall be effective only if accompanied by proof of the holding, at the date of such consent, of the Bonds with respect to which such consent is given, which proof shall be such as is permitted by Section 13.01. The Trustee may rely upon any such documentation received in accordance with Section 13.01. A certificate or certificates by the Trustee filed with the Trustee that it has received documentation in accordance with Section 13.01 shall be conclusive that the consents have been given by the Owners of the Bonds described in such certificate or certificates of the Trustee. Any such consent shall be binding upon the Owner of the Bonds giving such consent and, anything in Section 13.01

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to the contrary notwithstanding, upon any subsequent Owner of such Bonds and of any Bonds issued in exchange therefor (whether or not such subsequent Owner thereof has notice thereof) unless such consent is revoked in writing by the Owner of such Bonds giving such consent or a subsequent Owner thereof by filing such revocation with the Trustee prior to the time when the written statement of the Trustee hereinafter in this Section provided for is filed. The fact that a consent has not been revoked may likewise be proved by a Certificate of the Trustee to the effect that no revocation thereof is on file with the Trustee. At any time after the Owners of the required percentages of Bonds shall have filed their consents to the Supplemental Indenture or amendment to a Bond Document, the Trustee shall make and file with the Authority a written statement that the Owners of such required percentages of Bonds have filed such consents. Such written statement shall be conclusive evidence that such consents have been so filed. Upon receipt of the requisite consents, filing of the written statement of the Trustee required hereunder and the execution of such amendment by the parties thereto, notice, stating in substance that the Supplemental Indenture (which may be referred to as a Supplemental Indenture entered into by the Authority and the Trustee as of a stated date, a copy of which is on file with the Trustee) or other amendment to the Bond Documents has been consented to by the Owners of the required percentages of Bonds and will be effective as provided in this Section, shall be given by Trustee to Owners by mailing such notice to Owners immediately thereafter. Proof of the mailing of such notice shall be filed with the Trustee. A record, consisting of the papers required or permitted by this Section to be filed with the Trustee, shall be proof of the matters therein stated. Such Supplemental Indenture or amendment to a Bond Document making such amendment or modification shall be deemed conclusively binding upon the Authority, the agents and the Owners of all Bonds after the filing with the Trustee of the proof of the mailing of such last mentioned notice, except in the event of a final decree of a court of competent jurisdiction setting aside such Supplemental Indenture or amendment to a Bond Document in a legal action or equitable proceeding for such purpose commenced prior to such mailing; provided, that any agent and the Authority prior to such mailing and any such further period during which any such action or proceeding may be pending shall be entitled in their absolute discretion to take such action, or to refrain from taking such action, with respect to such Supplemental Indenture or amendment to a Bond Document as they may deem expedient.

Section 11.04. Amendment of Particular Bonds. The provisions of this Article shall not prevent any Owner from accepting any amendment as to the particular Bonds held by such Owner, provided that due notation thereof is made on such Bonds.

Section 11.05. Exclusion of Bonds. Bonds owned or held by or for the account of the Authority shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Bonds provided for in this Article, and the Authority shall not be entitled with respect to such Bonds to give any consent or take any other action provided in this Article. At the time of any consent or other action taken under this Article, the Authority shall furnish the Trustee a certificate of an Authorized Authority Representative, upon which the Trustee may rely, describing all Bonds to be so excluded.

Section 11.06. General Provisions.

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(a) This Indenture and the Bond Documents shall not be modified or amended in any respect except as provided in, in accordance with and subject to provisions of this Article.

(b) Any Supplemental Indenture or amendment to a Bond Document referred to and permitted or authorized by Section 11.01 may be entered into by the Authority and the Trustee, as applicable, without the consent of any of the Owners, but shall become effective only (i) after the parties thereto have duly executed such Supplemental Indenture or Bond Document, (ii) following written notice of the proposed supplement or amendment provided to the Owners and (iii) if such Supplemental Indenture or amendment meets the conditions, and to the extent provided, in Section 11.01. Prior to entering into any Supplemental Indenture or amendment to a Bond Document, the Trustee shall receive an opinion of Bond Counsel, to the effect that such Supplemental Indenture or amendment to a Bond Document has been duly and lawfully entered into by the Authority in accordance with the provisions of this Indenture, is authorized or permitted by this Indenture, and is valid and binding upon the Authority, will not be materially adverse to the interests of the Owners and will not, in and of itself, cause the interest on any of the tax-exempt Bonds to be includible in gross income for federal income tax purposes.

Section 11.07. Notation on Bonds. Bonds authenticated and delivered after the effective date of any action taken as provided in this Article may, and, if the Trustee so determines shall, bear a notation by endorsement or otherwise in form approved by the Trustee as to such action, and in that case upon demand of the Owner of any Bond Outstanding at such effective date and presentation of such Owner’s Bond for the purpose at the Principal Office of the Trustee or other agent responsible for transferring Bonds or upon any transfer of any Bond Outstanding at such effective date, suitable notation shall be made on such Bond or upon any Bond issued upon any such transfer by the Trustee or other agent responsible for transferring Bonds as to any such action. If the Trustee shall so determine, new Bonds so modified as directed by the Trustee to conform to such action shall be prepared, authenticated and delivered, and upon demand of the Owner of any Bond Outstanding shall be exchanged, without cost to such Owner, for Bonds Outstanding, upon surrender of such Bonds, for Bonds of the same Series and maturity then Outstanding.

Section 11.08. Mailing. Any provision in this Article for the mailing of a notice or other instrument to Owners shall be fully complied with if it is mailed postage prepaid to each Owner of Bonds at the address, if any, appearing upon the Register and to the Trustee.

ARTICLE XII

[RESERVED]

ARTICLE XIII

MISCELLANEOUS

Section 13.01. Evidence of Signatures of Owners and Ownership of Bonds.

(a) Any request, consent, revocation of consent or other instrument which this Indenture may require or permit to be signed and executed by the Owners may be in one or more

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instruments of similar tenor, and shall be signed or executed by such 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, shall be sufficient for any purpose of this Indenture (except as otherwise herein expressly provided) if made in the following manner, or in any other manner satisfactory to the Trustee, which may nevertheless in its discretion require further or other proof in cases where it deems the same desirable:

(i) The fact and date of the execution by any Owner or such Owner’s attorney of such instruments may be proved by a guarantee of the signature thereon by a bank or trust company or member of a national securities exchange or by the certificate of any notary public or other officer authorized to take acknowledgments of deeds, that the person signing such request or other instrument acknowledged the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. Where such execution by an officer of a corporation or association or a member of a partnership, purports to be on behalf of such corporation, association or partnership, such signature guarantee, certificate or affidavit shall also constitute sufficient proof of such officer’s or member’s authority.

(ii) The amount of Bonds transferable by delivery held by any Person executing any instrument as an Owner, the date of such Person’s holding such Bonds, and the numbers and other identification of such Bonds, may be proved by a certificate, which need not be acknowledged or verified, in form satisfactory to the Trustee, executed by the Trustee or by a member of a financial firm or by an officer of a bank, trust company, insurance company or financial corporation or other depository wherever situated, showing at the date mentioned that such person exhibited to such member or officer or had on deposit with such depository the Bonds described in such certificate. Such certificate may be given by a member of a financial firm or by an officer of any bank, trust company, insurance company or financial corporation or depository with respect to Bonds owned by it, if acceptable to the Trustee. In addition to the foregoing provisions, the Trustee may from time to time make such reasonable regulations as it may deem advisable permitting other proof of holding of Bonds transferable by delivery.

(b) The ownership of Bonds and the amount, numbers and other identification, and date of holding the same shall be provided by the Registrar.

(c) Any request or consent by the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the Authority or any agent in accordance herewith.

(d) In determining whether the Owners of the requisite percentage of the Series of Bonds have been met for any request, consent, approval or other action required hereunder from such Owners, such requisite percentage shall be based upon the principal amount of all of the Bonds of such Series then Outstanding, excluding any Bonds then registered in the name of the Authority.

Section 13.02. Money Held for Particular Bonds. Subject to the provisions of Section 13.04, the amounts held by the Trustee for the payment of the interest or principal or Redemption Price due on any date with respect to particular Bonds shall, on and after such date

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and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto.

Section 13.03. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject at all reasonable times upon reasonable notice to the inspection of the Authority, and any Owner and their agents and their representatives, any of whom may make copies thereof at the expense of the party so requesting.

Section 13.04. Failure to Present Bonds. Anything in this Indenture to the contrary notwithstanding, but subject to any applicable escheat or unclaimed property laws of the State of Wisconsin, any money held by an agent in trust for the payment and discharge of any of the Bonds which remain unclaimed for such period of time, after the date when such Bonds have become due and payable, either at their stated maturity dates or by call for earlier redemption, that the Owner thereof shall no longer be able to enforce the payment thereof, the Trustee shall at the Request of the Authority received at least 45 days prior to the expiration and/or running of any applicable escheat or unclaimed property laws, pay such money to the Authority as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Authority for the payment of such Bonds; provided, that before being required to make any such payment to the Authority, the Trustee shall, at the Direction and expense of the Authority (subject to Section 13.17), cause to be mailed to the Owners of the Bonds entitled to such money, a notice that such money remains unclaimed and that, after a date named in said notice at the Authority’s Direction, which date shall be not less than 30 days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the Authority.

Section 13.05. Parties Interested Herein. Nothing in this Indenture or any Supplemental Indenture expressed or implied is intended or shall be construed to confer upon, or to give to, any person, other than the Authority, the Trustee and the Owners, any right, remedy or claim under or by reason of this Indenture or any Supplemental Indenture or any covenant, condition or stipulation hereof or thereof; and all the covenants, stipulations, promises and agreements in this Indenture and each Supplemental Indenture contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the Authority, the Trustee and the Owners thereunto appertaining.

Section 13.06. No Recourse on the Bonds. No recourse shall be had for the payment of the principal or Redemption Price of or interest on the Bonds or for any claim based thereon or for any other obligation under this Indenture or on any Supplemental Indenture against any officer or employee of the Authority or the Trustee or any person executing or authenticating the Bonds.

Section 13.07. No Authority or Individual Liability. No Authority Indemnified Persons shall be individually or personally liable for the payment of any principal, Redemption Price, or interest on the Bonds or any costs incidental thereto or any sum hereunder or be subject to any personal liability or accountability by reason of the execution and delivery of this Indenture except in the case of such Authority Indemnified Person’s own willful misconduct.

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The Authority and the Authority Indemnified Persons are fully and forever and irrevocably released from and shall be fully defended, indemnified and protected by amounts in the Extraordinary Expense Fund against any and all Liabilities, including, without limitation, any Liabilities arising out of or based upon or in any way relating to:

(a) the Bonds, the Indenture, the Bond Documents, the Tax Certificate, the Bond Purchase Agreement and the execution or amendment hereof or thereof or in connection with transactions contemplated hereby or thereby, including the issuance, sale or resale of the Bonds and the ownership or operation of the Project;

(b) the performance and observance by or on behalf of the Authority of those things on the part of the Authority agreed to be performed or observed hereunder and under the Indenture and the documents identified in Subsection (a), above;

(c) any act or omission (regardless of whether such action or omission is a breach of such Person’s obligations or agreements) of the Operator, the Insurance Consultant, the Medical Consultant or any of their respective affiliates or affiliated persons, agents, contractors, servants, employees, tenants or licensees in connection with the Project, the operation of the Project, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, installation or construction of, the Project or any part thereof;

(d) any violation of any Environmental Regulations with respect to, or the release of any Hazardous Substances from, the Project or any part thereof;

(e) the defeasance and/or redemption, in whole or in part, of the Bonds;

(f) any untrue statement or misleading statement or alleged untrue statement or misleading statement of a material fact contained in any offering or disclosure document or disclosure or continuing disclosure document for the Bonds or any of the documents relating to the Bonds, or any omission or alleged omission from any offering or disclosure document or disclosure or continuing disclosure document for the Bonds of any material fact necessary to be stated therein in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading;

(g) (i) any declaration of taxability of interest on the tax-exempt Bonds, or allegations that interest on the tax-exempt Bonds is taxable or any regulatory audit or inquiry regarding whether interest on the tax-exempt Bonds is taxable; and (ii) any other investigation, proceeding or inquiry, formal or informal, by any other federal or state governmental or regulatory body (including, without limitation, the Securities and Exchange Commission or any state securities regulator) relating in any way to the Bonds or the Project; or

(h) 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, nonuse, condition or occupancy of the Project;

except in the case of the foregoing indemnification of the Authority and the Authority Indemnified Persons, (i) to the extent such damages are caused by the willful misconduct of the Authority (if

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the Authority is seeking indemnification) or (ii) the Authority Indemnified Person seeking indemnification.

IT IS EXPRESSLY ACKNOWLEDGED AND AGREED THAT THE AUTHORITY AND THE AUTHORITY INDEMNIFIED PERSONS SHALL BE RELEASED FROM, AND INDEMNIFIED HEREUNDER AGAINST, LIABILITIES ARISING FROM THE AUTHORITY’S OR ANY AUTHORITY INDEMNIFIED PERSON’S OWN NEGLIGENCE OF ANY KIND, DESCRIPTION OR DEGREE (EXPRESSLY WAIVING THE PROVISIONS OF SECTION 895.045 OF THE WISCONSIN STATUTES AND THE STATUTORY AND COMMON-LAW COMPARATIVE OR CONTRIBUTORY NEGLIGENCE LAWS OF ANY OTHER JURISDICTION), OR BREACH OF CONTRACTUAL DUTY, WITHOUT REGARD TO OR THE NECESSITY OF ANY BREACH OR FAULT ON THE PART OF ANY OTHER PERSON, EXCEPT INSOFAR AS AND TO THE EXTENT THAT ANY SUCH LIABILITIES ARISE FROM THE WILLFUL MISCONDUCT OF THE PERSON SEEKING INDEMNIFICATION.

Section 13.08. Indenture and Supplemental Indentures to Constitute Contracts. The rights of any persons to indemnity hereunder and rights to payment of fees and reimbursement of expenses shall survive the final payment or defeasance of the Bonds and in the case of the Trustee any resignation or removal. The provisions of this Section shall remain valid and in effect notwithstanding payment, redemption or defeasance of the Bonds or termination of the Indenture. In consideration of the purchase and acceptance of any and all of the Bonds authorized to be issued hereunder by those who shall hold the same from time to time, this Indenture and each Supplemental Indenture shall be deemed to be and shall constitute a contract among the Authority, the Trustee and the Owners; and the pledge made in this Indenture and the covenants and agreements herein to be performed by or on behalf of the Authority shall be for the equal benefit, protection and security of the Owners of any and all of the Bonds, all of which, regardless of the time or times of their authentication and delivery or maturity, shall be of equal rank within preference, priority or distinction of any of the Bonds over any other thereof, except as otherwise provided in or permitted by this Indenture or Supplemental Indenture.

Section 13.09. Notice. Any notice, demand, direction, request or other instrument authorized or required by this Indenture to be given to or filed with the Authority, the Trustee or the Operator shall be deemed to have been given only upon receipt. Any notice shall be sent by (i) e-mail or (ii) facsimile, and in either case followed by a hard copy via registered or certified mail or by overnight delivery, postage prepaid, to the address specified below or to such other address as may be designated in writing by the parties:

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Authority: Public Finance Authority 22 East Mifflin Street, Suite 900 Madison, WI 53703 Attention: Michael La Pierre ([email protected]) and Scott Carper ([email protected]) Facsimile: (608) 237-2368

Trustee: U.S. Bank National Association

Global Corporate Trust Services 1349 West Peachtree, N.W., Suite 1050 Atlanta, Georgia 30309 Attention: Zack Buckner Telephone: (404) 898-8831 Email: [email protected]

Operator: Maryland Proton Treatment Center, LLC

850 West Baltimore Street Baltimore, MD 21201 Attention: Leigh Howe, CEO and President Email: [email protected]

Section 13.10. Governing Law. This Indenture and each Supplemental Indenture shall be

governed in all respects, including validity, interpretation and effect, by, and shall be enforceable in accordance with, the laws of the State of Wisconsin without regard to conflict of laws provisions. Subject to the rights of the Trustee to assert claims and take actions with respect to the Project in the State of Maryland, all claims of whatever character arising out of this Indenture or any Supplemental Indenture, or under any statute or common law relating in any way, directly or indirectly, to the subject matter hereof or to the dealings between the Authority and any other party hereto, if and to the extent that such claim potentially could or actually does involve the Authority or any Authority Indemnified Person, shall be brought in any state or federal court of competent jurisdiction located in Dane County, Wisconsin. By executing and delivering this Indenture, each party hereto irrevocably; (i) accepts generally and unconditionally the exclusive jurisdiction and venue of such courts; (ii) waives any defense of forum non conveniens; (iii) agrees not to seek removal of such proceedings to any court or forum other than as specified above. The foregoing shall not be deemed or construed to constitute a waiver by the Authority of any prior notice or procedural requirements applicable to actions or claims against or involving joint powers commissions or governmental units of the State of Wisconsin that may exist at the time of and in connection with such matter.

Section 13.11. Severability of Invalid Provisions. If any one or more of the covenants or agreements provided in this Indenture or any Supplemental Indenture on the part of the Authority or the Trustee to be performed shall be contrary to law, then such covenant or covenants or agreement or agreements shall be deemed severable from the remaining covenants and agreements, and shall in no way affect the validity of the other provisions of this Indenture or any Supplemental Indenture.

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Section 13.12. Successors. Whenever in this Indenture or any Supplemental Indenture the Authority or the Trustee is named or referred to, it shall be deemed to include any entity succeeding to the principal functions and powers of the Authority or the Trustee, as appropriate, and all the covenants and agreements in this Indenture and each Supplemental Indenture by or on behalf of the Authority or the Trustee shall bind and inure to the benefit of said successor whether so expressed or not. Notwithstanding the foregoing, it is specifically acknowledged and agreed that, to the extent of their rights hereunder (including, without limitation, their rights to immunity and exculpation from pecuniary liability), each Authority Indemnified Person is a third-party beneficiary of this Indenture entitled to enforce such rights in his, her, its, or their own name.

Section 13.13. Business Days. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Indenture, shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in this Indenture, and no interest shall accrue for the period after such nominal date.

Section 13.14. Execution in Several Counterparts. This Indenture may be simultaneously executed in several counterparts, all of which shall constitute one and the same instrument and each of which shall be, and shall be deemed to be, an original. The parties hereto agree the transactions described herein may be conducted and related documents may be sent and stored by electronic means.

Section 13.15. Non-Liability of Authority. The Authority shall not be obligated to pay the principal of, Redemption Price, or interest on the Bonds or any costs incidental thereto, including the costs and expenses of the Project and indemnification of the Trustee, except as payable from Revenues available therefor under this Indenture. The Authority shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Indenture, any Supplemental Indenture, the Bonds or any Assigned Authority Documents or other documents related to the Bonds or the Project, except only as to Revenues available therefor under this Indenture.

Section 13.16. No Obligation to Enforce Assigned Rights. Notwithstanding anything to the contrary in this Indenture, the Authority shall have no obligation to and instead the Trustee shall be entitled to, subject to the provisions of this Indenture, without further direction from or action by the Authority, take any and all steps, actions and proceedings, to enforce any or all rights of the Authority under this Indenture (other than the Unassigned Rights and any other rights specifically retained by the Authority pursuant to this Indenture), provided that, upon Request of the Trustee and subject to payment of Authority expenses from moneys available pursuant to the Indenture, the Authority will cooperate with and assist the Trustee to the extent necessary to enable the Trustee to properly enforce such rights.

Section 13.17. Authority’s Performance. None of the provisions of this Indenture shall require the Authority to expend or risk its own funds or otherwise to 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 available therefor under this Indenture, or unless the Authority shall

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first have been adequately indemnified to its satisfaction against the cost, expense, and liability which may be incurred thereby. The Authority has the right to independently engage legal counsel, Consultants and other professionals as it determines in its sole discretion to be appropriate and the fees and expenses of such legal counsel, Consultants and other professionals, as approved by the Authority, shall be conclusively deemed reasonable and appropriate and shall be payable as Administrative Expenses or Extraordinary Costs and Expenses, as appropriate. The Authority shall not be under any obligation hereunder to perform any administrative service with respect to the Bonds (including, without limitation, record keeping and legal services), it being understood that such services shall be performed or provided by the Trustee to the extent expressly provided in this Indenture. The Authority covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions expressly contained in this Indenture, and any and every Bond executed, authenticated and delivered hereunder; provided, however, that unless required by the express provisions of this Indenture, the Authority shall not be obligated to take any action or execute any instrument unless and until it shall have (i) been directed to do so in writing by the Trustee or the Owners having the authority to so direct; (ii) received from the Person requesting such action or execution assurance satisfactory to the Authority that the Authority’s expenses incurred or to be incurred in connection with taking such action or executing such instrument have been or will be paid or reimbursed to the Authority; and (iii) if applicable, received in a timely manner the instrument or document to be executed, in form and substance satisfactory to the Authority; provided nothing herein shall obligate the Trustee to pay or reimburse the Authority for any such expenses.

Whenever in this Indenture it is stated that the Authority shall “cause” another Person to take or omit any action, the Authority shall be entitled to rely conclusively, solely and entirely (and without independent investigation or verification) (i) on the faithful and timely performance by the Trustee of its obligations hereunder as Trustee, (ii) on the faithful and timely performance by the Operator of its obligations under the Operating Agreement, (iii) upon any written certification or opinion furnished to the Authority by the Trustee. In acting, or refraining from acting, under this Indenture, the Authority may conclusively rely on the advice of its counsel. The Authority shall not be required to take any action hereunder or under the Authority Documents that it reasonably believes to be unlawful or in contravention hereof or thereof. In respect of the foregoing, the Authority nevertheless covenants and agrees that it will not knowingly interfere with or prevent the Trustee or the Operator, as the case may be, from taking any action required hereby, nor knowingly require or seek to compel the Trustee or the Operator, as the case may be, to take any action prohibited hereby except in good faith and reasonably believing that such action or omission is in violation of the Trustee’s or the Operator’s duties and obligations under the respective Bond Documents to which each is a party.

Section 13.18. No Impairment of Rights. Nothing herein shall be deemed or construed to limit, impair or affect in any way the Authority’s (or any Authority Indemnified Person’s) exclusive right to enforce the Unassigned Rights or any action based thereon, and regardless of any waiver or forbearance granted by the Trustee or any Owner in respect thereof. Any default in respect of the Unassigned Rights may only be waived with the Authority’s written consent.

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IN WITNESS WHEREOF, the Authority and the Trustee have caused this Indenture to be executed and sealed on their behalf by their duly authorized representatives, all as of the day and year first written above.

PUBLIC FINANCE AUTHORITY By: Name: Title: Assistant Secretary U.S. BANK NATIONAL ASSOCIATION,

AS TRUSTEE By: Authorized Representative

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EXHIBIT A

MASTER GLOSSARY OF TERMS

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EXHIBIT B

FORM OF SERIES 2018A BONDS

REGISTERED REGISTERED No. RA-_______ $____________


SENIOR REVENUE BONDS, SERIES 2018A[-1][-2] (Maryland Proton Therapy Center)

The Bonds have been authorized and issued pursuant to the laws of the State of Wisconsin, including particularly Section 66.0304 of the Wisconsin Statutes, as amended. Bonds issued under Section 66.0304 shall not be invalid for any irregularity or defect in the proceedings for their sale or issuance.

THE SERIES 2018A[-1][-2] BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM FUNDS PLEDGED FOR THEIR PAYMENT IN ACCORDANCE WITH THE INDENTURE (DEFINED HEREIN) AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY MEMBER (AS DEFINED IN THE INDENTURE), ANY SPONSOR (AS DEFINED IN THE INDENTURE), ANY AUTHORITY INDEMNIFIED PERSON (AS DEFINED IN THE INDENTURE), THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018A[-1][-2] BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE SERIES 2018A[-1][-2] BONDS ARE NOT A DEBT OF THE STATE OF WISCONSIN OR THE MEMBERS AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018A[-1][-2] BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION OR TO APPLY ANY OF ITS FUNDS OR ASSETS FOR PAYMENT OF THE SERIES 2018A[-1][-2] BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018A[-1][-2] BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY OR OF ANY SPONSOR OR ANY AUTHORITY INDEMNIFIED PERSON, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2018A[-1][-2] BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

THIS BOND MAY NOT BE TRANSFERRED BY THE REGISTERED OWNER HEREOF TO ANY PERSON OTHER THAN TO A “QUALIFIED INSTITUTIONAL

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BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933, AS AMENDED).

Interest Rate Maturity Date Dated Date CUSIP No.

% January 1, 20__ _________, 2018 ____________

REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: _________________________________ DOLLARS

The Public Finance Authority (the “Authority”), for value received, hereby promises to

pay upon surrender hereof at the designated corporate trust office of U.S. Bank National Association, or any successor thereto (the “Trustee”), solely from the sources and as herein and in the Indenture provided and permitted, to the Registered Owner hereof, the principal sum stated above on the maturity date stated above, subject to prior redemption as herein provided, and to pay, solely from such sources, interest hereon semiannually on each January 1 and July 1 (each, an “Interest Payment Date”), beginning January 1, 2019, at the Interest Rate stated above. Interest is payable from (a) the Dated Date set forth above, if this Series 2018A[-1][-2] Bond is authenticated prior to January 1, 2019, or (b) otherwise from the January 1 or July 1, that is, or immediately precedes, the date on which this Series 2018A[-1][-2] Bond is authenticated (unless payment of interest hereon is in default, in which case this Series 2018A[-1][-2] Bond shall bear interest from the date to which interest has been paid). Interest is payable on each Interest Payment Date (1) by check or draft mailed on such date to the Owner hereof at such Owner’s address as it appears on the Register, as defined in the Indenture, as hereafter defined, as of the close of business on the 15th day of the calendar month (whether or not a Business Day) preceding such Interest Payment Date (the “Record Date”), or (2) by wire transfer in accordance with a written notice and completed wire instructions for a wire transfer address in the United States provided by the Owner hereof to the Trustee not less than 15 days prior to such Interest Payment Date (which notice may provide that it will remain in effect with respect to subsequent Interest Payment Dates unless and until changed or revoked by subsequent notice); provided, that such wire transfer shall only be made for a registered owner of $1,000,000 or more in aggregate principal amount of the Series 2018A[-1][-2] Bonds as of the close of business on the Record Date for such Interest Payment Date. This Series 2018A[-1][-2] Bond shall be payable as to principal and Redemption Price, as defined in the Indenture, and interest in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts.

This Series 2018A[-1][-2] Bond is one of an issue of $__________ Public Finance Authority Senior Revenue Bonds, Series 2018A[-1][-2] (Maryland Proton Therapy Center) (the “Series 2018A[-1][-2] Bonds”), issued to finance the acquisition of the Project, including the funding of a Debt Service Reserve Fund, and to pay Costs of Issuance, as those terms are defined in the Indenture.

This Series 2018A[-1][-2] Bond and the premium, if any, and the interest hereon are limited obligations of the Authority and are payable solely from the Revenues, as defined in the Indenture,

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and other assets pledged under the Indenture, all in accordance with the Indenture. Additional Bonds ranking on parity with the Series 2018A[-1][-2] Bonds may be issued on the terms provided in the Indenture. The Series 2018A[-1][-2] Bonds and all Additional Bonds ranking on a parity with the Series 2018A[-1][-2] Bonds are collectively referred to as the “Senior Bonds.”

The Series 2018A[-1][-2] Bonds are issued under a Trust Indenture dated as of ________ 1, 2018 (the “Indenture”), between the Authority and the Trustee. Reference is hereby made to the Indenture for a description of the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Authority, the rights of the Owners, as defined in the Indenture, of the Series 2018A[-1][-2] Bonds and the terms upon which the Series 2018A[-1][-2] Bonds are issued and secured. Concurrently with the issuance of the Series 2018A[-1][-2] Bonds, the Authority is issuing its Public Finance Authority Senior Revenue Bonds, Series 2018A[-1][-2] (Maryland Proton Therapy Center) (the “Series 2018A[-1][-2] Bonds”) in the aggregate principal amount of $________, its Public Finance Authority Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Therapy Center) (the “Series 2018B-1 Bonds”) in the initial principal amount of $________, its Public Finance Authority Subordinate Revenue Bonds, Series 2018B-2 (Maryland Proton Therapy Center) (the “Series 2018B-2 Bonds” and, together with the Series 2018B-1 Bonds, the “Series 2018B Bonds”) in the initial principal amount of $________, its Public Finance Authority Junior Revenue Bonds, Series 2018C-1 (Maryland Proton Therapy Center) (the “Series 2018C-1 Bonds”) in the initial principal amount of $________, and its Public Finance Authority Junior Revenue Bonds, Series 2018C-2 (Maryland Proton Therapy Center) (the “Series 2018C-2 Bonds” and, together with the Series 2018C-1 Bonds, the “Series 2018C Bonds”) in the initial principal amount of $________.

The Series 2018A[-1][-2] Bonds are subject to redemption on the dates, and upon the terms and conditions, set forth in the Indenture.

No Owner of any Series 2018A[-1][-2] Bond shall have any right to institute any suit, action or proceedings at law or in equity for the appointment of a receiver or for any other remedy under the Indenture or by reason thereof, except to the extent and in the circumstances permitted by the Indenture.

The Authority and the Trustee may deem and treat the person in whose name this Series 2018A[-1][-2] Bond shall be registered in the Register as the absolute owner of this Series 2018A[-1][-2] Bond, whether this Series 2018A[-1][-2] Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal and Redemption Price of and interest on this Series 2018A[-1][-2] Bond and for all other purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. Notwithstanding the foregoing, interest on this Series 2018A[-1][-2] Bond, other than interest payable at maturity or on a Redemption Date, shall be paid to the Person, as defined in the Indenture, in whose name this Series 2018A[-1][-2] Bond is registered on the Register at the close of business on the Record Date for such Interest Payment Date.

All acts, conditions and things required to happen, exist or be performed precedent to and in the issuance of this Series 2018A[-1][-2] Bond have happened, exist and have been performed.

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This Series 2018A[-1][-2] Bond shall not be valid or entitled to any security or benefit under the Indenture until the Trustee shall have manually executed the certificate of authentication appearing hereon and inserted the date of authentication hereon.

IN WITNESS WHEREOF, the Public Finance Authority has caused this Series 2018A[-1][-2] Bond to be signed by the manual or facsimile signature of its Authorized Signatory on this ____ day of _________, 2018.

PUBLIC FINANCE AUTHORITY By: Name: Title: Assistant Secretary

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CERTIFICATE OF AUTHENTICATION

This Series 2018A[-1][-2] Bond is one of the Series 2018A[-1][-2] Bonds of the issue described in the within-mentioned Indenture.

Dated: ________________


By: Authorized Officer

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ASSIGNMENT

For value received the undersigned do(es) hereby sell, assign and transfer unto __________________________________________________ the within-mentioned Series 2018A[-1][-2] Bond and hereby irrevocably constitute(s) and appoint(s) ___________________________ attorney to transfer the same on the registration books maintained by the Authority with full power of substitution in the premises.

Dated: _______________________

Note: The signature(s) to this Assignment must correspond with the Registered Owner of the within Series 2018A[-1][-2] Bond in every particular, without alteration or enlargement or any change whatsoever.

Signature Guaranteed: Social Security Number, Taxpayer Identification Number or Other Identifying Number of Assignee:

NOTICE: Signature must be guaranteed by a member firm of the New York Stock Exchange, the National Association of Securities Dealers or a commercial bank or trust company.

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EXHIBIT C

FORM OF SERIES 2018B BOND

FORM OF SERIES 2018B-1 BOND

REGISTERED MATURITY VALUE No. RB1-_______ $____________


SUBORDINATE REVENUE BONDS, SERIES 2018B-1 (Maryland Proton Therapy Center)

THIS SERIES 2018B-1 BOND IS SUBORDINATE TO ALL OF THE SENIOR BONDS REFERRED TO HEREIN TO THE EXTENT DESCRIBED

IN THE INDENTURE REFERRED TO HEREIN.

The Series 2018B-1 Bonds have been authorized and issued pursuant to the laws of the State of Wisconsin, including particularly Section 66.0304 of the Wisconsin Statutes, as amended. Series 2018B-1 Bonds issued under Section 66.0304 shall not be invalid for any irregularity or defect in the proceedings for their sale or issuance.

THE SERIES 2018B-1 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM FUNDS PLEDGED FOR THEIR PAYMENT IN ACCORDANCE WITH THE INDENTURE (DEFINED HEREIN) AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY MEMBER (AS DEFINED IN THE INDENTURE), ANY SPONSOR (AS DEFINED IN THE INDENTURE), ANY AUTHORITY INDEMNIFIED PERSON (AS DEFINED IN THE INDENTURE), THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018B-1 BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE SERIES 2018B-1 BONDS ARE NOT A DEBT OF THE STATE OF WISCONSIN OR THE MEMBERS AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018B-1 BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION OR TO APPLY ANY OF ITS FUNDS OR ASSETS FOR PAYMENT OF THE SERIES 2018B-1 BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018B-1 BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY OR OF ANY SPONSOR OR ANY AUTHORITY

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INDEMNIFIED PERSON, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2018B-1 BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

THIS BOND MAY NOT BE TRANSFERRED BY THE REGISTERED OWNER HEREOF TO ANY PERSON OTHER THAN TO A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933, AS AMENDED) OR AN “ACCREDITED INVESTOR” (AS DEFINED IN REGULATION D OF THE SECURITIES ACT OF 1933, AS AMENDED).

Interest Rate Maturity Date Conversion Date Dated Date CUSIP No.

% ____________ ________, 2018 ____________

REGISTERED OWNER: _________________________________ INITIAL PRINCIPAL AMOUNT:

_________________________________ DOLLARS

ACCRETED VALUE AT CONVERSION DATE:

_________________________________ DOLLARS


pay upon surrender hereof at the designated corporate trust office of U.S. Bank National Association, or any successor thereto (the “Trustee”), solely from the sources and as herein and in the Indenture provided and permitted, to the Registered Owner hereof, on the maturity date specified above or upon prior redemption hereof, in lawful money of the United States of America, the Accreted Value hereof on such date, consisting of the initial principal amount hereof plus interest accrued hereon to the Conversion Date specified above, commencing on the date hereof, compounded semiannually on each January 1 and July 1, beginning January 1, 2019, at the interest rate stated above, assuming in any such semiannual period that such interest accretes in equal daily amounts on the basis of a 360-day year of twelve 30-day months, and from and after said Conversion Date to pay interest on said Accreted Value as of said Conversion Date in like lawful money from the Interest Payment Date next preceding the date of authentication of this Bond (unless this bond is authenticated after the close of business on a Record Date (as defined herein) and on or prior to the succeeding Interest Payment Date, in which event it shall bear interest from such Interest Payment Date) at the interest rate per annum stated above, payable commencing on the January 1 or July 1 first following said Conversion Date, and thereafter on January 1 and July 1 in each year, until the obligation represented hereby shall have been discharged, as provided in the Indenture. The Accreted Value hereof shall be determined in accordance with the Indenture and as reflected in the Table of Accreted Values hereinafter set forth; provided, however, that any

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Accreted Value determined in accordance with the Indenture shall prevail over any Accreted Values given in the Table of Accreted Values.

The Accreted Value hereof is payable to the Registered Owner hereof upon the surrender hereof at the principal corporate trust office of the Trustee. The interest hereon is payable to the person whose name appears on the bond registration books of the Trustee as the Registered Owner hereof as of the close of business on the 15th day of the calendar month (whether or not a Business Day) preceding an Interest Payment Date (the “Record Date”), such interest to be paid by check or draft mailed to such Registered Owner at the owner’s address as it appears on such registration books, or at such other address filed with the Trustee for that purpose. Upon written request, given no later than the Record Date immediately preceding an Interest Payment Date, of the owner of current interest bonds aggregating at least $1,000,000 in Accreted Value as of the Conversion Date, interest will be paid by wire transfer in immediately available funds to an account maintained in the United States as specified by the Registered Owner in such request. So long as Cede & Co. or its registered assigns shall be the Registered Owner of this Bond, payment shall be made in immediately available funds as provided in the Indenture.

This Series 2018B-1 Bond is one of an issue of $__________ Public Finance Authority Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Therapy Center) (the “Series 2018B-1 Bonds”), issued to finance, among other things, the acquisition of the Project, as defined in the Indenture.

This Series 2018B-1 Bond and the premium, if any, and the interest hereon are limited obligations of the Authority and are payable from the Revenues, as defined in the Indenture, and other assets pledged under the Indenture, all in accordance with the Indenture. Additional Bonds ranking on parity with the Series 2018B-1 Bonds may be issued on the terms provided in the Indenture. The Series 2018B-1 Bonds and all Additional Bonds ranking on a parity with the Series 2018B-1 Bonds are collectively referred to as the “Subordinate B-1 Bonds.”

The Series 2018B-1 Bonds are issued under a Trust Indenture dated as of ________ 1, 2018 (the “Indenture”), between the Authority and the Trustee. Reference is hereby made to the Indenture for a description of the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Authority, the rights of the Owners, as defined in the Indenture, of the Series 2018B-1 Bonds and the terms upon which the Series 2018B-1 Bonds are issued and secured. Concurrently with the issuance of the Series 2018B-1 Bonds, the Authority is issuing its Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Therapy Center) (the “Series 2018A-1 Bonds”) in the aggregate principal amount of $_________ and its Public Finance Authority Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Therapy Center) (the “Series 2018A-2 Bonds” and, together with the Series 2018A-1 Bonds, the “Series 2018A Bonds”) in the aggregate principal amount of $_________, which bonds are senior in right and time of payment to the Series 2018B-1 Bonds. Additional Bonds ranking senior to the Series 2018B-1 Bonds may be issued on the terms provided in the Indenture. The Series 2018A Bonds and all Additional Bonds ranking on a parity with the Series 2018A Bonds are collectively referred to as the “Senior Bonds.”

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THE SERIES 2018B-1 BONDS ARE SUBORDINATE TO THE SENIOR BONDS IN PAYMENT AND SECURITY. So long as any Senior Bonds are Outstanding, the Senior Bond “Controlling Party” (as defined under the Indenture) shall have the sole right to consent to or direct certain actions of the Trustee under the Indenture, including actions in event of default. Amounts on deposit in the Senior Debt Service Reserve Fund and certain other Funds are not available to pay the Accreted Value of any of the Subordinate B-1 Bonds.

The Series 2018B-1 Bonds are subject to redemption on the dates, and upon the terms and conditions, set forth in the Indenture.

No Owner of any Series 2018B-1 Bond shall have any right to institute any suit, action or proceedings at law or in equity for the appointment of a receiver or for any other remedy under the Indenture or by reason thereof, except to the extent and in the circumstances permitted by the Indenture.

The Authority and the Trustee may deem and treat the person in whose name this Series 2018B-1 Bond shall be registered in the Register as the absolute owner of this Series 2018B-1 Bond, whether this Series 2018B-1 Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the Accreted Value or maturity value of this Series 2018B-1 Bond and for all other purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary.

All acts, conditions and things required to happen, exist or be performed precedent to and in the issuance of this Series 2018B-1 Bond have happened, exist and have been performed.

This Series 2018B-1 Bond shall not be valid or entitled to any security or benefit under the Indenture until the Trustee shall have executed the certificate of authentication appearing hereon and inserted the date of authentication hereon.

IN WITNESS WHEREOF, the Public Finance Authority has caused this Series 2018B-1 Bond to be signed by the manual or facsimile signature of its Authorized Signatory on this ____ day of _________, 2018.


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This Series 2018B-1 Bond is one of the Series 2018B-1 Bonds of the issue described in the within-mentioned Indenture.

Dated:



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ASSIGNMENT

For value received the undersigned do(es) hereby sell, assign and transfer unto __________________________________________________ the within-mentioned Series 2018B[-1][-2] Bond and hereby irrevocably constitute(s) and appoint(s) ___________________________ attorney to transfer the same on the registration books maintained by the Authority with full power of substitution in the premises.

Dated: _______________________

Note: The signature(s) to this Assignment must correspond with the Registered Owner of the within Series 2018B[-1][-2] Bond in every particular, without alteration or enlargement or any change whatsoever.



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TABLE OF ACCRETED VALUES

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FORM OF SERIES 2018B-2 BOND

REGISTERED MATURITY VALUE No. RB2-_______ $____________


SUBORDINATE REVENUE BONDS, SERIES 2018B-2 (Maryland Proton Therapy Center)

THIS SERIES 2018B-2 BOND IS SUBORDINATE TO ALL OF THE SENIOR BONDS AND THE SERIES 2018B-1 BONDS REFERRED TO HEREIN TO THE EXTENT

DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.

The Series 2018B-2 Bonds have been authorized and issued pursuant to the laws of the State of Wisconsin, including particularly Section 66.0304 of the Wisconsin Statutes, as amended. Series 2018B-2 Bonds issued under Section 66.0304 shall not be invalid for any irregularity or defect in the proceedings for their sale or issuance.

THE SERIES 2018B-2 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM FUNDS PLEDGED FOR THEIR PAYMENT IN ACCORDANCE WITH THE INDENTURE (DEFINED HEREIN) AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY MEMBER (AS DEFINED IN THE INDENTURE), ANY SPONSOR (AS DEFINED IN THE INDENTURE), ANY AUTHORITY INDEMNIFIED PERSON (AS DEFINED IN THE INDENTURE), THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018B-2 BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE SERIES 2018B-2 BONDS ARE NOT A DEBT OF THE STATE OF WISCONSIN OR THE MEMBERS AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018B-2 BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION OR TO APPLY ANY OF ITS FUNDS OR ASSETS FOR PAYMENT OF THE SERIES 2018B-2 BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018B-2 BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY OR OF ANY SPONSOR OR ANY AUTHORITY INDEMNIFIED PERSON, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2018B-2 BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

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Interest Rate Maturity Date Conversion Date Dated Date CUSIP No.

% ____________ ________, 2018 ____________


_________________________________ DOLLARS

ACCRETED VALUE AT CONVERSION DATE:

_________________________________ DOLLARS


pay upon surrender hereof at the designated corporate trust office of U.S. Bank National Association, or any successor thereto (the “Trustee”), solely from the sources and as herein and in the Indenture provided and permitted, to the Registered Owner hereof, on the maturity date specified above or upon prior redemption hereof, in lawful money of the United States of America, the Accreted Value hereof on such date, consisting of the initial principal amount hereof plus interest accrued hereon to the Conversion Date specified above, commencing on the date hereof, compounded semiannually on each January 1 and July 1, beginning January 1, 2019, at the interest rate stated above, assuming in any such semiannual period that such interest accretes in equal daily amounts on the basis of a 360-day year of twelve 30-day months, and from and after said Conversion Date to pay interest on said Accreted Value as of said Conversion Date in like lawful money from the Interest Payment Date next preceding the date of authentication of this Bond (unless this bond is authenticated after the close of business on a Record Date (as defined herein) and on or prior to the succeeding Interest Payment Date, in which event it shall bear interest from such Interest Payment Date) at the interest rate per annum stated above, payable commencing on the January 1 or July 1 first following said Conversion Date, and thereafter on January 1 and July 1 in each year, until the obligation represented hereby shall have been discharged, as provided in the Indenture. The Accreted Value hereof shall be determined in accordance with the Indenture and as reflected in the Table of Accreted Values hereinafter set forth; provided, however, that any Accreted Value determined in accordance with the Indenture shall prevail over any Accreted Values given in the Table of Accreted Values.

The Accreted Value hereof is payable to the Registered Owner hereof upon the surrender hereof at the principal corporate trust office of the Trustee. The interest hereon is payable to the person whose name appears on the bond registration books of the Trustee as the Registered Owner

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hereof as of the close of business on the 15th day of the calendar month (whether or not a Business Day) preceding an Interest Payment Date (the “Record Date”), such interest to be paid by check or draft mailed to such Registered Owner at the owner’s address as it appears on such registration books, or at such other address filed with the Trustee for that purpose. Upon written request, given no later than the Record Date immediately preceding an Interest Payment Date, of the owner of current interest bonds aggregating at least $1,000,000 in Accreted Value as of the Conversion Date, interest will be paid by wire transfer in immediately available funds to an account maintained in the United States as specified by the Registered Owner in such request. So long as Cede & Co. or its registered assigns shall be the Registered Owner of this Bond, payment shall be made in immediately available funds as provided in the Indenture.

This Series 2018B-2 Bond is one of an issue of $__________ Public Finance Authority Subordinate Revenue Bonds, Series 2018B-2 (Maryland Proton Therapy Center) (the “Series 2018B-2 Bonds”), issued to finance, among other things, the acquisition of the Project, as defined in the Indenture.

This Series 2018B-2 Bond and the premium, if any, and the interest hereon are limited obligations of the Authority and are payable from the Revenues, as defined in the Indenture, and other assets pledged under the Indenture, all in accordance with the Indenture. Additional Bonds ranking on parity with the Series 2018B-2 Bonds may be issued on the terms provided in the Indenture. The Series 2018B-2 Bonds and all Additional Bonds ranking on a parity with the Series 2018B-2 Bonds are collectively referred to as the “Subordinate B-2 Bonds.”

The Series 2018B-2 Bonds are issued under a Trust Indenture dated as of ________ 1, 2018 (the “Indenture”), between the Authority and the Trustee. Reference is hereby made to the Indenture for a description of the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Authority, the rights of the Owners, as defined in the Indenture, of the Series 2018B-2 Bonds and the terms upon which the Series 2018B-2 Bonds are issued and secured. Concurrently with the issuance of the Series 2018B-2 Bonds, the Authority is issuing its Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Therapy Center) (the “Series 2018A-1 Bonds”) in the aggregate principal amount of $_________, its Public Finance Authority Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Therapy Center) (the “Series 2018A-2 Bonds” and, together with the Series 2018A-1 Bonds, the “Series 2018A Bonds”) in the aggregate principal amount of $_________, and its Public Finance Authority Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Therapy Center) (the “Series 2018B-1 Bonds”) in the aggregate principal amount of $_________, which bonds are senior in right and time of payment to the Series 2018B-2 Bonds. Additional Bonds ranking senior to the Series 2018B-2 Bonds may be issued on the terms provided in the Indenture. The Series 2018A Bonds and all Additional Bonds ranking on a parity with the Series 2018A Bonds are collectively referred to as the “Senior Bonds.” The Series 2018B-1 Bonds and all Additional Bonds ranking on a parity with the Series 2018B-1 Bonds are collectively referred to as the “Subordinate B-1 Bonds.”

THE SERIES 2018B-2 BONDS ARE SUBORDINATE TO THE SENIOR BONDS AND THE SUBORDINATE B-1 BONDS IN PAYMENT AND SECURITY. So long as any Senior

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Bonds are Outstanding, and if no Senior Bonds are Outstanding, so long as any Subordinate B-1 Bonds are Outstanding, the Senior Bond “Controlling Party” (as defined under the Indenture) or the Subordinate B-1 Bond “Controlling Party”, respectively, shall have the sole right to consent to or direct certain actions of the Trustee under the Indenture, including actions in event of default. Amounts on deposit in the Senior Debt Service Reserve Fund and certain other Funds are not available to pay the Accreted Value of any of the Subordinate B-2 Bonds.

The Series 2018B-2 Bonds are subject to redemption on the dates, and upon the terms and conditions, set forth in the Indenture.

No Owner of any Series 2018B-2 Bond shall have any right to institute any suit, action or proceedings at law or in equity for the appointment of a receiver or for any other remedy under the Indenture or by reason thereof, except to the extent and in the circumstances permitted by the Indenture.

The Authority and the Trustee may deem and treat the person in whose name this Series 2018B-2 Bond shall be registered in the Register as the absolute owner of this Series 2018B-2 Bond, whether this Series 2018B-2 Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the Accreted Value or maturity value of this Series 2018B-2 Bond and for all other purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary.

All acts, conditions and things required to happen, exist or be performed precedent to and in the issuance of this Series 2018B-2 Bond have happened, exist and have been performed.

This Series 2018B-2 Bond shall not be valid or entitled to any security or benefit under the Indenture until the Trustee shall have executed the certificate of authentication appearing hereon and inserted the date of authentication hereon.

IN WITNESS WHEREOF, the Public Finance Authority has caused this Series 2018B-2 Bond to be signed by the manual or facsimile signature of its Authorized Signatory on this ____ day of _________, 2018.


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This Series 2018B-2 Bond is one of the Series 2018B-2 Bonds of the issue described in the within-mentioned Indenture.

Dated:



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ASSIGNMENT

For value received the undersigned do(es) hereby sell, assign and transfer unto __________________________________________________ the within-mentioned Series 2018B-2 Bond and hereby irrevocably constitute(s) and appoint(s) ___________________________ attorney to transfer the same on the registration books maintained by the Authority with full power of substitution in the premises.

Dated: _______________________

Note: The signature(s) to this Assignment must correspond with the Registered Owner of the within Series 2018B-2 Bond in every particular, without alteration or enlargement or any change whatsoever.



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EXHIBIT D

FORM OF SERIES 2018C BOND

REGISTERED MATURITY VALUE No. RC-_______ $____________


JUNIOR REVENUE BONDS, SERIES 2018C[-1][-2] (Maryland Proton Therapy Center)

THIS SERIES 2018C[-1][-2] BOND IS SUBORDINATE TO ALL OF THE SENIOR BONDS AND SUBORDINATE BONDS

REFERRED TO HEREIN TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.

The Series 2018C[-1][-2] Bonds have been authorized and issued pursuant to the laws of the State of Wisconsin, including particularly Section 66.0304 of the Wisconsin Statutes, as amended. Series 2018C[-1][-2] Bonds issued under Section 66.0304 shall not be invalid for any irregularity or defect in the proceedings for their sale or issuance.

THE SERIES 2018C[-1][-2] BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM FUNDS PLEDGED FOR THEIR PAYMENT IN ACCORDANCE WITH THE INDENTURE (DEFINED HEREIN) AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY MEMBER (AS DEFINED IN THE INDENTURE), ANY SPONSOR (AS DEFINED IN THE INDENTURE), ANY AUTHORITY INDEMNIFIED PERSON (AS DEFINED IN THE INDENTURE), THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018C[-1][-2] BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE SERIES 2018C[-1][-2] BONDS ARE NOT A DEBT OF THE STATE OF WISCONSIN OR THE MEMBERS AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE of WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018C[-1][-2] BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION OR TO APPLY ANY OF ITS FUNDS OR ASSETS FOR PAYMENT OF THE SERIES 2018C[-1][-2] BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2018C[-1][-2] BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY OR OF ANY SPONSOR OR ANY AUTHORITY INDEMNIFIED PERSON, SHALL BE PLEDGED TO

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THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2018C[-1][-2] BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.


Interest Rate Maturity Date Dated Date CUSIP No.

% ____________ ________, 2018 ____________


_________________________________ DOLLARS

ACCRETED VALUE AT MATURITY:

_________________________________ DOLLARS


pay upon surrender hereof at the designated corporate trust office of U.S. Bank National Association, or any successor thereto (the “Trustee”), solely from the sources and as herein and in the Indenture provided and permitted, to the Registered Owner hereof, on the maturity date specified above or upon prior redemption hereof, in lawful money of the United States of America, the Accreted Value hereof on such date, consisting of the initial principal amount hereof plus interest accrued hereon to such date, commencing on the date hereof, compounded semiannually on each January 1 and July 1, beginning January 1, 2019, at the interest rate stated above, assuming in any such semiannual period that such interest accretes in equal daily amounts on the basis of a 360-day year of twelve 30-day months, until the obligation represented hereby shall have been discharged, as provided in the Indenture. The Accreted Value hereof shall be determined in accordance with the Indenture and as reflected in the Table of Accreted Values hereinafter set forth; provided, however, that any Accreted Value determined in accordance with the Indenture shall prevail over any Accreted Values given in the Table of Accreted Values.

This Series 2018C[-1][-2] Bond is one of an issue of $__________ Public Finance Authority Junior Revenue Bonds, Series 2018C[-1][-2] (Maryland Proton Therapy Center) (the “Series 2018C[-1][-2] Bonds”), issued to finance, among other things, the acquisition of the Project, as defined in the Indenture.

This Series 2018C[-1][-2] Bond and the premium, if any, and the interest hereon are limited obligations of the Authority and are payable from the Revenues, as defined in the Indenture, and

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other assets pledged under the Indenture, all in accordance with the Indenture. Additional Bonds ranking on parity with the Series 2018C[-1][-2] Bonds may be issued on the terms provided in the Indenture. The Series 2018C[-1][-2] Bonds and all Additional Bonds ranking on a parity with the Series 2018C[-1][-2] Bonds are collectively referred to as the “Junior Bonds.”

The Series 2018C[-1][-2] Bonds are issued under a Trust Indenture dated as of ________ 1, 2018 (the “Indenture”), between the Authority and the Trustee. Reference is hereby made to the Indenture for a description of the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Authority, the rights of the Owners, as defined in the Indenture, of the Series 2018C[-1][-2] Bonds and the terms upon which the Series 2018C[-1][-2] Bonds are issued and secured. Concurrently with the issuance of the Series 2018C[-1][-2] Bonds, the Authority is issuing its Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Therapy Center) (the “Series 2018A-1 Bonds”) in the aggregate principal amount of $_________, its Public Finance Authority Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Therapy Center) (the “Series 2018A-2 Bonds” and, together with the Series 2018A-1 Bonds, the “Series 2018A Bonds”) in the aggregate principal amount of $_________, its Public Finance Authority Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Therapy Center) (the “Series 2018B-1 Bonds”) in the aggregate principal amount of $_________, and its Public Finance Authority Subordinate Revenue Bonds, Series 2018B-2 (Maryland Proton Therapy Center) (the “Series 2018B-2 Bonds” and, together with the Series 2018B-1 Bonds, the “Series 2018B Bonds”) in the aggregate principal amount of $_________, which bonds are senior in right and time of payment to the Series 2018C[-1][-2] Bonds. Additional Bonds ranking senior to the Series 2018C[-1][-2] Bonds may be issued on the terms provided in the Indenture. The Series 2018A Bonds and all Additional Bonds ranking on a parity with the Series 2018A Bonds are collectively referred to as the “Senior Bonds.” The Series 2018B Bonds and all Additional Bonds ranking on a parity with the Series 2018B-1 Bonds or the Series 2018B-2 Bonds are collectively referred to as the “Subordinate Bonds.”

THE SERIES 2018C[-1][-2] BONDS ARE SUBORDINATE TO THE SENIOR BONDS AND THE SUBORDINATE BONDS IN PAYMENT AND SECURITY. So long as any Senior Bonds are Outstanding, or if no Senior Bonds are Outstanding, so long as any Subordinate Bonds are Outstanding, the Senior Bond “Controlling Party” (as defined under the Indenture) or the Subordinate Bond “Controlling Party”, respectively, shall have the sole right to consent to or direct certain actions of the Trustee under the Indenture, including actions in event of default. Amounts on deposit in the Senior Debt Service Reserve Fund and certain other Funds are not available to pay the Accreted Value of any of the Junior Bonds.

The Series 2018C[-1][-2] Bonds are subject to redemption on the dates, and upon the terms and conditions, set forth in the Indenture.

No Owner of any Series 2018C[-1][-2] Bond shall have any right to institute any suit, action or proceedings at law or in equity for the appointment of a receiver or for any other remedy under the Indenture or by reason thereof, except to the extent and in the circumstances permitted by the Indenture.

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The Authority and the Trustee may deem and treat the person in whose name this Series 2018C[-1][-2] Bond shall be registered in the Register as the absolute owner of this Series 2018C[-1][-2] Bond, whether this Series 2018C[-1][-2] Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the Accreted Value or maturity value of this Series 2018C[-1][-2] Bond and for all other purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary.

[This Series 2018C-2 Bond may not be purchased or transferred except upon receipt by the Trustee of an Investor Letter in the form required by the Purchase Agreement (as defined in the Indenture) executed and delivered by the purchaser hereof and accompanied by such other and further documentation, as are prescribed in the Purchase Agreement.]

All acts, conditions and things required to happen, exist or be performed precedent to and in the issuance of this Series 2018C[-1][-2] Bond have happened, exist and have been performed.

This Series 2018C[-1][-2] Bond shall not be valid or entitled to any security or benefit under the Indenture until the Trustee shall have executed the certificate of authentication appearing hereon and inserted the date of authentication hereon.

IN WITNESS WHEREOF, the Public Finance Authority has caused this Series 2018C[-1][-2] Bond to be signed by the manual or facsimile signature of its Authorized Signatory on this ____ day of _________, 2018.


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This Series 2018C[-1][-2] Bond is one of the Series 2018C[-1][-2] Bonds of the issue described in the within-mentioned Indenture.

Dated:



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ASSIGNMENT

For value received the undersigned do(es) hereby sell, assign and transfer unto __________________________________________________ the within-mentioned Series 2018C[-1][-2] Bond and hereby irrevocably constitute(s) and appoint(s) ___________________________ attorney to transfer the same on the registration books maintained by the Authority with full power of substitution in the premises.

Dated: _______________________

Note: The signature(s) to this Assignment must correspond with the Registered Owner of the within Series 2018C[-1][-2] Bond in every particular, without alteration or enlargement or any change whatsoever.



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EXHIBIT E FORM OF LIQUIDITY RESERVE FUND REQUEST

LIQUIDITY RESERVE FUND REQUEST NO. ____

This request is being delivered to U.S. BANK NATIONAL ASSOCIATION, as trustee (the “Trustee”) under the Trust Indenture, dated as of ____________ 1, 2018 (the “Indenture”) between the Public Finance Authority (the “Authority”) and the Trustee pursuant to Section 5.08 of the Indenture. The Trustee is hereby directed to take the action described herein. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Indenture.

Pursuant to Section 5.08 of the Indenture, you are hereby authorized and directed to disburse from the Liquidity Reserve Fund the amounts set forth in Appendix I attached hereto to the persons named therein in payment of expenditures permitted to be paid from the Liquidity Reserve Fund pursuant to Section 5.08(c) of the Indenture. The total amount to be disbursed pursuant to this request is $_____.

The Operator hereby certifies that (1) the statements made herein are accurate, (2) each such amount constitutes a proper charge against the Liquidity Reserve Fund, (3) no part of any such amounts shall be applied to any item which has been previously paid from the Liquidity Reserve Fund or any other Fund or Account, (4) all conditions precedent to such disbursements have been complied with and satisfied and (5) all consents, if any, required in connection with the submission hereof have been obtained and are attached hereto.

[Remainder of Page Intentionally Left Blank]

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Dated: [OPERATOR] as Operator By: Name: Title: APPROVED: PUBLIC FINANCE AUTHORITY By: GPM Municipal Advisors, LLC,

its Designated Agent

By: Name: Title:

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APPENDIX I

Account: Request No.:

No. (#)

Payment To Amount Purpose Address Bank

Routing Number Account Memo

1 2 3 4 5 6 7 8

Total: $______

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EXHIBIT F

FORM OF EXTRAORDINARY EXPENSE FUND REQUEST

EXTRAORDINARY EXPENSE FUND REQUEST NO. ____

This request is being delivered to U.S. BANK NATIONAL ASSOCIATION, as trustee (the “Trustee”) under the Trust Indenture, dated as of ____________ 1, 2018 (the “Indenture”) between the Public Finance Authority (the “Authority”) and the Trustee pursuant to Section 5.16(c) of the Indenture. The Trustee is hereby directed to take the action described herein. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Indenture.

Pursuant to Section 5.16(c) of the Indenture, you are hereby authorized and directed to disburse from the Extraordinary Expense Fund the sum of $____________. Such amount shall be paid to the Authority within three (3) Business Days of your receipt of this Request.

The Authority hereby certifies that such amount will be used to pay, or to reimburse the Authority for payment of, Extraordinary Costs and Expenses.

Dated:

PUBLIC FINANCE AUTHORITY By: Name: Title:

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EXHIBIT G

FORM OF REPAIR AND REPLACEMENT FUND REQUEST

REQUEST NO. ____


Pursuant to Section 5.10 of the Indenture, you are hereby authorized and directed to disburse from the Repair and Replacement Fund the amounts set forth in Appendix I attached hereto to the persons named therein in payment of expenditures permitted to be paid from the Repair and Replacement Fund under Section 5.10 of the Indenture. The total amount to be disbursed pursuant to this Request from the Repair and Replacement Fund is $_____.

The [Operator] hereby certifies that (1) the statements made herein are accurate, (2) each such amount constitutes a proper charge against the Repair and Replacement Fund, (3) no part of any such amounts shall be applied to any item which has been previously paid from the Repair and Replacement Fund or any other Fund or Account, (4) all conditions precedent to such disbursements have been complied with and satisfied and (5) all consents, if any, required in connection with the submission hereof have been obtained and are attached hereto.


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Dated: [[OPERATOR]] as [Operator] By: Name: Title: APPROVED: PUBLIC FINANCE AUTHORITY By: GPM Municipal Advisors, LLC,

its Designated Agent

By: Name: Title:

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APPENDIX I

Account: Request No.:

No. (#)

Payment To Amount Purpose Address Bank

Routing Number Account Memo

1 2 3 4 5 6 7 8

Total: $______

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EXHIBIT H

FORM OF EXCESS REVENUE FUND REQUEST

EXCESS REVENUE FUND REQUEST NO. ____


Pursuant to Section 5.11 of the Indenture, you are hereby authorized and directed to [transfer/disburse] from the Excess Revenue Fund the sum of $____________ to ___________________.

The Authority hereby certifies that (1) the statements made herein are accurate, (2) each such amount constitutes a proper charge against the Excess Revenue Fund, (3) all conditions precedent to such [transfer/disbursement] have been complied with and satisfied and (4) all consents, if any, required in connection with the submission hereof have been obtained and are attached hereto.

[TBD: Discussion of the use of Excess Revenue Funds/parties who can request them]


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Dated: PUBLIC FINANCE AUTHORITY By: Name: Title:

APPENDIX F

PROPOSED FORM OF THE LEASEHOLD MORTGAGE

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Maximum Principal Amount Secured is $221,000,000.00

THIS INSTRUMENT PREPARED BY: UPON RECORDATION RETURN TO:

U.S. Bank National Association Attn: Zacchaeus Buckner and David Dever Two Midtown Plaza 1349 W. Beachtree Street NW Suite 1050 Atlanta, Georgia 30309

DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (LEASEHOLD)

THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY

AGREEMENT AND FIXTURE FILING (LEASEHOLD) (herein “Deed of Trust”) made this _____ day of August, 2018, by and among PUBLIC FINANCE AUTHORITY, a unit of government and body corporate and politic of the State of Wisconsin (hereinafter referred to as “Grantor”) with an address for purposes hereof at 22 East Mifflin Street, Suite 900, Madison, WI 53703, to Zacchaeus Buckner and David Dever (hereinafter collectively referred to as “Trustee”) with an address for purposes hereof at U.S. Bank National Association, Two Midtown Plaza, 1349 W. Peachtree Street NW, Suite 1050, Atlanta, GA 30309 for the benefit of U.S. Bank National Association (hereinafter referred to as “Beneficiary”), as trustee for the Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center), Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Treatment Center) (Taxable), Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Treatment Center), Subordinate Revenue Bonds, Series 2018B-2 (Maryland Proton Treatment Center), and Junior Revenue Bonds, Series 2018C-1 (Maryland Proton Treatment Center) and Series 2018C-2 (Maryland Proton Treatment Center) in the original aggregate principal amount of $__________ (the “Bonds”), with an address for purposes hereof at Two Midtown Plaza, 1349 W. Peachtree Street NW, Suite 1050, Atlanta, GA 30309.

WITNESSETH:

In consideration of the indebtedness hereinafter referred to, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor does hereby grant, bargain, sell, assign, transfer and convey unto Trustee, in trust for the benefit of Beneficiary, with the power of sale and right of entry and possession, all of Grantor’s estate, right, title and interest in, to and under, and grants to Beneficiary a security interest in, that certain leasehold estate (the “Leasehold Estate”) under that certain Ground Lease Agreement dated August _____, 2018, between Maryland Proton Treatment Center, LLC, a Delaware limited liability company (“Lessor”) and Grantor, a memorandum of which is recorded among the Land Records of Baltimore City, Maryland at Liber ______, folio ____, as amended (collectively, the “Ground Lease”), pursuant to which Grantor has leased

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from Lessor that certain tract or parcel of land lying and being in Baltimore City, Maryland, more particularly described and set forth in Exhibit “A” annexed hereto and incorporated herein by this reference (the “Land”), together with all of the following described property (hereinafter referred to collectively as the “Mortgaged Property”) now owned or held or hereafter acquired by Grantor:

(i) All of the rights, privileges and appurtenances thereunto belonging, and all of the estate, right, title and interest of Grantor therein or thereto, either in law or in equity, now or hereafter acquired, and in and to all streets, roads and public places, opened or proposed, in front of or adjoining the said Land, and all easements and rights-of-way, public or private, now or hereafter used in connection with the Land (together with Grantor’s interest in the Land, collectively, the “Realty”);

(ii) All buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Land. All fixtures, machinery, appliances, equipment, furniture, and personal property of every nature whatsoever now or hereafter owned by Grantor and located in or on, or attached to, or used or intended to be used in connection with or with the operation of, the Realty, buildings, structures or other improvements, or in connection with any construction being conducted or which may be conducted thereon, and owned by Grantor, including all extensions, additions, improvements, betterments, renewals, substitutions, and replacements to any of the foregoing and all of the right, title and interest of Grantor in and to any such personal property or fixtures together with the benefit of any deposits or payments now or hereafter made on such personal property or fixtures by Grantor or on its behalf (the “Improvements”);

(iii) All leases and other agreements, including, without limitation, insurance contracts pertaining to the ownership, occupancy, use, possession or enjoyment of all or any part of the Mortgaged Property, now or hereafter entered into, and any modification, renewal or extension thereof, and all guarantees of the lessees’, tenants’ or occupants’ obligations thereunder, including, without limitation, deposits of cash or securities (collectively, the “Leases”), and all of the rents, royalties, issues, profits, revenue, income, unearned insurance premiums and other benefits hereafter accruing under any Lease or otherwise arising from the ownership, occupancy, use, possession or enjoyment of all or any part of the Mortgaged Property (collectively, the “Rents and Profits”);

(iv) All of Grantor’s right, title and interest in and to all accounts (including, without limitation, any and all deposit, operating and reserve accounts of Grantor with Beneficiary), instruments and general intangibles (as that term is defined in the Maryland Uniform Commercial Code), including, without limitation, all trademarks, trade names, symbols, logos and logo art, all permits, licenses, governmental approvals or consents, insurance policies, right of action and other choses in action (the “Intangible Property”); provided, however, that if Grantor is not in default under this Deed of Trust or any other Bond Document, Grantor may enjoy the benefit of all Intangible Property. Beneficiary will not be bound by any obligation of Grantor with respect to the Intangible Property unless, and only to the extent that, Beneficiary elects to assume Grantor’s liability in writing;

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(v) All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims, including, without limitation, proceeds of insurance and condemnation awards; and

(vi) All of Grantor’s rights further to encumber said Mortgaged Property for debt.

TO HAVE AND TO HOLD the Mortgaged Property unto Trustee, its successors and assigns, forever, IN TRUST, WITH POWER OF SALE, for the purpose of securing unto Beneficiary:

(a) The payment of the principal sum of __________ MILLION AND 00/100 DOLLARS ($_______________) and interest thereon for the Bonds, as provided in that certain Trust Indenture dated August _____, 2018 between Grantor and Beneficiary, as amended (the “Indenture”); and the payment of the principal sum, with interest thereon, of any Additional Bonds hereafter issued under the Indenture;

(b) The performance and observance of, and compliance with, each and every obligation, covenant, warranty, agreement, term, provision and condition contained in the Indenture and this Deed of Trust and in all other documents executed and/or delivered by Grantor and/or others to Beneficiary or Trustee having reference to or arising in connection with the Indenture or this Deed of Trust; and

(c) The payment of all other sums incurred or advanced by Beneficiary or Trustee or otherwise becoming due and payable under the provisions of the Indenture, this Deed of Trust or any Bond Documents (as hereafter defined), and interest thereon.

THIS IS A FIRST LIEN DEED OF TRUST GIVEN TO SECURE ANY PRESENT AND FUTURE OBLIGATIONS OF GRANTOR TO BENEFICIARY.

Grantor further covenants and agrees with Beneficiary as follows:

1. Wherever used in this Deed of Trust, unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, the word “Grantor” shall mean “Grantor and/or any subsequent owner or owners of the Mortgaged Property”; the word “Beneficiary” shall mean “Beneficiary or any subsequent holder or holders of this Deed of Trust”; the word “Bonds” shall mean “bond or bonds of even date herewith secured by this Deed of Trust, and any additional bonds hereafter to be issued secured by this Deed of Trust pursuant to the Indenture and any modification of any of the foregoing”; the word “Obligor” shall mean “Grantor, any guarantor of indebtedness secured hereby and any other person directly or indirectly liable to Beneficiary for any indebtedness secured hereby”; the word “person” shall mean “an individual, corporation, partnership or unincorporated association, joint stock corporation and joint venture”; the word “Bond Documents” shall mean the Indenture, this Deed of Trust and all other documents executed and/or delivered by Grantor, any Obligor or any other person to Beneficiary having reference to or arising in connection with the Bonds or this Deed of Trust; and pronouns of any gender shall include the other genders, and either the singular or plural shall include the other. If Grantor consists of more than one person, the obligations and liabilities of each such person hereunder shall be joint and several. All

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capitalized terms used in this Deed of Trust without definition shall have the meanings ascribed to such terms as are set forth in the Indenture.

2. Grantor covenants and warrants (a) that Grantor is seized of an indefeasible leasehold estate in the Land, with such right, title and interest in and to the Improvements as are provided by the Ground Lease, (b) that Grantor has good and absolute title to all existing personal property hereby mortgaged or made subject to the security interest hereby created and has good right, full power and lawful authority to convey, mortgage and encumber the same as provided herein, and (c) that the Mortgaged Property is and shall be kept free and clear of all liens, security interests, charges and encumbrances whatsoever, except for the lien for property taxes not yet due and payable and those encumbrances, if any, described in a schedule of exceptions to coverage in any title policy insuring Beneficiary’s interest in the Mortgaged Property. Grantor fully warrants the title to the Mortgaged Property and every part thereof, and will forever defend the same against the claims of all persons whomsoever.

3. Grantor shall perform, observe and comply with all provisions hereof, of the Indenture and of all Bond Documents, and will promptly pay to Beneficiary the principal with interest thereon and all other sums required to be paid by Grantor under the Bonds and pursuant to the provisions of this Deed of Trust and of all Bond Documents when payment shall become due, all without deduction or credit for taxes or other similar charges paid or payable by Grantor.

4. Grantor shall pay promptly, when and as due, all taxes, assessments, rates, dues, charges, fees, levies, fines, impositions, liens for unpaid withholding taxes, 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 Deed of Trust or the indebtedness or other sums secured hereby, or upon or against the interest of Beneficiary in the Mortgaged Property, as well as all income taxes, assessments and other governmental charges levied and imposed by the United States of America or any state, county, municipality, or other taxing authority upon or against Grantor or in respect of 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 Deed of Trust before they become delinquent and before any interest attaches or any penalty is incurred. If at any time the State of Maryland shall determine that documentary stamps be affixed to the Bonds or hereto, or that recordation or transfer taxes should thereafter be paid, Grantor shall promptly pay for the same. If Grantor fails to make any such payment or to otherwise resolve such tax obligation within thirty (30) days following written notice thereof, together with any interest or penalties imposed in connection with such determination, Beneficiary shall have the right, but not the obligation, to make such payment and in the event any such stamps or taxes and penalties are paid by Beneficiary, the amount advanced by Beneficiary for such stamps or taxes and penalties shall, until such amounts are reimbursed by Grantor, be a portion of the indebtedness secured by this Deed of Trust and bear interest from the date of such advance at the Default Rate (defined in Paragraph 37 hereof).

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5. Grantor shall at its sole expense obtain for, deliver to and maintain for the benefit of Beneficiary, during the life of this Deed of Trust, insurance policies in such amount as the Bond Documents may reasonably require, insuring the Mortgaged Property against fire, extended coverage (non-reporting Commercial Property Policy with Special Cause of Loss Form covering the Mortgaged Property in an aggregate amount not less than 100% of the agreed full insurable replacement value of the Mortgaged Property), flood (if the Mortgaged Property is or will be located in a flood hazard zone) and such other insurable hazards, casualties and contingencies (including windstorm) as the Bond Documents may require, and shall pay promptly, when due, any premiums on such insurance policies and on any renewals thereof. The form of such policies, policy deductibles and the companies issuing them shall be in accordance with the requirements of the Bond Documents. All such policies and renewals thereof shall be held by Beneficiary, shall contain a non-contributory mortgagee endorsement making losses payable to Beneficiary and, during construction, shall be in non-reporting builder’s risk form so far as such policies relate to the Improvements. The coverage under such policies shall be limited to the Improvements now or hereafter located on the Mortgaged Property. At least fifteen (15) days prior to the expiration date of all policies, renewals thereof shall be delivered to Beneficiary. Grantor shall deliver to Beneficiary receipts evidencing the payment of all premiums on such insurance policies and renewals within fifteen (15) days following written demand for same from Beneficiary. Delivery of the insurance policies and renewals thereof shall constitute an assignment to Beneficiary, as further security, of all unearned premiums. In the event of loss, Grantor will give immediate written notice to Beneficiary and Beneficiary may make proof of loss if not made promptly by Grantor. In the event of the foreclosure of this Deed of Trust or any other transfer of title to the Mortgaged Property in extinguishment of the indebtedness and other sums secured hereby, all right, title and interest of Grantor in and to all insurance policies and renewals thereof then in force shall pass to the purchaser or grantee.

Grantor hereby assigns to Beneficiary all proceeds from any insurance policies, and Beneficiary is hereby authorized and empowered, at its option, to adjust or compromise any loss under any insurance policies on the Mortgaged Property, and to collect and receive the proceeds from any such policy or policies. Each insurance company is hereby authorized and directed to make payment for all such losses directly to Beneficiary alone, and not to Grantor and Beneficiary jointly. After deducting from such insurance proceeds any expenses incurred by Beneficiary in the collection or handling of such funds, Beneficiary may apply the net proceeds in accordance with the Indenture. Beneficiary shall not be responsible for any failure to collect any insurance proceeds due under the terms of any policy regardless of the cause of such failure.

Grantor shall at its sole expense obtain for, deliver to and maintain for the benefit of Beneficiary, during the life of this Deed of Trust, liability insurance policies relating to the Mortgaged Property, in such amounts, with such companies and in such form as may be required by the Bond Documents. Such policies shall contain an endorsement naming Beneficiary as an additional insured thereunder. Grantor shall pay promptly, when due, any premiums on such insurance policies and renewals thereof.

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6. The Controlling Party (which term as used herein shall have the meaning ascribed to it in the Indenture) may, at its option, require Grantor to deposit with Beneficiary on the same day of each month for required payments of principal and interest, until the Bonds are fully paid, and in addition thereto, an amount equal to that portion of yearly taxes, assessments and other similar charges against the Mortgaged Property or any part thereof as estimated by Grantor to be sufficient to enable the payment of the same at least thirty (30) days before they become due and for the yearly premium for all insurance required to be maintained by Grantor hereunder. Such deposits shall not be, nor be deemed to be, trust funds, but may be commingled with the general funds of Beneficiary, and no interest shall be payable in respect thereof. Upon demand by Beneficiary, Grantor shall deliver to Beneficiary such additional moneys as are required to make up any deficiencies in the amounts necessary to enable the payment of such taxes, assessments, similar charges and insurance premiums. In the event of a default under any of the terms, covenants and conditions in the Bonds or the Indenture, this Deed of Trust or any other Bond Documents to be kept, performed or observed by Grantor, Beneficiary may apply to the reduction of the sums secured hereby, in such manner as Beneficiary shall determine, any amount under this Paragraph 6 remaining to Grantor’s credit. The amount of existing credit hereunder at the time of any transfer of the title to the Mortgaged Property shall, without any specific assignment thereof, inure to the benefit of the successor owner of the Mortgaged Property. Upon payment in full of the secured indebtedness, the amount of any unused credit shall be paid over to the owner of record as of the date of such full payment.

7. Notwithstanding any taking by eminent domain, alteration of the grade of any street or other injury to or decrease in value of the Mortgaged Property by any public or quasi-public authority or corporation, Grantor shall continue to make the regular payments of principal and/or interest as required by the Bonds and the Indenture and any other evidence of indebtedness secured hereby until the Bonds secured hereby are paid in full. Such award or payment may, subject to the provisions of the Indenture, be retained and applied by Beneficiary toward payment of the moneys secured by this Deed of Trust, or be paid over wholly or in part to Grantor for the purpose of altering, restoring or rebuilding any part of the Mortgaged Property which may have been altered, damaged or destroyed as a result of any such taking, alteration of grade, or other injury to the Mortgaged Property, or for any other purpose permitted under the Indenture. Nothing herein contained shall waive the right of Beneficiary to demand payment in full of all obligations hereby secured pursuant to Paragraph 19 hereof upon the occurrence of such taking.

8. Grantor shall preserve and maintain the Mortgaged Property in good condition and repair. Grantor shall not erect any building, structure or other improvement and shall not remove, demolish, materially alter or change the use of any building, structure or other improvement presently or hereafter on the Land without the prior written consent of Controlling Party. Grantor shall not permit, commit or suffer any waste, impairment or deterioration of the Mortgaged Property or of any part thereof, and will not take any action which will increase the risk of fire or other hazard to the Mortgaged Property or to any part thereof. Except as otherwise provided in this Deed of Trust, no material fixture, personal property or other part of the Mortgaged Property shall be removed, demolished or altered, without the prior written consent of Controlling Party, other than items which may become worn out, undesirable or obsolete provided that they

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are replaced immediately with similar items of at least equal value which shall, without further action, become subject to the lien of this Deed of Trust. Grantor will promptly repair, restore, replace or rebuild any part of the Mortgaged Property now or hereafter subject to the lien of this Deed of Trust which may be damaged or destroyed by any casualty whatsoever or which may be affected by any proceeding of the character referred to in Paragraph 7. Beneficiary may enter upon and inspect the Mortgaged Property at any reasonable time during the life of this Deed of Trust.

9. Grantor will promptly comply with all present and future laws, ordinances, rules and regulations of any governmental authority affecting the Mortgaged Property or any part thereof or its use and occupancy, including, without limitation, all applicable zoning requirements.

10. Grantor shall not sell, convey, transfer, lease or further encumber any legal or equitable interest in all or any part of the Mortgaged Property, without the prior written consent of Controlling Party unless expressly permitted under the Bond Documents, and any such sale, conveyance, transfer, lease or encumbrance made without Controlling Party’s prior written consent, to the extent required, shall be voidable at Beneficiary’s or Controlling Party’s option. For purposes of this Paragraph, sale of a majority of the stock of Grantor (if Grantor is a corporation) or of any corporate partner of Grantor (if Grantor is a partnership), sale of a majority of the membership interest (if Grantor is a limited liability company), or any change in the general partners of Grantor (if Grantor is a partnership), or a change in the beneficial ownership of Grantor, or a material change in the management of Grantor, shall be considered a conveyance of the Mortgaged Property. If any person should obtain any interest in all or any part of the Mortgaged Property pursuant to the execution or enforcement of any lien, security interest or other right, whether superior, equal or subordinate to this Deed of Trust or the lien hereof, such event shall be deemed to be a transfer by Grantor.

11. Grantor shall notify Beneficiary promptly of the occurrence of any of the following: (a) fire or other casualty (including flooding) causing damage to the Mortgaged Property; (b) receipt of notice from any governmental authority relating to the structure, use, or occupancy of the Mortgaged Property; (c) receipt of any notice of alleged default from any tenant under any lease of the Mortgaged Property; (d) substantial change in the occupancy of the Mortgaged Property; (e) receipt of any notice of alleged default from the holder of any lien or security interest in the Mortgaged Property; or (f) commencement of any litigation affecting the Mortgaged Property.

12. Grantor shall pay or reimburse Beneficiary and Trustee for all costs, charges and expenses, including reasonable attorney’s fees, disbursements and costs, incurred or paid by Beneficiary in any threatened, pending or completed action, proceeding or dispute in which Beneficiary or Trustee is or might be made a party or appears as a party plaintiff or party defendant and which affect the Bonds, this Deed of Trust or any other instrument securing the Bonds, or the Mortgaged Property or any part thereof, or the interests of Grantor, Beneficiary or Trustee therein, including, but not limited to, the foreclosure of this Deed of Trust, condemnation involving all or part of the Mortgaged Property or any action to protect the security hereof, including all appellate proceedings in connection with or

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arising out of any of the foregoing. All costs, charges and expenses so incurred or paid by Beneficiary or Trustee shall become due and payable immediately, whether or not there be notice, demand, attempt to collect or suit pending. The amounts so incurred or paid by Beneficiary or Trustee, together with interest thereon at the Default Rate (defined in Paragraph 37 hereof) from the date incurred until paid by Grantor, shall be added to the indebtedness and secured by the lien of this Deed of Trust.

13. If Grantor defaults in the payment of any tax, assessment, encumbrance or other imposition, in its obligation to furnish insurance hereunder or in the performance or observance of any other covenants, condition or term in this Deed of Trust or in any Bond Document, and after expiration of any applicable cure period, Beneficiary may at its option perform or observe the same, and all payments made (whether such payments are regular or accelerated payments) and costs and expense incurred or paid by Beneficiary in connection therewith shall become due and payable immediately, whether or not there be notice or demand. The amounts so incurred or paid by Beneficiary, together with interest thereon at the Default Rate (defined in Paragraph 37 hereof) from the date incurred until paid by Grantor, shall be added to the indebtedness and secured by the lien of this Deed of Trust. Nothing contained herein shall be construed as requiring Beneficiary to advance or expend monies for any purpose mentioned in this Paragraph, or for any other purpose. Beneficiary and Trustee are each hereby empowered to enter and to authorize others to enter upon the Mortgaged Property or any part thereof for the purpose of performing or observing any such defaulted covenant, condition or terms, without thereby becoming liable to Grantor or any person in possession holding under Grantor.

14. Intentionally Deleted.

15. Grantor, within ten (10) days after written request from Beneficiary, shall furnish a written statement, duly acknowledged, setting forth the unpaid principal of, and interest accrued on, the Bonds, and any other unpaid sums secured hereby, and whether or not any offsets or defenses exist against such principal and interest or other sums.

16. In addition to the lien on and security interest in the Realty and Improvements created hereby, this Deed of Trust shall, to the extent applicable, constitute a security agreement with respect to all personal property secured hereby and a fixture filing with respect to the fixtures secured hereby. In addition to any other rights and remedies provided herein or by law, Beneficiary shall be entitled to pursue any and all remedies of a secured party under the Uniform Commercial Code and other applicable statutes of the place or places where the Mortgaged Property is located, it being hereby agreed that (10) days’ notice as to the time and place of any sale shall be reasonable. No inference shall be drawn from the inclusion of any of the Mortgaged Property in a Financing Statement filed with the Maryland State Department of Assessments and Taxation that such property is considered by Beneficiary to be personalty as opposed to realty, Grantor hereby agreeing that in the event of uncertainty as to whether any portion of the Mortgaged Property is personalty or Realty, the presumption shall be that such item is Realty.

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For the purpose of the fixture filing: The name of Grantor (as Debtor under any applicable Uniform Commercial Code) is: Debtor Name/Record Owner: Public Finance Authority 22 East Mifflin Street, Suite 900 Madison, WI 53703

The name and chief executive office of Beneficiary (as Secured Party) is: Secured Party Name: U.S. Bank National Association Two Midtown Plaza 1349 W. Peachtree Street NW Suite 1050 Atlanta, GA 30309

17. At any time and from time to time, as required by law or upon Beneficiary’s request, Grantor shall make, execute and deliver or cause to be made, executed and delivered to Beneficiary such deeds of trust, instruments, certificates and documents and, where appropriate, shall cause to be recorded or filed and from time to time thereafter to be re-recorded or refiled at such time and in such offices and places as shall be deemed desirable in order to effectuate, complete, enlarge or perfect, or to continue and preserve the obligations of Grantor under the Bonds and the Indenture and this Deed of Trust, and the lien of this Deed of Trust as a first and prior lien upon all of the Mortgaged Property, whether now owned or hereafter acquired by Grantor.

18. This Deed of Trust constitutes an absolute and present assignment of the Leases and of the Rents and Profits and shall be fully operative without any further action on the part of either party. Beneficiary shall be entitled, at its option, upon the occurrence of a default hereunder which remains uncured beyond all applicable cure periods, to all Rents and Profits; provided, however, that so long as no default has occurred hereunder, Grantor is hereby given permission to collect, receive, take, use, and enjoy all such Rents and Profits as these come due and payable, but not in advance thereof. Upon any such default hereunder which remains uncured beyond all applicable cure periods, the permission hereby given to Grantor to collect such Rents and Profits shall terminate and such permission shall not be reinstated upon a cure of the default without Beneficiary’s specific consent. Beneficiary may exercise the rights herein granted upon notifying the tenants, purchasers or other obligors (the “Lessees”) in connection with the foregoing of the right of Beneficiary to receive such Rents and Profits, and shall instruct such Lessees to pay the same directly to Beneficiary without any consent from Grantor being required, a copy of this instrument and a statement by Beneficiary that the Deed of Trust is in default being sufficient notice to such Lessees of Beneficiary’s rights to collect the same. Neither

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the exercise of any right under this Paragraph 18 by Beneficiary, nor the application of any such Rents and Profits to the indebtedness and other sums secured hereby, shall cure or waive any default or notice of default or invalidate any act pursuant hereto, but the rights herein granted shall be cumulative of all other rights and remedies.

Grantor covenants and agrees that it shall: (a) observe and perform all of its obligations with respect to the Leases including, without limitation, its obligations as lessor under any lease, as seller under any purchase and sale contract and any other obligations which it may have under any other contract or instrument pursuant to which it is entitled to receive Rents and Profits, and shall not do or permit to be done anything to impair Grantor’s right to receive the same; (b) enforce or secure the performance of, at its sole costs and expense, every obligation of all such Lessees to Grantor; (c) not collect any of the Rents and Profits herein assigned in advance of the time when the same become due under the terms thereof, other than in the ordinary course of Grantor’s business; (d) not waive or release any Lessee from his obligation under any Lease or other instrument evidencing same except in the ordinary course of Grantor’s business; and (e) except in accordance with the terms of the Ground Lease and this Deed of Trust, and in the ordinary course of Grantor’s business, not execute any other assignment thereof or alter, modify or change the terms of any such obligation or cancel, terminate, or accept the surrender of the same.

Should Grantor fail to make any payment or perform any obligation required pursuant to this Paragraph 18, and after expiration of any applicable cure period, Beneficiary may elect to make such payment or perform such obligation, in which event Grantor agrees to pay, immediately upon demand, all sums expended by Beneficiary in making such payment or performing such obligation, together with interest in an amount equal to the Default Rate (defined in Paragraph 37 hereof) from the date that such expense is incurred by Beneficiary to the date of payment to Beneficiary. Any amount so expended by Beneficiary, together with interest thereon as herein provided, shall constitute part of the indebtedness secured hereby.

Notwithstanding the foregoing, Beneficiary shall not be obligated to perform or discharge, nor does it hereby undertake to perform or discharge, any obligation, duty or liability under any Lease, contract or other instrument and Grantor shall and does hereby agree to indemnify Beneficiary for and to hold Beneficiary harmless of and from any and all liability, loss or damage which it may or might incur under any of said Leases, contracts, or other instruments by reason of this assignment, and of and from any claims and demands whatsoever which may be asserted against it by reason of any alleged obligations or undertaking on its part to be performed or discharged pursuant to any of the terms, covenants or agreements contained herein. Any such liability, loss or damage, including costs, expenses and reasonable attorneys’ fees incurred in defending against any such claim, shall constitute part of the indebtedness secured hereby and Grantor shall reimburse Beneficiary therefor within fifteen (15) days following receipt of written demand, together with interest thereon, at the Default Rate (defined in Paragraph 37 hereof) from the date that such expense is incurred by Beneficiary to the date of payment of Beneficiary.

Grantor hereby represents, warrants and agrees that the assignment of Leases and Rents set forth in this Deed of Trust constitutes an interest created by deed assigning an interest in rents

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or profits arising from property for purposes of Section 3-204, Real Property Article, Annotated Code of Maryland, as amended or replaced from time to time.

19. Beneficiary shall have the unconditional right, at its option, to require payment in full of all indebtedness secured hereby and to declare all such indebtedness immediately due and payable: (a) after default in the payment when due of any installment of principal and/or of interest under the Bonds; or (b) after default for fifteen (15) days after notice and demand in the payment of any tax, water rate or assessment delivered after same becomes due; or (c) after default for fifteen (15) days after notice and demand either in assigning and delivering the policies of insurance hereinbefore described or referred to or in reimbursing Beneficiary for premiums paid to obtain such insurance as herein provided; or (d) after default for fifteen (15) days after request in furnishing a statement of the amount due on the Deed of Trust and whether any offsets or defenses exist to the payment of all indebtedness secured hereby; or (e) after default for fifteen (15) days after notice and demand in the payment of any installment of any assessment for local improvements which may now or hereafter affect the Mortgaged Property and may be or become payable in installments; or (f) after default for fifteen (15) days after notice and demand in the repayment of any sum advanced by Beneficiary or Trustee to protect the security hereof; or (g) upon the actual or threatened waste, removal or demolition of, or material alteration to or enlargement of, any building or other improvement on the Mortgaged Property or upon the commencement of unpermitted construction of any new building(s) on any part of the Mortgaged Property; or (h) upon failure to keep in force the insurance required by Paragraph 5 above; or (i) upon the entry by any court of last resort of a decision that an undertaking by Grantor as herein provided to pay taxes, assessments, levies, liabilities, obligations and encumbrances is legally inoperative or cannot be enforced; or (j) after default for fifteen (15) days after notice and demand in the removal of any Federal tax lien on the Mortgaged Property; or (k) after default for fifteen (15) days after notice and demand in the observance or performance of any other covenant(s) or agreement(s) of Grantor hereunder or of Grantor or any Obligor under any of the Bond Documents; or (l) upon the election by Beneficiary to accelerate the maturity of said principal sum pursuant to the provisions of any other instrument which may be held by Beneficiary as additional security for the Bonds; or (m) after occurrence and continuance of a default, beyond all applicable cure periods under the Ground Lease, or any termination of the Ground Lease; or (n) after failure to comply within sixty (60) days with a requirement or order or notice of violation of a law or ordinance issued by any political subdivision or governmental department claiming jurisdiction over the Mortgaged Property or any operation conducted on the Mortgaged Property, or in the case of a noncompliance which cannot be cured or complied with within said period, then upon the failure of Grantor to commence to comply with said orders or notices within said period or thereafter diligently pursue such cure to completion; or (o) immediately upon the filing in any court of competent jurisdiction by the United States of America, or any instrumentality thereof, of any notice of intention to acquire under the power of eminent domain any estate in the Mortgaged Property, or upon the recording by the State of Maryland, or any instrumentality thereof, of a notice of taking of any estate in the Mortgaged Property; or (p) upon the issuance of any order by the State of Maryland, or any instrumentality thereof, any administrative board thereof or any department thereof, declaring unlawful or suspending the current operation of the Mortgaged Property if not resolved within thirty (30) days; or

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(q) upon the filing by or against Grantor or any Obligor of any petition or application for relief, extension, moratorium or reorganization under any bankruptcy, insolvency or debtor’s relief law or law whereunder Grantor or any Obligor is making an assignment for the benefit of creditors, or entering into any arrangement with creditors or becomes a party to any receivership proceeding; or (r) upon the transfer, lease, sale, pledge, hypothecation, or further encumbrance of the Mortgaged Property or any portion thereof or of the rents and profits therefrom not expressly permitted by this Deed of Trust; or (s) upon the commencement of any suit against the Mortgaged Property upon any other claim or lien (whether superior or inferior to the lien of this Deed of Trust) if not dismissed within thirty (30) days, or in the event that any final judgment or lien (excluding a pledge of assets in the ordinary course of business) shall be entered or recorded against any of Grantor, any guarantor or any of their respective affiliates, and same is not satisfied, released or appealed within sixty (60) days; or (t) if there is any security instrument superior to this Deed of Trust, then upon the failure to pay when due any sums secured by or owing under said superior security instrument or the failure to abide by any other terms or provisions of said superior security instrument, or the modification of, or acceptance of any future or additional advance under, any such superior security instrument; or (u) upon determination by Beneficiary that any representation, warranty, or covenants made by Grantor or any Obligor or any other person in this Deed of Trust or in any other instrument or document executed in connection with this Deed of Trust, or in any certificate, agreement, affidavit or statement contemplated by, or made or delivered pursuant to, or in connection with, any such documents, is untrue or materially misleading; or (v) if Grantor, or any Obligor shall fail to pay when due any indebtedness for borrowed money owed by Grantor or such Obligor, or any interest or premium thereon, whether such indebtedness shall become due by scheduled maturity, required payment, acceleration, demand or otherwise unless waived in writing by the holder or holders of the indebtedness within thirty (30) days of a default thereunder; or (w) if Grantor or Obligor shall fail to abide by any term, covenant, or agreement under any agreement or instrument evidencing, securing or relating to any indebtedness for borrowed money owing by Grantor or such Obligor, if the effect of such failure is to accelerate, or permit the holder or holders to accelerate, the maturity of such indebtedness, unless waived in writing by the holder or holders of the indebtedness within thirty (30) days of a default thereunder; or (x) if Grantor shall grant any lien or mortgage on the Mortgaged Property or any part thereof junior to this Deed of Trust (or make any further assignment of the Leases and rentals assigned hereby) without first obtaining Beneficiary’s prior written consent; or (y) upon the death or incapacity of any Obligor and the failure of Grantor to provide Beneficiary with a substitute therefor acceptable to Controlling Party in Controlling Party’s sole and absolute discretion within ninety (90) days; or (z) any Event of Default (as defined in the Indenture) occurs. The occurrence of any of the foregoing events is hereafter referred to as “Event of Default”. No consent or waiver, express or implied, by Beneficiary to or of any default by Grantor hereunder shall be construed as a consent or waiver to or of any further default of the same or any other term, covenant, condition or provision hereof, or of or under any other course of conduct or in any other manner whatsoever except by a writing duly executed by Beneficiary and then only to the single occasion to which such writing is addressed. In order to accelerate the maturity of the indebtedness secured hereby because of the failure of Grantor to pay any tax, assessment, premium, charge, liability, obligation or encumbrance upon the Mortgaged

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Property as herein provided, it shall not be necessary or required that Beneficiary first pay the same.

20. Upon the occurrence of an Event of Default, Beneficiary may, or Beneficiary acting by or through 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 Bonds or the performance of any term hereof or any other right; (b) to foreclose this Deed of Trust and to sell, as an entirety or in separate lots or parcels, 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. Beneficiary or Trustee shall take action either by such proceedings or by exercise of its powers with respect to entry or taking possession, or both, as Beneficiary may determine. If any of the proceeds of the indebtedness evidenced by the Bonds have not been disbursed, upon the occurrence of an Event of Default, Beneficiary shall have the absolute right to refuse to disburse any such proceeds.

21. Upon the occurrence of an Event of Default, Trustee or Beneficiary may institute foreclosure proceedings, and Grantor assents to the passage of a decree for the sale of the Mortgaged Property and further authorizes Trustee to sell the Mortgaged Property. Any sale of the Mortgaged Property, or a portion thereof, whether by way of the assent to decree or power of sale, shall be made in accordance with the provisions of (i) Sections 7-105 through 7-105.14, Real Property Article, Annotated Code of Maryland, as amended or replaced from time to time, (ii) Rules 14-101 and 14-201 through 14-218 of the Maryland Rules, as amended or replaced from time to time and (iii) other applicable general or local laws of the State of Maryland or judicial rules of procedure relating to the foreclosure of deeds of trust. The terms of the sale may be cash upon settlement of the sale or upon such other and additional terms as Trustee deems necessary, proper or convenient, except as specifically limited by applicable law or court rule. Such sale may be of the entire Mortgaged Property as a unit or of such parts or parcels of the entire Mortgaged Property as Trustee, in its sole and absolute discretion, deems necessary, proper, or convenient. If Trustee deems it best for any reason to postpone or continue the sale at any time or from time to time, it may do so, in which event Trustee shall conduct the postponed sale in the same manner as the original sale provided for in this Deed of Trust. In the event of a sale of the Mortgaged Property under either the power of sale or assent to decree, such sale may be made, at the option of Beneficiary, subject to one or more of the tenancies entered into subsequent to the recording of this Deed of Trust, in accordance with the provisions of Section 7-105.6(c), Real Property Article, Annotated Code of Maryland, as amended or replaced from time to time. If the Mortgaged Property shall be advertised for sale as herein provided, and not sold, Trustee shall be entitled to a commission on the total amount of the indebtedness, principal and interest, remaining unpaid, equal to one-half of the percentage allowed as commission to trustees making a sale under a decree of a Maryland court exercising its equity jurisdiction or as otherwise allowed by applicable law, plus attorney’s fees incurred by Trustee. In the event of a foreclosure sale of the Mortgaged Property, the proceeds of said sale shall be applied, unless applicable statutes shall specify otherwise, first, to the expenses of such sale and of all proceedings in connection therewith, including attorneys’ and trustees’ fees equal to the commission allowed Trustee for making sales of property by virtue of a decree of a Maryland court exercising equity jurisdiction or as otherwise allowed by applicable law, then to insurance premiums, liens, assessments, taxes and utility charges including such charges advanced by

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Beneficiary, then to interest at the Default Rate until final ratification of the final auditor’s account in the foreclosure proceeding, then to payment of any other sums required to be paid pursuant to any provisions of the Bond Documents, whether the same shall have matured or not, and finally the remainder, if any, shall be paid to Grantor or as otherwise may be judicially determined or required by the provisions of applicable law. Pursuant to the Uniform Commercial Code, Trustee is expressly authorized and empowered to expose to sale and sell, together with the Realty and Improvements, any portion of the Mortgaged Property which constitutes Personal Property under the Maryland Uniform Commercial Code. If Personal Property is sold hereunder, it need not be at the place of sale.

22. If an Event of Default has occurred, Beneficiary, to the extent permitted by law and without regard to the value or occupancy of the security, 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 Mortgaged Property and to collect all rents, revenues, issues, income, products and profits thereof and apply the same as the court may direct. The receiver shall have all rights and powers permitted under the laws of the state where the Land is located and such other powers as the court making such appointment shall confer. The expenses, including receiver’s fees, attorneys’ fees, costs and agent’s compensation incurred pursuant to the powers herein contained shall be secured by this Deed of Trust. The right to enter and take possession of and to manage and operate the Mortgaged Property, and to collect the rents, issues and profits thereof, whether by a receiver or otherwise, shall be cumulative to any other right or remedy hereunder or afforded by law, and may be exercised concurrently therewith or independently thereof. Beneficiary shall be liable to account only for such rents, issues and profits actually received by Beneficiary, whether received pursuant to this Paragraph or any other provision hereof. Notwithstanding the appointment of any receiver or other custodian, Beneficiary shall be entitled as pledgee 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 Deed of Trust to, Beneficiary.

23. Beneficiary and Trustee shall have the power and authority to institute and maintain any suits and proceedings as Beneficiary or Trustee may deem advisable: (a) to prevent any impairment of the Mortgaged Property by any acts which may be unlawful or any violation of this Deed of Trust; (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 Beneficiary’s interest.

24. No delay or omission of Beneficiary or of any holder of the Bonds to exercise any right, power or remedy accruing upon any Event of Default shall exhaust or impair any such right, power or remedy or shall be construed to waive any such Event of Default or to constitute acquiescence therein. Every right, power and remedy given to Beneficiary may be exercised from time to time and as often as may be deemed expedient by Beneficiary.

25. If Beneficiary: (a) grants forbearance or an extension of time for the payment of any sums secured hereby; (b) takes other or additional security for the payment thereof;

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(c) waives or does not exercise any right granted in the Bonds, this Deed of Trust or any other Bond Document; (d) releases any part of the Mortgaged Property from the lien of this Deed of Trust or any other instrument securing the Bonds; (e) consents to the filing of any map, plat or replat of the Land; or (f) consents to the granting of any easement on the Land, no such act or omission shall release, discharge, modify, change or affect the original liability under the Bonds, this Deed of Trust or otherwise of Grantor, or any subsequent purchaser of the Mortgaged Property or any part thereof or any co-signer, endorser, surety or guarantor. No such act or omission shall preclude Beneficiary 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 Beneficiary, shall the lien of this Deed of Trust 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, Beneficiary, without notice to any person, firm or corporation, is hereby authorized and empowered to deal with any such vendee or transferee with reference to the Mortgaged Property or the indebtedness secured hereby, or with reference to any of the terms or conditions hereof, as fully and to the same extent as it might deal with the original parties hereto and without in any way releasing or discharging any of the liabilities or undertakings hereunder.

26. If Beneficiary or Trustee has proceeded to enforce any right or remedy under this Deed of Trust by foreclosure, entry or otherwise, and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to Beneficiary and/or Trustee, then, at the option of Beneficiary, Grantor, Beneficiary and Trustee shall be restored to their former positions and rights hereunder, and all rights, powers and remedies of Beneficiary and Trustee shall continue as if no such proceeding had occurred or had been taken.

27. No right, power or remedy conferred upon or reserved to Beneficiary by the Bonds, the Indenture, this Deed of Trust or any other Bond 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 the Bonds, the Indenture or any other Bond Document, or now or hereafter existing at law, in equity or by statute.

28. This Deed of Trust is also given to secure Additional Bonds (as defined in the Indenture), made under the Indenture, to the same extent as if such Additional Bonds were made on the date of the execution of this Deed of Trust. The total amount of indebtedness that may be so secured may decrease or increase from time to time, but the total unpaid balance so secured at one time shall not exceed such limit provided under the Indenture, plus interest thereon, and any disbursement made for the payment of taxes, levies or insurance on the Mortgaged Property, with interest on such disbursements at the Default Rate (defined in Paragraph 37 hereof). Grantor hereby agrees that the Mortgaged Property shall secure any and all Additional Bonds.

29. If as a part of the inducement to issue the Bonds and for Beneficiary to act as trustee for the Bonds, Grantor has caused certain other persons, firms or corporations to enter into certain guaranty agreements with Beneficiary guaranteeing the obligations of

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Grantor, Grantor covenants and agrees that such persons, firms or corporations shall fully perform, comply with and abide by such agreements. It is further understood and agreed by Grantor that such representations and agreements by such other persons, firms and corporations shall constitute, for the purpose of its obligations hereunder, covenants on behalf of Grantor.

30. Grantor shall not, at any time during the life of this Deed of Trust and so long as any of the indebtedness secured hereby remains outstanding, make any loans or advances to any parties related or affiliated with Grantor.

31. Grantor shall not, at any time during the life of this Deed of Trust and so long as any of the indebtedness secured hereby remains outstanding, incur any additional indebtedness relating to the Mortgaged Property, excepting (i) Additional Bonds or other Indebtedness permitted under the Indenture and (ii) unsecured trade debt incurred by Grantor in the ordinary course of business.

32. In the event of a conflict between the terms hereof and the Bonds and the Indenture or any other Bond Document, the terms of the Indenture shall control. Notwithstanding the foregoing, Beneficiary shall not take any action in violation of any of the terms of the Indenture or any other Bond Document.

33. Whenever one of the parties hereto is named or referred to herein, the heirs, successors and assigns of such party shall be included and all covenants and agreements contained in this Deed of Trust, by or on behalf of Grantor, Beneficiary or Trustee, shall bind and inure to the benefit of their respective heirs, successors and assigns, whether so expressed or not.

34. Any notice, report, demand or other instrument authorized or required to be given or furnished under this Deed of Trust to Grantor, Beneficiary or Trustee shall be deemed given or furnished when addressed to the party intended to receive the same, at the address of such party on the first page hereof, and delivered at such address or deposited in the United States mail as first class registered or certified mail, return receipt requested, postage pre-paid. Service shall be deemed complete on the date of actual delivery as shown by the addressee’s registry or certification receipt or at the expiration of the fifth (5th) business day after the date of mailing, whichever is earlier in time. Either party may change the address to which any such notice, report, demand or other instrument is to be delivered or mailed, by furnishing written notice in accordance herewith of such change to the other party, but no such notice of change shall be effective unless and until received by such other party.

35. In the event that any of the covenants, agreements, terms or provisions contained in the Bonds, the Indenture, this Deed of Trust or any other Bond Document shall be invalid, illegal or unenforceable in any respect, the validity of the remaining covenants, agreements, terms or provisions contained herein and in the Bonds, the Indenture and any other Bond Document shall be in no way affected, prejudiced or disturbed thereby.

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36. Neither this Deed of Trust 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 whom enforcement of the change, waiver, discharge or termination is sought. Any agreement hereafter made by Grantor and Beneficiary relating to this Deed of Trust shall be superior to the rights of the holder of any intervening lien or encumbrance.

37. The Default Rate shall be the lesser of (i) the default rate specified in the Indenture or (ii) the maximum interest rate per annum permitted by applicable law at the time of default, or, in the absence of a law limiting the maximum rate of interest after default, twenty-five percent (25%) per annum.

38. In addition to the obligations described above (as evidenced by the Bonds or otherwise), this Deed of Trust is given to secure any and all obligations from Grantor to Beneficiary arising by virtue of any security agreement, promissory note, guarantee or other agreement between Grantor and Beneficiary in connection with the Mortgaged Property and for all obligations of Grantor to Beneficiary, contingent or absolute, direct or indirect, regardless of however or whenever created.

39. Grantor (if a corporation, partnership, or other business entity) represents, warrants, covenants and agrees that it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its creation, and has all requisite power and authority (corporate or otherwise) to conduct its business, to own its properties, and to execute and deliver, and to perform all of its obligations under this Deed of Trust, the Bonds and any other instrument evidencing and/or securing the indebtedness secured hereby. The execution, delivery and performance of this Deed of Trust, the Bonds secured hereby, and each and every Bond Document have been duly authorized by all necessary action (corporate or otherwise) and do not (i) require any consent or approval of its stockholders (if a corporation) or any other person or entity which has not been obtained; (ii) violate any provisions of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award having applicability to Grantor or any other person executing and delivering such instrument, Bonds or other document; or (iii) result in a breach of, or constitute a default under, any indenture or loan agreement, mortgage, or any other agreement, lease or instruments to which Grantor or such other person or entity is a party or by which it or its properties may be bound or affected. This Deed of Trust, the Bonds and all other documents being executed in connection herewith constitute the legal, valid and binding obligations of Grantor, and any other person executing the same, as the case may be, enforceable against it or them in accordance with their respective terms.

40. Beneficiary and Trustee are hereby subrogated to the lien and to the rights of the owner and holder thereof of each and every mortgage, lien or other encumbrance on the Mortgaged Property, or any portion thereof, which is paid or satisfied, in whole or in part, out of the proceeds of the indebtedness secured hereby, and the respective liens of said mortgage, liens or other encumbrances shall be preserved and shall pass to and be held by Beneficiary and Trustee as security for the indebtedness secured hereby to the same extent as if they had been duly assigned by separate instrument of assignment and notwithstanding the fact that the same shall be cancelled and satisfied of record.

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41. That acceptance by Beneficiary of any payment which is less than full payment of all amounts due and payable at the time of such payment, even if made by one other than the Obligor, shall not constitute a waiver of Beneficiary’s right to exercise its option to declare the whole of the principal sum then remaining unpaid, together with all accrued interest thereon, immediately due and payable without notice or to exercise any other rights of Beneficiary except and as to the extent otherwise provided by law or this Deed of Trust.

42. Grantor consents to any and all renewals and extensions in the time of payment of the secured indebtedness, and agrees further that, at any time and from time to time without notice to any person, the terms of payment provided for in the Bonds may be modified or the security described in this Deed of Trust (or any other collateral which may be held by Beneficiary) may be released (in whole or in part) or increased, changed or exchanged by agreement between Beneficiary and any owner of the Mortgaged Property affected by this Deed of Trust without in anywise affecting the liability of any party to the Bonds, or any person liable or to become liable with respect to the secured indebtedness. Grantor agrees that no sale of the Mortgaged Property, no forbearance on the part of Beneficiary and no extensions, whether oral or writing, of the time for the payment of the whole or any part of the obligations hereby secured (or secured by any other collateral which may be held by Beneficiary), or any other indulgence given by Beneficiary, whether with or without consideration, shall operate to relieve, or, in any manner, affect the original liability of Grantor or the priority of this Deed of Trust or to limit, prejudice or impair any right of Beneficiary, notice of any such extension, indulgence and forbearance being hereby waived by Grantor (and by any guarantors, endorsers or other persons liable or who may become liable for payment of all or any portion of the indebtedness secured hereby) and all those claiming by, through and under Grantor. It is expressly agreed that any release or releases may be made by Beneficiary or Trustee without the consent or approval of any other person or persons whomsoever.

43. If Grantor shall, with the duly issued prior written consent of Controlling Party, grant any lien or mortgage on the Mortgaged Property junior to this Deed of Trust, such junior lien or mortgage shall be subject to, in addition to all tenancies now or hereafter affecting the Mortgaged Property, all such renewals and extensions, modifications, releases, increases, increases in interest rate, future advances, changes or exchanges to the Bonds and this Deed of Trust as Grantor and Beneficiary may agree upon or as may be provided herein, without joinder or consent of such junior lien or mortgage holder, and without an obligation on Beneficiary’s or Trustee’s part to give notice of any kind thereto. Notwithstanding the foregoing, Grantor will not suffer or permit any act or omission whereby any of the Mortgaged Property shall become subject to any attachment, judgment, lien, charge or other encumbrances whatsoever or whereby any of the security represented by this Deed of Trust shall be impaired or threatened. Grantor will not directly or indirectly do anything or take any action which might prejudice any of the rights, titles or interests of Beneficiary or Trustee in or to any of the Mortgaged Property and/or impose or create any direct or indirect obligation or liability on the part of Beneficiary or Trustee with respect to any of the Mortgaged Property. If any such attachment, judgment, lien, charge or other encumbrance is filed against the Mortgaged Property, or any portion

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thereof, Grantor shall cause the same to be immediately discharged or otherwise bonded or transferred to other security.

44. Beneficiary does not intend to violate any applicable usury laws. Accordingly, all agreements between Grantor and Beneficiary are expressly limited so that in no contingency or event whatsoever, whether by reason of advancement of the proceeds hereof, acceleration of maturity of the unpaid principal balance hereof, or otherwise, shall the amount paid or agreed to be paid to Beneficiary for the use, forbearance or detention of the money to be advanced hereunder (including all interest on the Bonds, any fees payable in connection herewith, and the aggregate of all other amounts taken, reserved or charged pursuant to the Bonds, the Indenture, this Deed of Trust, or any Bond Document, which, under applicable laws is or may be deemed to be interest) exceed the maximum rate allowed by applicable law. If, from any circumstances whatsoever, fulfillment of any obligation hereof or of the Bonds or any Bond Document, at the time performance of such obligation shall be due, shall cause the effective rate of interest upon the sums evidenced by the Bonds or hereby to exceed the maximum rate of interest allowed by applicable law, then the obligation to be fulfilled shall be reduced automatically to the extent necessary to prevent that effective rate of interest from exceeding the maximum rate allowable under applicable law and to the extent that Beneficiary shall receive any sum which would constitute excessive interest, such sum shall be applied to the reduction of the unpaid principal due hereunder and not to the payment of interest or, if such excessive interest exceeds the unpaid balance of principal, the excess shall be refunded to Grantor. This provision shall control every other provision of all agreements between Grantor and Beneficiary. Nothing herein shall be deemed to limit any rights, powers or privileges which Beneficiary may have by reason of its being a national banking association pursuant to any law of the United States of America or any rule, regulation or order of any departments or agency thereof and nothing herein shall be deemed to make unlawful any transaction or conduct by Beneficiary which is lawful pursuant to, or which is permitted by, any of the foregoing.

45. Grantor represents, warrants and covenants that Grantor has not used Hazardous Materials (as hereinafter defined), on, from, or affecting the Mortgaged Property in any manner which violates federal, state, or local laws, ordinances, rules, regulations or policies governing the use, storage, treatment, transportation, manufacture, refinement, handling, production or disposal of Hazardous Materials, and, to Grantor’s knowledge, no prior owner of the Mortgaged Property or any tenant, subtenant, prior tenant or prior subtenant has used Hazardous Materials, on, from, or affecting the Mortgaged Property, in any manner which violates federal, state or local laws, ordinances, rules, regulations, or policies governing the use, storage, treatment, transportation, manufacture, refinement, handling, production or disposal of Hazardous Materials. Grantor shall keep or cause the Mortgaged Property to be kept free of Hazardous Materials. Without limiting the foregoing, Grantor shall not cause or permit the Mortgaged Property to be used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce or process Hazardous Materials, except in compliance with all applicable federal, state and local laws and regulations, nor shall Grantor cause or permit, as a result of any intentional or unintentional act or omission on the part of Grantor or any tenant or subtenant, a release of Hazardous Materials onto the Mortgaged Property or onto any other property. Grantor shall

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comply with and ensure compliance by all tenants and subtenants with all applicable federal, state and local laws, ordinances, rules and regulations, whenever and by whomever triggered, and shall obtain and comply with any and all approvals, registrations or permits required thereunder. Grantor shall (a) conduct and complete all investigations, studies, sampling and testing, and all remedial, removal, and other actions necessary to clean up and remove all Hazardous Materials, on, from, or affecting the Mortgaged Property (i) in accordance with all applicable federal, state and local laws, ordinances, rules, regulations, and policies; (ii) to the satisfaction of Beneficiary; and (iii) in accordance with the orders and directions of all federal, state and local governmental authorities, and (b) defend, indemnify, and hold harmless Beneficiary, Trustee and their respective employees, agents, officers, and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs, or expenses of whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or in any way related to (i) the presence, disposal, release, or threatened release of any Hazardous Materials which are on, from, or affecting the soil, water, vegetation, building, personal property, persons, animals, or otherwise; (ii) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous Materials; (iii) any lawsuit brought or threatened, settlement reached, or government order relating to such Hazardous Materials; and/or (iv) any violation of laws, orders, regulations, requirements, or demands of governmental authorities, or any policies or requirements of Beneficiary, which are based upon or in any way related to such Hazardous Materials, including, without limitation, attorneys and consultant fees, investigation and laboratory fees, court costs, and litigation expenses. In the event this Deed of Trust is foreclosed, or Grantor tenders a deed in lieu of foreclosure, Grantor shall deliver the Mortgaged Property to Beneficiary free of any and all Hazardous Materials so that the condition of the Mortgaged Property shall conform with all applicable federal, state and local laws, ordinances, rules or regulations affecting the Mortgaged Property. For purposes of this Paragraph, “Hazardous Materials” includes, without limitation, any flammable explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, or related materials defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended (42 U.S.C. Sections 1801, et seq.), the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Sections 2901, et seq.), and in the regulations adopted and publications promulgated pursuant thereto, or any other federal, state or local environmental laws, ordinances, rules, or regulations. The provisions of this Paragraph shall be in addition to any and all obligations and liabilities Grantor may have to Beneficiary at common law, and shall survive the transactions contemplated herein. Beneficiary or Trustee, in their respective sole discretion, in the event of any Event of Default under this Deed of Trust, may inspect the Mortgaged Property or retain others to inspect the Mortgaged Property and conduct whatever tests Beneficiary and/or Trustee deems necessary to insure Grantor is in compliance with the warranties, covenants and representations contained in this Paragraph. In the event Beneficiary ascertains, with or without an inspection of the Mortgaged Property, that there are any violations of any warranties or covenants contained in this Paragraph or that any of Grantor’s representations contained herein are inaccurate, then Beneficiary may, or may direct Trustee to, foreclose this Deed of Trust, although Beneficiary shall be under no obligation to do so, or

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Beneficiary may pursue any other remedies provided under the Bond Documents which Beneficiary is entitled to pursue as a result of a violation of the warranties and covenants of this Paragraph or as a result of any inaccurate or false representations contained in this Paragraph. For the purposes of this Deed of Trust, whenever a statement or representation herein is qualified as to Grantor’s “knowledge”, the term “knowledge” shall mean the actual knowledge of the Designated Agent (as defined in the Indenture) relying solely upon the statements or representations of others, including the Lessor, without independent investigation or inquiry.

46. Beneficiary and Trustee shall each have the right, at any time or from time to time, to order an appraisal of the Land and Improvements (hereinafter collectively called the “Appraised Mortgaged Property”) at the expense of Grantor; provided, however, that in no event shall Grantor be obligated to pay for more than one (1) appraisal of the Appraised Mortgaged Property in any twenty-four (24) month period. Notwithstanding the foregoing, if an Event of Default has occurred hereunder, Grantor shall be obligated to pay for all appraisals of the Appraised Mortgaged Property ordered by Beneficiary or Trustee, but no more than one (1) appraisal of the Appraised Mortgaged Property in any twelve (12) month period. Such an appraisal (hereinafter called “Beneficiary’s Appraisal”) shall be rendered by a Maryland state-certified appraiser selected by Grantor and shall comply with the appraisal standards set forth in Section 34.44(a) of Subpart C of Part 34 of Title 12 of the Code of Federal Regulations, as determined by Grantor. The Beneficiary’s Appraisal will be addressed to Beneficiary and will constitute Beneficiary’s property. If the Beneficiary’s Appraisal is approved by Controlling Party, and provided that Grantor has remitted payment in full for the Beneficiary’s Appraisal, Beneficiary will provide Grantor with a copy of such Beneficiary’s Appraisal. Grantor hereby agrees to grant Beneficiary’s appraiser prompt access to the premises to be appraised, copies of all documents or other information requested by the appraiser, and to cooperate with the appraiser in the preparation of his appraisal report.

47. With respect to the Ground Lease, Grantor hereby warrants and represents as follows: (i) the Ground Lease, to Grantor’s knowledge, is in full force and effect, unmodified by any writing or otherwise that has not previously been provided to Beneficiary; (ii) all rent, additional rent and other charges reserved therein have been paid to the extent they are payable to the date hereof; (iii) Grantor enjoys the quiet and peaceful possession of the property demised thereby with the exception of those units which have been sold or subleased by Grantor; (iv) Grantor is not in default under any of the terms of the Ground Lease, to Grantor’s knowledge, and there are no circumstances which, with the passage of time or the giving of notice or both, would constitute a default or event of default thereunder; (v) to Grantor’s knowledge, Lessor is not in default under any of the terms or provisions of the Ground Lease; and (vi) no term, covenant or provision of the Ground Lease prohibits or imposes any limitation upon the grant and demise of this Deed of Trust, nor precludes, limits, conflicts with or interferes with the powers, rights and remedies granted to Beneficiary hereunder. Grantor further covenants and agrees as follows: (i) to promptly pay all rent, additional rent and other sums or charges required to be paid by Grantor under the Ground Lease; (ii) to promptly and faithfully observe, perform and comply with all of the terms, covenants and provisions thereof of its part to be observed, performed and complied with, at the time set forth therein, without any

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allowance for grace periods under the Ground Lease, if any; (iii) not to do, permit, suffer or refrain from doing anything as a result of which there could be a default or event of default under or breach of any of the terms of the Ground Lease; (iv) without the prior written consent of Controlling Party, not to cancel or terminate the Ground Lease, nor to suffer or permit such cancellation or termination, nor to modify, amend or in any way alter or permit the alteration of any of the terms thereof, nor to surrender the property demised thereunder, nor to grant any consents thereunder, unless otherwise permitted under the Bond Documents, nor to waive any of Grantor’s rights thereunder; (v) to give Beneficiary immediate notice of any default by anyone under the Ground Lease to which it has received written notice of and to promptly deliver to Beneficiary copies of each notice of default and all other notices, communications, plans, specifications and other similar instruments received or delivered by Grantor in connection therewith; and (vi) to furnish to Beneficiary such information and evidence as Beneficiary may reasonably require concerning Grantor’s due observance, performance and compliance with the terms, covenants and provisions thereof. In the event of any default by Grantor in the performance of any of its obligations under the Ground Lease, including, without limitation, any default or payment of tenant thereunder, then, in each and every case, Beneficiary may, at its option and upon giving such notice as is reasonable under the circumstances, cause the default or defaults to be remedied and otherwise exercise all of the rights of Grantor thereunder in the name and on behalf of Grantor. All sums, as well as costs, advanced by Beneficiary pursuant to this Paragraph shall be due from Grantor to Beneficiary within fifteen (15) days following written demand, shall be secured hereby and the lien therefor shall relate back to the date of this Deed of Trust, and shall bear interest as set forth in the Bonds from the date of payment by Beneficiary until the date of repayment. Grantor and Beneficiary acknowledge that the fee title in the leasehold estate in the property demised by the Ground Lease shall not merge but shall always be kept separate and distinct, notwithstanding the union of said estates in either the landlord thereunder, Grantor, Beneficiary, Trustee or a third party, whether by purpose or otherwise. If Grantor acquires the fee title or any other estate, title or interest in the property demised by the Ground Lease, or any part thereof, the lien of this Deed of Trust will automatically and without the necessity of the execution and/or delivery of any further instruments or documents attach to, cover and be a lien upon such acquired estate, title or interest and the same shall thereupon be and become a part of the Mortgaged Property with the same force and effect as if specifically encumbered herein. Without limitation or derogation of the foregoing sentence, Grantor nevertheless agrees to execute all instruments and documents which Beneficiary or Trustee may deem necessary or that Beneficiary or Trustee may reasonably request to ratify, confirm and further evidence Beneficiary’s lien on the acquired estate, title or interest. Furthermore, Grantor hereby appoints Beneficiary its true and lawful attorney in fact to execute and deliver all such instruments and documents in the name and on behalf of Grantor, if Grantor fails to promptly execute such instruments and documents upon demand by Beneficiary. The power, being coupled with an interest, shall be irrevocable as long as the indebtedness under the Bonds remains unpaid. If the Ground Lease is cancelled or terminated, and if Beneficiary or its nominee shall acquire an interest in any new lease of the property demised by the Ground Lease, Grantor shall have no right, title or interest in or to the new lease of the leasehold estate created by such new lease. Grantor shall use its best effort to obtain and deliver to Beneficiary within fifteen (15) days after written demand by

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Beneficiary, an estoppel certificate for the Ground Lease from Lessor setting forth (i) the name of the tenant thereunder; (ii) that the Ground Lease has not been modified, or, if it has been modified, the date of each modification (together with copies of each such modification certified as true and correct by the landlord); (iii) whether, to the best of Lessor’s knowledge and belief, there are any alleged defaults of the tenant under the Ground Lease, and, if there are, setting forth the nature thereof in reasonable detail; and (iv) such other information as Beneficiary may reasonably request. Notwithstanding anything to the contrary contained herein, this Deed of Trust shall not constitute an assignment of the Ground Lease within the meaning of any provision thereof prohibiting its assignment and Beneficiary and Trustee shall have no liability or obligation thereunder by reason of its acceptance of this Deed of Trust. Beneficiary shall be liable, solely to the extent of moneys available therefor held by Beneficiary pursuant to the Indenture, for the obligations of the tenants arising under the Ground Lease only for that period of time during which Beneficiary is in possession of the property demised by the Ground Lease or has acquired, by foreclosure or otherwise, and is holding all of Grantor’s right, title and interest therein.

48. Notwithstanding any provision to the contrary herein, the terms and provisions of Article 21 of the Ground Lease concerning the conditions and restrictions applicable to a Leasehold Mortgage (as such term is defined in the Ground Lease) are hereby incorporated herein as if they were written in their entirety herein.

49. By recording a written substitution in the county or city where the Realty is located or by any other means permitted by law, Beneficiary may (i) remove Trustee or any successor trustee at any time (or times) without notice or cause and (ii) replace any Trustee who dies or resigns or is removed. Trustee may resign at any time after furnishing Beneficiary with written notice of Trustee’s intention to resign. In the event of the resignation or death of Trustee, or Trustee’s failure, refusal or inability, for any reason, to perform any of the trusts herein declared, or, at the option of Beneficiary, without cause, Beneficiary may appoint, in writing, a substitute trustee or multiple substitute trustees, who shall thereupon succeed (and if multiple substitute trustees are appointed, each of such multiple substitute trustees shall succeed) to all the estates, titles, rights, powers, and trusts herein granted to and vested in Trustee. In the event of the resignation or death of any substitute trustee, or any such substitute trustee’s failure, refusal or inability to perform such trusts, or, at the option of Beneficiary, without cause, successive substitute trustees (or multiple successive substitute trustees) may thereafter, from time to time, be appointed in the same manner. Wherever herein the word “Trustee” is used, the same shall mean the person who is the duly appointed trustee in the first paragraph of this Deed of Trust or substitute trustee (or multiple successive substitute trustees) hereunder at the time in question. Grantor hereby ratifies and confirms any and all acts which the aforenamed Trustee, or Trustee’s successor or successors in this trust, shall do lawfully by virtue hereof. If multiple trustees or substitute trustees are appointed, each of such multiple trustees shall be empowered and authorized to act alone without the necessity of the joinder of the other multiple trustees, whenever any action or undertaking of such trustees is requested or required under or pursuant to this Deed of Trust or applicable law. Any substitute trustee appointed pursuant to any of the provisions hereof shall, without any further act, deed or conveyance, become vested with all the estates, properties, rights, powers, and trusts of its or his predecessor in the rights hereunder with like effect as if originally named as Trustee herein.

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50. GRANTOR AND, BY ITS ACCEPTANCE HEREOF, BENEFICIARY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS DEED OF TRUST, AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BENEFICIARY EXTENDING CREDIT TO GRANTOR.

51. Notwithstanding any provision to the contrary in this Deed of Trust (i) the liability of Grantor hereunder shall be limited to Revenues available therefor under the Indenture; (ii) the Mortgaged Property shall be construed to mean only the Leasehold Estate, the Realty, the Improvements, the Leases, the Rents and Profits, the Intangible Property, and the items of property described herein that are used in connection with the foregoing, and shall not be construed to include any other assets of Grantor; and (iii) no Authority Indemnified Persons shall be individually or personally liable hereunder or be subject to any personal liability or accountability by reason of the execution and delivery of this Deed of Trust except in the case of such Authority Indemnified Person’s own willful misconduct.

Further, Beneficiary acknowledges that (a) Grantor is entering into a Facility Operating Agreement with Lessor with respect to the Mortgaged Property and (b) Grantor intends to rely conclusively, solely and entirely (and without independent investigation or verification) on the faithful and timely performance by the Lessor of its obligations under such Facility Operating Agreement, provided that nothing in this sentence (including any reliance by Grantor on the timely performance by Lessor) shall be deemed or construed as depriving Beneficiary of any right or remedy granted to it by the express provisions of this Deed of Trust.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned has executed this instrument the day and year above first written.

WITNESSES: Print Name:__________________________

PUBLIC FINANCE AUTHORITY By: Name: ______________________________ Title: Assistant Secretary

STATE OF WISCONSIN ) ) SS: COUNTY OF DANE ) The foregoing instrument was acknowledged before me this ___ day of __________, 2018, by ________________, as Assistant Secretary of Public Finance Authority, a unit of government and body corporate and politic of the State of Wisconsin, on behalf of Public Finance Authority. He/she is personally known to me or who has produced a valid driver’s license as identification. __________________________ Notary Public, State of Wisconsin Print Name: _________________ Commission No.: _____________ My Commission Expires:

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EXHIBIT A

Legal Description

ALL that lot or parcel of ground located in the City of Baltimore and being known and designated as Lot 1B/80 (the “Lot”) on that plat entitled “Final Subdivision Plat, Proton Property, University of Maryland at Baltimore Biomedical Research Park,” which plat is recorded among the Land Records of Baltimore City as Plat FMC No. 4122.

THE LOT specifically includes all that parcel of real property (the “Parcel”) described in and conveyed by that Deed from the Mayor and City Council of Baltimore to UMB Health Sciences Research Park Corporation dated February 22, 2012, and recorded among the Land Records of Baltimore City, Maryland, at Liber 14201, folio 043, the Parcel being that portion of West Fairmount Avenue which was formerly lying within the boundary lines of the Lot; (and see also City of Baltimore Ordinance 11-477 and matters shown on that Development Plan entitled “University of Maryland BioPark, Planned Unit Development,” Sheets 1 through 4, dated June 2 and June 11, 2011, pursuant to which the rights of the public over the Parcel were closed).

TOGETHER WITH the easements established by Easement and Maintenance Agreement by and between Biopark Fayette, LLC, Poppleton Partners II, LP and Maryland Proton Treatment Center, LLC, dated April 17, 2012, and recorded among the Land Records of Baltimore City, Maryland, in Liber 14201, folio 006; but (and only as to the servient tenement benefiting the insured Lot under such Easement and Maintenance Agreement) subject to that Right of Way Agreement between Baltimore Gas and Electric Company and Poppleton Partners II, L.P, dated April 21, 2011, and recorded among the Land Records of Baltimore City, Maryland, in Liber 13543, folio 320.

BEING ALL the same Lot conveyed by Deed from UMB Health Sciences Research Park Corporation, a Maryland corporation, to Maryland Proton Treatment Center, LLC, a Delaware limited liability company, dated December 31, 2013, and recorded among the Land Records of Baltimore City, Maryland, in Liber 15907, folio 446.

THE IMPROVEMENTS on the Lot are generally described as 850 West Baltimore Street, Baltimore, Maryland.

APPENDIX G

PROPOSED FORM OF THE FACILITY OPERATING AGREEMENT


Public Finance Authority, Owner

and

Maryland Proton Treatment Center, LLC,

Operator

dated August 1, 2018

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Table of Contents

SECTION HEADING PAGE

ARTICLE 1 APPOINTMENT OF OPERATOR ............................................................................2 Section 1.01 Appointment of Operator; Appointment of Designated Agent. ..........................2 Section 1.02 Operations. ..........................................................................................................2 Section 1.03 Use of Building and Equipment. .........................................................................3 ARTICLE 2 TERM..........................................................................................................................3 ARTICLE 3 OPERATOR RESPONSIBILITIES ...........................................................................3 Section 3.01 Compliance with Operator Standard. ..................................................................3 Section 3.02 Permits. ...............................................................................................................4 Section 3.03 Collection of Gross Revenues. ............................................................................5 Section 3.04 Independent Contractor Status; Employees. .......................................................6 Section 3.05 Operator Funds. ...................................................................................................6 Section 3.06 Obligations Under the Ground Sublease. ............................................................7 ARTICLE 4 OPERATOR’S DUTIES AND RESPONSIBILITIES ...............................................7 Section 4.01 Operational Services. ..........................................................................................7 Section 4.02 Operating and Capital Budgets. ........................................................................10 Section 4.03 Approved Operating Plan and Budget; Deviations; Emergency

Expenditures. .....................................................................................................11 Section 4.04 Approved Capital Budget; Deviations; Emergency Expenditures. ...................12 Section 4.05 Fees and Charges. .............................................................................................12 Section 4.06 Utility Contracts. ...............................................................................................13 Section 4.07 Contracts and Subcontracts; Specified Contracts and Required Terms. ...........13 Section 4.08 Taxes, Assessments, Governmental Charges and Adverse Judgments.............16 Section 4.09 Financial Recordkeeping. ..................................................................................17 Section 4.10 Financial Reports. .............................................................................................18 Section 4.11 Periodic Financial Audit. ..................................................................................18 Section 4.12 Liens. .................................................................................................................18 Section 4.13 Access to Project; Medical Consultant. ............................................................19 Section 4.14 Restrictive Covenants; Exclusive Dealings. .....................................................20 ARTICLE 5 COMPENSATION OF OPERATOR .......................................................................23 Section 5.01 Operator’s Compensation..................................................................................23 ARTICLE 6 INSURANCE AND INDEMNIFICATION .............................................................24 Section 6.01 Owner’s Insurance Maintained by Operator and Paid by Operator as

Operating Expenses. ..........................................................................................24 Section 6.02 Evidence and Endorsement. ..............................................................................25

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Section 6.03 Acceptance by Owner and the Designated Agent. ............................................25 Section 6.04 Event of Loss or Event of Total Loss. ..............................................................25 Section 6.05 Indemnification. ................................................................................................26 Section 6.06 No Waiver of Rights. ........................................................................................28 ARTICLE 7 LIMITATION ON LIABILITY ................................................................................29 Section 7.01 Limited Liability of Owner. ..............................................................................29 Section 7.02 Certain Limitations. ..........................................................................................29 ARTICLE 8 TERMINATION .......................................................................................................30 Section 8.01 Termination for Cause. .....................................................................................30 Section 8.02 Termination for Convenience. ..........................................................................32 Section 8.03 Operator’s Duties on Termination. ...................................................................32 Section 8.04 Termination on Destruction. .............................................................................34 Section 8.05 Payments Upon Termination. ...........................................................................34 Section 8.06 Final Accounting. ..............................................................................................34 Section 8.07 Operator’s Retention of Copies. ........................................................................35 ARTICLE 9 REPRESENTATIONS AND WARRANTIES .........................................................35 Section 9.01 Operator’s Representations and Warranties. .....................................................35 Section 9.02 Owner’s Representations. .................................................................................37 ARTICLE 10 CONFIDENTIALITY .............................................................................................37 Section 10.01 Protection and Use of Operator Proprietary Materials. .....................................37 Section 10.02 Project Information. ..........................................................................................38 Section 10.03 Confidential Information. ..................................................................................38 Section 10.04 Patient Records; HIPAA. ..................................................................................39 ARTICLE 11 SECURITY .............................................................................................................40 Section 11.01 Grant of Security Interest. .................................................................................40 Section 11.02 Obligations Hereby Secured. ............................................................................40 Section 11.03 Operator Collateral; Section 11.03 Default. ......................................................40 Section 11.04 Collateral Agent. ...............................................................................................46 Section 11.05 Application of Proceeds. ...................................................................................47 ARTICLE 12 MISCELLANEOUS ...............................................................................................48 Section 12.01 Notices. .............................................................................................................48 Section 12.02 Consents and Approvals. ...................................................................................49 Section 12.03 Cooperation. ......................................................................................................49 Section 12.04 Transfer. ............................................................................................................49 Section 12.05 Interpretation. ....................................................................................................50 Section 12.06 Amendments. ....................................................................................................50 Section 12.07 Complete Agreement. .......................................................................................50 Section 12.08 Governing Law; Jurisdiction; Venue. ...............................................................50

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Section 12.09 Legal Construction. ...........................................................................................51 Section 12.10 Captions. ...........................................................................................................51 Section 12.11 Competitive Projects. ........................................................................................51 Section 12.12 Change of Control. ............................................................................................51 Section 12.13 Assignment to Collateral Agent and Trustee Under Bond Documents. ...........51 SCHEDULE A — Healthcare Financing Definitions SCHEDULE B — Project Expenses to be Funded by Operating Expenses Fund SCHEDULE C — Operators Compensation SCHEDULE D — Operator Licenses SCHEDULE E — Master Insurance Schedule EXHIBIT A — Master Glossary EXHIBIT B — Operations

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INDEX OF DEFINED TERMS

8.01(a) Termination Notice ................................................. 8.01(a) Approved Capital Budget ................................................... 4.02(b) Approved Operating Plan and Budget ................................ 4.02(b) CHAMPUS ......................................................................... SCHEDULE A CHAMPUS/CHAMPVA Regulations ................................ SCHEDULE A CHAMPVA......................................................................... SCHEDULE A Clinical Partner ................................................................... 4.01(q) Clinical Services Contract ................................................... 4.01(q) CMS .................................................................................... SCHEDULE A Confidential Information .................................................... 10.03 “comply in all material respects” ........................................ 3.01(b)(1) “contract” ............................................................................ 4.07 (intro.) “contractor” ......................................................................... 4.07 (intro.) Continuing Disclosure Agreement ..................................... 4.09(b) Control ................................................................................ 4.14(l)(1) Designated Agent ................................................................ 1.01 Employment-Related Liabilities ......................................... 6.09(g)(2) Event of Loss ...................................................................... 6.08(a) Event of Total Loss ............................................................. 6.08(a) Exclusion Lists .................................................................... 4.01(o) FF&E................................................................................... 4.04(a) GASB .................................................................................. 4.09 Government Pay Collection Account ................................ 3.03(a) gross negligence .................................................................. 6.09(a) Ground Lease ..................................................................... 3.06 Healthcare Laws .................................................................. SCHEDULE A HITECH .............................................................................. SCHEDULE A Indemnified Person ............................................................. 6.09(a) Impositions .......................................................................... 4.08 Include/Including ................................................................ 12.05 Indenture Funds .................................................................. 6.09(d) Industry Practices ................................................................ 3.01 Ineligible Person ................................................................. 4.01(o) Initial Operating Plan and Budget ....................................... 4.02(a) Initial Term ......................................................................... ARTICLE 2 Lien ..................................................................................... 4.12 Loss Proceeds...................................................................... 6.08(c) Material Contract ................................................................ 4.07(a) Medicaid ............................................................................. SCHEDULE A Medicaid Regulations ......................................................... SCHEDULE A Medicare ............................................................................. SCHEDULE A Medicare Regulations ......................................................... SCHEDULE A MPTH ................................................................................. 3.06 Operator Fees ...................................................................... 5.01

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Operator-Indemnified Liabilities ........................................ 6.09(g)(1) Operator Secured Obligation .............................................. 11.02 Operator Standard ............................................................... 3.01 Operator’s Monthly Financial Report ................................. 4.10 Operator Termination Default ............................................. 8.01(a) Operational Services ........................................................... 4.01 Operations Manuals ............................................................ 4.01(j) Operator Proprietary Materials ........................................... 10.01(b)(1) Other Center ........................................................................ 10.01(c)(3) Owner Default ..................................................................... 8.01(b) Private Pay Collection Account ......................................... 3.03(a) Project Information ............................................................. 10.01(c)(2) Project Operating Account .................................................. 3.03(d) Proposed Budget ................................................................. 4.02(b) Proton Beam Therapy Center .............................................. 4.14(l)(2) Renewal Term ..................................................................... ARTICLE 2 Restricted Period ................................................................. 4.14(l)(3) Restricted Territory ............................................................. 4.14(l)(1) Restrictive Covenants ......................................................... 4.14(e) Screened Persons ................................................................ 4.01(o) Section 11.03 Default.......................................................... 11.03(f) Secured Parties .................................................................... 11.02 Security Features ................................................................. 4.01(k) Specified Contract ............................................................... 4.07 (b) Standard Operating Procedures ........................................... 4.01(j) Term .................................................................................... ARTICLE 2 Termination Date ................................................................ 8.01(a) Transfer ............................................................................... 12.04 Unpaid Operator Fee ........................................................... 5.01(c) US GAAP............................................................................ 4.09 Utility Contracts .................................................................. 4.06 WPRL ................................................................................. 10.03

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FACILITY OPERATING AGREEMENT

This FACILITY OPERATING AGREEMENT (this “Operating Agreement”) is made and entered into by and between PUBLIC FINANCE AUTHORITY, a unit of government and body corporate and politic of the State of Wisconsin (including its successors and assigns, “Owner”), and MARYLAND PROTON TREATMENT CENTER, LLC, a Delaware limited liability company (“Operator”), and dated effective August 1, 2018 (the “Effective Date”). Owner and Operator are referred to herein collectively as the “Parties” and individually as a “Party.”

WITNESSETH:

WHEREAS, all capitalized terms used herein that are not otherwise defined shall have the meanings ascribed to them in the Master Glossary of Terms which is attached hereto as EXHIBIT A and incorporated herein by reference; and

WHEREAS, Owner was created under the Act; and

WHEREAS, Owner desires to acquire, own, and provide for the operation of a Proton Beam Therapy Center located at 850 West Baltimore Street in the City of Baltimore, Maryland known as “The Maryland Proton Treatment Center” (the “Project”); and

WHEREAS, the Act authorizes Owner, among other things, to issue bonds to finance the costs of leasing real property and constructing and owning “projects” (as defined in the Act) within and outside the State of Wisconsin; and

WHEREAS, Owner desires to finance the cost of acquiring the Building and the Equipment; and

WHEREAS, Owner and the Trustee have entered into the Indenture pursuant to which Owner will issue the Bonds, the net proceeds of which shall be used to (i) finance the acquisition of the Project, (ii) establish a debt service reserve fund for the Bonds, (iii) establish an extraordinary expense fund for the Bonds, (iv) fund capitalized interest; (v) provide working capital for the Project; and (vi) pay certain expenses incurred in connection with the issuance of the Bonds; and

WHEREAS, under the terms of the Indenture, Owner is required to enter into an operating agreement with respect to the operation and management of the Project; and

WHEREAS, Owner desires to engage Operator to manage and operate the Project in accordance with the terms and conditions of this Operating Agreement, the Ground Lease, and the Indenture, and Operator wishes to be so engaged.

NOW, THEREFORE, in consideration of the mutual covenants herein contained herein, and such other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Owner and Operator mutually agree as follows:

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ARTICLE 1 APPOINTMENT OF OPERATOR

Section 1.01 Appointment of Operator; Appointment of Designated Agent.

Owner hereby appoints Operator and Operator accepts appointment as the sole and exclusive Operator for the Project upon and subject to the terms and conditions set forth herein and in the Indenture, which are hereby incorporated by reference. Owner hereby appoints GPM Municipal Advisors, LLC as Owner’s representative under this Operating Agreement (the “Designated Agent”), who is empowered to give or withhold any consents or approvals required by Owner under this Operating Agreement or to impose conditions upon any such consent or approval; provided that the Designated Agent shall have no power or authority to (i) amend this Operating Agreement; (ii) terminate this Operating Agreement, or (iii) institute any action to enforce this Operating Agreement, all of which rights shall be reserved to Owner. Owner may revoke the designation of the Designated Agent and appoint a new Designated Agent at any time in Owner’s sole discretion. In the event of a change in the Designated Agent, Owner shall provide notice to Operator pursuant to Section 12.01; provided that, until Operator has received actual notice of any change in the Designated Agent by Owner, Operator shall be entitled to rely on any written consents or written approvals given by the previously-appointed Designated Agent.

Section 1.02 Operations.

Except as otherwise expressly provided in this Operating Agreement, and subject to and in compliance with the Bond Documents, during the Term:

(a) Operator shall have the sole and exclusive authority to act on behalf of Owner with respect to the operation, maintenance and management of the Project and shall have full, complete and exclusive responsibility to operate, maintain, manage and control the Project;

(b) except as expressly set forth herein, Operator shall make all decisions affecting the operation, maintenance and management of the Project; and

(c) except as expressly set forth herein, and except for expenditures relating to the Project incurred or accrued prior to the date of this Operating Agreement (which expenditures shall be Operator’s sole responsibility), to the extent the duties of Operator require expenditures of funds to be paid to third parties, Operator shall not have any obligation hereunder except to the extent that Owner makes funds available to it for the performance of such duties, and nothing herein shall be deemed to authorize or require Operator, in its capacity as such, to expend its individual funds for payment to third parties or to undertake any individual liability or obligation on behalf of Owner.

Operator is not and shall not be authorized, by the provisions hereof or otherwise, to (i) enter into any contract or agreement that is or purports to be in Owner’s name, or amend or modify any such contract or agreement, or grant any waiver or forbearance thereunder, except as

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contemplated and in full compliance with the requirements of Section 4.07; (ii) amend or modify, or grant any waiver or forbearance under the Ground Lease or any of the Bond Documents; (iii) commence, institute, defend, litigate, or settle any legal proceeding to which Owner is a party (except with respect to its own interests); (iv) take any other action that it believes in good faith is inconsistent with the scope of its duties and obligations hereunder; or (v) represent or hold itself out as having the authority to do any of the foregoing.

Section 1.03 Use of Building and Equipment.

Owner shall allow Operator the right to occupy the premises and use the Building and the Equipment needed to perform the Operational Services in accordance with Applicable Law and free from hindrance or ejection during the Term by Owner or other party claiming under, through, or by right of Owner except as expressly provided herein or in the Leasehold Mortgage.

ARTICLE 2 TERM

The term of this Operating Agreement shall commence on the Effective Date and terminate upon the eighteenth (18th) anniversary thereof (the “Initial Term”). Unless prior notice of termination is given in accordance with Article 8, thereafter, this Operating Agreement shall automatically renew for a fifteen (15) year renewal term (the “Renewal Term” and collectively with the Initial Term, the “Term”). Either Party may terminate this Operating Agreement in accordance with Article 8.

ARTICLE 3 OPERATOR RESPONSIBILITIES

Section 3.01 Compliance with Operator Standard.

(a) Operator shall, and shall cause its employees and agents (including Revenue Contractors and contractors) to, in Operator’s performance of its obligations under this Operating Agreement, the Assigned Authority Documents, the Bond Documents and any other contract entered into with respect to the Project, fully comply in all material respects with (i) Applicable Law (for purposes of this Operating Agreement, the term “Applicable Law” shall include but not be limited to Healthcare Laws, as herein defined); (ii) Permits; (iii) Industry Practices; and (iv) the requirements and standards set forth in the Ground Lease, the Bond Documents and the Assigned Authority Documents; and (v) other terms and provisions of this Operating Agreement (collectively, the “Operator Standard”). It is Operator’s responsibility to ensure that the Project and the operation thereof complies in all material respects with the Operator Standard; provided, that provision for payment of the cost of such compliance has been made. Operator will notify the Designated Agent as promptly as practicable of any complaints, warnings, notices or summonses received by it relating to, alleging or asserting a breach or violation of Applicable Law, and will notify the Designated Agent as promptly as practicable if and when Operator has actual knowledge of any violation or threatened violation of Applicable Law.

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(b) In this Operating Agreement:

(1) “material compliance” or “comply in all material respects” or similar phrases means that no breach or violation (or series of breaches or violations) of Applicable Law, Permits, Industry Practices, or contractual provisions, as the case may be, has (or have) occurred and is (or are) continuing that, if discovered and acted upon by the appropriate Governmental Authority or other Person having the right to enforce same, would have a Material Adverse Effect on the Operator or the Project; and

(2) “Industry Practices” means those practices, methods, and actions consistent with the highest industry standards and in the same manner as is customary and usual in the operation and management of comparable clinical facilities with comparable financial resources and budgetary parameters (including, maintaining any equipment in accordance with the standards imposed by the manufacturer of such equipment set forth in a Service Agreement and diligently prosecuting any warranty claim relating to the equipment in connection with and so as to preserve Operator’s and Owner’s rights under any manufacturer’s express or implied warranty) and with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of any enterprise of a like character and with like aims.

Section 3.02 Permits.

Operator shall obtain and keep in full force and effect all Permits necessary for Operator to perform its duties as “operator” under this Operating Agreement, including, but not limited to, those authorizations or licenses that are set forth in SCHEDULE D. All Permits pertaining to or required for the operation of the Project shall (i) be in the name of Operator; (ii) if applicable, be issued and maintained under Operator’s “provider number” and identify Operator (or a Clinical Partner) as the “provider” of medical and other services, as applicable, and (iii) submitted in Operator’s operating plan and budget in accordance with Section 4.02 to be paid as an Operating Expense. Operator shall (i) maintain or cause to be maintained in full force and effect all Permits now held or hereafter acquired with respect to the Project, and (ii) perform, observe, fulfill and comply (or cause the performance, observance, fulfillment and compliance of and with) all of the obligations, covenants and conditions contained in such Permits. Owner shall cooperate with Operator as needed in obtaining all Permits required for the Project. Without limiting the forgoing, Owner acknowledges that Operator is not obligated under this Operating Agreement to conduct an environmental assessment relating to the Project, nor to conduct a process of discovery requiring environmental testing or inspections, unless specifically requested to do so by the Designated Agent in writing and unless provision for payment of the cost thereof has been made to Operator’s satisfaction. Notwithstanding the foregoing, if an environmental condition is caused or exacerbated by Operator acting other than in accordance with the Operator Standard, all of the foregoing obligations, including any related cost or expense to the extent not covered by insurance, shall be Operator’s sole and absolute responsibility.

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Section 3.03 Collection of Gross Revenues.

Pursuant to the terms and conditions of the Bond Documents and this Operating Agreement, Operator shall, and shall cause each Revenue Contractor (if any) to:

(a) Collection Accounts. Deposit all payments that include amounts that are Gross Operating Revenues into a Collection Account, promptly but in any event no later than two (2) Business Days after receipt thereof. For avoidance of doubt, Operator and any applicable Revenue Contractor shall maintain separate Collection Accounts as follows: (i) separate Collection Accounts (collectively, the “Private Pay Collection Accounts” and each a “Private Pay Collection Account”) to receive deposits exclusively of payments from patient self-pay, private insurance, third party payors, and commercial receivables, but excluding Government Pay Receivables (collectively, “Private Pay Receivables”), and (ii) separate Collection Accounts (collectively, the “Government Pay Collection Accounts” and each a “Government Pay Collection Account”) to receive deposits exclusively of payments from Medicare, Medicaid, CHAMPUS and CHAMPVA receivables and any other government healthcare receivables (collectively “Government Pay Receivables”). Operator shall cause amounts held in any Government Pay Collection Account, regardless of amount, to be swept on each Business Day into a Private Pay Collection Account.

(b) Project Operating Account. Establish an Operating Account (the “Project Operating Account”) and cause all amounts in the Private Pay Collection Accounts to be swept on each Business Day into the Project Operating Account and withdraw funds in the Project Operating Account to pay Operating Expenses, Professional Fee Revenues, and Excluded Taxes and Other Charges related to the Project; provided, that notwithstanding the foregoing, Operator shall not make any payments out of the Project Operating Account except for expenditures specifically contemplated by the Approved Operating Plan and Budget or as otherwise expressly permitted under the terms of the Operating Agreement and the Indenture.

(c) Perfected Security Interest. Cause each Private Pay Collection Account and the Project Operating Account to be subject to an “account control agreement” that provides for “control” (within the meaning of Section 9-104 or 9-106 of the applicable Uniform Commercial Code) of such Private Pay Collection Account and/or the Project Operating Account by the Collateral Agent and that permits Operator or the applicable Revenue Contractor, prior to the Collateral Agent providing a notice of exclusive control, to direct the transfer of funds from such Private Pay Collection Account and/or the Project Operating Account in accordance with the requirements of this Operating Agreement (in particular, Article 11), the Bond Documents, the Assigned Authority Documents and the underlying contract between Operator and any such Revenue Contractor.

(d) Transfers to Revenue Fund. On the first Business Day of each month, transfer all amounts in the Project Operating Account in excess of $4,700,000.00

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(measured as of the last Business Day of the preceding month) to the Trustee for deposit in the Revenue Fund and application in accordance with Section 5.04 of the Indenture.

Section 3.04 Independent Contractor Status; Employees.

(a) Independent Contractor Status. Operator is engaged in the business of operating a Proton Beam Therapy Center and in that capacity, is serving as the Operator for the Project. The Parties intend for Operator to function as an independent contractor of Owner. This Operating Agreement shall therefore not be deemed to create an employer/employee, partnership, joint venture, principal-agent or other relationship between Operator and Owner. Owner and Operator agree that Operator is neither an owner of the Project nor a lessee of the Project for federal income tax purposes, and therefore, Operator will not be entitled to and will not take any federal income tax depreciation or amortization deductions, any investment tax credit or any rental payment deductions with respect to the Project. Except with respect to a breach of its obligations hereunder or as to items that are expressly at the cost and expense of Operator or for which Operator is otherwise responsible under the terms hereof, Operator shall not be liable for any obligation or expenditure incurred on behalf of the Project or Owner if such obligation is incurred by Operator within the scope of Operator’s authority and pursuant to the Approved Operating Plan and Budget and the Approved Capital Budget.

(b) On-Site Project Employees. Operator shall have sole and exclusive responsibility for its employees and their safety, including the sole and exclusive right and responsibility to screen, test, investigate, interview, hire, train, supervise, discharge, and pay all personnel necessary to maintain and operate the Project, subject to this Operating Agreement and the Approved Operating Plan and Budget. SUCH PERSONNEL SHALL IN EVERY INSTANCE BE EMPLOYEES OF OPERATOR, OR IF CONTRACTED OR SUBCONTRACTED PURSUANT TO Section 4.07, SHALL BE EMPLOYEES OF THE CONTRACTOR OR SUBCONTRACTOR, AND UNDER NO CIRCUMSTANCES SHALL ANY INDIVIDUAL EMPLOYED AT ANY TIME OR IN ANY CAPACITY IN RESPECT OF THE PROJECT, THE CONDUCT OF BUSINESS AND OPERATIONS OF THE PROJECT, OR ANY REPAIR, MAINTENANCE OR OPERATION THEREOF BE CONSIDERED EMPLOYEES OF OWNER, THE DESIGNATED AGENT, THE COLLATERAL AGENT, OR THE TRUSTEE FOR ANY PURPOSE WHATSOEVER.

Section 3.05 Operator Funds.

Operator may, but shall not be required to: (i) advance any of its own funds for the benefit of Owner or the Project; (ii) provide any financial support for the Project; (iii) lend its credit for the benefit of the Project or (iv) advance any of its own funds to replace the Project in the event of a catastrophic loss. Any amounts so advanced shall be reimbursed to Operator, at actual cost with no mark-up. Expenditures to address emergencies may be made as provided in Section 4.03(c).

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Section 3.06 Obligations Under the Ground Lease.

Owner is a party to that certain Ground Lease (the “Ground Lease”) by and between Operator, as lessor, and Owner, as lessee, dated as of an even date herewith, whereby Owner is, among other things, authorized to provide for the operation of the Project on the Land. Operator represents and warrants and covenants that it has reviewed the Ground Lease and is fully aware of the terms, conditions, covenants and obligations of Owner and of Operator thereunder to the extent that such terms, conditions, covenants and obligations are or may be attributable to Owner or Operator; (i) agrees to comply with those provisions, requirements and limitations of the Ground Lease applicable to it; and (ii) to the extent within its powers and authority hereunder, to cause Owner to comply therewith; provided, that nothing in the Ground Lease shall operate to reduce, diminish, or nullify Operator’s obligations expressly provided for herein.

ARTICLE 4 OPERATOR’S DUTIES AND RESPONSIBILITIES

Section 4.01 Operational Services.

Operator shall, in accordance with Operator Standard, promote, provide or arrange for all usual and customary services needed to operate, repair and maintain the Project, including all required physician services, staffing, billing, collection, service and maintenance, and daily financial and administrative activities, including, but not limited to, the services detailed on EXHIBIT B and the following (collectively, the “Operational Services”):

(a) maintain the Project in good repair, working order and condition in accordance with the Approved Operating Plan and Budget (hereinafter defined) including permitted deviations therefrom and Emergency Expenses;

(b) monitor and operate the Project in compliance with Applicable Law, including without limitation obtaining and maintaining in its own name all Permits necessary for Operator to fulfill its obligations under this Operating Agreement and all Permits necessary for the Project to operate;

(c) cause to be prepared and filed all necessary forms relating to the maintenance and operation of the Project required by any Applicable Law or Permit; provided that Owner shall cooperate if and as needed in completing such forms;

(d) prepare for review and approval by Owner, the Designated Agent and any accountants retained on Owner’s behalf, any federal, state, city and other income or other tax returns required, if any, under Applicable Law, with respect to the Project and cause the filing of any such approved returns;

(e) when tentatively assessed valuations of any taxing authority having jurisdiction over the Project become available, report each assessment to the Designated Agent, and, if (but only if) required by Owner, cooperate with any legal counsel, appraisers, or consultants retained on Owner’s behalf in connection with the preparation

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of applications for correction of the assessed evaluation and/or tax liability, or establishing and maintaining the Project as exempt from otherwise-applicable personal or real property taxes for so long as any such exemption is available under Applicable Law;

(f) obtain and maintain insurance with respect to the Project in accordance with the Master Insurance Schedule attached hereto as SCHEDULE E and incorporated herein by this reference (the “Master Insurance Schedule”);

(g) promptly investigate and make a full written report to the Designated Agent and applicable insurance carrier(s) as to all alleged accidents and/or alleged claims for damages, of which Operator becomes aware in the course of its operation of the Project, related to the ownership, operation, management and maintenance of the Project (including any personal injury or property damage occurring to or claimed by any tenant or third party on or with respect to the Project) and the estimated cost of repair; Operator shall acquaint itself with all terms and conditions of all insurance policies applicable to the ownership, operation, management and maintenance of the Project and reasonably cooperate with all insurance carriers; and Operator shall forward to the insurance carrier any summons, subpoena or other similar legal documents served upon Operator with copies to the Designated Agent;

(h) immediately notify the Designated Agent of any dumping, use (except strictly in accordance with Applicable Law and Permits) or leakage of any Hazardous Substances in or near the Project of which Operator has actual knowledge and notify Owner of any changes in the requirements of any such Applicable Law and Permits;

(i) cause an inventory to be taken annually of all major furniture, office equipment, materials, supplies, maintenance tools and any other major equipment or material used by Operator in connection with the operation and management of the Project and deliver such inventory to the Designated Agent and Trustee;

(j) develop and maintain standardized procedures to, among other things, comply with Applicable Law, billing and collection procedures, access to the Project, evacuation plan, cyber-security measures, and other activities and requirements pertinent to the operations of the Project (“Standard Operating Procedures”) and compile and maintain one or more manuals or other readily accessible documents containing the Standard Operating Procedures (the “Operations Manuals”), which Operations Manuals shall be made available to the Designated Agent and Owner and to their respective employees and agents (including the Medical Consultant, if any) upon reasonable request, and deliver same to the Designated Agent promptly upon termination of this Operating Agreement notwithstanding Section 5.01 and regardless of whether such Operations Manuals contain Operator Proprietary Materials;

(k) maintain the existing safety and security features and/or devices of the Project (collectively the “Security Features”) and conduct periodic assessments of such Security Features and make recommendations to Owner and the Designated Agent for

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any needed repairs or changes to or enhancements of the Security Features, such recommendations to be included as part of the Proposed Budget;

(l) consult with and follow the recommendations of the Insurance Consultant and of the Medical Consultant if one is appointed pursuant to the Indenture (except those recommendations that conflict with Operator’s duties and obligations under Applicable Laws or the Clinical Partners’ duties and obligations under Applicable Laws with respect to patient care );

(m) operate and cause the Project to be operated in compliance with all requirements of the Ground Lease applicable to Operator and the Assigned Authority Documents, including, without limitation, (i) use of the Project only for the Permitted Use, and (ii) comply with all notice requirements thereunder, and request and obtain any and all approvals or consents that may be required from time to time in connection with any operations, modifications, amendments or approvals in connection with this Operating Agreement or any contract with respect to the Project;

(n) obtain and keep in full force and effect all real estate and business licenses and governmental authorizations (including qualifications to do business) as may be necessary for the proper performance of Operator’s duties and obligations under this Operating Agreement;

(o) screen all of its current and prospective owners, legal entities, officers, directors and employees, and contractors, and agents engaged with respect to the Project (including those of Operator and any Clinical Partner) (“Screened Persons”), if any, against (i) the United States Department of Health and Human Services/Office of Inspector General List of Excluded Individuals/Entities (available through the Internet at http://www.oig.hhs.gov), and (ii) the General Services Administration’s List of Parties Excluded from Federal Programs (available through the Internet at http://www.epls.gov) (collectively, the “Exclusion Lists”) to ensure that none of the Screened Persons are currently excluded, debarred, suspended, or otherwise ineligible to participate in Federal healthcare programs or in Federal procurement or nonprocurement programs, or have been convicted of a criminal offense that falls within the ambit of 42 U.S.C. §1320a(7)(a), but have not yet been excluded, debarred, suspended, or otherwise declared ineligible (each, an “Ineligible Person”). In the case of determining whether a Screened Person has been convicted of a criminal offense described in the preceding sentence, Operator shall be required only to use reasonable commercial efforts to conduct criminal background searches in making such determination. If, at any time during the term of this Operating Agreement any Screened Person becomes an Ineligible Person or proposed to be an Ineligible Person, Operator shall immediately notify the Designated of the same;

(p) enter into and maintain agreements with qualified third-parties providing, generally, for all of the following: (i) physician medical director services, (ii) physician staffing, (iii) non-physician clinical staffing, (iv) medical research, (v) medical education and training, and (vi) other clinical agreements reasonably related to patient care and

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treatment as needed from time-to-time (each a “Clinical Services Contract” and each counterparty thereto a “Clinical Partner”);

(q) make recommendations concerning capital expenditures; and

(r) comply in all material respects with its obligations under the Tax Certificate.

Section 4.02 Operating and Capital Budgets.

Operator shall:

(a) on or prior to the Effective Date, submit to Designated Agent the initial operating plan and budget (in a form and substance reasonably acceptable to the Designated Agent) (the “Initial Operating Plan and Budget”) describing in detail the plans for the promotion, operation, repair and maintenance of the Project for the remainder of the Operating Year during which the Effective Date occurs, which shall also take into account the sale of any equipment; provided, however, that the sale of any equipment that is part of the Project for an amount in excess of $1,000,000 shall require the consent of Owner unless otherwise contemplated in the Approved Operating Plan and Budget or Approved Capital Budget; and

(b) not less than sixty (60) days prior to the start of each subsequent Operating Year, Operator shall develop, prepare and submit to Designated Agent an annual proposed operating plan and budget and describing in detail the plans for the promotion and operation of the Project for the upcoming Operating Year and an annual proposed capital plan and budget describing in detail the plans for the repair and maintenance of the Project for the upcoming Operating Year (collectively, the “Proposed Budget”). The Proposed Budget shall also take into account the sale of any equipment; provided, however, that the sale of any equipment that is part of the Project for an amount in excess of $1,000,000 shall require the consent of Owner unless otherwise contemplated in the Approved Operating Plan and Budget or Approved Capital Budget. The Proposed Budget must result in a Debt Service Coverage Ratio that is greater than the Debt Service Coverage Requirement. If the Proposed Budget does not result in a Debt Service Coverage Ratio that is greater than the Debt Service Coverage Requirement, Operator shall also include with the Proposed Budget a detailed written explanation as to why Operator has not budgeted to attain such ratio. Upon receipt of the Proposed Budget, the Designated Agent shall have the right to independently review and notify Operator, as soon as possible, but in any event no later than within thirty (30) days if the Designated Agent objects to any part of the Proposed Budget. If the Designated Agent objects to any part of the Proposed Budget, Operator will make reasonable efforts to revise the proposed plan and budget as requested by the Designated Agent. If the Parties have not agreed on the Proposed Budget, or any portion thereof, within thirty (30) days after presentation of the Proposed Budget to the Designated Agent, until such time as the Proposed Budget has been approved in its entirety, all items comprising the Proposed Budget which have theretofore been agreed upon by the Designated Agent and Operator shall be deemed part

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of the Approved Operating Plan and Budget and, with respect to those items which have not yet been agreed upon Operator shall continue to operate the Project in accordance with the standards of operation and operating policies in effect during the preceding Operating Year. The final Proposed Budget submitted to the Designated Agent and to which the Designated Agent confirms in writing that it has no objection is referred to herein as, the “Approved Operating Plan and Budget” and the “Approved Capital Budget,” respectively.

Section 4.03 Approved Operating Plan and Budget; Deviations; Emergency Expenditures.

(a) Operator is authorized to pay, or cause a Revenue Contractor to pay, all Budgeted Operating Expenses set forth in the Approved Operating Plan and Budget using funds from the applicable Operating Account. Operator shall operate the Project in a manner consistent with each Approved Operating Plan and Budget. Operator shall not exceed the Budgeted Operating Expenses in the Approved Operating Plans and Budget by more than ten percent (10%) in the aggregate, unless Operator obtains the prior written consent of the Designated Agent.

(b) If there is a deviation from the Budgeted Operating Expenses by more than ten percent (10%) in the aggregate, then, as part of Operator’s Monthly Financial Report that is delivered pursuant to Section 4.09, Operator shall include Operator’s recommendations as to curing any current variance between actual expense and budgeted expense and preventing future variances in same, and, if necessary after making a full analysis of the cause of the variance and possible remedies, submit to the Designated Agent for its approval in accordance with the timing and procedures set forth herein a revised operating plan and budget for the remainder of such Operating Year. The Parties acknowledge that a Liquidity Reserve Fund has been established under the Indenture for the purpose of funding Operating Expenses, subject to the Designated Agent’s prior approval, when the funds in the applicable Operating Account are insufficient to pay the Operating Expenses. In furtherance therefor, if at any time, there are insufficient funds in the applicable Operating Account to pay Operating Expenses, or other expenses and items expressly provided for in this Operating Agreement, then Operator is authorized to submit to Trustee a Request substantially in the form of Exhibit E to the Indenture directing a disbursement from the Liquidity Reserve Fund; provided that the Designated Agent has approved such Request prior to submission to the Trustee.

(c) Upon Operator’s determination, in Operator’s reasonable discretion, that there exists an emergency that requires an immediate expenditure in excess of the amounts provided for in the Approved Operating Plan and Budget, Operator is authorized to contract for and pay from its Project Operating Account and/or to submit to the Trustee a Request substantially in the form of Exhibit E to the Indenture, seeking payment from the Liquidity Reserve Fund of such operating expenditures on an emergency basis in excess of the amounts provided for in the Approved Operating Plan and Budget, if it is necessary, in the reasonable judgment of Operator, to prevent or correct any violation of or failure to comply with Applicable Law; to prevent or correct any condition that has

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resulted or could result in a Material Adverse Effect, excluding, however, Capital Expenses. Any such Liquidity Reserve Fund Request shall describe the cause of such emergency, the actions needed in connection with such emergency, and the cost of taking such actions. If Operator disburses funds from the Project Operating Account for the purposes described in this Section 4.03(c), Operator shall submit to Trustee a Request from the Liquidity Reserve Fund to reimburse the Project Operating Account for the amount so disbursed; provided, that the Designated Agent shall have approved such Request prior to submission to the Trustee.

Section 4.04 Approved Capital Budget; Deviations; Emergency Expenditures.

(a) Operator shall request Owner to direct the Trustee to make payment from the Repair and Replacement Fund under the Indenture for Furniture, Fixtures and Equipment (“FF&E”) and Capital Expenses included in the Approved Capital Budget. The Trustee shall disburse funds from the Repair and Replacement Fund in accordance with Section 5.10 of the Indenture. Operator shall not substantially deviate by more than ten percent (10%) in the aggregate from the aggregate budgeted FF&E and Capital Expenses included in the Approved Capital Budget, unless Operator obtains the prior written consent of the Designated Agent.

(b) Upon Operator’s determination, in Operator’s reasonable discretion, that there exists an emergency that requires an immediate expenditure in excess of the amounts provided for in the Approved Capital Budget, Operator is authorized to make payment from the Project Operating Account and/or to submit to the Trustee substantially in the form of Exhibit E to the Indenture, seeking payment from the Liquidity Reserve Fund of capital expenditures on an emergency basis for repairs in excess of the amounts provided for in the Approved Capital Budget, if it is necessary, in the reasonable judgment of Operator, to prevent imminent danger of damage to property or injury to persons. Any such request shall describe the cause of such emergency, the repairs needed in connection with such emergency, and the cost of making such repairs. If Operator disburses funds from the Project Operating Account for the purposes described in this Section 4.04(b), Operator shall submit to Trustee a Request for a disbursement from the Liquidity Reserve Fund to reimburse the Project Operating Account for the amount so disbursed; provided that the Designated Agent shall have approved such Request prior to submission to the Trustee.

Section 4.05 Fees and Charges.

Operator shall use its commercially reasonable efforts, in consultation with the Designated Agent, to set fees and charges for services rendered at the Project in each Operating Year in amounts reasonably calculated to produce Total Net Revenues in each Operating Year at least sufficient to meet the Debt Service Coverage Requirement for such Operating Year.

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Section 4.06 Utility Contracts.

Operator shall advise the Designated Agent of any contracts for water, sewer, electricity, gas, telephone, television, garbage collection, recycling, and any other utilities which are, in Operator’s opinion, reasonably necessary to properly serve and maintain the Project (“Utility Contracts”), which Utility Contracts shall be in Operator’s name or, if required by the utility provider, in Owner’s name, and, if in Owner’s name, subject to approval by the Designated Agent, which approval shall not be unreasonably withheld. All utility deposits required by a Utility Contract shall be included in the Approved Operating Plan and Budget and shall be paid from the applicable Project Operating Account. The Project Operating Account shall be credited with any discounts, rebates, or commissions obtained in connection with any such purchases or service contracts, such credit to be applied against Operating Expenses.

Section 4.07 Contracts and Subcontracts; Specified Contracts and Required Terms.

For purposes of this Section 4.07, “contract” means any contract, whether designated as a contract or subcontract, any Clinical Services Contract, or any contract or agreement of any kind with any Person (including any Revenue Contractor) entered into by Operator with respect to the Project and “contractor” means each party (other than Operator or Owner) to such contract.

(a) Contracts. Operator may contract with any Person to perform acts or services required or contemplated under this Operating Agreement as Operator may approve, in its reasonable discretion or enter in to any contract pertaining to the operations of the Project required in the ordinary course of business (including, contracts for the provision of medical services or the purchase or lease of any medical equipment, and Utility Contracts). Each such contract must be expressly contemplated and provided for in the Approved Operating Budget or Approved Capital Budget, or be approved in writing by the Designated Agent, which approval shall not be unreasonably withheld; provided, that the Designated Agent may in its discretion (subject to Applicable Law and Permits) impose conditions to such approval, including by requiring that such contract (i) be for a term of less than 12 months and terminable on not more than thirty (30) days’ notice for contracts with Persons other than referral sources, physicians or immediate family members of physicians or Revenue Contractors; (ii) require all contractors providing services to provide evidence of insurance as is usual and customary for contracts of the type or as requested by the Designated Agent; and (iii) with respect to any Material Contract, obtaining an unqualified opinion of nationally recognized bond counsel acceptable to Owner that such contract will satisfy the requirements of IRS Revenue Procedure 2017-13 such that the contract will not cause there to be private business use of the Project under Section 141 of the Internal Revenue Code of 1986. No contract entered into by Operator hereunder shall operate to absolve, limit or otherwise affect Operator’s duties, obligations and responsibilities under this Operating Agreement. “Material Contract” means (i) any Specified Contract (as defined in Subsection (b), below), and (ii) any contract the termination of which would have a Material Adverse Effect on the Operator or the Project.

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Notwithstanding the foregoing or any other provision of this Operating Agreement to the contrary, Operator shall not enter into any contract if the fees, charges, and other compensation or remuneration payable to the contractor under such contract is or are (i) unreasonably excessive for the products or services or other consideration provided by the contractor under such contract; or (ii) based directly or indirectly on the net profits or net losses of the Project unless, in either case, Operator provides the Designated Agent with an unqualified opinion of nationally recognized bond counsel acceptable to Owner that such contract will not adversely affect the exclusion from gross income of interest on the tax-exempt Bonds under Section 103 of the Internal Revenue Code of 1986.

(b) Specified Contracts and Required Terms. Each (i) Clinical Services Contract, and (ii) any contract (other than any Utility Contract) (A) to which Owner is a party; or (B) that identifies Owner as a responsible party or as the owner of the Project or otherwise references Owner; or (C) is expected to result in the expenditure of more than five hundred thousand dollars ($500,000) per Operating Year (each a “Specified Contract”) shall meet the following requirements:

(1) The contract shall expressly require that the contractor shall perform its Operational Services under such contract in accordance with the terms of this Operating Agreement to the extent applicable and (i) shall include a waiver of all rights the contracting parties may have against Owner and any Authority Indemnified Person for any bodily injury, death or loss or damage to property; (ii) shall contain an indemnification provision and limitation on liability provision in favor of Owner and each Authority Indemnified Person at least as favorable to the Authority Indemnified Person as those indemnities and limitation on liabilities set forth in Section 6.05 and Article 7; (iii) shall require the contractor to carry and maintain insurance in accordance with the requirements of this Operating Agreement; and (iv) shall not contain any provision that is inconsistent with this Operating Agreement;

(2) With respect to any contract with a Revenue Contractor that gives rise to Gross Operating Revenues, the applicable Revenue Contractor shall in a written instrument that is satisfactory to the Designated Agent and the Collateral Agent:

(A) agree to irrevocably direct payments of amounts that are Gross Operating Revenues from Private Pay Receivables to a Private Pay Collection Account, if any, maintained by it, and to irrevocably direct payments of amounts that are Gross Operating Revenues from Government Pay Receivables to a Government Pay Collection Account, if any, maintained by it;

(B) agree to irrevocably direct amounts held in any Government Pay Collection Account, regardless of amount, to be swept on each Business Day into a Private Pay Collection Account or other account

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that is subject to a deposit account control agreement for the benefit of the Trustee;

(C) pledge to Collateral Agent, for the benefit of Operator, Owner and the further benefit of the Trustee as assignee of Owner, and the Bondholders, its interest in all accounts, chattel paper, general intangibles, instruments or health-care insurance receivables giving rise to or evidencing Gross Operating Revenues, and proceeds thereof, to secure its payment obligations to Operator as may be specified in the applicable contract with Operator; and

(D) acknowledge in the applicable contract that (i) Operator is acting as an independent contractor of Owner, (ii) payment of obligations under the contract shall be made solely out of funds and assets of the Project and amounts withheld from the applicable Collection Account or paid to Operator for the payment of Operating Expenses, in each case, in accordance with the requisition procedures and limitations set forth in the Indenture; (iii) neither Operator nor Owner shall have any pecuniary liability out of their separate assets (other than funds and assets held under the Indenture) for the obligation or expenditure evidenced by such contract; and (iv) such counterparty will not take action against any Person for payment of amounts due under such subcontract except to request funds and assets of the Project and amounts withheld from the applicable Collection Account or paid to Operator for the payment of Operating Expenses, in each case, in accordance with the requisition procedures and limitations set forth in the Indenture; and

(3) permit the assignment of Operator’s right, title and interest in and to such Specified Contract to Owner or a successor operator upon termination of this Operating Agreement (provided that the counterparty may condition such permission on the express assumption by Owner or a successor operator, as the case may be, of Operator’s obligations under such Specified Contract and payment of all amounts then due to it thereunder).

(4) In addition to the above, any contract for services of an employee or contractor shall further provide that:

(A) each respective employer shall have sole responsibility for all other obligations to or for its Project employees arising from or connected with employment, including but not limited to, paying any and all salary, wages, commissions, fringe benefits and other remuneration, for paying any and all Social Security taxes, state and federal unemployment taxes, employment taxes and all other taxes and governmental assessments, and for paying all workers’ compensation insurance and benefits;

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(B) each employer at the Project shall assume the responsibility for timely compliance with all Applicable Law regarding its employees. Operator shall fully and completely indemnify and hold Owner harmless as provided in Section 6.05, but without regard to any fault or negligence of Operator, for any Employment-Related Liabilities (as hereinafter defined) whether arising under this Operating Agreement or any contract entered into by Operator;

(C) except for its payment of expenses included as part of the Approved Operating Plan and Budget solely from the sources provided therefor under the Indenture, Owner shall not have any legal or financial responsibilities, shall not be consulted and shall exercise no discretion or authority with respect to any employees or contractors of Operator or with respect to any employees of a contractor with respect to the Project; and

(D) the following provision: PERSONS EMPLOYED, RETAINED OR ENGAGED BY [NAME OF CONTRACTOR OR ANY PERMITTED SUBCONTRACTOR OF SUCH CONTRACTOR] TO CONDUCT SERVICES AT THE PROJECT SHALL IN EVERY INSTANCE BE EMPLOYEES OF [NAME OF CONTRACTOR OR ANY PERMITTED SUBCONTRACTOR OF SUCH CONTRACTOR] AND UNDER NO CIRCUMSTANCES SHALL ANY INDIVIDUAL EMPLOYED AT ANY TIME OR IN ANY CAPACITY IN RESPECT OF THE PROJECT, THE CONDUCT OF BUSINESS AND OPERATIONS OF THE PROJECT, OR ANY CONSTRUCTION, MAINTENANCE OR OPERATION THEREOF BE CONSIDERED EMPLOYEES OF [OPERATOR,] OWNER, THE DESIGNATED AGENT, THE COLLATERAL AGENT, OR THE TRUSTEE FOR ANY PURPOSE WHATSOEVER.

(c) Operator shall use commercially reasonable efforts to cause each Specified Contract in existence on the Effective Date to satisfy all applicable requirements of Section 4.07(b) as of the earliest practicable date following the Effective Date (but in any event, no later than the next renewal, amendment, or extension thereof).

(d) Each Specified Contract shall further contain a clause prohibiting the applicable counterparty from further subcontracting any part of its services thereunder if the amount of such subtract is more than $50,000 without the prior written consent of the Designated Agent, which consent shall not be unreasonably withheld, delayed or conditioned.

Taxes, Assessments, Governmental Charges and Adverse Judgments.

Operator shall pay and discharge or cause to be paid and discharged by any Revenue Contractor or contractor from the amounts in the Project Operating Account all taxes, assessments, governmental charges of any kind whatsoever (collectively, “Impositions”) that

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may be or have been assessed or rendered or that have or may become Liens upon the Project. Such payments of Impositions, together with all interest and penalties payable in connection therewith, shall be made in a timely manner from amounts in the Project Operating Account pursuant to Section 3.03(b) to prevent any delinquency thereon or any forfeiture or sale of the Project, the Revenues or other assets pledged under the Indenture or any part of thereof; provided that Operator shall not be required to pay any Imposition, including all interest, penalties, costs and charges accrued or accumulated thereon, that is contested in good faith by Owner, the Designated Agent or Operator so long as: (i) there is no risk of sale, forfeiture or loss of any interest in the Project, the Revenues or other assets pledged under the Indenture or any part thereof, in the Designated Agent’s reasonable judgment; (ii) such contest does not, in the Designated Agent’s reasonable judgment, have a Material Adverse Effect; and (iii) such contest is based on bona fide, material, and reasonable claims or defenses. Operator shall promptly pay the amount of the Imposition from the amounts in the Project Operating Account pursuant to Section 3.03(b), together with all interest and penalties payable in connection therewith. For the avoidance of doubt, it is understood and agreed that payment of any and all (x) foreign and U.S. federal, state, local, and other taxes which may be assessed on the income or gross receipts of Operator or the applicable Revenue Contractor or contractor; (y) payroll and other related employment compensation taxes for employees of Operator or any Revenue Contractor or contractor; and (z) adverse judgments, utility rates, meter charges and other utility charges shall the sole responsibility of Operator or such Revenue Contractor or contractor, as applicable.

Section 4.08 Financial Recordkeeping.

(a) Operator shall maintain all accounting records for the Project. Operator shall, and shall cause all Revenue Contractors to, for not less than seven (7) years from the last date on which any performance is due under any contract that gives rise to Gross Operating Revenues, maintain proper books of record and account, in which full, true and correct entries shall be made of the agreement, including payments received, and amounts that are Professional Fee Revenues or Excluded Taxes and Other Charges. All records maintained pursuant to this Section 4.08 shall be deemed to be Project Information. Operator shall set up and maintain orderly and accurate files and records with respect to the operation and management of the Project as are consistent with the Operator Standard and necessary for the completion of the audit referred to in Section 4.10, the same to be and at all times to remain the property of Owner, and Operator shall deliver same to the Designated Agent promptly upon the expiration or earlier termination of this Operating Agreement in accordance with the terms hereof, provided that Operator shall have the right to maintain copies of such Project Information as provided in Section 8.07. Operator may cause portions of such files and records to be set up and maintained by other Persons; provided, that Operator shall assure access to and delivery of all such files and records as contemplated herein. Operator shall use such accounting methods as are standard practice within the health care industry and consistent with generally accepted accounting principles in the United States (“US GAAP”).

(b) In addition to the foregoing, Operator shall be responsible for furnishing such information at such times as may be required by the Continuing Disclosure

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Undertaking dated as of August 1, 2018 delivered by Operator (“Continuing Disclosure Agreement”), and Owner shall have no responsibility therefor.

Section 4.09 Financial Reports.

Operator shall deliver to the Designated Agent and the Trustee, on or before the 30th day of each month, a financial activities report with respect to the preceding month’s financial activities, including, but not limited to, a detailed income statement/budget variance report, statement of cash flows, capital expenditure report, patient volume report, patient mix, type and payor source and aged accounts receivable, Professional Fee Revenues, Excluded Taxes and Other Charges, and such other information as the Designated Agent or Medical Consultant might reasonably request to assist in evaluating the performance, financial and otherwise, of the Project (the “Operator’s Monthly Financial Report”); provided, any obligation of the Trustee with respect to such report shall be solely as set forth in the Indenture. To support the Operators’ Monthly Financial Reports, Operator shall maintain electronic or physical copies of the following: (i) bank statements, bank deposit slips, and canceled checks; (ii) comprehensive bank reconciliations; (iii) detailed cash receipts records; (iv) summaries of adjusting journal entries; and (v) supporting documentation for payroll, payroll taxes and employee benefits.

(b) In addition to the foregoing, Operator shall be responsible for furnishing such information at such times as may be required by the Continuing Disclosure Agreement and Owner shall have no responsibility therefor.

Section 4.10 Periodic Financial Audit.

Operator shall submit to the Designated Agent and Trustee an annual examination of the books and records maintained by Operator with respect to the Project by a firm of independent registered public accountants (the selection of which firm shall be subject to approval by the Designated Agent) with a view to prepare audited financial statements in accordance with US GAAP and to perform any and all audit tests relating to Operator’s activities, either at the Project, or at any office of Operator; provided such examination and tests are related to those activities performed by Operator or its contractors or subcontractors under this Operating Agreement; provided, that any obligation of the Trustee with respect to such report shall be solely as set forth in the Indenture. The cost of any and all such audits shall constitute an Operating Expense payable from the Project Operating Account. Operator shall further provide Owner with such additional accounting records, information, and reports to enable Owner to report its financial condition and results of operations on a governmental accounting standards board principles (“GASB”) basis.

Section 4.11 Liens.

Operator shall not create or permit to exist a Lien in respect of the Building or the Equipment (other than a Permitted Encumbrance) without the prior written consent of Owner. In no event may Operator take any action that would cause or permit any mortgage, lien, pledge, charge, lease, easement, servitude, right of others, security interest or encumbrance of any kind

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in respect of the Building or the Equipment (“Lien”) (other than a Permitted Encumbrance) to exist.

Section 4.12 Access to Project; Medical Consultant.

(a) Access to Project. For the purposes of verifying compliance with the terms of this Operating Agreement, subject to Operator’s discretion in discharging its obligation to comply in all material respects with Applicable Law and Permits, Operator shall ensure that Owner, the Designated Agent and their respective agents, employees, invitees, or licensees (including, without limitation, the Medical Consultant) have at all times during the Term (i) full and complete access to the Project subject to reasonable limitations as to the number of persons that may be permitted to be given access and the timing of such access; (ii) the right to tour any portion of the Project to observe and to permit others to observe the various services performed by Operator, provided only that such tours shall be conducted in compliance with Operator’s safety standards and Applicable Law and shall not interfere with Operator’s ability to perform its obligations under this Operating Agreement, as well as other reasonable limitations on such tours; (iii) the right to conduct inspections of all or part of the Project at reasonable intervals during normal business hours; and (iv) the right to inspect and copy any and all books and records of the Operator pertaining to the operation of the Project (including all Permits, all contracts, insurance records under ARTICLE 6, financial records maintained under Section 4.09, and other Project Information) and to discuss the operation of the Project with appropriate representatives of the Operator or any contractor. Operator shall cooperate with Owner, the Designated Agent and their respective agents, employees, invitees, or licensees in such inspections and Owner, the Designated Agent and their respective agents, employees, invitees, or licensees shall conduct such inspections or cause such inspections to be conducted so as not to interfere with Operator’s performance of its obligations under this Operating Agreement or create unreasonable burdens or costs for Operator. Operator shall and shall cause each Subcontractor to, provide any of Owner, the Designated Agent, the Trustee or the Medical Consultant, at any time upon reasonable request with any Project Information so requested.

(b) Medical Consultant. Operator acknowledges and agrees that pursuant to Section 7.20 and 7.24 of the Indenture, under the circumstances set forth therein, Operator (or if Operator fails to do so, Owner) is required to select and appoint a Medical Consultant. Operator also acknowledges and agrees that Owner may appoint a Medical Consultant at any time in its own discretion. If Medical Consultant is appointed, Operator agrees that it will:

(1) review any report or written recommendations made by the Medical Consultant;

(2) meet with the Medical Consultant to discuss the Medical Consultant’s reports, findings and written recommendations; and

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(3) promptly implement all of the Medical Consultant’s written recommendations except (i) those recommendations that require an expenditure of funds greater than the amount available or projected to be available for such purpose under the Indenture; (ii) those recommendations that conflict with Operator’s duties and obligations under Applicable Laws or the Clinical Partners’ duties and obligations under Applicable Laws with respect to patient care; or (iii) those written recommendations that could, based upon the written advice of Bond Counsel, cause interest on the tax-exempt Bonds to be includible in gross income for federal income tax purposes. The fees and expenses of the Medical Consultant shall be paid as an Operating Expense. Each of Operator and Owner shall deliver to the other copies of any information, correspondence or documents delivered to or received from the Medical Consultant contemporaneously with the delivery or receipt of such information, correspondence or documents to or from the Medical Consultant.

Section 4.13 Restrictive Covenants; Exclusive Dealings.

(a) Operator hereby agrees that during the Restricted Period, neither Operator, nor any Affiliate, shall directly or indirectly through an Affiliate1 or otherwise, as sole proprietor, corporation, partner, member, employee, shareholder, principal, agent, consultant, operator, advisor, director, officer, control person, operator, or in any other capacity or manner whatsoever:

(1) engage in the business of developing or constructing (or assist another Person in the development or construction of) a Proton Beam Therapy Center, in whole or in part, in the Restricted Territory; or own (beneficially or of record), Control or have any interest whatsoever (including as an equity holder, lender or otherwise) in any enterprise that shall engage in the activities set forth in this clause (1); or

(2) own, manage, lease, operate, Control or participate in any manner in the ownership, management, leasing, operation or Control of, or have any financial interest in, or aid or assist anyone else in the conduct of (including through the provision of clinical or consulting services to) any Proton Beam Therapy Center, in the Restricted Territory; or own (beneficially or of record), Control or have any interest whatsoever (including as an equity holder, lender or otherwise) in any enterprise that shall engage in the activities set forth in this clause (2).

(b) Operator hereby further agrees that during the Restricted Period, it shall not recruit, hire or solicit the services of any employee, consultant, independent contractor, provider, or other individual or entity who or which renders services to Owner, its successors and assigns, or any of Owner’s Affiliates, related to the

1 NTD: “Affiliate” to be defined in Master Glossary as “a Person Controlling, under the Control of, or under common Control with, another Person.”

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management, use or operation of the Project, for Operator’s own benefit or for the benefit of any other person or entity.

(c) Operator hereby further agrees that during the Restricted Period, it shall not permit any physician to own (beneficially or of record), Control or have any equity interest whatsoever in Operator unless Operator is at such time a publicly-traded company and no Physician owns or Controls more than five percent (5%) of the equity of Operator.

(d) Without limiting the provisions of subparagraphs (a) – (c), above, during the Restricted Period, Operator agrees to limit its commercial dealings within the Restricted Territory with respect to any of activities described below exclusively through Owner:

(1) engaging in the business of developing or constructing (or assisting another Person in the development or construction of) a Proton Beam Therapy Center, in whole or in part; or owning (beneficially or of record), Controlling or having any interest whatsoever (including as an equity holder, lender or otherwise) in any enterprise that shall engage in the activities set forth in this clause (1); or

(2) owning, managing, leasing, operating, Controlling or participating in any manner in the ownership, management, leasing, operation or Control of, or having any financial interest in, or aiding or assisting anyone else in the conduct of (including through the provision of clinical or consulting services to) any Proton Beam Therapy Center; or owning (beneficially or of record), Controlling or having any interest whatsoever (including as an equity holder, lender or otherwise) in any enterprise that shall engage in the activities set forth in this clause (2).

(e) Operator expressly agrees that Owner has a legitimate and protectable business interest justifying the existence of the restrictions contained in the foregoing subsections (a), (b), (c), and (d) (collectively, the “Restrictive Covenants”).

(f) Owner and Operator have carefully considered the nature and extent of the Restrictive Covenants and the rights and remedies conferred upon Owner under the Restrictive Covenants and hereby expressly acknowledge and agree that: (i) the Restricted Period and the Restricted Territory and all other restrictions contained in the Restrictive Covenants are designed to protect the legitimate and protectable business interests of the Owner; (ii) the Restrictive Covenants are reasonable and necessary and fully required to protect the legitimate and protectable business interests of Owner; (iii) the Restrictive Covenants impose a reasonable restraint upon Operator; (iv) any violation of the terms of any of the Restrictive Covenants could have a substantial detrimental effect on Owner’s business and the Project; (v) the Restrictive Covenants do not stifle Operator’s inherent skill and experience; (vi) the Restrictive Covenants would not operate as a bar to Operator’s means of support; and (vii) Operator expressly

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acknowledges that Operator shall have the ability to practice Operator’s business outside of the Restricted Territory and that the Restrictive Covenants shall not inhibit Operator’s ability to practice Operator’s business or profession.

(g) Operator agrees and acknowledges that any damages resulting from any violation of the Restrictive Covenants would be difficult to ascertain and, for that reason, Operator expressly agrees that, in the event of any violation any of the Restrictive Covenants, Owner shall be entitled to preliminary and permanent injunctive relief restraining any such violation of any or all of the Restrictive Covenants either directly or indirectly, from any court of competent jurisdiction, without proof of actual damages, and without the need to post any bond, and such right of Owner shall be cumulative and in addition to any other remedy which Owner may desire or seek. Operator expressly waives the defense in an action in equity that Owner’s legal remedy is adequate and hereby agrees that Owner would suffer irreparable harm if Operator violates the Restrictive Covenants. Operator acknowledges that the Restrictive Covenants have been called to the attention of Operator and Operator understands that the Restrictive Covenants are a material covenant of this Operating Agreement and that Owner would not have entered into this Operating Agreement without the existence of the Restrictive Covenants. Owner and Operator further agree that, in the event of any litigation at law or at equity with regard to the enforcement or interpretation of any of the Restrictive Covenants, the prevailing Party shall be entitled to be reimbursed for all reasonable attorneys’ fees and costs incurred, at trial and through all levels of appeal, incurred as a result of such litigation.

(h) If a court having jurisdiction over this Operating Agreement shall determine that the Restricted Period or the Restricted Territory or any other restriction contained in any of the Restrictive Covenants is overbroad or is unenforceable for any reason whatsoever, it is the intention of Owner and Operator that the Restrictive Covenants shall not thereby be terminated or void, but shall be deemed amended to the extent required by such court to render them valid and enforceable to the greatest extent permissible by such court and the applicable law and public policy.

(i) If Operator violates any Restrictive Covenant, and Owner or any of Owner’s successors and assigns (including the Controlling Party under the Indenture) brings legal action for injunctive or other relief, such Party bringing the action shall not, as a result of the time involved in obtaining the relief, be deprived of the benefit of the full period of such Restrictive Covenant, unless a court of competent jurisdiction holds that such Restrictive Covenant is not enforceable in whole or in part. Accordingly, for any time period that Operator is in violation of any Restrictive Covenant, such time period shall not be included in calculating the Restricted Period.

(j) Owner and all successors and assigns of Owner, including the Trustee and the Bondholders and all successors and assigns of the Trustee, are third party beneficiaries of the Restrictive Covenants. The Restrictive Covenants are intended for the benefit of, and may be enforced by Owner, Owner’s successors and assigns and the Trustee and its further assigns.

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(k) The existence of any claim or cause of action by Operator against Owner, whether predicated upon this Operating Agreement or otherwise, shall not constitute a defense to the enforcement of the Restrictive Covenants by Owner, Owner’s successors and assigns and the Trustee and its further assigns, but shall be litigated separately.

(l) Definitions:

(1) “Control” with respect to a Person, means, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.

(2) “Restricted Territory” means any location within a 40-mile radius of the Project.

(3) “Proton Beam Therapy Center” means a radiation treatment facility at which proton beam therapy is offered to patients, whether in the form of a multi-room, one-room or two-room facility, and whether in the form of a separate stand-alone building or included in existing infrastructure of a hospital or other healthcare facility.

(4) “Restricted Period” means the term of this Operating Agreement plus three (3) years.

ARTICLE 5 COMPENSATION OF OPERATOR

Section 5.01 Operator’s Compensation.

(a) For services rendered in managing the Project in accordance with and subject to the terms of this Operating Agreement, Operator shall be paid the fees set forth on SCHEDULE C attached hereto and incorporated herein (such fees are collectively referred to herein as, the “Operator Fees”). Except as set forth in SCHEDULE C, Operator Fees are an Operating Expense and shall be payable in monthly increments from funds available in the Project Operating Account, to the extent and in the manner specified in the Indenture. It is expressly understood and agreed that the Operator Fee shall be the exclusive basis for payments to Operator, and Operator shall not be entitled to any additional or further payments for the services to be rendered by Operator pursuant to this Operating Agreement or to the reimbursement of any costs incurred by Operator in performing any of its obligations hereunder except as expressly provided in this Operating Agreement. Operator shall not be excused from the performance of any or all of the Operational Services hereunder to the extent that funds are not available for payment of the Operator Fees in accordance with the terms hereunder and under the Indenture; rather, in such event, Operator’s sole remedy shall be termination of this Operating Agreement under Section 8.01(b).

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(b) Affiliates of Operator may be compensated for services rendered (i) solely by the Operator from the Operator Fee, or (ii) as a Budgeted Operating Expense, provided that the services provided by any Affiliate must be pursuant to a contract that meets the requirements of a Specified Contract (without regard to the annual amounts payable thereunder) that has been approved in writing by the Designated Agent, and amounts paid or payable thereunder shall not exceed amounts that would be charged by an unrelated third-party for similar services.

(c) To the extent that funds are not available for payment of the Operator Fee in accordance with the terms hereunder and under the Indenture, the Operator Fee shall remain due and owing to Operator and the due but unpaid Operator Fee shall bear interest at a rate of 17%, compounded annually (collectively, the “Unpaid Operator Fee”). Interest shall be payable by Owner to Operator annually in arrears on each January 1, in accordance with the payment provisions of the Indenture. Owner shall pay any Unpaid Operator Fee (including the Subordinated Operator Fee as described in SCHEDULE C), including accrued interest, no later than the fifth (5th) anniversary of the date originally due from the Liquidity Reserve Fund or the Operator Fee Fund to the extent and in the manner specified in the Indenture.

(d) Operator represents and warrants that the amount of the Operator Fee is reasonable and customary, taking into account the obligations and risks assumed by Operator.

(e) Nothing in this Section 5.01 or elsewhere in this Operating Agreement shall give rise to or invest in Operator any claim for Operator Fees against any monies or funds (including, without limitation, Funds held under the Indenture and held by Operator or any Revenue Contractor in the Project Operating Account or any account hereunder) except as are expressly provided in this Section 5.01 for the payment thereof.

ARTICLE 6 Insurance and Indemnification

Section 6.01 Owner’s Insurance Maintained by Operator and Paid by Operator as Operating Expenses.

Operator shall be responsible for causing the Project and the operation thereof to be insured at all times, and shall be further responsible for satisfying all insurance requirements provided in Article 16 of the Ground Lease, by obtaining and maintaining insurance in accordance with the Master Insurance Schedule, subject in all cases to the recommendations of the Insurance Consultant (which shall be followed by Operator), any modifications to the requirements of the Master Insurance Schedule as approved by the Owner, and the Designated Agent’s prior written approval as to the sufficiency of such insurance which approval shall not be unreasonably withheld, delayed or conditioned. Operator shall provide copies of the insurance policies required under the Master Insurance Schedule to the Designated Agent. Operator shall pay all premiums for the insurance required under the Master Insurance Schedule as Operating Expenses.

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Section 6.02 Evidence and Endorsement.

For the insurance policies required by Sections 12 and 14 of the Master Insurance Schedule, Operator will cause and ensure the following are added by endorsement as named insureds to the policy: Owner and any Authority Indemnified Person, Operator, the Designated Agent, the parent companies, subsidiaries, affiliate companies and partnerships and all of their directors, officers, agents, representatives and employees of Owner, Operator and the Designated Agent, and Trustee. Evidence of Commercial Property Insurance obtained by the Designated Agent shall be provided before or concurrently with the expiry of each policy.

Section 6.03 Acceptance by Owner and the Designated Agent.

Operator will provide copies of all insurance policies maintained by Operator under this Operating Agreement, e either for itself or on behalf of Owner, to the Designated Agent for review and acceptance prior to the Effective Date. If the Designated Agent requests revisions to policies, coverages, or terms, Operator will cause such revisions to be effected on or before the Effective Date.

Section 6.04 Event of Loss or Event of Total Loss.

(a) Operator shall provide the Designated Agent and Owner with prompt written notice of any actual or threatened Event of Loss or Event of Total Loss. “Event of Loss” means any loss of, destruction or damage to, or Taking of any part of the Project. “Event of Total Loss” means (i) all or substantially all of the Project is damaged to the extent of being completely or substantially completely destroyed such that operations must be permanently discontinued; (ii) any damage to the Project that results in an insurance settlement with respect thereto on the basis of the Project being completely or substantially completely destroyed; or (iii) any Taking. “Taking” means all or substantially all of or a material portion of the Project is taken by exercise of eminent domain or a similar right or power by a Governmental Authority or a Governmental Authority shall order the Project to cease to operate permanently, or sale or transfer in lieu of a condemnation or taking of the Project or any part thereof.

(b) If an Event of Loss or an Event of Total Loss occurs, Operator shall prepare or cause to be prepared and promptly deliver to Owner an estimate of the total costs and schedule to repair or reconstruct the Project, as applicable. In the event Owner elects, in its sole discretion, to repair or reconstruct the Project, Operator shall be responsible for the oversight and management of the repair or reconstruction. All reasonable costs and expenses incurred by or on behalf of Operator and pre-approved by Owner pursuant to this Section 6.04 shall be incorporated by Operator in to the Approved Operating Plan and Budget or Approved Capital Budget, as applicable, and paid in accordance with Article 4. In the event Owner elects, in its sole discretion, not to repair or reconstruct the Project, the Loss Proceeds will be applied in accordance with the terms of the Indenture.

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(c) All Loss Proceeds received by Operator shall be deposited in the Insurance and Condemnation Proceeds Fund. Operator may seek the release of any Loss Proceeds that are used to repair or reconstruct the Project in accordance with Section 6.04(b) by submitting a request approved by the Designated Agent to the Trustee for payment from the Insurance and Condemnation Proceeds Fund, provided, that such amounts shall not exceed the Loss Proceeds received. “Loss Proceeds” means all proceeds (including insurance proceeds or proceeds from any Taking) payable by a third-party (including an insurer or re-insurer) to Owner or Operator in respect of an Event of Loss or an Event of Total Loss pursuant to insurance required to be maintained pursuant to Section 6.01; provided that “Loss Proceeds” shall not include any third-party liability insurance proceeds or other insurance proceeds payable directly to a third party in accordance with the terms of such insurance policy.

Section 6.05 Indemnification.

(a) Operator Indemnity. Operator shall indemnify, defend and hold each Authority Indemnified Person, each Trustee Indemnified Person and each Collateral Agent Indemnified Person (as used in this Section 6.05, each an “Indemnified Person”) harmless from and against all Operator-Indemnified Liabilities. Notwithstanding the foregoing sentence, such indemnity shall not be available to the extent that the Operator-Indemnified Liability is determined by a court of competent jurisdiction by final and nonappealable judgment to (i) have resulted from (A) the gross negligence or willful misconduct of a Trustee Indemnified Person or Collateral Agent Indemnified Person, or (B) the willful misconduct of a Authority Indemnified Person, or (ii) result from a claim brought by Operator against such Indemnified Person for a material breach of such Operator-Indemnified Person’s obligations hereunder. In this Operating Agreement, “gross negligence” of a Person means that such Person has acted (or refrained from acting) in reckless disregard of, or with a lack of substantial concern for, the rights of others.

(b) Scope of Indemnity Obligation. Operator expressly acknowledges and agrees that each Indemnified Person shall be held harmless and indemnified hereunder from and against Operator-Indemnified liabilities arising from Owner’s or any Person’s own negligence of any kind, description or degree (without regard to or application of the comparative negligence provisions of Section 895.045 of the Wisconsin Statutes), or breach of contractual duty, except insofar as such indemnity is not available as provided in the second sentence of Subsection (a), above.

(c) Procedure for Indemnification. In the event that any action or proceeding is brought against any Indemnified Person with respect to which indemnity may be sought hereunder, Operator, upon written notice from the Authority Indemnified Person, shall assume the investigation and defense thereof, including the employment of counsel approved by the Indemnified Person, such approval not to be unreasonably withheld or delayed, and shall assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the same in its sole discretion; provided that the Indemnified Person shall have the right to review and approve or disapprove any such

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compromise or settlement, such approval not to be unreasonably withheld or delayed. Each Indemnified Person shall have the right to employ separate counsel in any such action or proceeding and participate in the investigation and defense thereof. Operator shall pay the reasonable fees and expenses of such separate counsel; provided, however, that such Indemnified Person may only employ separate counsel at the expense of Operator if in the judgment of such Indemnified Person a conflict of interest exists by reason of common representation or if all parties commonly represented do not agree as to the action (or inaction) of counsel.

(d) Use and Benefit of Indenture Funds. Except as may be derived from insurance proceeds as set forth in subsection (e), below, Operator acknowledges and agrees that its obligation to defend, indemnify and hold the Indemnified Persons harmless from and against Operator-Indemnified Liabilities shall not be funded by the Extraordinary Expense Fund or any other Fund or Account held by the Trustee under the Indenture (“Indenture Funds”) or diminished in any respect by the availability of the Indenture Funds or the use or application by Owner thereof to satisfy any Liabilities (including Operator-Indemnified Liabilities) hereunder and that such use or application by Owner, the Trustee, or the Collateral Agent of the Indenture Funds for such purpose shall not affect in any manner Operator’s obligation to reimburse Owner therefor. This paragraph shall apply regardless of whether Indenture Funds at any time include any money provided by Operator.

(e) Insurance. It is Owner’s and Operator’s intent to look first to the insurance coverage required pursuant to this Operating Agreement for both legal defense and payment of any Liabilities subject to the provisions of this Section 6.05. Therefore, Owner and Operator agree that, notwithstanding any indemnity language to the contrary, in the event that Liability arises which is covered by the insurance required pursuant to the Indenture or this Operating Agreement, Operator shall cause such insurance to be paid in accordance with such policies, and to the extent of such payment, the procedures related to indemnity in subsection (c), above, shall not apply; provided, that the foregoing shall not have any effect whatsoever on an Indemnified Person’s underlying right to indemnity. As to any Liabilities paid by insurance, the Parties agree to waive all rights of subrogation, regardless of whether the negligence or fault of the other party or other party’s agents, officers, or employees causes or is alleged to have caused such claim, liability, loss or damage.

(f) Issuer Extraordinary Expense Fund. Owner shall look to the Extraordinary Expense Fund only if and to the extent (i) Operator is not required to indemnify Owner or any Indemnified Person for any Liability pursuant to this Section 6.05 and (ii) such Liability is not fully paid by applicable insurance. (and, to the extent such funds and assets are unavailable or insufficient to pay or satisfy such Liabilities, to the Indemnity Agreement.

(g) Defined Terms. The following definitions shall apply:

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(1) “Operator-Indemnified Liabilities” means Liabilities arising from: (i) any acts or omissions of Operator, its agents, representatives, contractors or employees constituting negligence, willful misconduct, malice or fraud and/or criminal activity in connection with services of Operator, its agents, representatives, contractors (including, without limitation, any Revenue Contractors, contractors, clinical partners, or tenants) or employees arising out of or relating to the management of the Project; (ii) Employment-Related Liabilities; (iii) any violation by Operator or its agents, representatives or employees of this Operating Agreement or of any Applicable Law; (iv) any losses suffered as a result of theft, embezzlement, fraud or other dishonesty by Operator, its agents, representatives, contractors or employees; and (v) any claims against Owner or any Authority Indemnified Person arising out of a Specified Contract that for any reason does not satisfy the requirements of Section 4.07(b).

(2) “Employment-Related Liabilities” means all Liabilities arising out of Operator’s or any other Person’s (including, without limitation, any Revenue Contractor’s, contractor’s, clinical partner’s or tenant’s) labor and employment-related activities (such as, by way of illustration, screening, testing, investigating, interviewing, hiring, training, supervising, discharging, and paying all personnel necessary to maintain and operate the Project, employment discrimination, wage & hour disputes, civil rights, unfair labor practices, OSHA and ADA compliance. For avoidance of doubt, Employment-Related Liabilities shall constitute Operator-Indemnified Liabilities without regard to any fault, negligence, misconduct, action or inaction on the part of Operator or any other Person.

(h) Survival. The rights of any Indemnified Person to indemnity hereunder shall survive termination of this Operating Agreement and in the case of any Indemnified Person such person’s dissolution, merger or death.

(i) Third-Party Beneficiaries. To the extent of their rights hereunder to indemnification and exculpation from pecuniary liability, each Indemnified Person is a third-party beneficiary of this Operating Agreement entitled to enforce such rights in his, her, its or their own name.

Section 6.06 No Waiver of Rights.

No termination of this Operating Agreement shall operate to waive, diminish or impair any right that has accrued to either party as of the date of termination, nor shall any such termination impair either party’s right to indemnity under this Operating Agreement. All of the indemnification obligations under this Operating Agreement shall survive termination or expiration of this Operating Agreement indefinitely, regardless of cause.

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ARTICLE 7 LIMITATION ON LIABILITY

Section 7.01 Limited Liability of Owner.

Notwithstanding anything to the contrary in this Operating Agreement or any other document or instrument to which Owner is a party, whether express or by implication or construction or interpretation or otherwise, Operator acknowledges and agrees that Owner is not liable or obligated in any manner under this Operating Agreement or otherwise to pay or cause to be paid any fees, expenses or reimbursements or to make any other payments or advance funds under this Operating Agreement or otherwise, or incur or cause to be incurred any expense in pursuing any course of action, in connection with the Project or any other matter within the scope of or contemplated by this Operating Agreement or be liable (directly or indirectly) for any claims, proceedings, costs or expenses of any kind for any reason in connection with or in any way related to this Operating Agreement or any other document or instrument to which Owner is a party related to the Project, its financing, development, operation, management or otherwise, except only to the extent that monies are held by the Trustee and available therefor as expressly set forth hereunder and in accordance with the Indenture, and provided, that Owner shall not be required to incur any expense or liability in pursuing any claim against such monies for the benefit of Operator or any other Person. Operator further acknowledges and agrees it must adhere to the provisions of the Indenture in requesting disbursements from the funds and amounts held by the Trustee for payment of all of its costs, expenses, and compensation payable by Owner hereunder out of the Project Operating Account as Operating Expenses and out of the amounts paid to Operator as Budgeted Operating Expenses and to the extent that funds are available therefor under the priority of payments set forth in the Indenture and Bond Documents. To the extent that funds or property are held by the Trustee but not sufficient for such purpose, Operator will be unable to recover any such cost, expense, loss or damage from Owner and may be unable to recover any such cost, expense, loss or damage from any other person.

Section 7.02 Certain Limitations.

Neither Party shall be liable under this Operating Agreement for incidental, special, punitive or consequential damages (including, lost revenues or lost profits) arising out of or in connection with this Operating Agreement or any services provided by Operator, even if such Party has previously been advised of the possibility of such damages; provided, that the foregoing limitation shall not apply to the extent that such incidental, special, punitive or consequential are (i) the direct result of Operator’s gross negligence, willful misconduct, fraud, malice and/or criminal activity; or (ii) third party damages for which Operator is responsible under Operator’s indemnification obligations to any Authority Indemnified Person or Parties under this Operating Agreement.

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ARTICLE 8 TERMINATION

Section 8.01 Termination for Cause.

(a) By Owner. This Operating Agreement may be terminated upon the occurrence of an Operator Termination Default (as defined below) under this Section 8.01(a) at any time during the Term by Owner by delivery of a written termination notice (an “8.01(a) Termination Notice”) to Operator. Operator shall notify Owner, Collateral Agent and the Trustee immediately upon discovering any Operator Termination Default or any Section 11.03 Default (as defined in Section 11.03). The 8.01(a) Termination Notice shall: (i) state that Operator’s termination is being initiated pursuant to this Section 8.01(a); (ii) include a reasonable description of the grounds for such termination and the alleged conduct or event constituting the Operator Termination Default; and (iii) be effective on the third (3rd) Business Day following delivery of the 8.01(a) Termination Notice to Operator (such effective date, or any other effective date of termination of this Operating Agreement, is referred to herein as the “Termination Date”); provide, that termination under this Section 8.01 or Section 8.02 shall not become effective sooner than the date that Operator and Owner have complied with the requirements of Applicable Law and Permits necessary to transition a successor operator. “Operator Termination Default” means the occurrence of any of the following:

(1) Operator’s willful misconduct, fraud or criminal activity in the performance by the Operator of its duties and obligations under this Operating Agreement or in the performance of any services provided by the Operator hereunder;

(2) the indictment of any of Operator’s directors, managers, or executive officers for a criminal offense materially related to the Operator or its business and/or operations; or;

(3) Operator’s failure to comply in all material respects with Applicable Law and Permits, unless Operator is appealing such alleged violation in good faith and by appropriate proceedings;

(4) Operator’s failure to comply with the provisions of Section 12.12 of this Operating Agreement;

(5) Operator’s failure to cure any default by Operator of any of its material obligations under this Operating Agreement within forty (45) days after written notice of such default has been given by the Designated Agent to Operator (and such notice of default must reasonably specify the alleged material breach); provided, however, that if a particular default cannot reasonably be cured within a forty-five(45) day cure period, Operator shall have an additional thirty (30) days to cure any such default so long as Operator begins to cure promptly after receiving notice of the default from Owner;

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(6) any representation, warranty, certification or statement made by Operator in this Operating Agreement or the Asset Purchase Agreement or which is contained in any report, certificate or other document furnished by it at any time under or in connection with this Operating Agreement or the Asset Purchase Agreement shall prove to have been untrue, incorrect, or misleading in any material respect on or as of the date made; for avoidance of doubt, failure of the Project to attain operating performance described in any projections for the Project provided to Owner by Operator shall not be considered to be included in this clause (6);

(7) Operator (i) makes a general assignment for the benefit of creditors or third parties; (ii) files in any court a petition in bankruptcy, or insolvency, or for a reorganization, or for the appointment of a receiver or trustee of all or a substantial part of its property; commences or consents to any case, proceeding, or other action (A) seeking reorganization, arrangement, adjustment, liquidation, dissolution, or composition of Operator or Operator’s debts under any Applicable Law relating to bankruptcy, insolvency, reorganization, or relief of debts, or (B) seeking appointment of a receiver, trustee, or similar official for Operator or for all or any part of Operator’s property;

(8) any case, proceeding, or other action against Operator is commenced (i) seeking to have an order for relief entered against Operator as debtor, (ii) seeking reorganization, arrangement, adjustment, liquidation, dissolution, or composition of Operator or Operator’s debts under any Applicable Law relating to bankruptcy, insolvency, reorganization, or relief of debtors, or (iii) seeking appointment of a receiver, trustee, or similar official for Operator or for all or any part of Operator’s property, and any such case, proceeding or other action shall not be dismissed within ninety (90) days after filing;

(9) Owner receives notice from the Trustee under the Indenture setting forth its intention to exercise its default remedies under the Indenture in response to a material default under such Indenture that has occurred as a result of an act or omission by Operator and Operator fails to cure such default within any cure period set forth in the Indenture;

(10) any breach of or material inaccuracy in any representation or warranty made by Operator herein or in any other document, instrument, certificate or agreement delivered or entered into in connection with this Operating Agreement or the trans actions referenced herein (regardless of whether Owner is a party to or addressee thereto or thereof);

(11) Operator commits any act of negligence that, individually or in combination with any other act of negligence, has a Material Adverse Effect on the business or operations of the Project;

(12) termination of the Ground Lease; or

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(13) an event of default or a breach of any material obligation of Operator has occurred and is continuing (beyond any applicable grace period) under any Material Contract.

(b) By Operator. This Operating Agreement may be terminated upon the occurrence of an Owner Default (as defined below) under this Section 8.01(b) at any time during the Term by Operator by delivery of a written termination notice (an “8.01(a) Termination Notice”) to Owner and Trustee and Owner’s or Trustee’s failure to cure such Owner Default within thirty (30) days from receipt of such notice. “Owner Default” means the occurrence and continuation of any of the following to the extent that funds under the priority of payments in the Indenture are available therefor: the Trustee, having received a written request therefor approved by the Designated Agent and made in accordance with this Operating Agreement, fails to pay (i)(A) within ten (10) Business Days after the date such payment is to be made under the Indenture, any Operator Fee, or (B) on or before the later of ten (10) Business Days after the date such payment is to be made under the Indenture or the date on which any such payment is due to a third-party, any Request submitted in accordance in accordance with the Indenture; or (ii) Owner fails to comply in all material respects with its obligations under this Operating Agreement.

(c) Other; Automatic Termination. This Operating Agreement shall automatically be terminated upon the occurrence of any of the following:

(1) Owner’s Transfer of the Project, except a Transfer made at the direction of the Controlling Party;

(2) at the Direction of the Controlling Party, a payment default on the Bonds has occurred and is continuing, and the Controlling Party has identified a successor operator acceptable to Owner; or

(3) a prepayment of the Bonds has occurred in accordance with the terms of the Bond Documents and the Ground Lease has terminated in accordance with its terms.

Section 8.02 Termination for Convenience.

Either Party may, subject to the terms and conditions herein, terminate this Management Agreement upon written notice to the other Party at least three (3) months but not more than nine (9) months prior to the expiration of the then-current Term, with such termination to be effective at the expiration of the then-current Term.

Section 8.03 Operator’s Duties on Termination.

Prior to any termination or expiration of this Operating Agreement, Operator shall, without additional reimbursement or payment, other than payment of Operator Fees otherwise due hereunder:

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(a) Completion of Operating Services. Complete all Operational Services required under the terms of this Operating Agreement scheduled for completion prior to the Termination Date or expiration of this Operating Agreement or such other date as is reasonably requested by Owner to allow Owner to find and transition a successor operator;

(b) Applicable Law and Permits. Disclose to Owner in writing (i) any failure by Operator to comply in all material respects with Applicable Law or Permits; and (ii) any breach or default by a contractor counterparty to any Material Contract of which Operator has actual knowledge (such disclosure shall contain a description of such failure to comply and what steps, if any, have been taken to remedy same);

(c) Assign Contracts and Warranties. If requested by Owner, assign to Owner, to a successor operator, or to a Person or entity designated by Owner all contracts with vendors, contractors, subcontractors, or others relating to the management, operation, and maintenance of the Project and any equipment utilized therein, and any warranties of such vendors, contractors, subcontractors, and others, to the extent that such contracts and warranties are assignable and all requisite consents have been obtained (provided that it shall be a condition to such assignment that such contract permits such assignment and that Owner or a successor operator, as the case may be, satisfies all of the reasonable conditions to such assignment imposed by the counterparty thereto);

(d) Deliver Books and Records. Subject to Applicable Law, including patient confidentiality laws, deliver to another person or entity designated by Owner (or relinquish Operator’s control over) (i) all Project Information, including books and records in Operator’s possession relating to the Project, (ii) all Operations Manuals (regardless of whether such Operations Manuals contain Operator Proprietary Materials); (iii) all financial records and copies of all other records created or maintained by Operator, and in Owner’s discretion, required for Owner or a successor operator to take over the management, operation and maintenance of the Project (provided that Operator and any Clinical Partner may retain such copies of medical records as are required to be retained by them under Applicable Law and Permits); and (iv) all materials, supplies, contracts, original documents and other items of personal property owned by Owner and in Operator’s possession or control; and

(e) Other Action. Reasonably cooperate with Owner and take any and all such further reasonable action as may be requested by Owner to ensure the complete and efficient transfer of the management, operation, and maintenance of the Project to any successor operator or any Person designated by Owner. For avoidance of doubt, reasonable action shall include, without limitation, the transfer of all Permits that may be transferred, or the provision of information necessary for the successor operator or Person designated by Owner to obtain all Permits necessary for the management, operation, and maintenance of the Project.

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Section 8.04 Termination on Destruction.

Subject to the terms and conditions set forth in Section 6.04, Owner or Trustee may terminate this Operating Agreement, with thirty (30) days’ prior written notice to Operator, upon the Event of Total Loss of the Project and the determination by Owner not to repair or reconstruct the Project.

Section 8.05 Payments Upon Termination.

(a) Owner will be responsible for the direct handling and payment of invoices received after notice of any termination hereunder; provided, that to the extent of available operating funds in the Project Operating Account, Operator may, but shall not be required to, continue to pay obligations incurred by the Project through the Termination Date. Upon notice of termination by any party for any reason, Operator will submit to the Designated Agent an estimate of the additional funds incurred by the Project through the Termination Date, and all other obligations of Owner under this Operating Agreement (including without limitation all of Operator’s reimbursable costs as specified in SCHEDULE B).

(b) In connection with a termination under Section 8.01(a), the 8.01(a) Termination Notice, shall be accompanied by payment (but nevertheless subject to Owner’s limitation on liability under Section 7.01) to Operator or invoice, as applicable, of (i) all accrued but unpaid Operator Fees (including without limitation all of Operator’s reimbursable costs as specified in SCHEDULE B) through the Termination Date less any (ii) cost or expense for remedying the Operator Termination Default, including the cost of replacing Operator with another operator, and any collections costs and attorneys’ fees. If any amount is owing to Owner pursuant to any Section 8.01(a) Termination, Operator shall pay such amount within five (5) Business Days of receipt of an invoice for the same.

(c) Subject to Owner’s limitation on liability under Section 7.01, in connection with any termination hereunder (except any termination under Section 8.01(a)) Owner shall direct the Trustee to pay to Operator all accrued but unpaid Operator Fees (including without limitation all of Operator’s reimbursable costs as specified in SCHEDULE B) through the date of termination on or before the date of termination, unless such failure is due to insufficient funds available therefor under and in accordance with the Indenture in which case Owner will not be required to make any payment.

Section 8.06 Final Accounting.

(a) Concurrently with the date of the termination of this Operating Agreement, and following the payment from the Project Operating Account of all Operator Fees and expenses due and owing to Operator under the terms of this Operating Agreement, Operator shall remit to the Revenue Fund all funds in all accounts related to the Project, and deliver to or at the direction of Owner, subject to the security interest of

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the Trustee and Collateral Agent (i) all keys and other items providing for access to the Project, (ii) possession of the Project, including vacation of any space in the Project occupied by Operator, and (iii) such documents as are necessary to remove Operator’s designees, employees and agents as signatories to any bank account, if any, established under the terms of this Operating Agreement by Owner, the Designated Agent, Trustee or Operator for the Project; and

(b) Within forty-five (45) days after the expiration of the Term, Operator shall deliver to the Designated Agent a final Operator’s Monthly Financial Report reflecting the balance of income and expenses pertaining to the Project as of the date of termination, which shall be paid by Owner within thirty (30) days, subject to the limitation on Owner’s liability set forth in Section 7.01.

Section 8.07 Operator’s Retention of Copies.

Operator shall be entitled to retain copies of or have reasonable access upon request to all documents referred to in Section 10.01, but such access shall be limited to the extent reasonably necessary for (a) Operator’s accountants to conduct any review of such books and records required for auditing purposes, preparation of tax returns for Operator and/or claims asserted against Operator, (b) for Operator to respond to any inquiry, audit or investigation by any governmental authority, including by not limited to the United States Department of Health and Human Services and the United States Comptroller General and their representatives and (c) as required by Applicable Law.

ARTICLE 9 REPRESENTATIONS AND WARRANTIES

Section 9.01 Operator’s Representations and Warranties.

Operator represents and warrants to Owner and the Designated Agent as of the Effective Date (and any additional date specified below) as follows:

(a) it is duly organized, validly existing and in good standing as a limited liability company under the laws of the State of Delaware and is qualified to conduct its business in the state or jurisdiction in which the Project is located; further, it has the requisite authority and power to execute and deliver this Operating Agreement and to perform its obligations hereunder; and it has taken all necessary action to authorize such execution, delivery and performance;

(b) the execution, delivery and performance of this Operating Agreement do not conflict with or violate any Applicable Law, any provision of its constituent documents, any order or judgment of any court or governmental agency applicable to it or any of its assets or any contractual restriction binding on it or its assets;

(c) this Operating Agreement constitutes Operator’s legal, valid and binding obligation, enforceable in accordance with its terms, subject to applicable bankruptcy,

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insolvency, reorganization, moratorium and similar laws relating to the enforcement of creditors’ rights generally and subject to principles of equity;

(d) Operator has received and read copies of the Bond Documents and the Assigned Authority Documents and is familiar with the material obligations of Owner under all such documents and instruments as the same relate to Operator and this Operating Agreement;

(e) Operator possesses the requisite skills, qualifications, experience and personnel to oversee and professionally manage the Project and perform its covenants and obligations hereunder; and the staffing levels and workforce composition to be maintained by Operator are sufficient to achieve those objectives;

(f) no event or condition exists on or with respect to the Project that, if such event were to occur or condition were to exist on the Effective Date, would result in a breach or default by Operator under this Operating Agreement;

(g) the amounts payable hereunder, under any Clinical Services Contract or under any other contract or agreement entered with respect to the Project, whether or not designated as “rent” (including all inducements and incentives), the area of leased premises and other relevant terms conform to the federal law Stark I and II anti-referral/fraud regulatory safe harbors (based upon the assumption that Landlord would be a party to this Operating Agreement or any Clinical Services Contract); provided that Operator shall be deemed to re-make this representation and warranty at the time it enters into or amends or modifies this Operating Agreement or any such Clinical Services Contract;

(h) as to any contract relating to the Project and its operation to which Operator is a party that is currently in force and effect and will remain in force and effect following consummation of the transactions contemplated hereby and by the Transaction Documents, neither Operator nor the counterparty or counterparties thereto are in breach or default and there is no Event of Default continuing or any event, fact, or circumstance that would, with the passage of time or the giving of notice, or both, would constitute an Event of Default which, in any case, would entitle the counterparty to terminate such contract or exercise any remedy or remedies thereunder that individually or collectively would have a Material Adverse Effect on the Operator or the Project;

(i) Operator has reviewed the Feasibility Study conducted in connection with Owner’s acquisition of the Project and issuance of the Bonds and believes the assumptions, projections, and other information therein to be factually correct in all material respects and reasonable and consistent with Operator’s expectations; and

(j) all representations made by Operator in connection with its application for any Permit with respect to the Project were true and correct at the time that they were made, are true and correct as of the date hereof (including, if amended, as so amended),

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and Operator has provided such additional or updated information to the issuer of any such Permit as required to comply in all material respects with the requirements therefor.

Section 9.02 Owner’s Representations.

Owner represents to Operator that Owner is a joint powers commission organized and existing under the laws of the State of Wisconsin and has full power and authority to enter into and to perform its obligations under this Operating Agreement and when executed and delivered by the respective parties thereto, this Operating Agreement will constitute the legal, valid and binding obligation of Owner enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases, to the limitations on legal remedies against Wisconsin governmental units such as Owner, and to limitations on Owner’s liability hereunder.

ARTICLE 10 CONFIDENTIALITY

Section 10.01 Protection and Use of Operator Proprietary Materials.

(a) Owner acknowledges that Operator will utilize its Operator Proprietary Materials (hereinafter defined) in connection with its performance under this Operating Agreement, and that Operator has invested considerable time, expertise and resources to develop or acquire the Operator Proprietary Materials. Owner acknowledges and agrees that the Operator Proprietary Materials and any and all improvements, modifications and updates to the Operator Proprietary Materials shall be the sole and exclusive property of Operator; provided, however, that Owner shall have a fully paid-up, royalty-free, non-exclusive, worldwide, irrevocable, non-transferable license to use such Operator Propriety Materials for the limited purpose of continued operation of the Project following the expiration or earlier termination of this Operating Agreement in accordance with the terms hereof.

(b) For purposes of this Operating Agreement,

(1) “Operator Proprietary Materials” means certain valuable and proprietary methods, systems and materials developed by Operator, including, but not limited to, form policy and procedure manuals, form training and operating manuals, form marketing plans, form hiring materials, and form programming calendars, but specifically excludes all of the following:

(A) any materials of similar nature or character provided to Operator by (i) the manufacturer of any equipment of any kind or nature used in the operation of the project; (ii) by any Clinical Partner in connection with the performance of its Operational Services under a Clinical Services Contract; or (iii) by the Medical Consultant in

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connection with the discharge of its duties as Medical Consultant under the Indenture;

(B) independently developed by or for Owner in connection with the management and operation of an Other Center; and

(C) Project Information.

(2) “Project Information” means reports, budgets, evaluations, surveys, and any other information or records that contain any information of Owner or the Project or that is otherwise necessary for the continued operation of the Project in the event that Operator terminates or is terminated under this Operating Agreement, or any information that is required to be delivered to Owner, the Designated Agent, or the Trustee under the Indenture or under this Operating Agreement (including, the financial records and reports under Section 4.08 and Section 4.09).

(3) “Other Center” means a Proton Beam Therapy Center, other than the Project, owned by Owner as of the date hereof or developed, established, or acquired by Owner in the future.

(c) Owner further agrees that neither Owner nor any of the Designated Agent or their respective employees, subcontractors, agents, officers, directors of Owner shall have any claims to ownership of any Operator Proprietary Materials, nor will it assert any right to use any Operator Proprietary Materials, except as expressly authorized under the limited license furnished to Owner under Section 10.01(a).

(d) Owner acknowledges and agrees that any breach of the provisions of this Section may cause irreparable injury to Operator for which monetary damages are inadequate, difficult to compute, or both, and that the provisions of Section 5.01 may be enforced by specific performance or other applicable equitable relief, without the necessity of proving irreparable harm or the posting of a bond.

Section 10.02 Project Information.

All Project Information shall be deemed Confidential Information and subject to the limitations set forth in Section 10.03. Each of Owner and Operator acknowledges and agrees that in the event that Operator terminates or is terminated under this Operating Agreement that Applicable Law may restrict or limit the communication of conveyance of patient records or patient information and that any requested transfer of patient information or records to a new or replacement Operator is intended to be in accordance with Applicable Law.

Section 10.03 Confidential Information.

For the Term and for one (1) year thereafter, Operator agrees not to directly or indirectly use or disclose any confidential, proprietary business, or trade secret information of Owner or the

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Project, including the Project Information (collectively, “Confidential Information”), to any third-party, except as Owner or the Designated Agent may explicitly authorize in writing. The obligations of nondisclosure of the Confidential Information under this Section 10.03 shall not apply to any part of the Confidential Information that (i) was already known to Operator before receiving such information from Owner or the Designated Agent; (ii) is or becomes known to the public or generally available to the public through no fault of Operator; (iii) is rightfully furnished to Operator from a third party who has not received such Project Information, directly or indirectly, from Owner or the Designated Agent under an obligation of nondisclosure or nonuse; (iv) is independently developed by or for Operator without use of the Project Information received from Owner or the Designated Agent; (v) is required to be disclosed under the Continuing Disclosure Agreement; or (vi) is contained in any reports given to Owner which become subject to the WPRL. The obligation of nondisclosure of the Confidential Information in this Operating Agreement shall not be breached by disclosure required in a judicial proceeding or governmental investigation; provided that Operator gives the Designated Agent prior notice of such requirement and affords Owner an opportunity to oppose such disclosure or seek a protective order or other appropriate remedy. Notwithstanding the foregoing or anything to the contrary contained herein, Operator acknowledges that Owner is an “authority” for purposes of the Wisconsin Public Records Law (“WPRL”) and that this Operating Agreement and confidential information received from Operator that is covered by this Operating Agreement, including, but not limited to, Operator Proprietary Materials, will be considered public records and will be subject to disclosure under the WPRL, except for information falling within one of the exemptions therefrom. Owner is required to and shall comply with all Applicable Law including, the WPRL in relation to any records, documents and information related to Owner’s dealings and relationship with Operator. Nothing in this Operating Agreement shall be deemed or construed as a limitation on Owner’s discretion relating to compliance with the WPRL or other Applicable Law. Nevertheless, Owner will use reasonable efforts to provide notice to Operator of any request under the WPRL.

Section 10.04 Patient Records; HIPAA.

(a) The Parties acknowledge and agree that as the provider of healthcare services to patients of the Project, all medical and professional matters relating to the care of patients receiving services at the Project shall remain the sole responsibility of Operator, the Clinical Partners, and the licensed practitioners providing services to such patients. Notwithstanding anything contained herein to the contrary, during the Term of this Agreement, records of patients treated at the Project shall not be included in the definition of “Project Information” and shall instead be in the sole custody and control of Operator and the licensed practitioners providing services to such patients.

(b) The Parties acknowledge and agree that, under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and any regulations promulgated thereunder, each Party has certain obligations with respect to the confidentiality of “protected health information,” as that term is defined by HIPAA. Owner and Operator agree that they shall perform their obligations under this Agreement in compliance with HIPAA and any regulations promulgated thereunder.

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ARTICLE 11 SECURITY

Section 11.01 Grant of Security Interest.

Operator hereby grants to the Collateral Agent, for the benefit of Owner and the further benefit of the Trustee and the Bondholders as assignees of Owner, a lien on and security interest in all right, title and interest of Operator, whether now owned or existing or hereafter created, acquired or arising, in and to all of the following: any Operating Account (including the Project Operating Account), any Collection Account created for or in the name of Operator, accounts, chattel paper, instruments (including promissory notes), documents, general intangibles, health care insurance receivables, letter of credit rights, supporting obligations, supporting evidence and documents relating to any of the above described property, including without limitation, computer programs, disks, tapes and related electronic data processing media, and all rights of Operator to retrieve the same from third parties, written applications, credit information, account cards, payment records, correspondence, delivery and installation certificates, invoice copies, delivery receipts, notes, and other evidences of indebtedness, insurance certificates and the like, together with all books of account, ledgers, and cabinets in which the same are reflected or maintained; accessions and additions to, and substitutions and replacements of, any and all of the foregoing; and proceeds and products of the foregoing, and all insurance of the foregoing and proceeds thereof, in each case giving rise to or evidencing Gross Operating Revenues, to secure the Operator Secured Obligations (collectively, the “Operator Collateral”).

Section 11.02 Obligations Hereby Secured.

The lien and security interest herein granted and provided for is made and given to secure, and shall secure, the payment and performance of (a) any and all indebtedness, obligations, and liabilities of whatsoever kind and nature of Operator to Owner, the Trustee, the Collateral Agent or any Authority Indemnified Person (collectively, the “Secured Parties”) under the Project Documents (whether arising before or after the filing of a petition in bankruptcy), whether direct or indirect, absolute or contingent, due or to become due, and whether now existing or hereafter arising and howsoever held, evidenced, or acquired, and whether several, joint, or joint and several, and (b) any and all expenses and charges, legal or otherwise, suffered or incurred by any Secured Party in collecting or enforcing any of such indebtedness, obligations, or liabilities or in realizing on or protecting or preserving any security therefor, including, without limitation, the lien and security interest granted hereby (all of the foregoing being hereinafter referred to as the “Operator Secured Obligations”).

Section 11.03 Operator Collateral; Default.

Operator hereby covenants and agrees with, and represents and warrants to, the Secured Parties that:

(a) Operator is the sole and lawful owner of the Operator Collateral, and has full right, power, and authority to enter into this Operating Agreement and to perform each and all of the matters and things herein provided for.

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(b) Operator’s chief executive office and principal place of business is at, and Operator keeps and shall keep all of its books and records relating to Operator Collateral only at 850 West Baltimore Street, Baltimore, Maryland 21201 and Operator has no other executive offices or places of business.

(c) Operator shall not change its legal name, change its jurisdiction of organization, move its chief executive office or maintain a place of business at a location other than those specified above, without first providing the Collateral Agent fifteen (15) days’ prior written notice of Operator’s intent to do so; provided, that Operator shall at all times maintain its chief executive office in the United States of America and, with respect to any other such change, Operator shall have taken all action necessary or reasonably requested by the Collateral Agent to maintain the lien and security interest of the Collateral Agent in the Operator Collateral at all times fully perfected and in full force and effect.

(d) Operator agrees to execute and deliver to the Collateral Agent such further agreements, assignments, instruments, and documents and to do all such other things as the Collateral Agent may reasonably request as necessary or appropriate to assure the Collateral Agent its lien and security interest hereunder, including, without limitation, (i) such financing statements, and amendments thereof or supplements thereto, and such other instruments and documents as may be necessary or appropriate to perfect its security interest and comply with the UCC and any other Applicable Law, (ii) such agreements with respect to patents, trademarks, copyrights, and similar intellectual property rights as the Collateral Agent may request to comply with the filing requirements of the United States Patent and Trademark Office and the United States Copyright Office, and (iii) such control agreements with respect to all Deposit Accounts, Investment Property, Letter of Credit Rights, and electronic Chattel Paper, and to cause the relevant depository institutions, financial intermediaries, and issuers to execute and deliver such control agreements, as the Collateral Agent may request; provided that (A) without limiting the sweep obligations respecting Government Pay Collection Accounts set forth herein, no control agreement shall be required for any Government Pay Collection Account and (B) Operator only agrees to the matters set forth in this clause (d) with respect to the Government Pay Collection Accounts and Government Pay Receivables to the extent permitted by the Medicare Regulations, Medicaid Regulations, CHAMPUS/CHAMPVA Regulations, the CMS Medicare Claims Processing Manual and other applicable Healthcare Laws.

(e) . Operator hereby agrees that a carbon, photographic, or other reproduction of this Operating Agreement or any such financing statement is sufficient for filing as a financing statement by the Collateral Agent without notice thereof to Operator wherever the Collateral Agent in its sole discretion desires to file the same. Operator hereby authorizes the Collateral Agent to file any and all financing statements covering the Operator Collateral or any part thereof as the Collateral Agent may require. The Collateral Agent may order lien searches from time to time against Operator and the Operator Collateral, and Operator shall promptly reimburse the Collateral Agent for all reasonable costs and expenses incurred in connection with such lien searches; provided,

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however, that unless an Section 11.03 Default exists, Operator shall only be responsible for reimbursing the Collateral Agent for two (2) lien searches per calendar year. In the event for any reason the law of any jurisdiction other than Operator’s current jurisdiction of organization or the jurisdiction identified in the schedules attached hereto as of the date hereof becomes or is applicable to the Operator Collateral or any part thereof, or to any of the Secured Obligations, Operator agrees to execute and deliver all such instruments and documents and to do all such other things as the Collateral Agent may reasonably request as necessary or appropriate to preserve, protect, and enforce the lien and security interest of the Collateral Agent under the law of such other jurisdiction. Operator agrees to mark its books and records to reflect the lien and security interest of the Collateral Agent in the Operator Collateral.

(f) In addition to any other powers of attorney contained herein, Operator hereby appoints the Collateral Agent, its nominee, and any other person whom the Collateral Agent may designate, as Operator’s attorney-in-fact, with full power and authority to sign Operator’s name on verifications of receivables and other Operator Collateral; to send requests for verification of Operator Collateral to Operator’s customers, account debtors, and other obligors; to endorse Operator’s name on any checks, notes, acceptances, money orders, drafts, and any other forms of payment or security that may come into the Collateral Agent’s possession or on any assignments, or other instruments of transfer relating to the Operator Collateral or any part thereof; to sign Operator’s name on any invoice or bill of lading relating to any Operator Collateral, on claims to enforce collection of any Operator Collateral, on notices to and drafts against customers and account debtors and other obligors, on schedules and assignments of Operator Collateral, on notices of assignment and on public records; to notify the post office authorities to change the address for delivery of Operator’s mail to an address designated by the Collateral Agent; to receive, open and dispose of all mail addressed to Operator; and to do all things necessary to carry out this Operating Agreement; provided nothing herein shall obligate the Collateral Agent or any Secured Party to take any such action. Collateral Agent agrees not to exercise such power except during a Section 11.03 Default which is continuing. Operator hereby ratifies and approves all acts of any such attorney taken under the scope of the provisions of this clause and agrees that neither the Collateral Agent nor any such attorney taken under the scope of the provisions of this clause will be liable for any acts or omissions nor for any error of judgment or mistake of fact or law other than such person’s gross negligence or willful misconduct. The Collateral Agent may file one or more financing statements disclosing its security interest in any or all of the Operator Collateral without Operator’s signature appearing thereon. Operator also hereby grants the Collateral Agent a power of attorney to execute any such financing statements, or amendments and supplements to financing statements, on behalf of Operator without notice thereof to Operator. The foregoing powers of attorney, being coupled with an interest, are irrevocable until the Secured Obligations have been fully paid and performed in full (other than any contingent indemnification and other obligations that by their nature survive the termination of the Operating Agreement) and satisfied and the Operating Agreement has terminated. Notwithstanding the foregoing, (A) without limiting the sweep obligations respecting Government Pay Collection Accounts set forth herein, no control agreement shall be required for any Government

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Pay Collection Account, (B) no Secured Party shall have the right to verify Government Pay Receivables or the right to direct payments with respect to any Government Pay Receivable in violation of Medicare Regulations, Medicaid Regulations, CHAMPUS/CHAMPVA Regulations, the CMS Medicare Claims Processing Manual and other applicable Healthcare Laws, (C) the Secured Parties shall only have the right to send notices of assignment of, and liens in, Government Pay Receivables to the extent permitted by Medicare Regulations, Medicaid Regulations, CHAMPUS/CHAMPVA Regulations, the CMS Medicare Claims Processing Manual and other applicable Healthcare Laws and (D) the Secured Party shall only have rights and remedies with respect to Government Pay Collection Accounts and Government Pay Receivables to the extent permitted by the Medicare Regulations, Medicaid Regulations, CHAMPUS/CHAMPVA Regulations, the CMS Medicare Claims Processing Manual and other applicable Healthcare Laws.

(g) Unless waived by the Controlling Party, Operator shall be in default under this Operating Agreement giving rise to the remedies described in this Section 11.03, upon the occurrence of any of the following events (each, a “Section 11.03 Default” hereunder):

(1) Operator or any Revenue Contractor fails to remit payments to the Accounts as required by this Operating Agreement, or Operator is in breach of, or threatens to breach, any term, condition, obligation or covenant made by it to or with Owner or any Secured Party, or any representation or warranty of Operator is untrue or ceases to be accurate; or

(2) this Operating Agreement shall for any reason not be or shall cease to be in full force and effect or is declared to be null and void or Operator shall assert any claim or disclaim its obligations hereunder; or

(3) a receiver, Operator, receiver and Operator or receiver-Operator of all or a part of the Operator Collateral is appointed; or

(4) Operator ceases or threatens to cease to carry on all or a substantial part of its business or makes or threatens to make a sale of all or substantially all of its assets; or

(5) any judgment or judgments, writ or writs, or warrant or warrants of attachment, or any similar process or processes shall be entered or filed against Operator or against any of its property or assets in excess of $1,000,000 and which remains unvacated, unbonded, unstayed or unsatisfied for a period of thirty (30) days; or

(6) the holder of any other security interest, charge, encumbrance, lien or claim against any of the Operator Collateral with value in excess of $1,000,000 does anything to enforce or realize on such security interest, charge, encumbrance, lien or claim; or

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(7) an Operator Termination Default or an Event of Default (as defined in the Indenture) occurs.

(h) Upon the occurrence and during the continuation of any Section 11.03 Default, the Collateral Agent shall have, in addition to all other rights provided herein or by law, the rights and remedies of a Collateral Agent under the UCC (regardless of whether the UCC is the law of the jurisdiction where the rights or remedies are asserted and regardless of whether the UCC applies to the affected Operator Collateral), and further the Collateral Agent may, without demand and without advertisement, notice, hearing, or process of law, all of which Operator hereby waives, at any time or times, sell and deliver all or any part of the Operator Collateral (and any other property of Operator attached thereto or found therein) held by or for it at public or private sale, for cash, upon credit, or otherwise, at such prices and upon such terms as the Collateral Agent deems advisable, in its sole discretion. In addition to all other sums due the Collateral Agent hereunder, Operator shall pay the Collateral Agent all costs and expenses incurred by the Collateral Agent, including reasonable attorneys’ fees and court costs, in obtaining, liquidating or enforcing payment of Operator Collateral or the Secured Obligations or in the prosecution or defense of any action or proceeding by or against the Collateral Agent or Operator concerning any matter arising out of or connected with this Operating Agreement or the Operator Collateral or the Secured Obligations, including, without limitation, any of the foregoing arising in, arising under or related to a case under the United States Bankruptcy Code (or any successor statute). Any requirement of reasonable notice shall be met if such notice is personally served on or mailed, postage prepaid, to Operator in accordance with Section 12.01 at least ten (10) days before the time of sale or other event giving rise to the requirement of such notice; provided, that no notification need be given to Operator if Operator has signed, after a Section 11.03 Default has occurred, a statement renouncing any right to notification of sale or other intended disposition. The Collateral Agent shall not be obligated to make any sale or other disposition of the Operator Collateral regardless of notice having been given. The Collateral Agent or any Secured Party may be the purchaser at any such sale. Operator hereby waives all of its rights of redemption from any such sale. The Collateral Agent may postpone or cause the postponement of the sale of all or any portion of the Operator Collateral by announcement at the time and place of such sale, and such sale may, without further notice, be made at the time and place to which the sale was postponed or the Collateral Agent may further postpone such sale by announcement made at such time and place. The Collateral Agent has no obligation to prepare the Operator Collateral for sale. The Collateral Agent may sell or otherwise dispose of the Operator Collateral without giving any warranties as to the Operator Collateral or any part thereof, including disclaimers of any warranties of title or the like, and Operator acknowledges and agrees that the absence of such warranties shall not render the disposition commercially unreasonable. Notwithstanding the foregoing, (A) without limiting the sweep obligations respecting Government Pay Collection Accounts set forth herein, no control agreement shall be required for any Government Pay Collection Account, (B) no Secured Party shall have the right to verify Government Pay Receivables or the right to direct payments with respect to any Government Pay Receivable in violation of Medicare Regulations, Medicaid Regulations, CHAMPUS/CHAMPVA Regulations, the CMS Medicare Claims

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Processing Manual and other applicable Healthcare Laws, (C) the Secured Parties shall only have the right to send notices of assignment of, and liens in, Government Pay Receivables to the extent permitted by Medicare Regulations, Medicaid Regulations, CHAMPUS/CHAMPVA Regulations, the CMS Medicare Claims Processing Manual and other applicable Healthcare Laws and (D) the Secured Party shall only have rights and remedies with respect to Government Pay Collection Accounts and Government Pay Receivables to the extent permitted by the Medicare Regulations, Medicaid Regulations, CHAMPUS/CHAMPVA Regulations, the CMS Medicare Claims Processing Manual and other applicable Healthcare Laws.

(i) Without in any way limiting the foregoing, upon the occurrence and during the continuation of any Section 11.03 Default, the Collateral Agent shall have the right, in addition to all other rights provided herein or by law, to take physical possession of any and all of the Operator Collateral and anything found therein, the right for that purpose to enter without legal process any premises where the Operator Collateral may be found (provided such entry be done lawfully), and the right to maintain such possession on Operator’s premises (Operator hereby agreeing to lease such premises without cost or expense to the Collateral Agent or its designee if the Collateral Agent so requests) or to remove the Operator Collateral or any part thereof to such other places as the Collateral Agent may desire. Upon the occurrence and during the continuation of any Section 11.03 Default, the Collateral Agent shall have the right to exercise any and all rights with respect to all deposit accounts of Operator, including, without limitation, the right to direct the disposition of the funds in each deposit account and to collect, withdraw, and receive all amounts due or to become due or payable under each such Deposit Account. If the Controlling Party directs the Collateral Agent to exercise remedies with respect to the Collection Account, the Collateral Agent shall open a Deposit Account and shall thereafter cause the transfer of funds from the Collection Account to such Deposit Account and the administer such funds. Upon the occurrence and during the continuation of any Section 11.03 Default, Operator shall, upon the Collateral Agent’s demand, promptly assemble the Operator Collateral and make it available to the Collateral Agent at a place designated by the Collateral Agent. If the Collateral Agent exercises its right to take possession of the Operator Collateral, Operator shall also at its expense perform any and all other steps requested by the Collateral Agent to preserve and protect the security interest hereby granted in the Operator Collateral, such as placing and maintaining signs indicating the security interest of the Collateral Agent, appointing overseers for the Operator Collateral, and maintaining Operator Collateral records. Notwithstanding the foregoing, (A) without limiting the sweep obligations respecting Government Pay Collection Accounts set forth herein, no control agreement shall be required for any Government Pay Collection Account, (B) no Secured Party shall have the right to verify Government Pay Receivables or the right to with respect to any Government Pay Receivable in violation of Medicare Regulations, Medicaid Regulations, CHAMPUS/CHAMPVA Regulations, the CMS Medicare Claims Processing Manual and other applicable Healthcare Laws, (C) the Secured Parties shall only have the right to send notices of assignment of, and liens in, Government Pay Receivables to the extent permitted by Medicare Regulations, Medicaid Regulations, CHAMPUS/CHAMPVA Regulations, the CMS Medicare Claims Processing Manual and

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other applicable Healthcare Laws and (D) the Secured Party shall only have rights and remedies with respect to Government Pay Collection Accounts and Government Pay Receivables to the extent permitted by the Medicare Regulations, Medicaid Regulations, CHAMPUS/CHAMPVA Regulations, the CMS Medicare Claims Processing Manual and other applicable Healthcare Laws.

Section 11.04 Collateral Agent.

Owner and Operator each hereby irrevocably appoints U.S. Bank National Association as “Collateral Agent” and authorizes the Collateral Agent to act as the agent of each of Owner and of Operator, and acknowledge that the Collateral Agent has been appointed by the Trustee under the Indenture, for purposes of acquiring, holding and enforcing any and all liens or security interests on collateral granted by Operator, any Revenue Contractor or any Person to secure any of their respective obligations under the Bond Documents or Assigned Authority Documents, together with such powers as are reasonably incidental thereto. In this connection, the Collateral Agent, pursuant to the Indenture, any Bond Document or Assigned Authority Document for purposes of holding or enforcing any lien or security interest on any collateral (or any portion thereof) under the any of the foregoing, or for exercising any rights and remedies thereunder at the direction of the Controlling Party, shall be entitled the benefits and protections of all provisions of Article V, Article IX, and Article X of the Indenture (including, without limitation, any and all rights to indemnity prior to taking action) as if set forth in full herein, mutatis mutandis, with respect thereto. It is further agreed:

(a) The powers conferred upon the Collateral Agent hereunder are solely to protect its interest in the Operator Collateral on behalf of the Secured Parties and shall not impose on it or any Secured Party any duty to exercise such powers. To the extent that at any time the Collateral Agent is deemed to take possession of Operator Collateral, the Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Operator Collateral in its possession or control if such Operator Collateral is accorded treatment substantially equivalent to that which the Collateral Agent accords its own property, consisting of similar type assets, it being understood, however, that the Collateral Agent shall have no responsibility for ascertaining or taking any action with respect to calls, conversions, exchanges, maturities, tenders, or other matters relating to any such Operator Collateral, whether or not the Collateral Agent has or is deemed to have knowledge of such matters. The grant of the security interest in the Operator Collateral hereunder constitutes an assignment of rights only and not an assignment of any duties or obligations of Operator in any way related to the Operator Collateral, and the Collateral Agent shall have no duty or obligation to discharge any such duty or obligation. The Collateral Agent shall have no responsibility for taking any necessary steps to preserve rights against any parties with respect to any Operator Collateral or initiating any action to protect the Operator Collateral against the possibility of a decline in market value. Neither the Collateral Agent nor any party acting as attorney for the Collateral Agent shall be liable for any acts or omissions or for any error of judgment or mistake of fact or law other than their gross negligence or willful misconduct.

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(b) Failure by the Collateral Agent to exercise any right, remedy, or option under this Operating Agreement or any other agreement between Operator and the Collateral Agent or any other Secured Party or provided by law, or delay by the Collateral Agent in exercising the same, shall not operate as a waiver; and no waiver by the Collateral Agent shall be effective unless it is in writing and then only to the extent specifically stated. The rights and remedies of the Collateral Agent under this Operating Agreement shall be cumulative and not exclusive of any other right or remedy which the Collateral Agent may have.

(c) With respect to any request permitted to be made by the Collateral Agent pursuant to Section 11.03(d) through Section 11.03(g), each of Owner and Operator acknowledge and agree that the Collateral Agent is not responsible or required to make any such request or demand or to take action to maintain or perfect any security interest provided for hereunder, except upon instruction of Operator, Owner or the Controlling Party under the Indenture. In the case of conflicting instructions, instructions of Owner shall control over instructions made by Operator, and instructions by the Controlling Party shall control over instructions made by either Owner or Operator.

Section 11.05 Application of Proceeds.

The proceeds and avails of the Operator Collateral at any time received by the Collateral after the occurrence and during the continuation of any Section 11.03 Default shall, when received by the Collateral Agent in cash or its equivalent, be applied by the Collateral Agent in accordance with Section 9.05 of the Indenture.

Operator shall remain liable to the Collateral Agent and the Secured Parties for any deficiency.

Section 11.06 Termination and Release of Security Interests.

Upon payment and performance of the Secured Obligations in full (other than any contingent indemnification and other obligations that by their nature survive the termination of the Operating Agreement) and the termination of the Operating Agreement, all of the Liens and security interests in the Operator Collateral in favor of, or for benefit of, the Collateral Agent and the Secured Parties shall automatically terminate and be null and void, and Collateral Agent shall file such terminations, terminate account control agreements, return tangible collateral and otherwise take such actions as are required to terminate and release such Liens and security interests of public record or otherwise, all at Operator’s cost and expense.

Section 11.07 Waiver of Set Off. Each Secured Party hereby waives any and all rights of offset against, and any and all rights to debit, each Government Pay Collection Accounts in accordance with Chapter 1, Section 30.2.5 of the CMS Medicare Claims Processing Manual .

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ARTICLE 12 MISCELLANEOUS

Section 12.01 Notices.

All notices provided for in this Operating Agreement shall be in writing and sent by overnight courier service, personal delivery, certified or registered mail, facsimile or e-mail. Any notice provided by facsimile transmission or e-mail shall be followed up with written notice through overnight courier service, personal delivery or certified or registered mail. All notices shall be given to Owner, Trustee, the Designated Agent or Operator, at the address set forth below or at such other address as they individually may specify thereafter by written notice in accordance herewith:

If to Owner: Public Finance Authority 22 East Mifflin Street, Suite 900 Madison, WI 53703 Attention: Michael LaPierre and Scott Carper

If to the Designated Agent: GPM Municipal Advisors, LLC 2999 Oak Road, Suite 710 Walnut Creek, CA 94597 Attention: Program Manager, Maryland Proton Treatment Center

If to the Trustee: U.S. Bank National Association Global Corporate Trust Services 1349 West Peachtree, N.W., Suite 1050 Atlanta, Georgia 30309 Attention: Zack Buckner Telephone: (404) 898-8831 Email: [email protected]

If to the Collateral Agent: U.S. Bank National Association [SAME ADDRESS AS TRUSTEE ADDRESS?]

If to Operator: Maryland Proton Treatment Center, LLC 850 W. Baltimore Street Baltimore, MD 21201 Attention: President

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Copy to: Miles & Stockbridge, PC 1500 K Street, NW, Suite 800 Washington, DC 20005 Attention: John A. Stalfort, Esquire

Such notices shall be deemed to have been given: (i) if sent by overnight or international courier service, when receipt by the recipient is confirmed by such service; (ii) if delivered by personal delivery, when received by the recipient; (iii) if sent by certified or registered mail, on the third (3rd) day after the date mailed, by certified or registered mail (in each case, return receipt requested, postage pre-paid); (iv) if sent by facsimile transmission, on the date sent by facsimile (with confirmation of transmission) if sent prior to 5:00 p.m. in the recipient’s time zone, and on the next Business Day if sent after 5:00 p.m. in the recipient’s time zone; or (v) if sent by e-mail, on the date sent by email (unless notification of non-delivery is provided) if sent prior to 5:00 p.m. in the recipient’s time zone, and on the next business day if sent after 5:00 p.m. in the recipient’s time zone.

Section 12.02 Consents and Approvals.

All consents and approvals and waivers required or asserted hereunder shall be in writing, signed by the party from whom such consent, approval, waiver or notice is requested; provided, that no written consent or approval of Owner or the Designated Agent shall be required for any action that Operator may, in its reasonable good faith judgment, find it necessary to take in the event of an emergency and Operator complies with either Section 4.02 or Section 4.03 in respect of such emergency.

Section 12.03 Cooperation.

Owner will keep Operator advised of its complete name at all times, including any change of such name. Operator will keep Owner advised of its complete name at all times, including any change of such name. Operator shall cooperate with Owner promptly, as and when reasonably requested by Owner, in order to assist Owner, the Designated Agent, the Collateral Agent, and the Trustee in the performance of their respective duties, responsibilities and obligations under this Operating Agreement, including executing and delivering documents, certificates or instruments reasonably necessary for Owner, Designated Agent , the Collateral Agent, or the Trustee to perform their respective duties, responsibilities and obligations under this Operating Agreement.

Section 12.04 Transfer.

Except as otherwise provided in Section 12.13 of this Operating Agreement, no Party may sell, lease, assign, transfer, convey or otherwise dispose of in any manner, directly or indirectly (collectively, “Transfer”) all or any part of its rights, obligations, benefits, advantages, titles and interest in this Operating Agreement or the Project without the prior written consent of the other Party. Any such assignment in contravention of this Section 12.04 shall be null and void ab initio. Notwithstanding the foregoing, Operator’s consent shall not be required for a Transfer by Owner of all or any part of its rights, obligations, benefits, advantages, titles and

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interest in this Operating Agreement or the Project to a political subdivision, instrumentality, or agency of the State of Wisconsin pursuant to a change in Applicable Law effected by the Wisconsin legislature.

Section 12.05 Interpretation.

Where appropriate to the context, words of one gender include all genders, and the singular includes the plural and vice versa. references to this Operating Agreement shall include a reference to all Recitals and Exhibits hereto, as the same may be amended, modified, supplemented or replaced from time to time. References to any agreement, document or instrument shall mean a reference to such agreement, document or instrument as the same may be amended, modified, supplemented or replaced from time to time. References to Applicable Laws shall mean a reference to such Applicable Laws as the same may be amended, modified, supplemented or restated and be in effect from time to time, including rules and regulations promulgated thereunder. The words “include” or “including” mean “including, without limitation,” or “including, but not limited to,” whether or not they are followed by such phrases or words of like import. Whenever in this Operating Agreement Owner covenants to “cause” any person to take any action, it is expressly understood and agreed that Owner shall not be required to take any affirmative action and Owner’s obligation to so “cause” shall be fully satisfied solely by (i) including reasonable and appropriate provisions in the Indenture or other agreement providing for the obligation of such person to take such action; and (ii) not knowingly and actively preventing such action from being taken.

Section 12.06 Amendments.

This Operating Agreement may not be amended or modified except in a written instrument signed by Operator and Owner; provided if any such modification would adversely affect the interests of the Collateral Agent, the Trustee or the holders of the Bonds, no such modification shall be effective without the consent of the Collateral Agent and the Trustee (who may rely upon the direction of the holders of the Bonds in providing any such consent).

Section 12.07 Complete Agreement.

This Operating Agreement together with all schedules and exhibits attached hereto and made part thereof supersedes all previous agreements, understandings and representations made by or between the parties hereto; provided, that in the event of any conflict between the provisions hereof and the provisions of the Indenture, the Indenture shall control.

Section 12.08 Governing Law; Jurisdiction; Venue.

This Operating Agreement shall be governed by and construed in accordance with the laws of the State of Wisconsin, without regard to conflicts of law principles. All claims of whatever character arising out of this Operating Agreement, or under any statute or common law relating in any way, directly or indirectly, to the subject matter hereof or to the dealings between Owner and any other party hereto, shall be brought in any state or federal court of competent jurisdiction located in Dane County, Wisconsin. By executing and delivering this Operating

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Agreement, each party hereto irrevocably: (i) accepts generally and unconditionally the exclusive jurisdiction and venue of such courts; (ii) waives any defense of forum non conveniens; (iii) agrees not to seek removal of such proceedings to any court or forum other than as specified above. The foregoing shall not be deemed or construed to constitute a waiver by Owner of any prior notice or procedural requirements applicable to actions or claims against or involving governmental units and/or political subdivisions of the State of Wisconsin that may exist at the time of and in connection with such matter.

Section 12.09 Legal Construction.

In case any one or more of the provisions contained in this Operating Agreement shall for any reason be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalid provision shall be deemed severable, and shall not affect the validity or enforceability of any other provisions of this Operating Agreement, all of which shall remain fully enforceable.

Section 12.10 Captions.

The captions used in this Operating Agreement are solely for convenience, and shall not be deemed to constitute a part of the substance of the Agreement for purpose of its construction.

Section 12.11 Competitive Projects.

Except as specifically set forth herein, Operator may, individually or with others, engage in or possess an interest in any other projects and ventures of every nature and description, including, but not limited to, the ownership, financing, leasing, operation, management, brokerage, development and sale of real property and building projects other than the Project, whether or not such other ventures or projects are competitive with the Project.

Section 12.12 Change of Control.

Operator may not, without prior written consent of Owner merge, consolidate, reorganize, or engage in any other fundamental transaction that would result in a change of control of Operator, provided that such written consent shall not be unreasonably withheld; and further provided that such written consent shall not be required (i) for the addition to Operator’s Board of Directors of one or more individuals who are members of the Maryland healthcare community; or (ii) effect changes in the equity ownership of Operator (or its ultimate parent entity) from such ownership on the Effective Date of less than fifty percent of the equity interests in Operator (or such ultimate parent entity).

Section 12.13 Assignment to Collateral Agent and Trustee Under Bond Documents.

Operator acknowledges (i) that Owner, pursuant to the Indenture and Bond Documents, shall assign to the Collateral Agent and Trustee, for the benefit of the Trustee, the Bondholders, and other secured parties under and as defined in the Indenture, its rights, remedies, powers and privileges under this Operating Agreement and (ii) that the Collateral Agent or Trustee may

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further assign such rights, remedies, powers and privileges to the extent contemplated by the Bond Documents. Operator agrees that the Trustee or Collateral Agent, as the assignee of Owner, shall, subject to the terms of the Bond Documents, have the right to enforce the indemnification provisions hereof that expressly reference the Trustee or the Collateral Agent and Operator agrees to cooperate fully with the Collateral Agent and the Trustee in the exercise of such rights and remedies. Operator further agrees to give to the Collateral Agent and Trustee copies of all notices it is required to give to Owner hereunder.

Signature Page to Facility Operating Agreement

IN WITNESS WHEREOF , the parties have executed this Operating Agreement as of the Effective Date set forth above.

OWNER: Public Finance Authority By: ____________________________________ Name: _______________________________ Title: ________________________________ OPERATOR: Maryland Proton Treatment Center, LLC By: ____________________________________ Name: _______________________________ Title: ________________________________

Schedule A - Administration of Collateral Agent Accounts

SCHEDULE A HEALTHCARE FINANCING DEFINITIONS

“CHAMPUS” means the Civilian Health and Medical Program of the Uniformed

Services under 10 U.S.C. §§ 1071 et seq., as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented.

“CHAMPUS/CHAMPVA Regulations” means, collectively, all published federal statutes, rules, regulations, manuals, orders, administrative, reimbursement and other guidelines related to the health insurance program under CHAMPUS (including the TRICARE program of the Department of Defense) or CHAMPVA, as the same now exist or may from time to time hereafter be amended, modified, recodified or supplemented.

“CHAMPVA” means the Civilian Health and Medical Program of Veterans Affairs under Chapter 17 of Title 38 U.S.C., as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented.

“CMS” shall mean the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services, formerly known as the Health Care Financing Administration, or any successor or replacement federal Governmental Authority with the same or similar powers and responsibilities.

“Healthcare Laws” means (a) all federal and state fraud and abuse laws, including the federal Anti-Kickback Statute (42 U.S.C. §1320a-7b(b)), the Stark Law (42 U.S.C. §1395nn), the civil False Claims Act (31 U.S.C. §3729-33 et seq.), TRICARE (formerly known as CHAMPUS) (10 U.S.C. Section 1071 et seq.), Section 1320a-7 and 1320a-7a of Title 42 of the United States Code and the regulations promulgated pursuant to such statues; (b) HIPAA and the regulations promulgated thereunder; (c) Medicare and Medicare Regulations; (d) Medicaid and Medicaid Regulations; (e) the Food, Drug & Cosmetic Act and all applicable requirements, regulations and guidances issued thereunder by the FDA; (f) the Controlled Substances Act, as amended, and all applicable requirements, regulations and guidances issued thereunder by the DEA; (g) all applicable state healthcare laws or regulations; including applicable licensure laws and regulations and published professional standards regulations, manual provisions, policies and administrative guidance, including those related to the corporate practice of medicine, fee-splitting, state anti-kickback or self-referral prohibitions, and (h) any other applicable Healthcare Laws including the Social Security Act, the Social Security Amendments of 1972, the Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977, the Medicare and Medicaid Patient and Program Protection Act of 1987, the Medicare Prescription Drug, Improvement and Modernization Act of 2003, the Deficit Reduction Act of 2005, HITECH and CHAMPVA; each of which may be amended from time to time.

“HITECH” means the Health Information and Technology for Economic and Clinical Health Act of 2009 and the Standards for Privacy and Security of Individually identifiable health Information, 45 C.F.R. parts 160 and 164 promulgated thereunder.

“Medicaid” shall mean the medical financial assistance program jointly financed and administered by the Federal and state governments under Title XIX of the Social Security Act

Schedule A - Administration of Collateral Agent Accounts

(42 U.S.C. §§ 1396 et seq.), as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented.

“Medicaid Regulations” means, collectively, all federal, state and local statutes related to the medical assistance program established by Title XIX of the Social Security Act (42 U.S.C. §§ 1396 et seq.), as the same now exist or may from time to time hereafter he amended, modified, recodified or supplemented, together with all applicable provisions of all published federal rules, regulations, manuals and orders promulgated pursuant to or in connection with Medicaid, including all federal administrative, reimbursement and other guidelines.

“Medicare” means the medical financial assistance program under Title XVIII of the Social Security Act (42 U.S.C. §§ 1395 et seq.), as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented.

“Medicare Regulations” means, collectively, all Federal statutes related to the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act (42 U.S.C. §§ 1395 et seq.), as the same now exist or may from time to time hereafter be amended, modified, recodified or supplemented, together with all applicable provisions of all published federal rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to or in connection with Medicare, including all published federal administrative, reimbursement and other guidelines of all Governmental Authorities related to Medicare, in each case as may be amended, modified, recodified or supplemented.

Schedule B – Project Expenses to be Funded by Operating Expenses Fund

SCHEDULE B PROJECT EXPENSES TO BE FUNDED BY OPERATING EXPENSES FUND

To be updated with budget and all operating expenses for the Project.

1. All payroll-related costs and expenses, personnel costs, and all other expense and benefits associated with independent contractors and/or employees providing specific on-site property management duties, set up and any training and on-going support of the property management staffing, including without limitation:

(A) Regular, overtime, and holiday pay (for purposes of this Operating Agreement, holidays shall be New Year’s Day, Martin Luther King Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, Day after Thanksgiving, and Christmas Day/Chanukah (1 day)/Kwanzaa (1 day) and such other holidays as may be required under Applicable Law);

(B) Incentive bonuses and leasing commissions (any incentive subject to this line item is to be agreed upon in writing by the Designated Agent and Operator in advance and subject to the Approved Operating Budget);

(C) Annual leave time (vacation and illness) allowed by Operator’s Employee Handbook as in effect from time to time, a copy of which is available upon request.

2. Statutory payroll taxes and related personnel costs of employees assigned on-site duties, that are calculated based on the total payroll per pay period and that are subject to periodic change.

3. Where applicable, taxes will be charged on services performed by on-site personnel and reimbursed through payroll costs.

4. Direct expenses of on-site management personnel, such as photocopying charges, special handling postage, long-distance phone charges and all reasonable corporate travel, lodging and meal expenses actually incurred by Operator, its officers, employees and agents in performing Operator’s duties under this Operating Agreement.

5. Reimbursement of any On-Site accounting Operator Fees paid by Operator with respect to the Project.

6. Reimbursement for Payor contracting, Accounting Software, and Insurance.

Schedule C – Operator’s Compensation

SCHEDULE C OPERATOR’S COMPENSATION

(i) $750,000 management fee per year beginning in 2018, subject to a 2% annual

increase;

(ii) $525,000 finance and accounting fee per year beginning in 2018, subject to a 2% annual increase;

(iii) $505,000 program development and overhead fee per year beginning in 2018,

subject to a 2% annual increase;

(iv) $800,000 marketing fee per year beginning in 2018, subject to a 2% annual increase; and

(v) 10% of total Operator Fee incentive bonus per year (to be payable from the

Operator Fee Fund; and not as an Operating Expense).

Schedule D – Operator Licenses

SCHEDULE D OPERATOR LICENSES

• Freestanding Major Medical Equipment Facility License issued by Maryland Department of Health (“DMH”)

• Radioactive Materials License from Maryland Department of the Environment (“MDE”)

• Medicare Provider Number and NPI

o National Provider Identifier (NPI): 1255742375 o Provider Transaction Access Number (PTAN): 428477

• Maryland Medicaid Number – 5210313

• Tricare (no separate number)

Schedule E – Master Insurance Schedule

SCHEDULE E MASTER INSURANCE SCHEDULE

This Master Insurance Schedule is attached to and incorporated by reference in all of the following: (i) that certain Ground Lease dated as of __________, 2018 (as the same may be amended, restated, modified, extended or supplemented, from time to time, the “Ground Lease”) and (ii) that certain Facility Operating Agreement dated as of _________, 2018 (as the same may be amended, restated, modified, extended or supplemented, from time to time, the “Operating Agreement”) between the Authority, as Owner, and Maryland Proton Treatment Center, LLC, as Operator (the “Operator”).

General Requirements – All Policies:

All insurance policies and renewals thereof that are required to be carried by Operator hereunder shall –

1. unless otherwise indicated, be issued by insurance carriers authorized to conduct business in Maryland and with an A.M. Best guide rating no less than A VIII and an S&P rating of no less than A.

2. be written on an occurrence (and not “claims made”) basis; provided, however, that employment practices liability insurance, professional liability insurance, cyber liability insurance and insurance for crime coverage will be on a “claims made” basis.

3. contain a provision whereby the insurer agrees to give to the Designated Agent and Trustee at least thirty (30) days’ prior written notice of any cancellation or material modification.

4. include insurer’s waiver of subrogation as against Trustee.

5. be primary and without right of contribution of any other insurance carried by or on behalf of Operator or Owner or Trustee with respect to their respective interests in the Revenues and the Project.

6. list the Trustee and the Collateral Agent as an additional insured, be payable to the Collateral Agent or the Trustee as a mortgagee and not as a coinsured, and, in the case of all policies of insurance carried by any lessee for the benefit of Owner, all such policies shall be payable to Trustee as loss payee.

7. comply with any other insurance requirements provided in the Indenture, Ground Lease, and Operating Agreement.


8. provide for a term of not less than one (1) year, provided, that policies may be obtained for a lesser period to the extent necessary for the term thereof to end concurrently with other related coverages.

Specific Requirements for Coverage, Limits, Deductibles:

9. Workers’ Compensation Insurance: In amounts required by applicable law and employers’ liability insurance in an amount equal to that currently maintained by Operator.

10. Employment Practices Liability. Employment Practices Liability insurance in an amount not less than $1,000,000 each claim/aggregate and with a deductible no greater than $15,000, including at a minimum coverage for employee discrimination liability (with respect to Operator’s employees at the Project) and third party discrimination; provided that Operator shall be solely responsible for the payment of (i) any deductible or (ii) any amounts in excess of the policy limits of insurance, arising out of or related to a claim under the Employment Practices Liability insurance and shall further be solely responsible for indemnification of Owner and the Authority Indemnified Persons. The Employment Practices Liability insurance must also contain an amount not less than $100,000 for wage and hour defense.

11. Health and Welfare Benefits. Employee Health and Welfare Benefits as provided to all of Operator’s site level employees.

12. Cyber Liability. Cyber Liability insurance with a policy limit of not less than $1,000,000 and not less than $1,000,000 in aggregate. The policy is claims made form and must contain limits of not less than $1,000,000 for each of the following: (i) enterprise security event claims, (ii) each privacy regulation claim, (iii) first party coverage claims (including each of aggregate first party, crisis management expense, fraud response expense, public relations expense, forensic and legal expense, and extortion loss), (iv) business interruption and data recovery claims (including each of system disruption business interruption, and data recovery expense coverage), (v) PCI-DSS fines coverage claims aggregate, and for each PCI-DSS claim, (vi) each website media claim, and (vii) ransomware loss claims. The policy must also contain a limit of not less than $100,000 for social engineering fraud. The policy must have retention of levels of no more than $10,000 for each of the following: (a) aggregate policy level, (b) each claim, (c) first party, (d) data recovery expense retention, (e) PCI-DSS fines, (f) website media liability, (g) ransomware loss limit, and (h) social engineering fraud limit. Any such retention amounts to be satisfied and paid solely by Operator.

13. General and Professional Liability. General and Professional liability insurance with an A.M. Best Rating of A++ XV, Admitted, in an amount not less than $1,000,000 per incident and not less than $3,000,000 in the aggregate, and listing the Authority as an additional insured. Coverage shall include broad form commercial general liability and automobile liability insurance, including


coverage for owned, non-owned and leased automobiles, garage keepers liability, products and completed operations, contractual liability, in an amount not less than $5 million per occurrence/aggregate. This coverage shall be satisfied by any combination of the primary general liability and excess and/or umbrella policies.

14. Crime. A comprehensive Crime insurance policy to include blanket employee dishonesty coverage in an amount not less than $1,000,000 with a deductible of no more than $5,000 (any such deductible amount to be satisfied and paid solely by Operator), ERISA fidelity coverage in an amount not less than $1,000,000, forgery or alteration coverage in an amount not less than $1,000,000, money and securities inside or outside coverage in an amount not less than $1,000,000, computer fraud coverage in an amount of not less than $1,000,000, social engineering coverage in an amount of not less than $1,000,000, and claim expense in the amount of $5,000. .

15. Umbrella Liability. Umbrella Liability insurance with an A.M Best Rating of A++ XV, Non-Admitted, in an amount not less than $10,000,000 each occurrence and $10,000,000 aggregate coverage, and listing the Authority as an additional in-sured. The policy must include, at a minimum, coverage for bodily injury, prop-erty damage and advertising/personal injury arising from premises, operations, independent contractors, products completed operations, host liquor liability and liability assumed under an insured contract both oral and written.

16. Property. Property insurance with an A.M. Best Rating of A+ XV, Admitted, a total insured value of approximately $271 million, with a deductible no greater than $25,000 (any such deductible amount to be satisfied and paid solely by Op-erator) and listing the Authority and Trustee as an additional insured. A sublimit of $5,000,000 is acceptable for each of earthquake peril and flood peril. The re-placement value of the Project shall be determined from time to time (but not less frequently than once in every five years) by the Insurance Consultant.

17. Business Interruption. Business interruption insurance on an all risk policy form, including coverage for business interruption resulting from the perils of fire, windstorm, flood, and accidental damage to or the explosion of boilers, pressure vessels and pipes, electrical apparatus and air conditioning systems, including re-frigeration and heating apparatus, and other risks covered by extended coverage endorsements, for full recovery of the Gross Operating Revenues of the Project for the entire period of any business interruption less charges and expenses that do not continue during such interruption (subject to the terms and conditions of the policy and the policy limit), with limits equal to the sum of (A) Debt Service for the next twelve months, (B) a reasonable estimate of the Taxes and Insurance Costs for the Project during the next twelve months and (C) a reasonable estimate of the Administrative Expenses during the next twelve months.

18. Boiler. Broad form insurance against loss from accidental damage to or the ex-plosion of boilers, pressure vessels and pipes, electrical apparatus and air condi-tioning systems, including refrigeration and heating apparatus in an amount equal


to the full replacement value of such items; provided, that it shall be in an amount not less than 25% of the limit on the Project or the total insurable value, subject to reasonable deductibles not exceeding $500,000 per occurrence.

Exhibit A – Master Glossary

EXHIBIT A MASTER GLOSSARY

[to be attached upon completion]

Exhibit B – Operations

EXHIBIT B OPERATIONS

Operator’s Equipment and Operation Services

Equipment Service Contract Coverage

The Equipment Service Contract Includes:

• Guaranteed uptime performance

• All hardware and software upgrades required for the purchased treatment configuration

• All personnel needed to non-clinically operate and maintain the systems.

• All spare parts and managing the inventory spare parts. The parts that are most critical to daily operations will either onsite or near by the Project for rapid repair.

• Travel expenses, hotel and living allowance for any required personnel.

• All tools and equipment required for monitoring, operation, and maintenance of the proton system.

• All consumables and supplies required for monitoring, operation and maintenance of the proton system.

• Onsite system operation team responsible for non-clinical operation of the proton system as needed for patient treatments:

• Perform all system start up, daily operation and shut down.

• Identify and log all component failures and corrective actions.

• Re-qualify the proton system if needed to meet all applicable safety and regulatory requirements.

• Communicating with the necessary regulatory authorities as the manufacturer and service provider of the proton system.

Operation Service

Operator will provide all required operational and management services to effectively and efficiently operate the Project, including:

• Billing and Collections

• All required staffing

• Daily Operations Management

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• Budgeting and effective financial management and reporting

• Responsible for:

• Patient acquisition

• Payer contracting

• Proton Therapy research coordination

• Operational efficiency

• Information Technology

• Operator to support from first patient treatment forward and manage the day to day operational needs of the Project. Operator will be dedicated to service the needs of the Project and be a key asset to the organizational learning required for world-class radiation therapy. Responsibilities include:

• Coordination of all equipment service contracts

• All system issues and performance improvements

• Primary point of contact with equipment suppliers

• Site reporting on any significant downtime events and corrective action

• Key Performance Indicator (KPI) reporting on all critical system performance metrics

• Coordination of any third party contracted services related to the operation of the Project

• Daily management of Project administrative functions

• Coordination of on-going physics quality and commissioning services and oversight of all quality equipment calibration and maintenance.

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APPENDIX H

PROPOSED FORM OF BOND COUNSEL OPINION

_____________, 2018

Public Finance Authority Madison, Wisconsin

Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center), Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Treatment Center),

Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Treatment Center), Subordinate Revenue Bonds, Series 2018B-2 (Maryland Proton Treatment Center), Junior Revenue Bonds, Series 2018C-1 (Maryland Proton Treatment Center), and

Junior Revenue Bonds, Series 2018C-2 (Maryland Proton Treatment Center) (Final Opinion)


We have acted as bond counsel to the Public Finance Authority (the “Issuer”) in connection with the issuance of $__________ aggregate principal amount of Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center) (the “Series 2018A-1 Bonds”), $__________ aggregate principal amount of Public Finance Authority Senior Revenue Bonds, Series 2018A-2 (Maryland Proton Treatment Center) (the “Series 2018A-2 Bonds” and, together with the Series 2018A-1 Bonds, the “Senior Bonds”), $__________ aggregate principal amount of Public Finance Authority Subordinate Revenue Bonds, Series 2018B-1 (Maryland Proton Treatment Center) (the “Series 2018B-1 Bonds”), $__________ aggregate principal amount of Public Finance Authority Subordinate Revenue Bonds, Series 2018B-2 (Maryland Proton Treatment Center) (the “Series 2018B-2 Bonds” and, together with the Series 2018B-1 Bonds, the “Subordinate Bonds”), $_________ aggregate principal amount of Public Finance Authority Junior Revenue Bonds, Series 2018C-1 (Maryland Proton Treatment Center) (the “Series 2018C-1 Bonds”) and $_________ aggregate principal amount of Public Finance Authority Junior Revenue Bonds, Series 2018C-2 (Maryland Proton Treatment Center) (the “Series 2018C-2 Bonds” and, together with the Series 2018C-1 Bonds, the “Junior Bonds”, and collectively with the Senior Bonds and the Subordinate Bonds, the “Bonds”), issued pursuant to a trust indenture, dated as of __________ 1, 2018 (the “Indenture”), between the Issuer and U.S. Bank National Association, as trustee (the “Trustee”). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture.

In such connection, we have reviewed the Indenture, the Tax Certificate of the Issuer, dated the date hereof (the “Tax Certificate”), opinions of counsel to the Issuer and others, certificates of the Issuer, the Trustee and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein.

The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. Accordingly, this letter speaks only as of its date and is not intended to, and may not, be relied upon or otherwise used in connection with any such actions, events or matters. We disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Issuer. We have assumed, without undertaking to verify, the accuracy of the factual matters

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represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants and agreements contained in the Indenture and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to assure that future actions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds, the Indenture, and the Tax Certificate and their enforceability may be subject to bankruptcy, insolvency, receivership, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against public authorities in the State of Wisconsin. We express no opinion with respect to any indemnification, contribution, liquidated damages, penalty (including any remedy deemed to constitute a penalty), right of set off, arbitration, choice of law, choice of forum, choice of venue, non-exclusivity of remedies, waiver or severability provisions contained in the foregoing documents, nor do we express any opinion with respect to the state or quality of title to or interest in any of the real or personal property described in or as subject to the lien of the Indenture or the accuracy or sufficiency of the description contained therein of, or the remedies available to enforce liens on, any such property. We also express no opinion regarding the accreted value table or calculation set forth or referred to in any of the Subordinate Bonds or Junior Bonds or in the Indenture. Our services did not include financial or other non-legal advice. Finally, we undertake no responsibility for the accuracy, completeness or fairness of the Official Statement or other offering material relating to the Bonds and express no opinion with respect thereto.

Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions:

1. The Bonds constitute the valid and binding limited obligations of the Issuer.

2. The Indenture has been duly executed and delivered by, and constitutes the valid and binding obligation of, the Issuer. To secure the payment of the principal of and interest on the Senior Bonds, and subject to the priority of the Senior Bonds, to secure the payment of the principal and Accreted Value of and interest on the Series 2018B-1 Bonds, and subject to the priority of the Senior Bonds and the Series 2018B-1 Bonds, to secure the payment of the principal and Accreted Value of and interest on the Series 2018B-2 Bonds, and subject to the priority of the Senior Bonds and the Subordinate Bonds, to secure the payment of the principal and Accreted Value of and interest on the Junior Bonds, the Indenture creates a valid pledge of the Revenues and any other amounts held by the Trustee in any fund or account established pursuant to the Indenture, except the Rebate Fund and any subaccounts in the Project Fund otherwise pledged, subject to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture.

3. Interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986. Interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax. We express no opinion regarding other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds.

Faithfully yours,

ORRICK, HERRINGTON & SUTCLIFFE LLP

APPENDIX I

PROPOSED FORM OF CONTINUING DISCLOSURE UNDERTAKING

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CONTINUING DISCLOSURE UNDERTAKING

This Continuing Disclosure Undertaking, dated as of ______, 2018 (this “Undertaking”), is made by Maryland Proton Treatment Center, LLC, a Delaware limited liability company (the “Operator”), in connection with the issuance by the Public Finance Authority (the “Authority”) of $______ aggregate principal amount of its Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center) (the “Bonds”).

The Bonds are being issued pursuant to a certain Trust Indenture, dated as of August 1, 2018 (the “Indenture”), between the Authority and U.S. Bank National Association, as trustee (the “Trustee”). The proceeds of the Bonds will be used by the Authority to, among other things, finance the acquisition of a proton treatment center (the “Center”) located in the City of Baltimore, Maryland. The Center will be operated by the Operator pursuant to the terms and conditions of a Facility Operating Agreement, dated the date of issuance of the Bonds (the “Facility Operating Agreement”), between the Authority and the Operator.

The Operator covenants and agrees as follows for the benefit of the Bondholders (as defined below):

Section 1. Purpose of Undertaking. This Undertaking is being executed and delivered by the Operator for the benefit of the Bondholders and in order to assist the Underwriters (defined below) in complying with the Rule (defined below). The Operator acknowledges that the Authority has undertaken no responsibility with respect to any reports, notices or disclosures provided or required under this Undertaking, including their accuracy and completeness, and has no liability to any Person, including any Bondholder and the Underwriters, with respect to any such reports, notices or disclosures.

Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Undertaking, unless otherwise defined in the first paragraph of this Undertaking or in this Section, the following capitalized terms shall have the meanings indicated below.

“Annual Report” shall mean any Annual Report provided by the Operator pursuant to Section 4(a) of this Undertaking.

“Bondholder” or “Holder” of a Bond shall mean any registered owner of any of the Bonds or any Person which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any of the Bonds (including Persons holding through any nominee, securities depository or other intermediary, including any beneficial owner), or (ii) is treated as the holder of any of the Bonds for federal income tax purposes.

“EMMA” means the Electronic Municipal Market Access system of the MSRB as provided at http://www.emma.msrb.org, or any similar system that is acceptable to or as may be prescribed by the MSRB for purposes of the Rule and approved by the SEC from time to time. A current list of such systems may be obtained from the SEC at http://www.sec.gov/info/municipal/nrmsir.htm.

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“Fiscal Year” means the fiscal year of the Center ending on December 31 of each calendar year.

“Listed Events” shall mean any of the events listed in Section 4(e) of this Undertaking.

“Monthly Report” shall mean any Monthly Report provided by the Operator pursuant to Section 4(c) of this Undertaking.

“MSRB” means the Municipal Securities Rulemaking Board established pursuant to Section 15(B)(b)(1) of the Securities Exchange Act of 1934, as amended, or any successor organization.

“Official Statement” shall mean the Official Statement dated _______, 2018 used in connection with the sale of the Bonds.

“Quarterly Report” shall mean any Quarterly Report provided by the Operator pursuant to Section 4(b) of this Undertaking.

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

“SEC” shall mean the United States Securities and Exchange Commission.

“Underwriters” shall mean Citigroup Global Markets Inc. and Raymond James and Associates.

Section 3. Content of Annual Reports, Quarterly Reports and Monthly Reports.

(a) Each Annual Report shall each contain (i) an annual financial report of the Center on a combined basis prepared by an Accountant, including a balance sheet as of the end of such Fiscal Year, a statement of revenues and expenses for such Fiscal Year, and a statement of cash flows for such Fiscal Year, showing in each case in comparative form the financial figures for the preceding Fiscal Year, which financial statements must be accompanied by an audit report, and (ii) a certificate of a financial officer of the Operator showing calculations of the Debt Service Coverage Ratios for such Fiscal Year and Days Cash on Hand as of end of the Fiscal Year and certifying that (x) there is no Default or Event of Default (or a description if there is a Default or an Event of Default) and (y) such financial report is a fair representation of the Center’s financial condition and financial results shall accompany such financial statements.

(b) Each Quarterly Report shall contain:

(i) quarterly unaudited financial statements of the Center on a combined basis as soon as practicable after they are available but in no event more than thirty (30) days after the completion of such fiscal quarter, including a balance sheet as of the end of each such fiscal quarter, a statement of revenues and expenses, and a statement of cash flows of the Center during such period, showing in each case in comparative form the financial figures for the same fiscal quarter of the preceding Fiscal Year, and the Debt Service Coverage Ratios for the preceding four fiscal quarters, and the Days Cash on Hand as of the end of the Fiscal Year,

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all prepared in reasonable detail and certified as to accuracy and a fair representation of the Center’s financial condition and financial results by a financial officer of the Operator and a certification by an officer of the Operator that there is no default or Event of Default (or a description if there is a default or an Event of Default), and

(ii) quarterly operating reports showing operating data for the Center, variances with the approved Operating Plan and Budget and Center operating parameters, including admissions, payor mix, the number of hours of treatment with the proton beam, the number of hours the proton beam was not available, and minutes per fraction, and variances with the approved Capital Budget, along with certification that such report was prepared in good faith and on the basis of information reasonably believed to be accurate at the time such report was prepared.

(c) Each Monthly Report shall contain:

(i) the number of patients treated, Revenues, and Operating Expenses and Capital Expenses for such month;

(ii) if the Debt Service Coverage Ratio of the Center for the last two (2) consecutive fiscal quarters is less than 1.2 with respect to Senior Bonds, the Operator will deliver the financial information and the calculations described in Section 3(b)(i) on a monthly basis within thirty (30) days of the end of each month until the Debt Service Coverage Ratio of the Center is at least 1.2 with respect to Senior Bonds; and

(iii) If the Days Cash on Hand of the Center for the last two (2) consecutive fiscal quarters is less than 60, the Operator will deliver the financial information and the calculations described in Section 3(b)(i) above on a monthly basis within thirty (30) days of the end of each month until the Days Cash of Hand of the Center is at least 60.

(d) The Operator shall make available one or more representatives for a telephone conference call with the Beneficial Owners of Bonds, which shall occur: (i) if the Debt Service Coverage Ratio is met, annually or (ii) if the Debt Service Coverage Ratio or DCOH Covenant is not met or if a Default or Event of Default has occurred and is continuing, at least monthly. In the event the Senior Bonds maintain an investment grade rating, no conference call is required. The Operator shall post notice of such calls to EMMA at least two (2) weeks prior to the scheduled date of each call.

Section 4. Provision of Annual Reports, Quarterly Reports and Notices of Listed Events and certain Other Events.

(a) Within 120 days after the end of each Fiscal Year, the Operator shall file the Annual Report with the MSRB. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information to the extent permitted by the Rule. Notwithstanding the foregoing, the audited financial statements with respect to the Center may be submitted separately from the balance of the Annual Report when such audited financial statements are available. If audited financial statements are not available at the time of the required filing of the Annual Report, the Operator

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shall timely file unaudited financial statements and shall file the audited financial statements when available.

(b) Within 30 days after the end of each fiscal quarter, the Operator shall file the Quarterly Report with the MSRB.

(c) Within 30 days after the end of each month, the Operator shall file the Monthly Report referred to in Section 3(c) hereof, if required, with the MSRB.

(d) The Operator shall also make the information required by Section 3(d) and (e) available as required pursuant to that Section.

(e) In a timely manner not in excess of ten (10) Business Days after the occurrence of any of the following events, the Operator shall file with the MSRB notice of any of the following events with respect to the Bonds:

(i) principal and interest payment delinquencies;

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

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

(iv) unscheduled draws on debt service reserves reflecting financial difficulties and substitution of credit or liquidity providers, or their failure to perform;

(v) 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 Bonds, or other material events affecting the tax status of the Bonds;

(vi) modifications to rights of the Holders of the Bonds, if material;

(vii) bond calls, if material, and tender offers;

(viii) defeasances;

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

(x) rating changes;

(xi) bankruptcy, insolvency, receivership or similar event of the Operator or the Authority;

(xii) the consummation of a merger, consolidation, or acquisition involving the Operator or the Authority or the sale of all or substantially all of the assets of the Operator or the Authority, other than in the ordinary course of business, the entry into a

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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

(xiii) appointment of a successor or additional trustee or the change of name of a trustee, if material.

Section 5. Termination of Undertaking. The obligations of the Operator under this Undertaking shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds. The Operator shall file notice of such termination with the MSRB. If the obligations of the Operator under the Facility Operating Agreement are assumed in full by another obligated person (as defined in the Rule), such Person shall be responsible for compliance with this Undertaking in the same manner as if it were the Operator, and the Operator shall have no further responsibility hereunder.

Section 6. Amendment; Waiver. Notwithstanding any other provision of this Undertaking, the Operator may amend this Undertaking and any provision of this Undertaking may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws acceptable to the Operator to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule.

Section 7. Additional Information. Nothing in this Undertaking shall be deemed to prevent the Operator from disseminating any other information, using the means of dissemination set forth in this Undertaking or any other means of communication, or including any other information in any Annual Report, Quarterly Report or Monthly Report or notice of occurrence of a Listed Event, in addition to that which is required by this Undertaking. If the Operator chooses to include any information in any Annual Report, Quarterly Report or Monthly Report or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Undertaking, the Operator shall have no obligation under this Undertaking to update such information or include it in any future Annual Report, Quarterly Report or Monthly Report or notice of occurrence of a Listed Event.

Section 8. Transmission of Information and Notices. Unless otherwise required by law, all documents provided to the MSRB in compliance with Section 4 shall be provided to the MSRB in an electronic format and shall be accompanied by identifying information, in each case as prescribed by the MSRB. As of the date of this Undertaking, the MSRB has established EMMA as its continuing disclosure service for purposes of the Rule, and unless and until otherwise prescribed by the MSRB, all documents provided to the MSRB in compliance with Section 4 shall be submitted through EMMA in the format prescribed by the MSRB.

Section 9. Default. Any Bondholder may enforce the obligations of the Operator under this Undertaking; provided however that (i) any breach of such obligations shall not constitute or give rise to a default or an Event of Default under the Indenture, the Bonds or any other Bond Document except as specifically set forth therein, and (ii) the sole remedy for any breach under this Undertaking shall be to compel specific performance of the obligations of the Operator under this Undertaking.

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Section 10. Beneficiaries. This Undertaking shall inure solely to the benefit of the Authority, the Underwriters, the Operator and Bondholders, and shall create no rights in any other Person.

Section 11. Governing Law. This Undertaking shall be governed by and construed in accordance with the laws of the State of New York and the Rule.

Section 12. Severability. In case any one or more of the provisions of this Undertaking shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Undertaking, but this Undertaking shall be construed and enforced as if such illegal or invalid provision had not been contained herein.

Section 13. Notices. Unless otherwise provided herein, all notices, certificates, requests or other communications hereunder shall be given by telephone and promptly confirmed in writing and shall be deemed given when given by telephone or addressed as follows:

To the Operator: Maryland Proton Treatment Center, LLC 850 W. Baltimore Street Baltimore, Maryland 21201 Attention: Facsimile Number:

The above party may, by written notice given to the Trustee and the Authority, designate any further or different addresses to which subsequent notices, certificates, requests, or other communications shall be sent. In addition, the Operator may agree to any other means by which subsequent notices, certificates, requests or other communications may be sent.

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IN WITNESS WHEREOF, the Operator has caused this Continuing Disclosure Undertaking to be executed in its name and on its behalf, all as of the date and year first above written.

MARYLAND PROTON TREATMENT CENTER, LLC

By: Name: Title:

APPENDIX J

PROPOSED FORM OF INITIAL INVESTOR LETTER

FORM OF INVESTOR REPRESENTATION LETTER FOR THE SERIES 2018A-1 BONDS

__, 2018

[Dated Date of Purchase]

Public Finance Authority Madison, Wisconsin U.S. Bank National Association, Trustee Atlanta, Georgia Re: Public Finance Authority Senior Revenue Bonds, Series 2018A-1 (Maryland Proton Treatment Center) (the “Bonds”)


The undersigned, on behalf of [NAME OF PURCHASER] as purchaser of that portion of the above-captioned Bonds as set forth opposite its signature hereto (the “Purchaser”), in connection with the sale of the Bonds to the Purchaser, hereby makes the following representations and warranties upon which you are authorized to rely:

1. The Purchaser has been informed that the Public Finance Authority (the “Authority”) will not sell or permit any Bonds to be sold to the Purchaser unless the Purchaser makes the representations, warranties and covenants herein and authorizes the Authority and the Trustee to rely thereon and such representations, warranties and covenants are made by the Purchaser AS AN INDUCEMENT to the sale of the Bonds to the Purchaser.

2. The Purchaser understands that the Bonds have not been registered under the Securities Act of 1933, as amended (the “1933 Act”), or the securities laws of any state, and will be sold to the Purchaser in reliance upon certain exemptions from registration and in reliance upon the representations and warranties of the Purchaser as set forth herein. Capitalized terms used herein shall have the meanings given to them in the Trust Indenture dated as of August 1, 2018 (the “Indenture”) between the Authority and U.S. Bank National Association (the “Trustee”) relating to the Bonds.

3. The Purchaser has sufficient knowledge and experience in business and financial matters in general, and the purchase of bonds such as the Bonds in particular, and is capable of evaluating the merits and risks involved in a purchase of the Bonds. The Purchaser is able to bear the economic risk of, and an entire loss of, a purchase of the Bonds and understands that it may

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be required to bear the risks of an investment in the Bonds for an indefinite time, since any sale prior to maturity may not be possible. The Purchaser is acquiring the Bonds for its own account for investment purposes and not with a view to the resale or other distribution thereof; provided, however, the Purchaser retains the right to sell the Bonds at its discretion.

4. The Purchaser acknowledges that it has been provided a copy of the Private Placement Memorandum dated __, 2018 (the “Private Placement Memorandum”) with respect to the Bonds, and that it has either been supplied with or been given access to information, including financial statements and other financial information, to which a reasonable investor would attach significance in making investment decisions, and the Purchaser has had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the Project, the Bonds and the security therefor so that, as a reasonable investor, the Purchaser has been able to make its decision to purchase the Bonds. Purchaser acknowledges that it has not relied upon the Authority or the Placement Agent for any information in connection with the Purchaser’s purchase of the Bonds.

5. The Purchaser acknowledges and understands that a purchase of the Bonds involves a high degree of risk regarding, among other things, the payment of current interest and the payment of principal on the Bonds. The Purchaser has made its own inquiry and analysis with respect to the Bonds and the security therefor, and other material factors affecting the security and payment of the Bonds.

6. The Purchaser has authority to purchase the Bonds and to execute this letter and any other instruments and documents required to be executed by the Purchaser in connection with the purchase of the Bonds.

7. The Purchaser understands and acknowledges that (i) under no circumstances shall the Bonds and the interest thereon be or become an indebtedness or obligation of the State of Wisconsin (the “State”), within the purview of any constitutional or statutory limitation or provision, or a charge against the credit of, or a pledge of the taxing power of, the State or any political subdivision thereof, (ii) the Bonds shall be special limited obligations of the Authority, and no taxes are required to be levied for the payment of principal of, premium, if any, and interest on the Bonds; such principal of, premium, if any, and interest on the Bonds being payable solely out of moneys to be received by the Authority as proceeds from the sale of the Bonds or from certain amounts on deposit with the Trustee pursuant to the Indenture and from certain income, if any, from the temporary investment of any of the foregoing and (iii) the Authority does not have the power to levy taxes for any purpose whatsoever, including, but not limited to, payment of principal of, premium, if any, and interest on the Bonds. The Purchaser also acknowledges that the Bonds do not represent general obligations of the Authority, the State or any political subdivision or agency thereof. The Purchaser understands that the Bonds are not payable from taxes or any moneys provided by or to the Authority, other than those described in the Indenture.

8. The Purchaser acknowledges and understands that the Bonds: (i) have not been and will not be registered or otherwise qualified for sale under the “Blue Sky” laws and regulations of any jurisdiction, (ii) will not be listed on any stock or other securities exchange, (iii) will carry no rating from any rating service, and (iv) will not be readily marketable.

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9. The Purchaser is purchasing the Bonds solely for its own account (or an account of an affiliate) for investment purposes and has no present intention to resell or distribute all or any portion of, or interest in, the Bonds other than to an affiliate of the Purchaser; provided that the Purchaser reserves the right to transfer or dispose of the Bonds at any time, and from time to time, in its complete and sole discretion, subject, however, to the restrictions described in paragraphs 10 and 11 of this letter. Under no circumstances will the Bonds (or any portion thereof) become part of a securitization whereby beneficial interests in the Bonds are offered and sold to downstream investors as a separate security.

10. The Purchaser agrees that it will only offer, sell, pledge, transfer or exchange the Bonds (or any legal or beneficial interest therein) in Authorized Denominations, and then only (i) in accordance with an applicable exemption from the registration requirements of Section 5 of the 1933 Act, and (ii) in accordance with any applicable state securities laws.

11. The Purchaser is a “qualified institutional buyer” within the meaning of Rule 144A of the Securities and Exchange Commission under the 1933 Act, and the Purchaser agrees that it will only offer, sell, pledge, transfer or exchange the Bonds (or any legal or beneficial interest therein) only (i) to another “qualified institutional buyer” and (ii) in compliance with the Indenture. Notwithstanding the foregoing, any affiliate of the Purchaser which holds the Bonds shall comply with the terms of Paragraph 10 and this Paragraph 11 in connection with any subsequent transfer of the Bonds.

12. The Purchaser hereby indemnifies the Authority, the Authority Indemnified Persons, the Placement Agent and the Trustee against any breach of its representations and warranties herein and against any failure by the Purchaser to transfer the Bonds in accordance with the restrictions relating thereto set forth in the Bonds, the Indenture and herein, and in applicable federal and state securities laws.

13. No party other than the addressees hereto is entitled to rely on the representations and acknowledgements contained in this letter. Without limiting the generality of the foregoing, nothing in this letter will be deemed to relieve any party of its obligations under any federal or state securities laws.

Sincerely,

Principal Amount: $_______________ [NAME OF PURCHASER]

By:

Name:

Title:

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