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Home My WebLink AboutResolution 4810-08-2017 A Resolution NO. 4810-08-2017 A RESOLUTION OF THE CITY OF FORT WORTH, TEXAS APPROVING THE FORM AND AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY LIMITED OFFERING MEMORANDUM FOR THE CITY OF FORT WORTH, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2017 (FORT WORTH PUBLIC IMPROVEMENT DISTRICT NO. 17 (ROCK CREEK RANCH) MAJOR IMPROVEMENT PROJECT); AND RESOLVING OTHER MATTERS INCIDENT AND RELATED THERETO. WHEREAS, Chapter 372,Texas Local Government Code(the"Act") authorizes the governing body(the "City Council") of the City of Fort Worth, Texas (the "City"), to create a public improvement district within the corporate limits and extraterritorial jurisdiction of the City; and WHEREAS, on December 6, 2016, the City Council conducted a public hearing to consider a petition received by the City on November 9, 2016 (the "Petition") requesting the creation of the Fort Worth Public Improvement District No. 17 (Rock Creek Ranch) (the "District") to undertake the construction of certain public improvements described in the Petition(the"Authorized Improvements"); and WHEREAS, on December 13, 2016, the City Council adopted Resolution No. 4724-12-2016 (the "Authorization Resolution"), authorizing, establishing and creating the District; and WHEREAS, the City intends to issue the bonds to be designated "City of Fort Worth, Texas Special Assessment Revenue Bonds, Series 2017 (Fort Worth Public Improvement District No. 17 (Rock Creek Ranch) Major Improvement Project)"(the"Bonds")to fund certain improvements in the District as authorized by the Act; and WHEREAS, there has been presented to the City Council a Preliminary Limited Offering Memorandum relating to the Bonds(the"Preliminary Limited Offering Memorandum"); and WHEREAS, the City Council finds and determines that it is necessary and in the best interest of the City to approve the form and content of the Preliminary Limited Offering Memorandum and authorizes the use of the Preliminary Limited Offering Memorandum in the offering and sale of the Bonds by the Underwriter of the Bonds, Stifel,Nicolaus&Company, Incorporated, under the conditions outlined herein. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: SECTION 1. THAT the recitals set forth above in this Resolution are true and correct and are hereby adopted as findings of the City Council and are incorporated into the body of this Resolution as if fully set forth herein. ORT WORT Resolution No.4810-08-2017 SECTION 2. THAT the form and content of the Preliminary Limited Offering Memorandum are hereby approved with such changes, addenda, supplements or amendments as may be approved jointly by the Chief Financial Officer/Director of Financial Management Services and the City Manager, or his designee,of the City. SECTION 3. THAT the City hereby authorizes the Preliminary Limited Offering Memorandum to be used by Stifel, Nicolaus & Company, Incorporated (the "Underwriter") in connection with the initial marketing and sale of the Bonds;provided that such Preliminary Limited Offering Memorandum shall not be released to the public without the joint approval of the Chief Financial Officer/Director of Financial Management Services and the City Manager, or his designee, of the City, which approval shall be made in consultation with: (1) FirstSouthwest, a division of Hilltop Securities, Inc., the City's Financial Advisor; and (2) McCall Parkhurst &Horton, L.L.P. and Kelly, Hart & Hallman, LLP, the City's Co-Bond Counsel and Disclosure Counsel (collectively, the "City Advisors"). SECTION 4.THAT the City Council hereby delegates to the Chief Financial Officer/Director of Financial Management Services and the City Manager,or his designee,the authority to approve the release of the Preliminary Limited Offering Memorandum to the public for use in marketing the Bonds under the conditions outlined herein. SECTION 5. THAT the City Council shall be required to approve any changes to the Preliminary Limited Offering Memorandum in the event that the City staff, in consultation with the City Advisors, determine such changes to be material. SECTION 6. THAT the City Council shall be required to approve the substantially final form of the Final Limited Offering Memorandum SECTION 7. THAT the City staff is authorized and directed to do all things proper and necessary to carry out the intent hereof. SECTION 8. THAT this Resolution shall become effective from and after its date of passage in accordance with law. Adopted this 1St day of August, 2017. ATTEST: n ® �- B y Ronald P. Gonzales, Assistant City Secretary �XAS ORT WORT EXHIBIT A PRELIMINARY LIMITED OFFERING MEMORANDUM NEW ISSUE NOT RATED EACH PROSPECTIVE PURCHASER IS ADVISED THAT THE BONDS BEING OFFERED PURSUANT TO THIS LIMITED OFFERING MEMORANDUM ARE BEING OFFERED AND SOLD ONLY TO A"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE"SECURITIES ACT"). SEE"LIMITATIONS APPLICABLE TO PROSPECTIVE PURCHASERS"HEREIN. THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON THE EXEMPTION PROVIDED BY SECTION 3(A)(2) THEREIN. NO ACTION HAS BEEN TAKEN TO QUALIFY THE BONDS FOR SALE UNDER THE SECURITIES LAWS OF ANY STATE. PRELIMINARY LIMITED OFFERING MEMORANDUM DATED ,2017 In the opinion of Co-Bond Counsel, interest on the Bonds ivill be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under "TAX MATTERS"herein. See "TAX MATTERS—Tax Exemption"herein for a discussion of Co-Bond Counsel's opinion, including a description of certain alternative minimum tax consequences for corporations. CITY OF FORT WORTH,TEXAS, (a municipal corporation of the State of Texas located in Tarrant,Denton,Parker,Johnson and Wise Counties) SPECIAL ASSESSMENT REVENUE BONDS,SERIES 2017 (FORT WORTH PUBLIC IMPROVEMENT DISTRICT NO.17(ROCK CREEK RANCH)MAJOR IMPROVEMENT PROJECT) Dated Date: ,2017 Due:September 1,as shown on the inside cover Interest to Accrue from Date of Delivery The City of Fort Worth, Texas, Special Assessment Revenue Bonds, Series 2017 (Fort Worth Public Improvement District No. 17 (Rock Creek Ranch)Major Improvement Project)(the"Bonds"), are being issued by the City of Fort Worth,Texas(the"City"). The Bonds will be issued in fully registered form, without coupons, in authorized denominations of$100,000 of principal amount and any integral multiple of$5,000 in excess thereof. The Bonds will bear interest at the rates set forth on the inside cover,calculated on the basis of a 360-day year of twelve 30-day months,payable on each March 1 and September 1,commencing March 1,2018,until maturity or earlier redemption. The Bonds will be registered in the name of Cede&Co.,as nominee of The Depository Trust Company("DTC"),New York,New York. No physical delivery of the Bonds will be made to the beneficial owners thereof. For so long as the book-entry only system is maintained, the principal of and interest on the Bonds will be paid from the sources described herein by BOKF,N.A.,as trustee(the"Trustee"),to DTC as the registered owner thereof. See"BOOK-ENTRY ONLY SYSTEM." The Bonds are being issued by the City pursuant to the Public Improvement District Assessment Act, Subchapter A of Chapter 372,Texas Local Government Code,as amended(the"PID Act"),an ordinance adopted by the City Council of the City(the"City Council")on ,2017,and an Indenture of Trust,dated as of ,2017(the"Indenture"),entered into by and between the City and the Trustee. Proceeds of the Bonds will be used to provide funds for(i)paying a portion of the costs of the Major Improvements(as defined herein)within the Eastern Improvement Area(as defined herein)and the Western Improvement Area(as defined herein)of the District,(ii)paying a portion of the interest on the Bonds during and after the period of acquisition and construction of the Major Improvements, (iii) funding a reserve fund for the payment of principal of and interest on the Bonds,(iv)paying a portion of the costs incidental to the organization of the District,and(v)paying the costs of issuance of the Bonds. See"THE MAJOR IMPROVEMENTS"and"APPENDIX B—Form of Indenture." Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Indenture. The Bonds, when issued and delivered, will constitute valid and binding special obligations of the City payable solely from and secured by the Pledged Revenues, consisting primarily of Major Improvement Special Assessments and other funds comprising the Trust Estate (as defined herein) levied against assessable properties in the Eastern Improvement Area and Western Improvement Area of the District in accordance with a Service and Assessment Plan,all to the extent and upon the conditions described herein. The Bonds are not payable from funds raised or to be raised from taxation. See"SECURITY FOR THE BONDS." The Bonds are subject to redemption at the times, in the amounts, and at the redemption prices more fully described herein under the subcaption "DESCRIPTION OF THE BONDS—Redemption Provisions." The Bonds involve a high degree of risk and are not suitable for all investors. See"BONDHOLDERS RISKS" and"SUITABILITY FOR INVESTMENT." Prospective purchasers should carefully evaluate the risks and merits of an investment in the Bonds,should consult with their legal and financial advisors before considering a purchase of the Bonds,and should be willing to bear the risks of loss of their investment in the Bonds. The Bonds are not credit enhanced or rated and no application has been made for a rating on the Bonds. THE BONDS ARE SPECIAL OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE PLEDGED REVENUES AND OTHER FUNDS COMPRISING THE TRUST ESTATE,AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY FROM THE SOURCES IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION, OR OUT OF ANY FUNDS OF THE CITY OTHER THAN THE PLEDGED REVENUES, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO DEMAND ANY EXERCISE OF THE CITY'S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE INTEREST OR REDEMPTION PREMIUM,IF ANY,THEREON. THE CITY SHALL HAVE NO LEGAL OR MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY FUNDS OF THE CITY OTHER THAN THE PLEDGED REVENUES AND OTHER FUNDS COMPRISING THE TRUST ESTATE. SEE "SECURITY FOR THE BONDS." This cover page contains certain information for quick reference only. It is not a summary of the Bonds. Investors must read this entire Limited Offering Memorandum to obtain information essential to the making of an informed investment decision. The Bonds are offered for delivery when,as,and if issued by the City and accepted by the Underwriter,subject to,among other things,the approval of the Bonds by the Attorney General of Texas and the receipt of the opinion of Kelly,Hart&Hallman LLP and McCall Parkhurst&Horton,LLP.Co- Bond Counsel and Co-Disclosure Counsel,as to the validity of the Bonds and the excludability of interest thereon from gross income for federal income tax purposes. See "APPENDIX D—Form of Opinion of Co-Bond Counsel." Certain legal matters will be passed upon for the Underwriter by its counsel, Bracewell LLP, and for the Developer by Toates Law Firm, PLLC and by Shupe Ventura, PLLC, Special Counsel to the Developer. It is expected that the Bonds will be delivered in book-entry form through the facilities of DTC on or about ,2017. #5470717.14 STIFEL MATURITIES,PRINCIPAL AMOUNTS,INTEREST RATES,PRICES,YIELDS, AND CUSIP NUMBERS CUSIP Prefix: (a) CITY OF FORT WORTH,TEXAS, (a municipal corporation of the State of Texas located in Tarrant,Denton,Parker,Johnson and Wise Counties) SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2017 (FORT WORTH PUBLIC IMPROVEMENT DISTRICT NO. 17(ROCK CREEK RANCH) MAJOR IMPROVEMENT PROJECT) $ %Term Bonds,Due September 1,20_,Priced to Yield %; CUSIP (a)tb>(c) $ %Term Bonds,Due September 1,20,Priced to Yield %;CUSIP (a)(b)(c) $ %Term Bonds,Due September 1,20,Priced to Yield %;CUSIP (a)(b)(°) (a) CUSIP numbers are included solely for the convenience of owners of the Bonds. CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Global Market Intelligence on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. CUSIP numbers are provided for convenience of reference only. None of the City,the City's Financial Advisor or the Underwriter takes any responsibility for the accuracy of such members. (b) The Bonds are subject to redemption,in whole or in part,prior to stated maturity,at the option of the City,pursuant to the terms and at the redemption prices set forth herein under"DESCRIPTION OF THE BONDS—Redemption Provisions." (c) The Bonds are also subject to mandatory sinking Rind redemption and extraordinary optional redemption as described herein under "DESCRIPTION OF THE BONDS—Redemption Provisions." I #5470717.14 CITY OF FORT WORTH,TEXAS CITY COUNCIL Term Expires Name Place Ma Betsy Price Mayor 2019 Carlos Flores District 2 2019 Brian Byrd District 3 2019 Cary Moon District 4 2019 Gyna Bivens District 5 2019 Jungus Jordan District 6 2019 Dennis Shingleton District 7 2019 Kelly Allen Gray District 8 2019 Ann Zadeh District 9 2019 CITY MANAGER CITY SECRETARY CHIEF FINANCIAL OFFICER David Cooke Mary J.Kayser Aaron J.Bovos SPECIAL ASSESSMENT CONSULTANT Development Planning&Financing Group,Inc. PID ADMINISTRATOR Municap,Inc. FINANCIAL ADVISOR TO THE CITY FirstSouthwest,a Division of Hilltop Securities,Inc. CO-BOND COUNSEL&CO-DISCLOSURE COUNSEL Kelly Hart&Hallman LLP McCall,Parkhurst&Horton,LLP UNDERWRITER'S COUNSEL Bracewell LLP For additional information regarding the City,please contact: Aaron J. Bovos Boyd London Chief Financial Officer First Southwest Company,LLC, City of Fort Worth,Texas a Division of Hilltop Securities, Inc. 200 Texas Street 1201 Elm Street Fort Worth,Texas 76102 Suite 3500 (817)392-8517 Dallas,Texas 75270 Aaron.bovos@fortworthtexas.gov (214)953-4013 boyd.london@ hilltopsecurities.com ii #5470717.14 AREA LOCATION MAP OF THE DISTRICT 1 1 I I I _�---r- _ L J_ 1 1 1 1 -- w --- I I 1 1 (i~pOODVMI EXHIBITMAP �� SHOWING PUBLIC IMPROVEMENT DISTRICT BOUNDARIES FOR ROCKCREEK Q CML ENGINEERS—PLANNERS—SURVEYORS SITUATED IN TARANT COUNTY,TX 'n eros MLVKW onus,Ompovins,TK 7MI JUNE,2017 CA Metro(W)304M E,\10639—Rockcreek\COGO\ZONING\PID.pro 111 #5470717.14 REGIONAL LOCATION OF ROCK CREEK RANCH DEVELOPMENT Northiake - - Argyle Highland Allen Justin Village The Colony Rhome an � Lewisville —na Plano Flower Mound —.;i r — Roanoke x' Carrollton ; na `.�_ Addison Richardson Keller Grapevine Farmers Branch Q3 (-6) Garlanc t= 111 Saginaw 'North an aco L`� GD111WRich and Hills lea Euless, IfVlll9 Haltom City v Dallas SettlementWhite M Fort Worth ® m Arlington Balch sl a1 Benbrook Forest Hill' 0 0 'Kennedale Duncanville Hutchins ROCK CREEK RANCH zar Cedar Hill Desoto Lancaster Wilmer Crowley _ Mansfield Burleson Red Oak Ferris J87 I;,a Briaroaks ti Midlothian Joshua _ eY av tfm -Venus Palmer Go gle e7 Alyaradc, asr Ike Map daL 1V #5470717.14 ROCK Rocl< Creel< Contex #547 %" _ City of Fort Worth d - Q r r ' � � Fort Worth City Llml s 1 r . y 3 � � G - + r y 1 MAP SHOWING BOUNDARIES OF THE EASTERN IMPROVEMENT AREA AND WESTERN IMPROVEMENT AREA OF THE DISTRICT WESTERN IMPROVEMENT AREA NJ- J-1-t-1. i , 1 I B vi #5470717.14 EASTERN IMPROVEMENT AREA F LlAp L_.= rrrrT'ril= Vll #5470717.14 EACH PROSPECTIVE PURCHASER IS ADVISED THAT THE BONDS BEING OFFERED PURSUANT TO THIS LIMITED OFFERING MEMORANDUM ARE BEING OFFERED AND SOLD ONLY TO A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). SEE "LIMITATIONS APPLICABLE TO PROSPECTIVE PURCHASERS" HEREIN. EACH PROSPECTIVE PURCHASER IS RESPONSIBLE FOR ASSESSING THE MERITS AND RISKS OF AN INVESTMENT IN THE BONDS, MUST BE ABLE TO BEAR THE ECONOMIC AND FINANCIAL RISK OF SUCH INVESTMENT IN THE BONDS, AND MUST BE ABLE TO AFFORD A COMPLETE LOSS OF SUCH INVESTMENT. CERTAIN RISKS ASSOCIATED WITH A PURCHASE OF THE BONDS ARE SET FORTH UNDER "BONDHOLDERS' RISKS" HEREIN. EACH PURCHASER, BY ACCEPTING THE BONDS, AGREES THAT IT WILL BE DEEMED TO HAVE MADE THE ACKNOWLEDGEMENTS AND REPRESENTATIONS DESCRIBED UNDER THE HEADING "LIMITATIONS APPLICABLE TO PROSPECTIVE PURCHASERS." FURTHER, EACH INITIAL PURCHASER OF THE BONDS SHALL BE REQUIRED TO DELIVER TO THE CITY A LETTER OF REPRESENTATION ON PRIOR TO THEIR PURCHASE OF THE BONDS,IN THE FORM ATTACHED AS EXHIBIT J. NO DEALER,BROKER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED BY THE CITY OR THE UNDERWRITER TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS LIMITED OFFERING MEMORANDUM, AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY EITHER OF THE FOREGOING. THIS LIMITED OFFERING MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY AND THERE SHALL BE NO OFFER, SOLICITATION OR SALE OF THE BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS LIMITED OFFERING MEMORANDUM IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE UNITED STATES FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION. THE INFORMATION SET FORTH HEREIN HAS BEEN FURNISHED BY THE CITY AND OBTAINED FROM SOURCES, INCLUDING THE DEVELOPER, WHICH ARE BELIEVED BY THE CITY AND THE UNDERWRITER TO BE RELIABLE, BUT IT IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS, AND IS NOT TO BE CONSTRUED AS A REPRESENTATION OF THE UNDERWRITER. THE INFORMATION AND EXPRESSIONS OF OPINION HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS LIMITED OFFERING MEMORANDUM, NOR ANY SALE MADE HEREUNDER, SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY OR THE DEVELOPER SINCE THE DATE HEREOF. NEITHER THE CITY NOR THE UNDERWRITER MAKE ANY REPRESENTATION AS TO THE ACCURACY, COMPLETENESS, OR ADEQUACY OF THE INFORMATION SUPPLIED BY THE DEPOSITORY TRUST COMPANY FOR USE IN THIS LIMITED OFFERING MEMORANDUM. THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, NOR HAS THE INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH LAWS. THE REGISTRATION OR QUALIFICATION OF THE BONDS UNDER THE SECURITIES LAWS OF ANY JURISDICTION IN WHICH THEY MAY HAVE BEEN REGISTERED OR QUALIFIED, IF ANY, SHALL NOT BE REGARDED AS A RECOMMENDATION THEREOF. NONE OF ANY SUCH JURISDICTIONS, OR ANY OF THEIR AGENCIES, HAVE PASSED UPON THE MERITS OF THE BONDS OR THE ACCURACY OR COMPLETENESS OF THIS LIMITED OFFERING MEMORANDUM. CERTAIN STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN THIS LIMITED OFFERING MEMORANDUM CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, SECTION 21E OF THE UNITED STATES EXCHANGE ACT OF 1934, AS AMENDED, AND SECTION 27A OF THE SECURITIES ACT. SUCH STATEMENTS ARE GENERALLY IDENTIFIABLE BY THE TERMINOLOGY USED SUCH AS "PLAN," "EXPECT," "ESTIMATE," "PROJECT," "ANTICIPATE," "BUDGET" OR OTHER SIMILAR WORDS. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND viii #5470717.14 UNKNOWN RISKS,UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ANY OF ITS EXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR,OTHER THAN AS DESCRIBED UNDER"CONTINUING DISCLOSURE"HEREIN. THE TRUSTEE HAS NOT PARTICIPATED IN THE PREPARATION OF THIS LIMITED OFFERING MEMORANDUM AND ASSUMES NO RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF ANY INFORMATION CONTAINED IN THIS LIMITED OFFERING MEMORANDUM OR THE RELATED TRANSACTIONS AND DOCUMENTS OR FOR ANY FAILURE BY ANY PARTY TO DISCLOSE EVENTS THAT MAY HAVE OCCURRED AND MAY AFFECT THE SIGNIFICANCE OR ACCURACY OF SUCH INFORMATION. (REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK) ix #5470717.14 TABLE OF CONTENTS INTRODUCTION.....................................................1 Prepayment of Special Assessments................32 PLAN OF FINANCE""""""""""""""""""""""""2 Priority of Lien.................................................33 Development Plan 2 Foreclosure Proceedings '• 33 The Eastern Major Improvement Area THE CITY...............................................................34 and Western Improvement Area Background......................................................34 and the District............................................3 City Government..............................................34 University Property............................................3 THE DISTRICT......................................................34 TheBonds..........................................................4 General.............................................................34 DESCRIPTION OF THE BONDS............................5 Powers and Authority.......................................35 General Description............................................5 Redemption Provisions......................................5 THE MAJOR IMPROVEMENTS..........................35 General.............................................................35 BOOK-ENTRY ONLY SYSTEM............................8 Description of the Major Improvements..........35 LIMITATIONS APPLICABLE TO PROSPECTIVE Future Roadway Improvements.......................36 Non-PID Related Improvements......................37 PURCHASERS.......................................................10 Ownership and Maintenance of SECURITY FOR THE BONDS .............................11 Improvements............................................39 General.............................................................11 Pledged Revenues 11 THE DEVELOPMENT...........................................39 g ............................................ Collection and Deposit of Major Overview..........................................................40 Development Plan............................................41 Improvement Special Assessment PID Reimbursement Agreement......................42 Revenues...................................................12 City Facilities Agreement.................................42 Unconditional Levy of Assessments................13 Perfected Secure Interest 13 Market Study Summary...................................42 Security """""""""""""""' Engineer's Report Summa 45 Pledged Revenue Fund.....................................14 Environmental..................................................47 BondFund........................................................14 Reserve Fund....................................................14 THE DEVELOPER.................................................48 Delinquency and Prepayment Reserve General.............................................................48 Account of the Reserve Fund....................15 Description of the Developer...........................48 Administrative Fund.........................................16 Developer Texas Projects.................................49 Project Fund.....................................................16 Bankruptcy of Certain Canadian Defeasance.......................................................17 Affiliates of Landowners and Events of Default..............................................17 Developer..................................................50 Remedies in Event of Default..........................18 Current Defaults...............................................50 Restriction on Owner's Actions.......................18 Marketing of the Development.........................50 Application of Revenues and Other Executive Biography of Principals of Moneys After Event of Default.................19 the Developer............................................51 Investment or Deposit of Funds.......................20 Acquisition of the Property in the Against Encumbrances.....................................20 District.......................................................52 Additional Obligations.....................................20 THE SPECIAL ASSESSMENT CONSULTANT..52 SOURCES AND USES OF FUNDS ......................22 THE PID ADMINISTRATOR................................53 DEBT SERVICE REQUIREMENTS.....................23 APPRAISAL OF PROPERTY WITHIN THE OVERLAPPING TAXES AND DEBT..................24 DISTRICT...............................................................53 ASSESSMENT PROCEDURES.............................26 The Appraisal...................................................53 General.............................................................26 Value to Assessment Burden Ratio..................54 Assessment Methodology................................27 BONDHOLDERS' RISKS......................................55 Collection and Enforcement of Major Deemed Representations and Improvement Special Assessment Acknowledgment by Purchasers...............55 Amounts....................................................31 Assessment Limitations....................................56 Major Improvement Special Risks Related to the Current Real Estate Assessment Amounts................................32 Market.......................................................57 x #5470717.14 Competition......................................................57 Compliance with Prior Undertakings...............67 Loss of Tax Exemption....................................57 The Developer..................................................67 Bankruptcy.......................................................57 Direct and Overlapping Indebtedness, UNDERWRITING..................................................68 Assessments and Taxes.............................58 REGISTRATION AND QUALIFICATION OF Depletion of Reserve Fund;No BONDS FOR SALE................................................68 Prefunding of Delinquency and LEGAL INVESTMENT AND ELIGIBILITY TO Prepayment Reserve Account...................58 Hazardous Substance........................................58 SECURE PUBLIC FUNDS IN TEXAS .................68 Regulation........................................................59 INVESTMENTS.....................................................69 Bondholders'Remedies and INFORMATION RELATING TO THE TRUSTEE71 Bankruptcy................................................59 No Acceleration...............................................60 SOURCES OF INFORMATION71 ............................ Bankruptcy Limitation to Bondholders' General.............................................................71 Rights........................................................60 Source of Certain Information..........................71 Management and Ownership............................60 Experts .............................................................72 General Risks of Real Estate Investment Updating of Limited Offering and Development......................................61 Memorandum............................................72 Dependence Upon Developer and Landowners...............................................61 FORWARD-LOOKING STATEMENTS...............72 Dependence on Future Roadway AUTHORIZATION AND APPROVAL.................72 Improvements............................................62 Agricultural Use Valuation and APPENDIX A General Information Regarding the Redemption Rights....................................62 City and Surrounding Area A-1 TAX MATTERS.....................................................63 APPENDIX B Form of Indenture B-1 Tax Exemption...................... ............... . ...........63 APPENDIX C Form of Service and Assessment Tax Accounting Treatment of Discount Plan C-1 and Premium on Certain Bonds................64 APPENDIX D Form of Opinion of Co-Bond Counsel D-1 LEGAL MATTERS................................................65 APPENDIX E-1 Form of Disclosure Agreement of Legal Proceedings............................................65 the Issuer E-1 Legal Opinions.................................................65 APPENDIX E-2 Form of Disclosure Agreement of Litigation—The City......................................66 the Developer E-2 Litigation—The Developer............................66 APPENDIX F Appraisal of the District F-1 SUITABILITY FOR INVESTMENT.....................66 APPENDIX G Form of PID Reimbursement Agreement G-1 ENFORCEABILITY OF REMEDIES....................66 APPENDIX H Market Study H-1 NO RATING...........................................................67 APPENDIX I Engineer's Report 1-1 APPENDIX J Investor Letter J-1 CONTINUING DISCLOSURE..............................67 TheCity............................................................67 xi #5470717.14 (THIS PAGE IS INTENTIONALLY LEFT BLANK) #5470717.14 PRELIMINARY LIMITED OFFERING MEMORANDUM CITY OF FORT WORTH,TEXAS, (a municipal corporation of the State of Texas located in Tarrant,Denton,Parker,Johnson and Wise Counties) SPECIAL ASSESSMENT REVENUE BONDS,SERIES 2017 (FORT WORTH PUBLIC IMPROVEMENT DISTRICT NO. 17 (ROCK CREEK RANCH)MAJOR IMPROVEMENT PROJECT) INTRODUCTION The purpose of this Limited Offering Memorandum, including the cover page, inside cover and appendices hereto, is to provide certain information in connection with the issuance and sale by the City of Fort Worth, Texas (the "City"), of its $ aggregate principal amount of Special Assessment Revenue Bonds, Series 2017 (Fort Worth Public Improvement District No. 17(Rock Creek Ranch)Major Improvement Project)(the"Bonds"). PROSPECTIVE INVESTORS SHOULD BE AWARE OF CERTAIN RISK FACTORS, ANY OF WHICH, IF MATERIALIZED TO A SUFFICIENT DEGREE, COULD DELAY OR PREVENT PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON THE BONDS. THE BONDS ARE NOT A SUITABLE INVESTMENT FOR ALL INVESTORS. See "SUITABILITY FOR INVESTMENT" and "BONDHOLDERS' RISKS." The Bonds are being issued by the City pursuant to the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas Local Government Code, as amended (the "PID Act"), the ordinance authorizing the issuance of the Bonds enacted by the City Council of the City(the"City Council") on , 2017 (the "Bond Ordinance"), and an Indenture of Trust, dated as of , 2017 (the "Indenture"), entered into by and between the City and BOKF,N.A.,as trustee(the"Trustee"). The Bonds will be secured by a portion of the special assessments ("Major Improvement Special Assessments") levied against assessable property located within the Eastern Improvement Area(as defined below)and Western Improvement Area(each as defined below)of Fort Worth Public Improvement District No. 17 (Rock Creek Ranch) (the "District") pursuant to an ordinance enacted by the City Council on ,2017(the"Assessment Ordinance"). Reference is made to the Indenture for a full statement of the authority for,and the terms and provisions of, the Bonds. All capitalized terms used in this Preliminary Limited Offering Memorandum that are not otherwise defined herein shall have the meanings set forth in the Indenture. See"APPENDIX B—Form of Indenture." Set forth herein are brief descriptions of the City, the District, the Assessment Ordinance, the Bond Ordinance, the Service and Assessment Plan (as defined herein), the PID Reimbursement Agreement (as defined herein), the Redemption/Waiver Agreement (as defined herein), the Memorandum of Understanding (as defined herein), Walton Development & Management TX, LLC, a Delaware limited liability company ("WDM" or the "Developer"), Development Planning & Financing Group, Inc. (the "Special Assessment Consultant) and Municap Inc. (the "PID Administrator"), together with summaries of terms of the Bonds and the Indenture and certain provisions of the PID Act. All references herein to such documents and the PID Act are qualified in their entirety by reference to such documents or such PID Act and all references to the Bonds are qualified by reference to the definitive forms thereof and the information with respect thereto contained in the Indenture. Copies of these documents may be obtained during the period of the offering of the Bonds from the office of the Underwriter. The Form of Indenture appears in APPENDIX B and the Form of Service and Assessment Plan appears as APPENDIX C. The information provided under this caption"INTRODUCTION" is intended to provide a brief overview of the information provided in the other captions herein and is not intended, and should not be considered, fully representative or complete as to the subjects discussed hereunder. (REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK) #5470717.14 PLAN OF FINANCE Development Plan The District contains approximately 1,756 acres generally located in the southwest portion of the City on either side of Chisholm Trail Parkway, south of McPherson Boulevard and north of Farm to Market Road 1187. As described below, the District consists of an Eastern Improvement Area and a Western Improvement Area; and current plans for the "Rock Creek Ranch" development (the "Development") are in the preliminary stages but currently contemplate approximately 4,917 single family residential homes, approximately 2,520 multi-family residential units, approximately 3,780,000 square feet of commercial space and approximately 960,000 square feet planned as a future satellite campus for Tarleton State University(the"University"). All of the property within the District except for the University Property (as defined below) is currently owned by entities affiliated with Walton International Group(USA), Inc., an Arizona corporation("Walton USA"). The current landowners within the District are: (1)Walton Texas LP, a Texas limited partnership("Walton Texas," a wholly-owned subsidiary of Walton USA),(2)WUSF 4 Rock Creek, LP,a Texas limited partnership("WUSF4"), and wholly owned subsidiary of Walton U.S. Land Fund 4, LP, a Delaware partnership ("Land Fund 4"), and (3) WUSF 5 Rock Creek East LP, a Texas limited partnership ("WUSF5"), a wholly owned subsidiary of Walton U.S. Land Fund 5, LP, a Delaware partnership ("Land Fund 5") Land Fund 5, WUSF5, Walton Texas and WUSF4, are collectively referred to as the"Landowners." Land Fund 4 and Land Fund 5 are not landowners within the District. Walton Texas entered into a purchase contract for the property within the Western Improvement Area of the District with the State of Texas on October 24,2013 for a purchase price of$12,000,000 and such property was transferred by deed on June 4,2014. Following a series of transactions,the last of which occurred on June 18,2014, Walton Texas now owns an undivided 5% tenancy-in-common interest and WUSF4 now owns an undivided 95% tenancy-in-common interest in the property within Western Improvement Area. Walton Texas and WUSF5 entered into a purchase contract for the property within the Eastern Improvement Area with the State of Texas on October 24, 2013 for a purchase price of $10,750,000 and such property was transferred by deed on August 27,2015. Following a series of transactions,the last of which occurred on November 12, 2015, WUSF5 now owns an undivided 95%tenancy-in-common interest and Walton Texas owns an undivided 5%tenancy-in-common interest in the property within the Eastern Improvement Area. On December 15, 2016, Walton Texas and WUSF4 donated eighty (80) acres of land within the Western Improvement Area (the "University Property") to the Texas A&M University System, an agency of the State of Texas,for the use and benefit of the University. Upon their acquisition of the District Property the Landowners retained Walton Development & Management TX, LLC, a Delaware limited liability company ("Developer" or "WDM") to perform certain preliminary development concept planning services so long as the Landowners own the property within the District, administer the property within the District. Both Walton Texas and WDM are affiliates of Walton USA. Independent of the preliminary development concept planning services it provides to Landowners, the Developer will develop infrastructure and roadway improvements on the property within the District for dedication to the City. Development will begin with the construction and installation of the major infrastructure consisting of water and sanitary sewer improvements benefitting and serving the entire District (the "Major Improvements") followed by an additional phase of development of road improvements benefitting the Western Improvement Area of the District (the "Roadway Improvements"). See "THE DEVELOPMENT— Development Plan." The terms "Eastern Improvement Area" and "Western Improvement Area" together describe all of the property within the District. The boundaries of the District, and the Eastern Improvement Area and Western Improvement Area thereof are shown in the "MAP SHOWING BOUNDARIES OF THE EASTERN IMPROVEMENT AREA AND THE WESTERN IMPROVEMENT AREA OF THE DISTRICT"on page v. 2 #5470717.14 The Eastern Major Improvement Area and Western Improvement Area and the District The Western Improvement Area and Eastern Improvement Area are two separate and distinct areas of the District. In the first phase of the District's development, the Major Improvements will be constructed in both the Western Improvement Area and Eastern Improvement Area. The total cost of the Major Improvements is expected to be approximately $8,483,636 (the "Major Improvements Cost"). Of the Major Improvements Cost, $4,497,067 will be allocated to the Eastern Improvement Area, and $3,986,568 will be allocated to the Western Improvement Area. See "APPENDIX C — Form of Service and Assessment Plan." The future development of lots within the Western Improvement Area will also necessitate the construction of the future Roadway Improvements within the Western Improvement Area. As set forth in the Service and Assessment Plan, and the non-binding"Memorandum of Understanding—City of Fort Worth/Rock Creek Ranch/Chisholm Trail Ranch—Brewer Road Project" effective as of August 1, 2017 and attached to the PID Reimbursement Agreement as Exhibit D (the "Memorandum of Understanding"), the Developer and the City expect that Additional Obligations (as defined below) will be sold to finance the construction of such Roadway Improvements, subject to certain restrictions set forth in the Indenture for the Bonds and subject to the discretion of the City Council of the City. See "SECURITY FOR THE BONDS — Additional Obligations." Also under the Memorandum of Understanding, the City, the Developer and a Walton affiliated entity involved with a neighboring residential development called"Chisholm Trail Ranch" are expected to provide additional funds prior to or concurrently with the issuance of Additional Obligations for the construction of related road improvements outside of the District. See "APPENDIX G—Form of PID Reimbursement Agreement (Exhibit D)"and"THE MAJOR IMPROVEMENTS—Non-PID Related Improvements." The Bonds are being issued for the purpose of financing the Major Improvements Cost, and will be secured by assessments levied solely against property in the Eastern Improvement Area and Western Improvement Area. Any future Additional Obligations which are anticipated to be issued for the purpose of financing Roadway Improvements located within the Western Improvement Area,will be secured by separate assessments levied against the Western Improvement Area. No Additional Obligations will be issued with respect to the Eastern Improvement Area. See "SECURITY FOR THE BONDS —Additional Obligations" and "THE MAJOR IMPROVEMENTS — Non-PID Related Improvements." University Property Within the Western Improvement Area will be approximately 960,000 square feet of a planned Tarleton State University Fort Worth campus located on the approximately eighty (80) acres of land donated by Walton Texas and WUSF4 (the "University Property"). The University was established in 1899 and is a member of the Texas A&M University System with its main campus in Stephenville,Texas,an hour southwest of Fort Worth. The University has provided undergraduate and graduate degree programs in Fort Worth since 1976 and currently offers 48 degree programs. The University has no permanent campus in Fort Worth but rents a variety of office space in which to hold its classes and programs. The University sees the donation of 80 acres of land fiom Walton Texas and WUSF4 to be an opportunity to establish a permanent campus in Fort Worth that would house all of its programs and students on the same campus. The University's student enrollment draws heavily from the area directly southwest of Fort Worth and also draws a large number of students from Tarrant County Community College and surrounding community colleges, making a campus located in the southwest Fort Worth area an ideal location for the University. The University has commissioned a master plan for development of the entire 80 acres as an extended campus and has hired a contractor for development of the first phase of construction of the campus on the site. The University plans a ground breaking for the first phase of construction in Fall 2018 with the new campus opening scheduled for the Fall 2019 semester. Current enrollment in the University's Fort Worth programs is approximately 2,000 students,but the University estimates that by the time the new campus opens in 2019, student enrollment will be between 2,500 and 3,000 students. Certain of the Major Improvements and future Roadway Improvements are being constructed on the University Property. In addition, certain improvements related to the Major Improvements and future Roadway Improvements are being constructed elsewhere in the District which serve the University Property. These 3 #5470717.14 improvements constructed on or otherwise serving the University Property are referred to herein as the "University Improvements." The costs of the University Improvements will be funded directly by the Developer. No University Improvements will be financed by Major Improvement Assessments or any future Roadway Improvement Assessments nor will any assessments be levied in the future for the purpose of reimbursing the Developer for the costs of such improvements. Since the University Improvements are being paid from sources other than Major Improvement Assessments or any future Roadway Improvement Assessments in the District, the University Property has been treated as Non-Benefitted Property in the Service and Assessment Plan. See "APPENDIX C— Form of Service and Assessment Plan." The actual costs of the University Improvements related to the water improvements and sanitary sewer improvements have been determined on the basis of the estimated usage, as determined by the project engineer, of all Major Improvements in the District consisting of water improvements and sanitary sewer improvements applicable to the University Property. The actual costs of the University Improvements related to the Western Improvement Area's future Roadway Improvements will be determined on the basis of the University Property's pro-rata share of the total acreage of the Western Improvement Area. A table from the Service and Assessment Plan depicting the University Improvements expected to be paid by the Landowner or Developer and that are not financed through the District is below. The construction of the University Improvements, the Major Improvements, the future Roadway Improvements and the Non-PID Roadway Improvements(defined herein)are critical to the operation of the University. Table tied Non-Benefitted Area Costs of University Improvements(not to be financed by or through the PID) City of Fort Chisholm Trall Worth Non-PID Ranch Non-PID Total Non-PID Related Related Related Total Costs- University Authorized University Share University Improvements Total Costs(a) Improvements Improvements Improvements Project Improvements Improvements %(c) Major Improvements Water $ 2,914,364 $ - $ $ - $ 2,914,364 $ 155,045 $ 2,759,319 5.3% Sanitary Sewer 6,880,644 825,088 - 825,088 6,055,556 331,239 5,724,317 5.5% Total Major Improvements $ 9,795,008 $ 825,088 $ - $ 825,088 $ 8,969,919 $ 486,284 $ 8,483,636 Roadway Improvements Roadway(b) 8,469,182 843,382 843,382 1,686,764 6,782,418 679,720 6,102,698 10.0% Total University Improvements $ 18,264,190 $ 1,668,470 $ 843,382 $ 2,511,852 $ 15,752,337 $ 1,166,004 $ 14,586,334 (a)Total Costs include the Actual Costs of Authorized Improvements,the Non-PID Related Improvements and the University Improvements per Table III-A. -� (b)Roadway Improvements are estimates. (c)Percentages for Water and Sanitary Sewer Improvements were determined based on estimated usage,as determined by the Project Engineer,by the University Property and for the Roadway Improvements based on the University Property's pro-rata share of the total Western Improvement Area acreage. The Bonds Proceeds of the Bonds will be used primarily to finance(i)the costs of the Major Improvements;(ii)paying a portion of the interest on the Bonds during and after the period of acquisition and construction of the Major Improvements; (iii) funding a reserve fund for the payment of principal of and interest on the Bonds; (iv)paying a portion of the costs incidental to the organization of the District; and(v)paying the costs of issuance of the Bonds. To the extent that a portion of the proceeds of the Bonds is allocated for the payment of the costs of issuance of the Bonds and less than all of such amount is used to pay such costs,the excess amount may, at the option of the City, be transferred to the Major Improvement Account of the Project Fund(both defined herein) or to the Principal and Interest Account of the Bond Fund (both defined herein) to pay interest on the Bonds. See "THE MAJOR IMPROVEMENT PROJECTS,""APPENDIX B—Form of Indenture"and"SOURCES AND USES OF FUNDS." The City expects to issue one or more series of bonds (collectively, the "Additional Obligations") to finance the cost of the future Roadway Improvements within the Western Improvement Area of the District as the development proceeds. The current estimated costs of the Roadway Improvements benefiting the Western Improvement Area of the District are set forth in the Service and Assessment Plan which will be updated with revised estimates and descriptions,if applicable,if and when the Additional Obligations are issued. Such Additional Obligations will be secured by separate special assessments levied pursuant to the PID Act on assessable property within the Western Improvement Area of the District. See "APPENDIX C — Form of Service and Assessment 4 # 470717.14 Plan,""THE MAJOR IMPROVEMENTS–Future Roadway Improvements" and"SECURITY FOR THE BONDS –Additional Obligations." The Bonds, and any Additional Obligations issued by the City are separate and distinct issues of securities secured by separate special assessments. Any Additional Obligations are not offered pursuant to this Limited Offering Memorandum. Payment of the Bonds is secured by a pledge of and a lien upon the Pledged Revenues, consisting primarily of a portion of Major Improvement Special Assessments to be levied against the assessable parcels or lots within the Eastern Improvement Area and Western Improvement Area of the District and other funds comprising the Trust Estate, all to the extent and upon the conditions described herein and in the Indenture. See"SECURITY FOR THE BONDS" and "SPECIAL ASSESSMENT PROCEDURES." The Bonds shall never constitute an indebtedness or general obligation of the City, the State or any other political subdivision of the State, within the meaning of any Constitutional provision or statutory limitation whatsoever, but the Bonds are limited and special obligations of the City payable solely from the Pledged Revenues and other funds comprising the Trust Estate as provided in the Indenture. Neither the faith and credit nor the taxing power of the City, the State or any other political subdivision of the State is pledged to the payment of the Bonds. When compared to the estimated aggregate "As Complete" value of the assessable property in the District ($51,500,000), the principal amount of the Bonds has an estimated value to assessment burden ratio of 3.68 to 1. See"APPRAISAL OF PROPERTY WITHIN THE DISTRICT—Value to Assessment Burden Ratio." DESCRIPTION OF THE BONDS General Description The Bonds will mature on the dates and in the amounts set forth in the inside cover page of this Limited Offering Memorandum. Interest on the Bonds will accrue from their date of delivery to the Underwriter and will be computed on the basis of a 360-day year of twelve 30-day months. Interest on the Bonds will be payable on each March 1 and September 1, commencing March 1, 2018 (each an "Interest Payment Date"), until maturity or prior redemption. BOKF,N.A. is the initial Trustee,Paying Agent and Registrar for the Bonds. The Bonds will be issued in fully registered form without coupons. The Bonds will initially be issued in authorized denominations of $100,000 or any integral multiple of $5,000 in excess thereof ("Authorized Denominations"). Upon initial issuance,the ownership of the Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), and purchases of beneficial interests in the Bonds will be made in book-entry only form. See "BOOK-ENTRY ONLY SYSTEM" and "SUITABILITY FOR INVESTMENT." Redemption Provisions Optional Redemption. The City reserves the right and option to redeem the Bonds before their scheduled maturity dates, in whole or in part,on any Interest Payment Date on or after September 1,20 such date or dates to be fixed by the City, at the prices shown below (expressed as a percentage of par), plus accrued interest to date of redemption: Redemption Period Redemption Price September 1,20_through February 28,20_ [ ]% March 1,20_through August 31,20 L---]% Extraordinaty Optional Redemption. The Bonds are subject to extraordinary optional redemption by the City prior to their scheduled maturity on the fist business day of any month after the required notice of redemption at a redemption price equal to 100%of the principal amount of the Bonds, or portions thereof,to be redeemed plus accrued interest to the redemption date from amounts on deposit in the Redemption Fund as a result of (i) 5 #5470717.14 Prepayments, including related transfers to the Redemption Fund, (ii) unexpended proceeds transferred from the Major Improvement Account of the Project Fund to the Redemption Fund pursuant to the Indenture, (iii) Foreclosure Proceeds to the extent that such proceeds are not needed to restore deficiencies in the Reserve Fund to restore any transfers from the Reserve Fund made with respect to the Assessed Property (as defined in the Service and Assessment Plan) to which Foreclosure Proceeds relate, (iv) transfers of Major Improvement Assessment Revenue to the Redemption Fund as directed by the City pursuant to the Indenture, (v)transfers to the Redemption Fund from the Delinquency and Prepayment Reserve Account pursuant to the Indenture in the event that the Delinquency and Prepayment Reserve Account contains the Delinquency and Prepayment Reserve Requirement, and (vi) transfers to the Redemption Fund made pursuant to the Indenture in the event that the amount held in the Reserve Fund together with the amount held in the Pledged Revenue Fund,the Bond Fund and Redemption Fund is sufficient to pay the principal amount and of all Outstanding Bonds, or(vii) any other transfers to the Redemption Fund under the terms of the Indenture. Unexpended proceeds from the Major Improvement Account shall be transferred to the Redemption Fund only in the event that the City Representative determines that all Major Improvements have been completed or that the amounts then on deposit in the Major Improvement Account of the Project Fund are not expected to be expended for the purpose of the Project Fund due to the abandonment, or constructive abandonment, of the Major Improvements such that, in the opinion of the City Representative, it is unlikely that the amounts in the Project Fund will ever be expended for the purposes of the Major Improvement Account of the Project Fund. Bonds redeemed pursuant to extraordinary optional redemption shall be redeemed in inverse order of maturity. See "ASSESSMENT PROCEDURES — Prepayment of Special Assessments" for the definition and description of Prepayments. Mandatory Sinking Fund Redemption. The Bonds are subject to mandatory sinking fund redemption prior to their respective maturities and will be redeemed by the City in part at a price of 100% of the principal amount thereof, plus accrued interest to the redemption date, fi-om moneys available for such purpose in the Principal and Interest Account of the Bond Fund pursuant to the Indenture, on the dates and in the respective Sinking Fund Installments as set forth in the following schedules: $1 1 Term Bonds due September 1,201 1 Redemption Date(09/01) Sinking Fund Installment 20 20 20 20 *20— $1 1 Term Bonds due September 1,201 1 Redemption Date(09/01) Sinking Fund Installment 20 20 20 20 *20— $[ 1 Term Bonds due September 1,20[- Redemption 0FRedemption Date(09/01) Sinking Fund Installment 20 20 20 20 *20 * Stated Maturity 6 #5470717.14 At least forty-five(45)days prior to each mandatory sinking fund redemption date,the Trustee will select a principal amount of Bonds equal to the Sinking Fund Installment amount for such date of such maturity of Bonds to be redeemed, will call such Bonds for redemption on such scheduled mandatory sinking fund redemption date, and shall give notice of such redemption, as provided in the Indenture. Bonds redeemed pursuant to mandatory redemption shall be redeemed in inverse order of maturity. The principal amount of Bonds required to be redeemed on any mandatory sinking fund redemption date shall be reduced, at the option of the City,by the principal amount of any Bonds of such maturity which, at least 45 days prior to the sinking fund redemption date shall have been acquired by the City at a price not exceeding the principal amount of such Bonds plus accrued unpaid interest to the date of purchase thereof, and delivered to the Trustee for cancellation. The principal amount of Bonds required to be redeemed on any mandatory sinking fund redemption date shall be reduced on a pro rata basis among Sinking Fund Installments for each maturity of Bonds by the principal amount of any Bonds which, at least 45 days prior to the mandatory sinking fund redemption date, shall have been redeemed pursuant to the optional redemption or extraordinary optional redemption provisions of the Indenture and not previously credited to a mandatory sinking fund redemption. Notice of Redemption. Notice of any redemption shall be given by the Trustee at least thirty(30)days prior to the redemption date by giving written notice to the Owner of each Bond to be redeemed in whole or in part at the address shown on the Register by first-class mail,postage prepaid. Any such notice shall be conclusively presumed to have been duly given,whether or not the Owner receives such notice. Notice of redemption having been given as provided in the Indenture,the Bonds or portions thereof called for redemption shall become due and payable on the date fixed for redemption provided that funds for the payment of the redemption price of such Bonds to the date fixed for redemption are on deposit with the Trustee; thereafter, such Bonds or portions thereof shall cease to bear interest from and after the date fixed for redemption, whether or not such Bonds are presented and surrendered for payment on such date. With respect to any optional redemption of the Bonds, unless the Trustee has received funds sufficient to pay the Redemption Price of the Bonds to be redeemed before giving of a notice of redemption,the notice may state that the City may condition redemption on the receipt of such funds by the Trustee on or before the date fixed for the redemption, or on the satisfaction of any other prerequisites set forth in the notice of redemption. If a conditional notice of redemption is given and such prerequisites to the redemption and sufficient funds are not received, the notice shall be of no force and effect, the City shall not redeem the Bonds and the Trustee shall give notice, in the manner in which the notice of redemption was given,that the Bonds have not been redeemed. The City has the right to rescind any optional redemption or extraordinary optional redemption by written notice to the Trustee on or prior to the date fixed for redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under the Indenture. The Trustee shall mail notice of rescission of redemption in the same manner notice of redemption was originally provided. Additional Provisions with Respect to Redemption. A portion of a single Bonds of a denomination less $100,000 may be redeemed but only in a principal amount of at least$5,000 or any integral of$5,000 in excess thereof. After giving effect to a partial redemption as described in the Indenture, a Bond in the principal amount equal to the unredeemed portion but not less than $5,000 may be issued. If less than all of the Bonds are to be redeemed pursuant to Extraordinary Option Redemption or Mandatory Sinking Fund Redemption, the Bonds shall be redeemed in inverse order of maturity. If less than all the Bonds within a maturity are to be redeemed, such Bonds shall be called by random selection. Each Bond shall be treated as representing the number of Bonds that is obtained by dividing the principal amount of such Bond by the smallest Authorized Denomination for such Bonds. A portion of a single Bond of a denomination equal to or greater than $100,000 may be redeemed but only in a principal amount of$100,000 or any integral $5,000 in excess thereof; provided, however, that the Trustee shall treat each $5,000 portion of such Bond in excess of$100,000 as though it were a single bond for purposes of selection for redemption. 7 #5470717.14 Upon surrender of any Bond in part, the Trustee, in accordance with the provisions of the Indenture, shall authenticate and deliver in exchange thereof a Bond or Bonds of like tenor,maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond or Bonds so surrendered. BOOK-ENTRY ONLY SYSTEM This section describes how ownership of the Bonds is to be transferred and how the principal of,premium, if any, and interest on the Bonds are to be paid to and credited by The Depository Trust Company ("DTC'), New York, New York, while the Bonds are registered in its nominee name. The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this Limited Offering Memorandum. The City and the Underwriter believe the source of such information to be reliable, but neither the City not-the Underwriter takes responsibility for the accuracy or completeness thereof. The City cannot and does not give any assurance that(1)DTC will distribute payments of debt service on the Bonds, or redemption or other notices, to DTC Participants, (2)DTC Participants or others will distribute debt service payments paid to DTC or its nominee(as the registered owner of the Bonds), or redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis or (3) DTC will serve and act in the manner described in this Limited Offering Memorandum. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered security certificate will be issued for each maturity of the Bonds,each in the aggregate principal amount of such maturity,and will be deposited with DTC. DTC,the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a"banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a"clearing corporation"within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants (`Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities,through electronic computerized book- entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust&Clearing Corporation("DTCC"). DTCC, is the holding company for DTC,National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its registered subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard&Poor's rating of"AA+." The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation fi•om 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, fi•om the Direct or Induect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. 8 #5470717.14 To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds;DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited,which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them,subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds,such as redemptions,tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative,Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all Bonds of the same maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant of such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City 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 Bonds are credited on the record date(identified in a listing attached to the Omnibus Proxy). Principal, interest and all other payments on the Bonds will be made to Cede&Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or Paying Agent/Registrar, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC nor its nominee, the Trustee, the Paying Agent/Registrar, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, interest and payments to Cede&Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Trustee, the Paying Agent/Registrar or the City, 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 Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained,Bond certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. Thereafter, Bond certificates may be transferred and exchanged as described in the Indenture. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the City believes to be reliable, but none of the City, the City's Financial Advisor or the Underwriter take any responsibility for the accuracy thereof. NONE OF THE CITY, THE TRUSTEE, THE PAYING AGENT, THE CITY'S FINANCIAL ADVISOR OR THE UNDERWRITER WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO THE DTC PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEE WITH RESPECT TO THE 9 #5470717.14 PAYMENTS TO OR THE PROVIDING OF NOTICE FOR THE DTC PARTICIPANTS, THE INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS OF THE BONDS. THE CITY CANNOT AND DOES NOT GIVE ANY ASSURANCES THAT DTC, THE DTC PARTICIPANTS OR OTHERS WILL DISTRIBUTE PAYMENTS OF PRINCIPAL OF OR INTEREST ON THE BONDS PAID TO DTC OR ITS NOMINEE,AS THE REGISTERED OWNER, OR PROVIDE ANY NOTICES TO THE BENEFICIAL OWNERS OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL ACT IN THE MANNER DESCRIBED IN THIS LIMITED OFFERING MEMORANDUM. THE CURRENT RULES APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE CURRENT PROCEDURES OF DTC TO BE FOLLOWED IN DEALING WITH DTC PARTICIPANTS ARE ON FILE WITH DTC. LIMITATIONS APPLICABLE TO PROSPECTIVE PURCHASERS Each prospective purchaser is advised that the Bonds being offered pursuant to this Limited Offering Memorandum are being offered and sold only to a "qualified institutional buyer" as defined in Rule 144A promulgated under the Securities Act of 1933, as amended (the"Securities Act"). Each initial purchaser of Bonds (each, a "Purchaser") will be required to deliver a Letter of Representation to the City prior to their purchase of the Bonds in the form attached as Exhibit J, and each initial and subsequent purchaser will be deemed to have acknowledged and represented to the City as follows: 1. A purchase of the Bonds involves investment risks, certain of which are set forth under "BONDHOLDERS' RISKS" herein, and the Purchaser, either alone or with its purchaser representative(s) (as defined in Rule 501(h) of Regulation D under the Securities Act), has sophisticated lmowledge and experience in financial and business matters and the capacity to evaluate such risks in making an informed investment decision to purchase the Bonds. The Purchaser can afford a complete loss of its investment in the Bonds. 2. The Purchaser is a "qualified institutional buyer" as defined in Rule 144A promulgated under the Securities Act,or an entity in which all the equity owners are"qualified institutional buyers." The Purchaser is acquiring the Bonds for its own account with no present intention of distributing, reselling or redistributing the Bonds. 3. The Bonds are being offered and sold initially and subsequently may be sold or transferred only in denominations of$100,000 and any integral multiple of$5,000 in excess thereof; provided that upon partial redemption of any Bond, a Bond in the principal amount equal to the unredeemed portion,but not less than$5,000,may be issued. 4. None of the City,its counsel, Co-Bond Counsel or any other person representing the City has made any representation to the Purchaser with respect to the offering or sale of the Bonds, other than the information contained herein which relates specifically to the City, upon which the Purchaser is relying in making its investment decision with respect to the Bonds. No dealer, salesman or other person has been authorized to give any information or to make any representation other than the information contained in this Limited Offering Memorandum in connection with the offering of the Bonds, and, if given or made, any such information or representation will not be relied upon by the Purchaser as having been authorized by the City. 5. The Purchaser has had access to such financial and other information concerning the Bonds as it has deemed necessary in connection with its investment decision to purchase the Bonds. 6. The Bonds (i) are being offered pursuant to exemptions from registration under the Securities Act and any applicable state securities laws (the "State Laws") and are not being registered under the Securities Act or the State Laws; (ii) will not be listed on any stock or other securities exchange; and (iii) may be sold, transferred, or assigned only in compliance with the Securities Act, the State Laws and the Indenture. This Limited Offering Memorandum does not constitute an offer or solicitation in any jurisdiction in which such offer or solicitation is not authorized, or in which any person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation. 10 #5470717.14 7. No credit rating has been sought or obtained with respect to the Bonds, there is no established secondary market for the Bonds and the Purchaser has no present need for liquidity in connection with its investment in the Bonds. In the event the Purchaser subsequently determines to transfer or assign the Bonds or any interest therein, the Purchaser will not undertake such transfer or assignment except in full and complete compliance with all applicable local, state and federal laws, including State law and the Securities Act,and the requirements of the Indenture. 8. The Purchaser understands the meaning and legal consequences of the acknowledgements and representations set forth herein in the above paragraphs and further understands that the City has relied and will rely upon such acknowledgements and representations. SECURITY FOR THE BONDS General THE BONDS ARE SPECIAL OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE PLEDGED REVENUES AND OTHER FUNDS COMPRISING THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY FROM THE SOURCES IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION, OR OUT OF ANY FUNDS OF THE CITY OTHER THAN THE PLEDGED REVENUES, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO DEMAND ANY EXERCISE OF THE CITY'S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE INTEREST OR REDEMPTION PREMIUM, IF ANY, THEREON. THE CITY SHALL HAVE NO LEGAL OR MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY FUNDS OF THE CITY OTHER THAN THE PLEDGED REVENUES AND OTHER FUNDS COMPRISING THE TRUST ESTATE. The principal of,premium, if any, and interest on the Bonds are secured by a pledge of and a lien upon the pledged revenues (the "Pledged Revenues"), consisting primarily of a portion of Major Improvement Special Assessments levied against the Assessed Property within the Eastern Improvement Area and Western Improvement Area of the District and other funds comprising the Trust Estate, all to the extent and upon the conditions described herein and in the Indenture. The District contains approximately 1,756 acres. In accordance with the PID Act, the City has caused the preparation of a Service and Assessment Plan(as amended and supplemented,the"Service and Assessment Plan"), which describes the special benefit received by the property within the District, including the Eastern Improvement Area and the Western Improvement Area, provides the basis and justification for the determination of special benefit on such property, establishes the methodology for the levy of Major Improvement Special Assessments and provides for the allocation of Pledged Revenues for payment of principal of, premium, if any, and interest on the Bonds. The Service and Assessment Plan will be reviewed and updated annually for the purpose of determining the annual budget for improvements and the Annual Installments (as defined below) of Major Improvement Special Assessments due in a given year. The determination by the City of the assessment methodology set forth in the Service and Assessment Plan is the result of the discretionary exercise by the City Council of its legislative authority and governmental powers and is conclusive and binding on all current and future landowners within the District. See"APPENDIX C—Form of Service and Assessment Plan." Pledged Revenues The City is authorized by the PID Act,the Assessment Ordinance and other provisions of law to finance the Major Improvements by levying the Major Improvement Special Assessments upon properties in the Eastern Improvement Area and the Western Improvement Area of the District benefitted thereby. For a description of the assessment methodology and the amounts of Major Improvement Special Assessments anticipated to be levied in the District,see"ASSESSMENT PROCEDURES"and"APPENDIX C—Form of Service and Assessment Plan." Pursuant to the Indenture, Pledged Revenues are the sum of(i)Major Improvement Assessment Revenues (excluding that portion of the Annual Installments collected for the payment of Administrative Expenses); (ii) the moneys held in the Pledged Funds; and(iii) any additional revenues that the City may pledge to the payment of the 11 #5470717.14 Bonds. "Major Improvement Assessment Revenue" means monies collected by or on behalf of the City from any one or more of the following: (i)an Annual Installment, (ii)a Prepayment, and(iii)Foreclosure Proceeds. "Annual Installments" means, with respect to each Assessed Parcel, each annual payment of(i) the Major Improvement Special Assessments as shown on the Assessment Roll attached to the Service and Assessment Plan and related to the Bonds and the Major Improvements; (ii)the 0.50%additional interest rate(authorized by Section 372.018(a) of the PID Act) collected on each annual payment of Major Improvement Special Assessments for a Delinquency and Prepayment Reserve as described in the Indenture and as defined and calculated in the Service and Assessment Plan or in any Annual Service Plan Update,and Administrative Expenses. The City will covenant in the Indenture that it will take and pursue all actions permissible under Applicable Laws to cause the Major Improvement Special Assessments to be collected and the liens thereof to be enforced continuously. See "— Pledged Revenue Fund." See also "— Pledged Revenue Fund," "Delinquency and Prepayment Reserve Account of the Reserve Fund," "APPENDIX B—Form of Indenture"and"APPENDIX C—Form of Service and Assessment Plan." The PID Act provides that the Major Improvement Special Assessments (including any reassessment, with interest, the expense of collection and reasonable attorney's fees, if incurred) are a first and prior lien (the "Assessment Lien") against the property assessed, superior to all other liens or claims, except liens and claims for the State of Texas (the "State"), county, school district, municipality, or other political subdivisions of the State for ad valorem taxes and are a personal liability of and charge against the owners of property,regardless of whether the owners are named. Pursuant to the PID Act, the Assessment Lien is effective from the date of the Assessment Ordinance until the Major Improvement Special Assessments are paid(or otherwise discharged), and is enforceable by the City Council in the same manner that an ad valorem property tax levied against real property may be enforced by the City Council. See"ASSESSMENT PROCEDURES"herein. Collection and Deposit of Major Improvement Special Assessment Revenues The Major Improvement Assessment Revenues (excluding that portion collected for the payment of Administrative Expenses and Delinquent Collection Costs)shown on the Assessment Roll,together with the interest thereon, shall be deposited to the Pledged Revenue Fund for the payment of the principal of and interest on the Bonds as and to the extent provided in the Service and Assessment Plan and the Indenture. The Major Improvement Special Assessments, together with interest thereon, are payable in Annual Installments established by the Assessment Ordinance and the Service and Assessment Plan to correspond, as nearly as practicable, to the debt service requirements for the Bonds (excluding the portion of the Assessments levied for Administrative Expenses and the Additional Interest (defined herein)). An Annual Installment of a Major Improvement Special Assessment has been made payable in the Assessment Ordinance in each City fiscal year preceding the date of final maturity of the Bonds which, if collected, will be sufficient to first pay debt service requirements attributable to Major Improvement Special Assessments in the Service and Assessment Plan. Each Annual Installment is payable as provided in the Service and Assessment Plan and the Assessment Ordinance. A record of the Major Improvement Special Assessments on each parcel, tract, or lot which are to be collected in each year during the term of the Bonds is shown on the Assessment Roll. Sums received from the collection of the Major Improvement Special Assessments to pay the debt service requirements (including delinquent installments,Foreclosure Proceeds and penalties and interest thereon)shall be deposited into the Pledged Revenue Fund, except that(1) amounts received as Prepayments shall be deposited into the Pledged Revenue Fund and shall thereafter be transferred to the Redemption Fund and(2) amounts collected as Additional Interest shall be deposited to the Pledged Revenue Fund and thereafter, shall be transferred to the Delinquency and Prepayment Reserve Account in each case, as set forth in the Indenture. The Trustee shall deposit Foreclosure Proceeds in the Pledged Revenue Fund and as soon as practical after such deposit shall transfer the Foreclosure Proceeds first to the Reserve Fund to restore any transfers from the Reserve Fund made with respect to the Assessed Parcel or Assessed Property to which the Foreclosure Proceeds relate,and second to the Redemption Fund. Sums received fiom the collection of the Major Improvement Special Assessments to pay Administrative Expenses and any Delinquent Collection Costs shall be deposited directly to the District Administrative Account of the Administration Fund and shall not constitute Pledged Revenues. 12 #5470717.14 Unconditional Levy of Assessments The City will impose Major Improvement Special Assessments on the property within the Eastern Improvement Area and the Western Improvement Area of the District to pay the principal of and interest on the Bonds scheduled for payment from Pledged Revenues as described in the Indenture and in the Service and Assessment Plan and coming due during each Fiscal Year. The Major Improvement Special Assessments shall be effective on the date of, and strictly in accordance with the terms of, the Assessment Ordinance. Each Major Improvement Special Assessment may be paid immediately in full or in periodic Annual Installments over a period of time equal to the term of the Bonds, which installments shall include interest on the Major Improvement Special Assessments. Pursuant to the Assessment Ordinance, interest on the Major Improvement Special Assessments will be calculated at the rate of interest on the Bonds plus 0.50%, calculated on the basis of a 360-day year of twelve 30- day months. Such rate may be adjusted as described in the Service and Assessment Plan. Each Annual Installment, including the interest on the unpaid amount of a Major Improvement Special Assessment, shall be calculated on or before September 1 and shall be due on October 1 of each year. Each Annual Installment together with interest thereon shall be delinquent if not paid prior to February 1 of the following year. The initial Annual Installments will be due when billed, and will be delinquent if not paid prior to February 1, 2018. The City anticipates that it will contract with the Tarrant County Tax Assessor-Collector for the billing and collection of the Major Improvement Special Assessments. As authorized by Section 372.018(b)of the PID Act,the City will calculate and collect each year while the Bonds are Outstanding and unpaid, commencing October 1, 2017, a portion of the Major Improvement Special Assessment to pay the annual costs incurred by the City in the administration and operation of the District. The portion of each Annual Installment of a Major Improvement Special Assessment used to pay such annual administrative costs shall remain in effect from year to year until all Bonds are finally paid or until the City adjusts the amount of the levy after an annual review in any year pursuant to Section 372.013 of the PID Act. The portion of the Major Improvement Special Assessments to pay Administrative Expenses shall be due in the manner set forth in the Assessment Ordinance on October 1 of each year and shall be delinquent if not paid by February 1 of the following year. Such portion of the Major Improvement Special Assessments to pay expenses do not secure repayment of the Bonds. There will be no discount for the early payment of Major Improvement Special Assessments. Major Improvement Special Assessments, together with interest, penalties, and expense of collection and reasonable attorneys' fees, as permitted by the Texas Tax Code, shall be a first and prior lien against the property assessed, superior to all other liens and claims, except liens or claims for State, county, school district or municipality ad valorem taxes and shall be a personal liability of and charge against the owner of the property regardless of whether the owners are named. The lien for Major Improvement Special Assessments and penalties and interest begins on the effective date of the Assessment Ordinance and continues until the Major Improvement Special Assessments are paid or until all Bonds are finally paid. Failure to pay an Annual Installment when due shall not accelerate the payment of the remaining Annual Installments of the Major Improvement Special Assessments and such remaining Annual Installments (including interest)shall continue to be due and payable at the same time and in the same amount and manner as if such default had not occurred. Perfected Security Interest Chapter 1208,Texas Government Code, applies to the issuance of the Bonds and the pledge of the Pledged Revenues and such pledge is valid, effective, and perfected. The City will covenant in the Indenture that should Texas law be amended at any time while the Bonds are outstanding and unpaid,the result of such amendment being that the pledge of such revenues is subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, in order to preserve to the registered owners of the Bonds a security interest in such pledge,the City will take such measures as it determines are reasonable and necessary to enable a filing of a security interest in said pledge to occur. See"APPENDIX B—Form of Indenture." 13 #5470717.14 Pledged Revenue Fund The City has created under the Indenture a Pledged Revenue Fund to be held by the Trustee. On or before February 1st of each year while the Bonds are outstanding, and beginning in the year 2018,the City shall deposit or cause to be deposited the Pledged Revenues (excluding, for the avoidance of doubt (i) that portion of the Annual Installments collected for the payment of Administrative Expenses and (ii) Delinquent Collection Costs) into the Pledged Revenue Fund. Specifically,the City shall deposit or cause to be deposited Pledged Revenues as follows: (i)first,to the Principal and Interest Account of the Bond Fund amounts sufficient to pay debt service on the Bonds next coming due; (ii)second,to the Bond Reserve Account of the Reserve Fund in an amount necessary to cause the amount on deposit therein to equal the Bond Reserve Account Requirement; (iii) third, to pay other costs of the Major Improvements; and (iv)fourth, to pay any other costs permitted by the PID Act. Notwithstanding the foregoing, following the initial deposit to the Pledged Revenue Fund, the Additional Interest Component of the Annual Installments will be deposited into the Delinquency and Prepayment Reserve Account, Administrative Fund, or the Redemption Fund, as applicable. Notwithstanding the foregoing, if any funds remain on deposit in the Pledged Revenue Fund after the transfers required by clauses (i) and (ii) above are made, the City shall have the option, in its sole and absolute discretion, to transfer such excess funds into the Redemption Fund to redeem Bonds as provided in the Indenture. From time to time as needed to pay the obligations relating to the Bonds, but no later than five business days before each Interest Payment Date,the Trustee shall withdraw from the Pledged Revenue Fund and transfer to the Principal and Interest Account of the Bond Fund, an amount,taking into account any amounts then on deposit in such Principal and Interest Account and any expected transfers fi•om the Capitalized Interest Account to the Principal and Interest Account, such that the amount on deposit in the Principal and Interest Account equals the principal (including any Sinking Fund Installments) and interest due on the Bonds on the next Interest Payment Date. If,after the foregoing transfers and any transfer from the Reserve Fund(as described under"Reserve Fund" below), there are insufficient funds to make the payments provided in the preceding paragraph, the Trustee shall apply the available funds in the Principal and Interest Account first to the payment of interest,then to the payment of principal(including any Sinking Fund Installments)on the Bonds. Notwithstanding the deposits described in(i)first through(iv)fourth above: (i) the Trustee shall transfer Prepayments to the Redemption Fund as soon as practical after deposit of such amounts into the Pledged Revenue Fund. (ii) the Trustee shall deposit Additional Interest to the Pledged Revenue Fund and shall transfer such Additional Interest to the Delinquency and Prepayment Reserve Account or as otherwise directed in the Indenture; and (iii) the Trustee shall transfer Foreclosure Proceeds (which exclude Delinquent Collection Costs) first to the Reserve Fund to restore any transfers from the applicable account of the Reserve Fund made with respect to an Assessed Parcel to which the Foreclosure Proceeds relate,and second,to the Redemption Fund. Bond Fund On each Interest Payment Date, the Trustee shall withdraw from the Principal and Interest Account and transfer to the Paying Agent/Registrar the principal (including any Sinking Fund Installments)and interest then due and payable on the Bonds, less any amount to be used to pay interest on the Bonds on such Interest Payment Date from the Capitalized Interest Account as provided in the Indenture. Reserve Fund Pursuant to the Indenture, a Bond Reserve Account will be created within the Reserve Fund for the benefit of the Bonds and held by the Trustee and will be funded with proceeds of the Bonds in the amount of the Reserve 14 #5470717.14 Account Requirement. Pursuant to the Indenture,the"Bond Reserve Account Requirement" for the Bonds shall be an amount equal to the least of(i) Maximum Annual Debt Service on the Bonds as of their date of issuance, (ii) 125%of average Annual Debt Service on the Bonds as of their date of issuance, and(iii) 10%of the proceeds of the Bonds; provided, however, that such amount shall be reduced by the amount of any transfers made in connection with a mandatory or extraordinary optional redemption. Also, as a result of an optional redemption of the Bonds, the Bond Reserve Account Requirement shall be reduced by a percentage equal to the pro rata amount of Bonds redeemed by such optional redemption divided by the total amount of the Outstanding Bonds prior to such redemption. As of the date of delivery of the Bonds,the Reserve Account Requirement equals$1,388,900,which is an amount equal to the Maximum Annual Debt Service on the Bonds as of the date of issuance. If there is any deficiency in the Bond Reserve Account, the Excess Delinquency and Prepayment Reserve Amount (defined below),will be deposited into the Bond Reserve Account until the amount in the Bond Reserve Account is funded to the Bond Reserve Account Requirement. If, on any Interest Payment Date, the amount on deposit in the Bond Fund is insufficient to pay the debt service on the Bonds due on such date, the Trustee shall, transfer any available funds on deposit first from the Delinquency and Prepayment Reserve Account (described below), and second from the Bond Reserve Account of the Reserve Fund,to the Bond Fund in the amount necessary to cure such deficiency. If, after a Reserve Fund withdrawal, the amount on deposit in the Bond Reserve Account is less than the Bond Reserve Account Requirement,the Trustee shall transfer from the Pledged Revenue Fund to the Bond Reserve Account the amount of such deficiency, in accordance with the Indenture, but only to the extent that such amount is not required for the timely payment of principal,interest,or Sinking Fund Installments. Delinquency and Prepayment Reserve Account of the Reserve Fund Pursuant to the Indenture, a Delinquency and Prepayment Reserve Account will be created within the Reserve Fund and held by the Trustee for the benefit of the Bonds. The Trustee will transfer the Additional Interest (as defined below) from the Pledged Revenue Fund to the Delinquency and Prepayment Reserve Account on March 1 of each year, commencing March 1, 2018 until the amount on deposit in the Delinquency and Prepayment Reserve Account is equal to the Delinquency and Prepayment Reserve Requirement;provided,however,that at any time the amount on deposit in the Delinquency and Prepayment Reserve Account is less than Delinquency and Prepayment Reserve Requirement, the Trustee shall resume depositing the Additional Interest Component (as defined below) into the Delinquency and Prepayment Reserve Account until the Delinquency and Prepayment Reserve Requirement has accumulated in the Delinquency and Prepayment Reserve Account. The Delinquency and Prepayment Reserve Requirement is an amount equal to 5.5% of the principal amount of the Outstanding Bonds. The Additional Interest is the one-half of one percent interest above the interest rate borne by the Bonds, authorized by Section 372.018(a)of the PID Act. Whenever, on any Interest Payment Date, or on any other date at the written request of the City Representative, the amounts on deposit in the Delinquency and Prepayment Reserve Account exceed the Delinquency and Prepayment Reserve Requirement, the Trustee shall provide written notice to the City of the amount of the excess(the"Excess Delinquency and Prepayment Reserve Amount"). The Excess Delinquency and Prepayment Reserve Amount shall be transferred first to fund any deficiency in the Bond Reserve Account. If no deficiency in the Bond Reserve Account exists, the Excess Delinquency and Reserve Amount shall be transferred, at the direction of the City pursuant to a City Order, to the Administrative Fund for the payment of Administrative Expenses or to the Redemption Fund to redeem bonds pursuant to extraordinary optional redemption. In the event that the Trustee does not receive a City Order directing the transfer of the Excess Delinquency and Prepayment Reserve Amount to the Administrative Fund within 45 days of providing notice to the City of such Excess Delinquency and Prepayment Reserve Amount, the Trustee shall transfer the Excess Delinquency and Prepayment Reserve Amount to the Redemption Fund to redeem Bonds pursuant to the Indenture. See"APPENDIX B—Form of Indenture"and"APPENDIX C—Form of Service and Assessment Plan." Moneys deposited in the Delinquency and Prepayment Reserve Account will be used and withdrawn by the Trustee for the purpose of making transfers to the Bond Fund, pursuant to, and at the times specified in, the Indenture to pay a portion of the accrued interest on Bonds being redeemed pursuant to an extraordinary optional redemption for Prepayments. The amount to be transferred shall be an amount, for each Prepayment, equal to the amount of any shortfall, after transfers from the Bond Reserve Account of the Reserve Fund as described above and 15 #5470717.14 application of investment earnings on the Prepayment toward payment of accrued interest, in funds necessary to pay the principal amount plus accrued interest on such Bonds to be redeemed as a result of the Prepayment. If, on any Interest Payment Date, the amount on deposit in the Bond Fund is insufficient to pay the debt service on the Bonds due on such date, the Trustee shall transfer funds first from the Delinquency and Prepayment Reserve Account to the Bond Fund and second from the Bond Reserve Account of the Reserve Fund the amounts necessary to cure such deficiency. Administrative Fund The City has created under the Indenture an Administrative Fund held by the Trustee. Upon receipt, the City shall transfer to the Trustee, for deposit to the District Administration Account of the Administrative Fund, the portion of the Special Assessments and Annual Installments allocated to the payment of Administrative Expenses and Delinquent Collection Costs as set forth in the Service and Assessment Plan. Monies in the District Administration Account of the Administrative Fund may be used as directed by City Order for the purposes set forth in the Service and Assessment Plan, including payment of the Administrative Expenses and Delinquent Collection Costs. THE ADMINISTRATIVE FUND SHALL NOT BE PART OF THE TRUST ESTATE AND SHALL NOT BE SECURITY FOR THE BONDS. Moneys in the Developer Property Tax Account of the Administrative Fund shall be held by the Trustee separate and apart from the other Funds created and administered hereunder and shall be released to the Developer as directed by City Order; provided, however, that the Trustee shall transfer to the Developer any amounts remaining in the Developer Property Tax Account of the Administrative Fund after the last Outstanding Bond is discharged regardless of whether a City Order directing such action is received. THE DEVELOPER PROPERTY TAX ACCOUNT SHALL NOT BE PART OF THE TRUST ESTATE AND SHALL NOT BE SECURITY FOR THE BONDS. Project Fund The Project Fund under the Indenture contains the Major Improvement Account, the University Property Improvement Account and the Costs of Issuance Account. Money on deposit in the Major Improvement Account of the Project Fund shall be used for the payment of the Costs of the Major Improvements. Money on deposit in the University Property Improvement Account of the Project Fund shall be used solely for the purposes of paying the costs of University Improvements associated with the University Property(as each term is defined in the Service and Assessment Plan). Disbursements from the Costs of Issuance Account of the Project Fund shall be made by the Trustee to pay costs of issuance of the Bonds pursuant to one or more City Certificates (as defined in the Indenture). Disbursements from all other accounts of the Project Fund to pay Major Improvement Costs or the costs of any University Improvements shall be made by the Trustee upon receipt by the Trustee of a properly executed and completed Certificate for Payment(as defined in the Indenture). The disbursement of funds from the Project Fund pursuant to a Certificate for Payment shall be pursuant to and in accordance with the disbursement procedures described in the PID Reimbursement Agreement. Such provisions and procedures related to such disbursement contained in the PID Reimbursement Agreement, and no other provisions of the PID Reimbursement Agreement, are herein incorporated by reference and deemed set forth herein in full. The University Property Improvement Account shall not be part of the Trust Estate and shall not be security for the Bonds. AMOUNTS IN THE UNIVERSITY PROPERTY IMPROVEMENT ACCOUNT SHALL NOT BE USED TO PAY THE PRINCIPAL OF OR INTEREST ON THE BONDS. 16 #5470717.14 Defeasance All Outstanding Bonds shall prior to the Stated Maturity or redemption date thereof be deemed to have been paid and to no longer be deemed Outstanding if(i) in case any such Bonds are to be redeemed on any date prior to their Stated Maturity, the Trustee shall have given notice of redemption on said date as provided in the Indenture,(ii)there shall have been deposited with the Trustee either moneys in an amount which shall be sufficient, or Defeasance Securities the principal of and the interest on which when due will provide moneys which, together with any moneys deposited with the Trustee at the same time, shall be sufficient to pay when due the principal of and interest on of the Bonds to become due on such Bonds on and prior to the redemption date or maturity date thereof, as the case may be, (iii) the Trustee shall have received a report by an independent certified public accountant selected by the City verifying the sufficiency of the moneys or Defeasance Securities deposited with the Trustee to pay when due the principal of and interest on of the Bonds to become due on such Bonds on and prior to the redemption date or maturity date thereof, as the case may be, and (iv) if the Bonds are then rated, the Trustee shall have received written confirmation from each rating agency then rating the Bonds that such deposit will not result in the reduction or withdrawal of the rating on the Bonds. Neither Defeasance Securities nor moneys so deposited with the Trustee nor principal or interest payments on any such Defeasance Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for,the payment of the principal of and interest on the Bonds. Any cash received from such principal of and interest on such Defeasance Securities deposited with the Trustee, if not then needed for such purpose, shall be reinvested in Defeasance Securities as directed by the City maturing at times and in amounts sufficient to pay when due the principal of and interest on the Bonds on and prior to such redemption date or maturity date thereof, as the case may be. Any payment for Defeasance Securities purchased for the purpose of reinvesting cash as aforesaid shall be made only against delivery of such Defeasance Securities. "Defeasance Securities" means Investment Securities then authorized by applicable law for the investment of funds to defease public securities. "Investment Securities" means those authorized investments described in the Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended; and provided further investments and are, at the time made, included in and authorized by the City's official investment policy as approved by the City Council from time to time. Under current State law, Investment Securities that are authorized for the investment of funds to defease public securities are(a)direct,noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America; (b)noncallable obligations of an agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality, and that, on the date the governing body of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent; and (c) noncallable obligations of a state or an agency or a county,municipality, or other political subdivision of a state that have been refunded and that, on the date the governing body of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than "AAA"or its equivalent. There is no assurance that the current law will not be changed in a manner which would permit investments other than those described above to be made with amounts deposited to defease the Bonds. Because the Indenture does not contractually limit such investments, Owners may be deemed to have consented to defeasance with such other investments,notwithstanding the fact that such investments may not be of the same investment quality as those currently permitted under State law. There is no assurance that the ratings for U.S. Treasury securities used as Defeasance Securities or that for any other Defeasance Security will be maintained at any particular rating category. Events of Default Each of the following occurrences or events constitutes an"Event of Default"under the Indenture: (i) the failure of the City to deposit the Pledged Revenues to the Bond Pledged Revenue Account of the Pledged Revenue Fund; (ii) the failure of the City to enforce the collection of the Major Improvement Special Assessments including the prosecution of foreclosure proceedings; 17 #5470717.14 (iii) the failure to make payment of the principal of or interest on any of the Bonds when the same becomes due and payable and such failure is not remedied within 30 days thereafter;and (iv) default in the performance or observance of any covenant, agreement or obligation of the City under the Indenture and the continuation thereof for a period of 90 days after written notice to the City by the Trustee,or by the Owners of at least 25%of the aggregate outstanding principal of the Bonds with a copy to the Trustee, specifying such default by the Owners of at least 25% of the Bonds at the time Outstanding requesting that the failure be remedied. Remedies in Event of Default Upon the happening and continuance of any Event of Default, the Owners of not less than 25% in aggregate outstanding principal amount of the Bonds then Outstanding may proceed against the City for the purpose of protecting and enforcing the rights of the Owners under the Indenture by action seeking mandamus or by other suit, action, or special proceeding in equity or at law in any court of competent jurisdiction for any relief to the extent permitted by Applicable Laws including, but not limited to, the specific performance of any covenant or agreement contained in the Indenture, or injunction; provided, however, that no action for money damages against the City may be sought or will be permitted. THE PRINCIPAL OF THE BONDS SHALL NOT BE SUBJECT TO ACCELERATION UNDER ANY CIRCUMSTANCES. If the assets of the Trust Estate are sufficient to pay all amounts due with respect to all Outstanding Bonds, in the selection of Trust Estate assets to be used in the payment of Bonds due in an Event of Default,the City shall determine, in its absolute discretion, and shall instruct the Trustee by City Order, which Trust Estate assets shall be applied to such payment and shall not be liable to any Owner or other Person by reason of such selection and application. In the event that the City shall fail to deliver to the Trustee such City Order,the Trustee shall select and liquidate or sell Trust Estate assets as provided in the following paragraph, and shall not be liable to any Owner, or other Person, or the City by reason of such selection, liquidation or sale. Whenever moneys are to be applied pursuant to an Event of Default, irrespective of and whether other remedies authorized under the Indenture shall have been pursued in whole or in part,the Trustee may cause any or all of the assets of the Trust Estate, including Investment Securities,to be sold. The Trustee may so sell the assets of the Trust Estate and all right, title, interest, claim and demand thereto and the right of redemption thereof, in one or more parts, at any such place or places,and at such time or times and upon such notice and terms as the Trustee may deem appropriate and as may be required by law and apply the proceeds thereof in accordance with the provisions of the Indenture. Upon such sale, the Trustee may make and deliver to the purchaser or purchasers a good and sufficient assignment or conveyance for the same, which sale shall be a perpetual bar both at law and in equity against the City and all other Persons claiming such properties. No purchaser at any sale shall be bound to see to the application of the purchase money proceeds thereof or to inquire as to the authorization, necessity, expediency, or regularity of any such sale. Nevertheless, if so requested by the Trustee,the City shall ratify and confirm any sale or sales by executing and delivering to the Trustee or to such purchaser or purchasers all such instruments as may be necessary or, in the judgment of the Trustee,proper for the purpose which may be designated in such request. Restriction on Owner's Actions No Owner shall have any right to institute any action, suit or proceeding at law or in equity for the enforcement of the Indenture or for the execution of any trust thereof or any other remedy thereunder, unless (i) a default has occurred and is continuing of which the Trustee has been notified in writing or of which it is deemed to have notice, (ii) such default has become an Event of Default and the Owners of 25% of the aggregate principal amount of the Bonds then Outstanding have made written request to the Trustee and offered it reasonable opportunity either to proceed to exercise the powers granted or to institute such action, suit or proceeding in its own name, (iii)the Owners have furnished to the Trustee indemnity as provided in the Indenture, (iv)the Trustee has for 90 days after such notice failed or refused to exercise the powers granted, or to institute such action, suit, or proceeding in its own name, (v) no direction inconsistent with such written request has been given to the Trustee during such 90-day period by the owners of a majority of the aggregate principal amount of the Bonds then 18 #5470717.14 Outstanding, and (vi) notice of such action, suit, or proceeding is given to the Trustee; however, no one or more Owners of the Bonds shall have any right in any manner whatsoever to affect, disturb, or prejudice the Indenture by its,his or their action or to enforce any right thereunder except in the manner provided in the Indenture, and that all proceedings at law or in equity shall be instituted and maintained in the manner provided in the Indenture and for the equal benefit of the registered owners of all Bonds then Outstanding. The notification, request and furnishing of indemnity shall,at the option of the Trustee,be conditions precedent to the execution of the powers and trusts of the Indenture and to any action or cause of action for the enforcement of the Indenture or for any other remedy thereunder. Subject to provisions of the Indenture with respect to certain liabilities of the City,nothing in the Indenture shall affect or impair the right of any Owner to enforce, by action at law, payment of any Bond at and after the maturity thereof, or on the date fixed for redemption or the obligation of the City to pay each Bond issued thereunder to the respective Owners thereof at the time and place, from the source and in the manner expressed therein and in the Bonds. In case the Trustee or any Owners shall have proceeded to enforce any right under the Indenture and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or any Owners, then and in every such case the City, the Trustee and the Owners shall be restored to their former positions and rights thereunder, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken. Application of Revenues and Other Moneys After Event of Default All moneys, securities, funds and Pledged Revenues and the income therefrom received by the Trustee pursuant to any right given or action taken under the provisions of the Indenture with respect to Events of Default shall, after payment of the cost and expenses of the proceedings resulting in the collection of such amounts, the expenses(including Trustee's counsel), liabilities, and advances incurred or made by the Trustee and the fees of the Trustee in carrying out the Indenture,be applied by the Trustee,on behalf of the City,to the payment of interest and principal or redemption price then due on Bonds,as follows: (i) FIRST: To the payment to the registered owners entitled thereto all installments of interest then due in the direct order of maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment, then to the payment thereof ratably, according to the amounts due on such installment,to the registered owners entitled thereto, without any discrimination or preference; and (ii) SECOND: To the payment to the registered owners entitled thereto of the unpaid principal of Outstanding Bonds, or redemption price of any Bonds which shall have become due, whether at maturity or by call for redemption, in the direct order of their due dates and, if the amounts available shall not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal due and to the registered owners entitled thereto, without any discrimination or preference. In the event funds are not adequate to cure an Event of Default, the available funds will be allocated to the Bonds that are Outstanding in proportion to the quantity of Bonds that are currently due and in default under the terms of the Indenture. Within ten days of receipt of such good and available funds,the Trustee may fix a record and payment date for any payment to be made to Owners. The restoration of the City to its prior position after any and all defaults have been cured, as provided above, shall not extend to or affect any subsequent default under the Indenture or impair any right consequent thereon. 19 #5470717.14 Investment or Deposit of Funds Money in any fund or account established pursuant to the Indenture (other than the Reserve Account) will be invested by the Trustee as directed by the.City pursuant to a City Order filed with the Trustee at least two (2) days in advance of the making of such investment in time deposits or certificates of deposit secured in the manner required by law for public funds, or be invested in such other investments as are permitted under the Public Funds Investment Act, Chapter 2256, Government Code, as amended(the"PFIA") or any successor law, as in effect from time to time; provided that all such deposits and investments shall be made in such manner (which may include repurchase agreements for such investment with any primary dealer of such agreements)that the money required to be expended from any fund will be available at the proper time or times as set forth in the Indenture. Obligations purchased as an investment of moneys in any fund or account established pursuant to the Indenture shall be deemed to be part of such fund or account, subject,however,to the requirements of the Indenture for transfer of interest earnings and profits resulting from investment of amounts in funds and accounts. Whenever in the Indenture any moneys are required to be transferred by the City to the Trustee, such transfer may be accomplished by transferring a like amount of permitted investments under the Indenture. Against Encumbrances Other than bonds issued to refund all or a portion of the Bonds, the City will covenant in the Indenture not to create and, to the extent Pledged Revenues are received, not suffer to remain, any lien, encumbrance or charge upon the Pledged Revenues, other than that specified in the Indenture, or upon any other property pledged under the Indenture, except the pledge created for the security of the Bonds, and other than a lien or pledge subordinate to the lien and pledge of such property related to the Bonds. So long as Bonds are Outstanding under the Indenture, the City will not issue any bonds, notes or other evidences of indebtedness other than the Bonds and bonds issued to refund all or a portion of the Bonds secured by any pledge of or other lien or charge on the Pledged Revenues or other property pledged under this Indenture, other than a lien or pledge subordinate to the lien and pledge of such property related to the Bonds. Additional Obligations The City expects to issue Additional Obligations to finance the cost of Roadway Improvements within the Western Improvement Area of the District as the development of the District proceeds. All of the Roadway Improvements will be located in the Western Improvement Area and no Roadway Improvements will be located in the Eastern Improvement Area. Such Additional Obligations will be secured by separate special assessments levied pursuant to the PID Act on assessable property within the Western Improvement Area of the District only. The City and the Developer anticipate that Additional Obligations will be issued within the next year. No Additional Obligations will be issued with respect to the Eastern Improvement Area. Although the Additional Obligations will not be secured by the Trust Estate securing the Bonds, the City reserves the right to issue Additional Obligations for any purpose permitted by the Act, including those described above, and in accordance with the conditions set forth below: 1. There are no delinquent Major Improvement Special Assessments at the time the Additional Obligations are to be issued; 2. The City and the Developer are each in full compliance with their respective continuing disclosure agreements entered into in connection with the Bonds pursuant to Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934; 3. Either(a)the Major Improvements have been completed, or(b) the Project Engineer (as defined in the Service and Assessment Plan) shall have certified in writing to the City prior to the levy of assessments for the Additional Obligations that there are sufficient funds in the form of cash available to complete the Major Improvements;and 20 #5470717.14 4. The City will have determined that there are sufficient funds in the form of cash on hand to fund the construction of all of the planned roadway improvements (other than the Future Roadway Improvements to be financed by the Additional Obligations) as contemplated by the Memorandum of Understanding. 21 #5470717.14 SOURCES AND USES OF FUNDS The table that follows summarizes the expected sources and uses of proceeds of the Bonds and additional funds received from the Developer: Sources of Funds: Principal Amount $ Net Premium $ Developer Contribution for University Property $ Developer Contribution for Developer Property Tax Account of the $ Administrative Fund TOTAL SOURCES $ Use of Funds: Deposit to Major Improvement Account $ Deposit to University Property Improvement Account $ Deposit to Capitalized Interest Account of Bond Fund(') $ Deposit to Reserve Account of the Reserve Fund $ Deposit to District Administrative Account of the Administrative Fund $ Deposit to Developer Property Tax Account of the Administrative Fund $ Costs of Issuance $ Underwriter Discount $ TOTAL USES The Bonds will include capitalized interest through September 1,2020. (REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK) 22 #5470717.14 DEBT SERVICE REQUIREMENTS The following table sets forth the anticipated debt service requirements for the Bonds: Year Ending (September 1) Principal Interest Total 2018 - 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 Totals (REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK) 23 #5470717.14 OVERLAPPING TAXES AND DEBT As noted above, Major Improvement Area of the District includes territory located in other governmental entities that may issue or incur debt secured by the levy and collection of ad valorem taxes or assessments. Set forth below is an overlapping debt table showing the outstanding indebtedness payable from ad valorem taxes with respect to property within Major Improvement Area of the District, as of August 1, 2017 and City debt to be secured by the Special Assessments: In addition to the Major Improvement Special Assessments described above,the Developer anticipates that each residential lot owner in the District will pay a maintenance and operation fee and/or a property owner's association fee to a homeowner's association(the "HOA"), one or more of which are expected to be formed by the Developer after delivery of the Bonds. In addition to the City,and as described in the following tables the following taxing entities may each levy ad valorem taxes upon land in the District for payment of debt incurred by such governmental entities and/or for payment of maintenance and operations expenses. The City has no control over the level of ad valorem taxes or special assessments levied by such other taxing authorities. The following table reflects the overlapping ad valorem tax rates currently levied on property located in the District. The District is located entirely within Tarrant County. OVERLAPPING JURISDICTIONS TAX RATES At Delivety Projected at of Bonds Build Out Tax Year 2016 Tax Year 2016 Ad Valorem Ad Valorem Taxing Entity Tax Rate( ) Tax Rate(l) City of Fort Worth $ 0.8350 $ 0.8350 Tarrant County 0.2540 0.2540 Tarrant County College District 0.1447 0.1447 Tarrant County Hospital District 0.2279 0.2279 Crowley Independent School District 1.6500 1.6500 Total Tax Rate $ 3.1116 $ 3.1116 Average Annual Installment for Major Improvements(2)of the District as a tax rate equivalent per$100 in value $ 2.9890 (3) $ 0.0603 (4) Total Tax Rate and Average Annual Installment for Major Improvements of of the District as tax rate equivalent per$100 in value $ 6.1006 $ 3.1720 (1)As reported by the Appraisal District. Per$100 taxable appraised value. Tax Year 2017 ad valorem tax rates will be available by September 2017. (2)Derived from information presented in Section IV,Appendix A-1 and Appendix A-2 of the Service and Assessment Plan. Includes Special Assessments initially levied for payment of the Bonds, but does NOT include any future assessments expected to be levied on the Western improvement Area for Roadway Improvements. (3)Based on$51,500,000 "As Complete"value as calculated in the Appraisal. (4)Based on$2,551,158,000 Build Out Value as calculated in Section IV of the Service and Assessment Plan. Sources: Tarrant Appraisal District, the Appriasal and the Service and Assessment Plan. 24 #5470717.14 OVERLAPPING DEBT TABLE Gross Direct and Outstanding Estimated Estimated Taxing or Debt Percentage Overlapping Assessing Entity 8/1/2017 Applicabletl� Debt(1) The City(Special Assessments - The Series 2017 Bonds) $ 13,995,000 100.00% $13,995,000 The City(Ad Valorem Taxes) 725,685,000 0.10% 694,329 Tarrant County 318,245,000 0.03% 104,395 Tarrant County College District - 0.03% - Tarrant County Hospital District 20,835,000 0.03% 6,828 Crowley Independent School District 310,523,964 0.96% 2,966,620 $ 1,389,283,964 $17,767,173 (1)Based on the Appraisal"As Complete" value for the District and on the Tax Year 2016 Net Taxable Assessed Valuation for the taxing entities. Source:Municipal Advisory Council of Texas, the Appraisal District and the Appraisal. Estimated Average Annual Assessment in Western Improvement Area of the District as tax rate equivalent per$100 in value(') $0.0607 Estimated Average Annual Assessment in Eastern Improvement Area of the District as tax rate equivalent per$100 in value(') $0.0603 Estimated Total Tax Rate and Average Annual Assessment in District per$100 $0.0603 in value (1) Derived from information presented in the Service and Assessment Plan. Does not include any future assessments levied for Roadway Improvements in the Western Improvement Area (2) Derived from information presented in the Service and Assessment Plan Source: Tarrant Central Appraisal District (REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK) 25 #5470717.14 If land is devoted principally to agricultural use, the developer can apply for an agricultural valuation on the property and pay ad valorem taxes based on the land's agricultural value. All of the property in the District is currently subject to an agricultural value. Agricultural use includes production of crops or livestock. It also can include leaving the land idle for a government program or for normal crop or livestock rotation. A portion of the property in the District is currently being leased to two unaffiliated third parties for agricultural purposes only. The aforesaid agricultural lease will be terminated as to the property within the District at or prior to commencement of development by Developer of the Development, and will be terminated as to any subsequent phase development property at or prior to commencement of such subsequent phase development. If land qualified for an agricultural valuation and the land use changes to a non-agricultural use, "rollback taxes" are assessed for each of the previous five years in which the land received the lower agricultural valuation. The rollback tax is the difference between taxes paid on land's agricultural value and the taxes that the land owner would have paid if the land had been taxed on a higher market value plus interest charged for each year from the date on which taxes would have been due. If the land use changes to a non-agricultural use on only a portion of a larger tract,the land owner can fence off the remaining land and maintain the agricultural valuation on the remaining land. In this scenario, the land owner would only be responsible for rollback taxes on that portion of the land where use changed and not the entire tract. It is expected that rollback taxes will be paid by the Landowners or purchasers from the Landowners during development of the District. ASSESSMENT PROCEDURES General As required by the PID Act, when the City determines to defray a portion of the costs of the Major Improvements through Major Improvement Special Assessments, it must adopt a resolution generally describing the Major Improvements allocable to the District and the land within the District to be subject to Major Improvement Special Assessments to pay the costs therefor. The City has caused an assessment roll to be prepared for each of the Western Improvement Area and Eastern Improvement Area(such assessment rolls are referred to collectively herein as the"Assessment Roll"), which Assessment Roll will show the land within the Eastern Improvement Area and the Western Improvement Area of the District to be assessed, the amount of the benefit to and the Major Improvement Special Assessment against each lot or parcel of land and the number of Annual Installments in which the Major Improvement Special Assessment is divided. Statutory notice was given to the owners of the property to be assessed and a public hearing was conducted to hear testimony from affected property owners as to the propriety and advisability of undertaking the Major Improvements and funding the same with Major Improvement Special Assessments. The City expects to proceed to levy the Major Improvement Special Assessments and adopt the Assessment Ordinance immediately prior to adopting the Bond Ordinance. After such adoption, the Major Improvement Special Assessments will become legal, valid and binding liens upon the property against which the Major Improvement Special Assessments are made. The Assessment Roll will be filed with the City Secretary and made available for public inspection. Under the PID Act, the costs of Major Improvements may be assessed by the City against the assessable property in Eastern Improvement Area and Western Improvement Area of the District so long as the special benefit conferred upon the Assessed Property by the Major Improvements equals or exceeds the Major Improvement Special Assessments. The costs of the Major Improvements may be assessed using any methodology that results in the imposition of equal shares of cost on Assessed Property similarly benefited. The allocation of benefits and assessments to the benefitted land within Eastern Improvement Area and Western Improvement Area of the District is presented in the Service and Assessment Plan, which should be read in its entirety. See"APPENDIX C—Form of Service and Assessment Plan." 26 #5470717.14 Assessment Methodology The Service and Assessment Plan describes the special benefit to be received by each parcel of assessable property as a result of the Major Improvements, provides the basis and justification for the determination that such special benefit exceeds the Major Improvement Special Assessments being levied, and establishes the methodology by which the City allocates the special benefit of the Major Improvements to parcels in a manner that results in equal shares of costs being apportioned to parcels similarly benefited. As described in the Service and Assessment Plan, a portion of the costs of the Major Improvements are being funded with proceeds of the Bonds, which are payable from and secured by Pledged Revenues. Assessment Methodology. As set forth in the Service and Assessment Plan, the City Council has determined that the Actual Costs (as defined in the Service and Assessment Plan) associated with the Major Improvements will be allocated to the Assessed Property by spreading the entire Major Improvement Special Assessment across all the Assessed Property within the Eastern Improvement Area and Western Improvement Area on the ratio of estimated buildout value of each Land Use (as defined in the Service and Assessment Plan) to the estimated buildout value for all Land Uses within the Eastern Improvement Area and Western Improvement Area to the total build out value for all Land Uses. There is no assurance that the estimated build out value of each Land Use will be achieved. The following tables from the Service and Assessment Plan summarize the assessment methodology for the Major Improvements in the Eastern Improvement Area and for the Major Improvements and future assessments for Roadway Improvements in the Western Improvement Area, assuming the planned issuance of assessment revenue bonds. The following tables also summarize (i)the Assessment for each Land Use, (ii)the Annual Installment for each Land Use, and (iii)the annual installment as an equivalent tax rate for each Land Use based on the estimated build out value, as well as(i), (ii) and(iii)for property in the Western Improvement Area after the planned issuance of assessment revenue bonds for the Roadway Improvements. The City has determined the method of allocation for the costs of the Major Improvement Projects will result in the imposition of equal shares of the Major Improvements Special Assessments on parcels similarly situated within the District. The Major Improvements Special Assessments and interest thereon are expected to be paid in Annual Installments as described above. The determination by the City of the assessment methodology set forth in the Service and Assessment Plan is the result of the discretionary exercise by the City Council of its legislative authority and governmental powers and is conclusive and binding on the Developer, all other current owners of property within the District and all future owners and developers within the District. 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The Major Improvement Special Assessments may be enforced by the City in the same manner that an ad valorem tax lien against real property is enforced. Delinquent installments of the Major Improvement Special Assessments incur interest,penalties and attorney's fees in the same manner as delinquent ad valorem taxes. Under the PID Act, the Assessment Lien is a first and prior lien against the property assessed, superior to all other liens and claims except liens or claims for State, county, school district or municipality ad valorem taxes. See"BONDHOLDERS' RISKS—Assessment Limitations"herein. The City will covenant in the Indenture to collect, or cause to be collected, Major Improvement Special Assessments as provided in the Assessment Ordinance. No less frequently than annually, City staff or a designee of the City shall prepare, and the City Council shall approve, an Annual Service Plan Update to allow for the billing and collection of Annual Installments. Each Annual Service Plan Update shall include an updated Assessment Roll and a calculation of the Annual Installment for each Parcel. Administrative Expenses shall be allocated among all Parcels in proportion to the amount of the Annual Installments for the Parcels. The City will covenant, agree and warrant in the Indenture that, for so long as any Bonds are Outstanding, that it will take and pursue all actions permissible under Applicable Laws to cause the Major Improvement Special Assessments to be collected and the liens thereof enforced continuously, in the manner and to the maximum extent permitted by Applicable Laws,and,to the extent permitted by Applicable Laws,to cause no reduction, abatement or exemption in the Major Improvement Special Assessments. To the extent permitted by law and available to the City,notice of the Annual Installments will be sent by, or on behalf of the City,to the affected property owners on the same statement or such other mechanism that is used by the City, so that such Annual Installments are collected simultaneously with ad valorem taxes and shall be subject to the same penalties,procedures, and foreclosure sale in case of delinquencies as are provided for ad valorem taxes of the City. The City will determine or cause to be determined, no later than March 1 of each year, whether or not any Annual Installment is delinquent and, if such delinquencies exist,the City will order and cause to be commenced as soon as practicable any and all appropriate and legally permissible actions to obtain such Annual Installment, and any delinquent charges and interest thereon, including diligently prosecuting an action in district court to foreclose the currently delinquent Annual Installment. Notwithstanding the foregoing, the City shall not be required under any circumstances to purchase or make payment for the purchase of the delinquent Major Improvement Special Assessment or the corresponding Assessed Property. The City will implement the basic timeline and procedures for Major Improvement Special Assessment collections and pursuit of delinquencies set forth in Exhibit C of the Continuing Disclosure Agreement of the Issuer set forth in APPENDIX E-1 and to comply therewith to the extent that the City reasonably determines that such compliance is the most appropriate timeline and procedures for enforcing the payment of delinquent Major Improvement Special Assessments. The City shall not be required under any circumstances to expend any funds for delinquent collection costs in connection with its covenants and agreements under the Indenture or otherwise other than funds on deposit in the Administrative Fund. Annual Installments will be paid to the City or its agent. Annual Installments are due on October 1 of each year, and become delinquent on February 1 of the following year. In the event Major Improvement Special Assessments are not timely paid,there are penalties and interest as set forth below: #5470717.14 Date Payment Cumulative Cumulative Received Penalty Interest Total February 6% 1% 7% March 7% 2% 9% April 8% 3% 11% May 9% 4% 13% June 10% 5% 15% July 12% 6% 18% After July,the penalty remains at 12%, and interest increases at the rate of 1%each month. In addition, if an account is delinquent in July, a 20% attorney's collection fee may be added to the total penalty and interest charge. In general,property subject to lien may be sold, in whole or in parcels,pursuant to court order to collect the amounts due. An automatic stay by creditors or other entities, including governmental units, could prevent governmental units from foreclosing on property and prevents liens for post-petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In most cases, post-petition Major Improvement Special Assessments are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court. Major Improvement Special Assessment Amounts Major Improvement Special Assessment Amounts. The maximum amounts of the Major Improvement Special Assessments have been established by the methodology described in the Service and Assessment Plan. The Assessment Roll sets forth for each year the Annual Installments for each Parcel consisting of(i)the annual portion allocable to the payment of principal and interest on the Bonds for each Parcel and the Additional Interest, and (ii) the component of the Annual Installment allocable to Administrative Expenses. The Annual Installments for Major Improvements may not exceed the amounts shown on the Assessment Roll as may be modified pursuant to the terms of the Service and Assessment Plan. The Major Improvement Special Assessments will be levied against the parcels comprising the Assessed Property as indicated on the Assessment Roll. See"APPENDIX C—Form of Service and Assessment Plan"and"APPENDIX G—Form of PID Reimbursement Agreement." The Annual Installments shown on the Assessment Roll will be reduced to equal the actual costs of repaying the Bonds, the Additional Interest and actual Administrative Expenses (as provided for in the definition of such term), taking into consideration any other available funds for these costs, such as interest income on account balances. Method of Apportionment of Assessments. For purposes of the Service and Assessment Plan, the City Council has determined that the Major Improvement Special Assessments shall be initially allocated to the Eastern Improvement Area and Western Improvement Area Assessed Property based on the ratio of estimated buildout value of each Land Use to estimated buildout value of all Land Uses. See "APPENDIX C — Form of Service and Assessment Plan." See"ASSESSMENT PROCEDURES." The Bonds are secured by a first lien on and pledge of Pledged Revenues, including the Major Improvement Special Assessments. See"SECURITY FOR THE BONDS" and"APPENDIX C—Form of Service and Assessment Plan." Prepayment of Special Assessments Pursuant to the PID Act and the Indenture, the owner of any property assessed may voluntarily prepay (a "Prepayment") all or part of any Major Improvement Special Assessment levied against any lot or parcel,together with accrued interest to the date of payment, at any time. Upon receipt of such Prepayment, such amounts will be applied towards the redemption or payment of the Bonds. Amounts received at the time of a Prepayment which represent a payment of principal, interest, or penalties on a delinquent installment of a Major Improvement Special Assessment are not to be considered a Prepayment, but rather are to be treated as payment of regularly scheduled Major Improvement Special Assessments. 32 #5470717.14 Priority of Lien The Major Improvement Special Assessments or any reassessment, the expense of collection, and reasonable attorney's fees, if incurred, constitute a first and prior lien against the property assessed, superior to all other liens and claims except liens or claims for the State, county, school district or municipality ad valorem taxes, and are a personal liability of and charge against the owners of the property regardless of whether the owners are named. The lien is effective from the date of the Assessment Ordinance until the Major Improvement Special Assessment is paid, and may be enforced by the City in the same manner as an ad valorem tax levied against real property may be enforced by the City. The owner of any property assessed may pay the entire Major Improvement Special Assessment levied against any lot or parcel, together with accrued interest to the date of payment, at any time. Foreclosure Proceedings In the event of delinquency in the payment of any Annual Installment, except for unpaid Major Improvement Special Assessments on homestead property (unless the lien associated with the special assessment attached prior to the date the property became a homestead), the City is empowered to order institution of an action in state district court to foreclose the lien of such delinquent Annual Installment. In such action the real property subject to the delinquent Annual Installments may be sold at judicial foreclosure sale for the amount of such delinquent Annual Installments,plus penalties and interest. Any sale of property for nonpayment of an installment or installments of an Major Improvement Special Assessment will be subject to the lien established for remaining unpaid installments of the Special Assessment against such property and such property may again be sold at a judicial foreclosure sale if the purchaser thereof fails to make timely payment of the non:delinquent installments of the Major Improvement Special Assessments against such property as they become due and payable. Judicial foreclosure proceedings are not mandatory. In the event a foreclosure is necessary, there could be a delay in payments to owners of the Bonds pending prosecution of the foreclosure proceedings and receipt by the City of the proceeds of the foreclosure sale. It is possible that no bid would be received at the foreclosure sale, and in such event there could be an additional delay in payment of the principal of and interest on Bonds or such payment may not be made in full. The City is not required under any circumstance to purchase or make payment for the purchase of the delinquent Major Improvement Special Assessment on the corresponding Assessed Property. The City will covenant in the Indenture to take and pursue all actions permissible under Applicable Laws to cause the Major Improvement Special Assessments to be collected and the liens thereof enforced continuously, in the manner and to the maximum extent permitted by Applicable Laws, and to cause no reduction, abatement or exemption of the Major Improvement Special Assessments, provided that the City is not required to expend any funds for collection and enforcement of Major Improvement Special Assessments other than funds on deposit in the Administrative Fund. Pursuant to the Indenture, Foreclosure Proceeds (excluding Delinquent Collection Costs) constitute Pledged Revenues to be deposited into the Pledged Revenue Fund upon receipt by the City and distributed in accordance with the Indenture. See"APPENDIX B—Form of Indenture. "See also"APPENDIX E-1 —Form of Disclosure Agreement of the Issuer" for a description of the expected timing of certain events with respect to collection of the delinquent Special Assessments. The City will create the Delinquency and Prepayment Reserve Account under the Indenture and will fund such account as provided in the Indenture. The City will not be obligated to fund foreclosure proceedings out of any funds other than in the Administrative Fund. If there are insufficient funds to pay foreclosure costs, the owners of the Bonds may be required to pay amounts necessary to continue foreclosure proceedings. See "SECURITY FOR THE BONDS—Delinquency and Prepayment Reserve Account of the Reserve Fund,""APPENDIX B—Form of Indenture"and"APPENDIX C—Form of Service and Assessment Plan." 33 #5470717.14 THE CITY Background The City of Fort Worth, Texas(the"City")is a political subdivision and municipal corporation of the State, located in Tarrant, Denton, Parker, Johnson and Wise Counties, Texas. The City covers approximately 345 square miles. City Government The City is a political subdivision and municipal corporation of the State, duly organized and existing under the laws of the State, including the City's Home Rule Charter. The City was incorporated in 1873, and first adopted its Home Rule Charter in 1924.The City operates under a Council/Manager form of government with a City Council comprised of the Mayor and eight Councilmembers. The term of office for the Mayor and the eight Councilmembers is two years. The City Manager is the chief administrative officer for the City. Some of the services that the City provides are public safety (police and fire protection), streets, water and sanitary sewer utilities, culture-recreation, public transportation, public improvements, planning and zoning, and general administrative services. The 2010 Census population for the City was 741,206,while the estimated 2017 population is 815,430. The current members of the City Council and their respective expiration of terms of office are as follows: Term Expires Council Member Ma Betsy Price(Mayor) 2019 Carlos Flores 2019 Bryan Bird 2019 Cary Moon 2019 Gyna Bivens 2019 Jungus Johnson 2019 Dennis Shingleton 2019 Kelly Allen Gray 2019 Ann Zadeh 2019 The principal administrators of the City include the following: Name Position David Cooke City Manager Mary J.Kayser City Secretary Aaron J. Bovos Chief Financial Officer General information regarding the City and the surrounding area can be found in"APPENDIX A-General Information Regarding the City and Surrounding Area." THE DISTRICT General The PID Act authorizes municipalities, such as the City,to create public improvement districts within their boundaries or extraterritorial jurisdiction, and to impose assessments within the public improvement district to pay for certain improvements. The District was created by Resolution No. 4724-12-2016 of the City adopted on December 13, 2016 in accordance with the PID Act(the"Creation Resolution")for the purpose of undertaking and financing, the costs of certain public improvements within the District, including the Major Improvements, authorized by the PID Act and approved by the City Council that confer a special benefit on the portion of the 34 #5470717.14 District property being developed in a phase. The District is not a separate political subdivision of the State and is governed by the City Council. A map of the property within the District is included on page v hereof. Powers and Authority Pursuant to the PID Act, the City may establish and create the District and undertake, or reimburse a developer for the costs of, improvement projects that confer a special benefit on property located within the District, whether located within the City limits or the City's extraterritorial jurisdiction. The PID Act provides that the City may levy and collect the Major Improvement Special Assessments on property in the District, or portions thereof, payable in periodic installments based on the benefit conferred by an improvement project to pay all or part of its cost. Pursuant to the PID Act and the Creation Resolution, the City has the power to undertake, or reimburse a developer for the costs of,the financing, acquisition, construction or improvement of the Major Improvements. See "THE MAJOR IMPROVEMENTS."Pursuant to the authority granted by the PID Act and the Creation Resolution, the City has determined to undertake the construction, acquisition or purchase of certain water, sanitary sewer and drainage public improvements within Eastern Improvement Area and Western Improvement Area of the District and outside of the District comprising the Major Improvements and to finance a portion of the costs thereof through the issuance of the Bonds. The City has further determined to provide for the payment of debt service on the Bonds through Pledged Revenues. See"ASSESSMENT PROCEDURES" herein and"APPENDIX C—Form of Service and Assessment Plan." THE MAJOR IMPROVEMENTS General The Major Improvements will be funded with proceeds of the Bonds and, once completed, will be dedicated to the City. The Developer is responsible for the completion of the construction, acquisition or purchase of the Major Improvements, and the Developer or its designee will act as construction manager. From the proceeds of the Bonds, the City will either pay directly or will reimburse the Developer for project costs actually incurred in developing and constructing the Major Improvements within the District. See "THE MAJOR IMPROVEMENTS —General"and"THE DEVELOPMENT—Development Plan." The Appraisal(as defined below)estimates that the"As Complete"value of the property within the District is $51,500,000. See "APPRAISAL OF PROPERTY WITHIN THE DISTRICT." The cost of the Major Improvements is expected to be approximately$8,483,636. Such costs are expected to be paid with proceeds of the Bonds. The Service and Assessment Plan will be amended to show the final Roadway Improvements costs that will be needed for full development of the Western Improvement Area. It should be noted that the Roadway Improvements are anticipated to be funded by the issuance of Additional Obligations if and when issued, as contemplated by the Service and Assessment Plan and the Memorandum of Understanding. See "SOURCES AND USES OF FUNDS"and"SECURITY FOR THE BONDS—Additional Obligations." Description of the Major Improvements The Major Improvements of the Eastern Improvement Area and Western Improvement Area, include water and sanitary sewer improvements benefitting the Eastern Improvement Area and the Western Improvement Area of the District. Water Iinprovements - The water improvements ("Water Improvements") consist of the construction and installation of waterlines, mains, pipes, valves and appurtenances, necessary for the water distribution system that will service all of the Assessed Property within the PID. The Water Improvements will be constructed according to City standards, determined in the City's sole discretion. The Actual Costs of the Water Improvements are $2,759,319. An additional$155,045 is expected to be paid by the Landowner for the water improvement portion of the University Improvements which will be constructed concurrently with the Water Improvements. 35 #5470717.14 Sanitary Sewer Improvements - The sanitary sewer improvements ("Sanitary Sewer Improvements") consist of construction and installation of pipes, service lines, manholes, encasements and appurtenances necessary to provide sanitary sewer service to all of the Assessed Property within the PID. The Sanitary Sewer Improvements will be constructed according to City standards, determined in the City's sole discretion. The Actual Costs of the Sanitary Sewer Improvements are$5,724,317. An additional$331,239 is expected to be paid by the Landowner for the sanitary sewer improvement portions of the University Improvements which will be constructed simultaneously with the Sanitary Sewer Improvements. Future Roadway Improvements Roadway Improvements — The roadway improvements ("Roadway Improvements") consist of the construction of paving, storm drainage, retaining walls, signage, and traffic control devices and the acquisition of right-of-way to benefit the Assessed Property within the Western Improvement Area. The Roadway Improvements are not being funded by the Bonds. Instead, it is anticipated that the Roadway Improvements will be funded by the Additional Obligations. The Roadway Improvements will be constructed according to City standards, determined in the City's sole discretion. The Actual Costs of the Roadway Improvements are $8,469,182, of which $2,886,489 is expected to be paid from the net proceeds of the Additional Obligations. The Actual Costs of the Roadway Improvements to be financed fi•om the net proceeds of the Additional Obligations will be allocated solely to Assessed Property within the Western Improvement Area. An additional $679,720 is expected to be paid by the Developer for the road improvement portion of the University Improvements which will be constructed concurrently with the future Roadway Improvements. As described in the Memorandum of Understanding relating to the Roadway Improvements and the Non-PID Roadway Improvements (defined below), the City expects to pay approximately $3,216,209 of the costs of the Roadway Improvements and approximately $843,382 of the costs of Non-PID Roadway Improvements(defined below)with cash on hand or through the issuance of future bonds,notes, or other obligations secured by ad valorem taxes or other revenues of the City. As also described in the Memorandum of Understanding, a Walton-affiliated entity that owns and is currently developing a neighboring residential development called"Chisholm Trail Ranch" is expected to pay approximately $843,382 of the costs of the Non-PID Roadway Improvements that benefit Chisholm Trail Ranch. The Roadway Improvements and the Non-PID Roadway Improvements are not being constructed with the proceeds of the Bonds and are not a part of the Major Improvement Special Assessment. See "MAJOR IMPROVEMENTS - Non-PID Improvements" below for a discussion of the funding of the portions of Brewer Road outside of the District's boundaries. The following tables from the Service and Assessment Plan reflect the total expected costs of the Major Improvements and the estimated future Roadway Improvements (with respect to the Western Improvement Area), and the Eastern Improvement Area and Western Improvement Area's proportionate share of the Major Improvements and,with respect to the Western Improvement Area,the estimated future Roadway Improvements. 36 #5470717.14 Table IV-B Western Improvement Area Actual Costs Allocation City of Fort Chisholm Trail Western Worth Non-PID Ranch Non-PID Improvement Related Related University Total Costs- Area Share of Authorized Improvements Total Costs(a) Improvements Improvements Improvements Project Costs Water $ 2,914,364 $ - $ $ 155,045 $ 2,759,319 $ 1,296,639 Sanitary Sewer 6,880,644 825,088 331,239 5,724,317 2,689,929 Roadway(b) 8,469,182 843,382 843,382 679,720 6,102,698 6,102,698 (d) Total Authorized Improvements $ 18,264,190 $ 1,668,470 $ 843,382 $ 1,166,004 $ 14,586,334 $ 10,089,267 (a)See Table III-A for details. (b)Roadway Improvements are estimates and the Actual Costs will be detemined at the time Assessments are levied in the future. The Roadway Authorized Improvements will be funded equally by the Owner and the City except for the acquisition of right of way of$350,000,which will funded fully by the Owner. (c)Percentages for Water and Sanitary Sewer Improvements were determined based on the Western Improvement Area's ratio of the estimated build out value of each Lot or Parcel to the total build out value for all Lots and Parcels and for the Roadway Improvements based on the University Property's pro-rata share of the total Western Improvement Area acreage. (d)The Roadway Improvements of$6,102,696 will be funded$3,216,209 by the City of Fort Worth and$2,886,489 by the Owner through the PID. Table IV-C Eastern Improvement Area Actual Costs Allocation City of Fort Chisholm Trail Eastern Worth Non-PID Ranch Non-PID Improvement Related Related University Total Costs- Area Share of Authorized Improvements Total Costs(a) Improvements Improvements Improvements Project Costs Water $ 2,914,364 $ - $ $ 155,045 $ 2,759,319 $ 1,462,680 Sanitary Sewer 6,880,644 825,088 331,239 5,724,317 3,034,388 Roadway(b) 8,469,182 843,382 843,382 679,720 6,102,698 - Total Authorized Improvements $ 18,264,190 $ 1,668,470 $ 843,382 $ 1,166,004 $ 14,586,334 $ 4,497,067 (a)See Table III-A for details (b)Roadway Improvements are estimates and the Actual Costs will be detemined at the time Assessments are levied in the future. The Roadway Authorized Improvements will be funded equally by the Owner and the City except for the acquisition of right of way of$350,000,which will funded fully by the Owner. (c)Percentages for Water and Sanitary Sewer Improvements were determined based on the Eastern Improvement Area's ratio of the estimated build out value of each Lot or Parcel to the total build out value for all Lots and Parcels and for the Roadway Improvements based on the University Property's pro-rata share of the total Eastern Improvement Area acreage. Non-PID Related Improvements There are certain public improvements which, although constructed at the same time as the Major Improvements, do not benefit the Assessed Property and are not paid for by assessments levied within the District, but will be paid by either the City or other property owners not located within the District (the "Non-PID Related Improvements"). The Non-PID Related Improvements include sanitary sewer and road improvements to be constructed outside the District. The Non-PID Related Improvements contain certain sanitary sewer improvements (oversizing) that do not benefit the Assessed Property within the District and are not necessary for sanitary sewer service to the Assessed Property within the District. As such, the costs of such sanitary sewer Non-PID Related Improvements are anticipated to be financed by the City,in its discretion. 37 #5470717.14 Additional Non-PID Related Improvements are roadway improvements consisting of an extension of Brewer Road to serve property not located within the District (the "Non-PID Roadway Improvements"). These Non-PID Roadway Improvements are expected to be constructed concurrently with the future Roadway Improvements. The City, the Developer and the Walton-affiliated entity developing the nearby "Chisholm Trail Ranch" have entered into a "Memorandum of Understanding — City of Fort Worth/Rock Creek Ranch/Chisholm Trail — Brewer Road Project" effective August 1, 2017 (the "Memorandum of Understanding") reflecting the parties' intentions to fund the Roadway Improvements and the Non-PID Roadway Improvements and describing the financing vehicles expected to be employed by the Parties to finance such improvements. As set forth in the Memorandum of Understanding, the costs of the Non-PID Roadway Improvements will be funded equally by the City and the Walton affiliated entity developing of Chisholm Trail Ranch prior to the start of construction of the Roadway Improvements being funded by the Developer and the City through the District. The concurrent construction of the Non-PID Roadway Improvements is important infrastructure for the operation of the University and is necessary for overall development within the District. The Memorandum of Understanding also contemplates that the parties will enter into a Community Facilities Agreement that will contain provisions relating to the donation of real property within the District by the Landowners for use by the City for a police,fire or other public facility. The approved Memorandum of Understanding is attached as Exhibit D to the PID Reimbursement Agreement. The Memorandum of Understanding is a non-binding agreement expressing the intent of the parties thereto to fund the Non-PID Related Improvements and the Roadway Improvements. No assurances can be given that any party to the Memorandum of Understanding will ultimately fund their portion of the Non-PID Related Improvements or the Roadway Improvements. Prior to the issuance of any obligations to fund the City's portion of the Roadway Improvements and Non-PID Roadway Improvements, the parties shall enter into a City Facilities Agreement substantially in the City's standard form attached as Exhibit C to the PID Reimbursement Agreement for such improvements. The costs of the Non-PID Related Improvements are depicted in the table from the Service and Assessment Plan below: 38 #5470717.14 Table III-A Rock Creek Ranch Cost of Authorized Improvements Costs of Non-PID Related Improvements Non-PID Related Improvements(a) Actual Costs of Authorized Total Costs of Improvements Non-PID Related University Improvements Description (a) Improvements Improvements (b) Major Improvements Water $ 2,759,319 $ - $ 155,045 $ 2,914,364 Sanitary Sewer $ 5,724,317 825,088 (c) 331,239 6,880,644 Total Major Improvements 8,483,636 825,088 486,284 9,795,008 Roadway Improvements Roadway(d) $ 6,102,698 1,686,764 679,720 8,469,182 Total Authorized Improvements $ 14,586,334 $ 2,511,852 $ 1,166,004 $ 18,264,190 (a)The Actual Costs of the Authorized Improvements will be funded by the PID and the costs of the Non-PID Related Improvements will not be funded by the PID. (b)Costs provided by Goodwin&Marshall, Inc.and include project management,soft costs and contingency allocations.The figures shown in Table 111-A will be revised in Annual Service Plan Updates. (c)Sanitary Sewer costs include Non-PID Related Improvements consisting of oversizing costs to be paid for by City and that are not required to service the PID property. (d) Roadway Improvements are estimates and the Actual Costs will be detemined at the time Assessments are levied in the future. The Total Roadway Improvements,excluding the acquisition of right of way and the Non-PID Related Improvements but including Roadway Authorized Improvements and the University Roadway Improvements,will be funded equally by the Owner and the City. The City is expected to fund its portion of the Roadway Improvements through the issuance of bonds, notes or other obligations to be issued concurrently with the proposed Roadway Improvements PID Bonds. The Non-PID Related Roadway Improvements will be funded equally by the City and the owner/developer of Chisholm Trail Ranch. The Roadway Improvements also include $350,000 for the acquisition of right of way that will be funded by the Owner and which will be allocated between the PID and the University Property based on the total acreage of the University Property within the Western Improvement Area. Ownership and Maintenance of Improvements The Major Improvements will be dedicated to and accepted by the City either by fee or through a public use easement and will constitute a portion of the City's infrastructure improvements. The City will provide for the ongoing operation,maintenance and repair of the Major Improvements constructed and conveyed, as outlined in the Service and Assessment Plan. The Private Improvements (defined herein) not owned by a lot owner within the District will be dedicated to and accepted by one or more Homeowner's Associations ("HOAs"). The HOAs are anticipated to provide for the ongoing operation, maintenance and repair of the Private Improvements through the administration of a maintenance and operation fee and/or a property owner's association fee to be paid by each lot owner within the District benefitted by such Private Improvements. THE DEVELOPMENT The following information has been provided by the Developer. Certain of the following information is beyond the direct knowledge of the City,the City's Financial Advisor and the Underwriter,and none of the City,the City's Financial Advisor or the Underwriter have any way of guaranteeing the accuracy of such information. The Developer has reviewed portions of this Limited Offering Memorandum and warrants and represents that neither(i) the information under the caption"THE DEVELOPMENT"nor(ii)the information relating to the Developer's plan for developing the land within the District (the "Development") under the subcaption "BONDHOLDERS' RISKS —Dependence Upon Developer and Landowners" contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made herein, in the light of the circumstances under 39 #5470717.14 which they are made, not misleading. At the time of delivery of the Bonds to the Underwriter, the Developer will deliver a certificate to this effect to the City and the Underwriter. Overview Rock Creek Ranch(the`=Development")consists of approximately 1,756 acres of undeveloped land located in the southwest quadrant of the City of Fort Worth, Tarrant County, Texas generally located south of the intersection of the Chisholm Trail Parkway and McPherson Boulevard and east of Benbrook Lake along Farm Road 1187 near Old Granbury, Stewart Feltz, and Cleburne Roads. Chisholm Trail Parkway bisects the Development from the northeast to the southwest.Approximately 923 acres of the Development is located to the west of Chisholm Trail Parkway ("Western Improvement Area"), and approximately 833 acres of the Development is located to the east of Chisholm Trail Parkway ("Eastern Improvement Area"). An aerial depiction of the Development and the surrounding area is set forth below: Fort Worth's Central Business District 19 miles*0 Rock Creek Ranch Nest(-923 acres) Rock Creek Rauch East(-833 ages) i The Development site is approximately 19 miles south of downtown Fort Worth on the Chisholm Trail Parkway. The Development is located in a growing development area situated in the south quadrant of the City. The City, located in the western region of the Dallas-Fort Worth-Arlington TX Metropolitan Statistical Area(the"DFW MSA"),projects significant growth as the overall DFW MSA continues its growth trajectory. The Landowners(as defined herein)acquired the property within the District comprising the Development as a long-tern investment through multiple transactions that occurred from October 2013 through November 2015. The Development is expected to consist primarily of residential land use with certain parcels reserved for commercial and mixed-use development. In December, 2016, approximately 80 acres (the "University Property") within the Western Improvement Area was donated to the Texas A&M University System (the "University System"), an agency of the State of Texas, for the use and benefit of the University. See "THE DEVELOPER— Acquisition of Property in the District." The Development is currently planned to include a variety of parks, trails, an amenity center and open space areas. Although, the Service and Assessment Plan estimates and assumes development within the District, the actual planning for the development is still in its preliminary stages and the final development plans, including the mix of single family and multi-family residential units, commercial property and amenities has not yet been finally determined. The Development is located within the Crowley Independent School District. 40 #5470717.14 The Development is owned by the Landowners, as described below in"THE DEVELOPER—Description of the Developer." Master planning of the Development is in preliminary stages, but the Developer believes the Development can be completed in approximately 20 phases over an approximately 15 to 20 year period. Currently, the Developer anticipates commencing construction of the Major Improvements in the third quarter of 2017; the Developer hopes to complete the Water Improvements by January 2018 and hopes to complete of the Sewer Improvements by February 2019. Subject to terms generally set forth in the Memorandum of Understanding, the Developer anticipates commencing construction of the Roadway Improvements and Non-PID Roadway Improvements immediately following the City's issuance of Additional Obligations to secure the payment thereof, with completion expected to occur approximately twelve months thereafter. The Additional Obligations are expected to be issued by mid-2018. Additionally, Developer expects that negotiations with merchant home builders, commercial developers and other interested parties will begin in approximately 12 months. The Developer currently anticipates completing land transactions with builders and/or developers of commercial and residential tracts within the first phase of development on a schedule that will result in the first delivery of single-family lots to builders in the second half of 2020. Currently,there are no builder letters of intent and no purchase contracts with respect to the sale of property within the Development and no purchase contracts are currently being negotiated. Based on current analysis in consultation with third-party consultants, the Developer's current expectations regarding estimated home prices in the Eastern Improvement Area and Western Improvement Area of the District are as follows: Base Lot Price Average Home Price Product Tyne (in 2016 Dollars) (in 2016 Dollars) Average Plan Size SF 40' lots $45,000 $225,000 1,675 sf SF 50' -55' lots $55,000 to$65,000 $230,000 to$300,000 1,800 sf to 2,325 sf SF 60'to 65' lots $64,400 to$68,150 $270,000 to$350,000 2,675 sf to 3,225 sf SF 70'to 75' lots $70,900 to$77,680 $325,000 to$400,000 3,400 sf to 3,800 sf Development Plan The current development plan for the public improvements is divided into two initial stages: (1) the construction and installation of the Major Improvement Projects in both the Western Improvement Area and Eastern Improvement Area,and(2)the construction of the Roadway Improvements to serve the Western Improvement Area. The total cost of the Major Improvements is expected to be approximately $8,483,636 (the "Major Improvements Cost"). Of the Major Improvements Cost, $4,986,568 will be allocated to the Western Improvement Area, and $4,497,067 will be allocated to the Eastern Improvement Area. Construction of the Major Improvements is expected to commence in the third quarter of 2017. The Water Improvements are projected to be completed by the end of January 2018 and the Sewer Improvements are projected to be completed by February 2019. As set forth in the Service and Assessment Plan and the Memorandum of Understanding, the Developer and the City expect that Additional Obligations will be sold to finance the construction of the Roadway Improvements, subject to certain restrictions set forth in the Indenture. Additionally, the City and the Walton- affiliated entity which owns and is developing a neighboring residential development called"Chisholm Trail Ranch" are expected to provide additional funds prior to or concurrently with the issuance of the Additional Obligations for the construction of the Non-PID Roadway Improvements (Brewer Road) outside of the District. The City and the Developer currently anticipate financing for the Roadway Improvements and Non-PID Roadway Improvements will occur in 2018. Construction on the Roadway Improvements is anticipated to commence immediately thereafter and the Roadway Improvements are expected to be complete within approximately twelve months. See"APPENDIX C – Form of Service and Assessment Plan." See "THE BONDS – Additional Obligations" and "THE MAJOR IMPROVEMENTS–Future Roadway Improvements." To complete fully developed lots within the District, each phase of Development will require additional phase-specific roadway improvements, water and sewer improvements and utility improvements (the "Private Improvements"). These improvements will not be funded by the Bonds and will be the responsibility of the Developer, Landowners, or their successors-in-interest. Currently,the Developer does not have a final plan for the 41 #5470717.14 construction and installation of the Private Improvements or the estimated costs of such Private Improvements. The Developer is still in the process of analyzing the Private Improvements needed for the Development and their related costs. Preliminary master planning is underway in the Development but has not yet been completed. The Developer has not determined how the Private Improvements will be funded. The sole assets of the Landowner are land within the District, and minor operating accounts, and no firm banking or financial arrangements have been made to date for the completion of the Development. See `BONDHOLDERS RISKS — Dependence on Developers and Landowners". The Developer currently expects to complete the first lots in January 2020 with the first single-family homes completed no earlier than June 2020, however, the Landowner and Developer do not currently have a firm timeline for the delivery of lots and the corresponding construction of homes. The dates set forth herein are estimates only and the estimated completion dates are subject to a variety of factors, including the issuance of the Bonds and the issuance of future assessment revenue bonds by the City to fund the future Roadway Improvements, the funding of the Non-PID Related Improvements, the ability of Developer to fund the necessary Private Improvements and the ability of the Developer to sell lots to builders. PID Reimbursement Agreement The City and the Developer will enter into a PID Reimbursement Agreement with respect to the development(the"PID Reimbursement Agreement"). Under the PID Reimbursement Agreement,the Developer is contractually obligated to construct the Major Improvements or cause the Major Improvements to be constructed and is also obligated to enter into a City Facilities Agreement relating to the Major Improvements. The Developer is not relieved of its obligation to construct or cause to be constructed such Major Improvements even if there are insufficient funds in the Project Fund under the Indenture to pay the Major Improvement Costs,or in the event that the assessment revenues received from the Major Improvement Special Assessments are insufficient to pay all costs of the Major Improvements. In addition, the Developer is obligated to complete the Major Improvements and is responsible for all cost overruns for the Major Improvements in excess of the Actual Costs set forth in the Service and Assessment Plan. The City is not responsible for any cost overruns of the costs to construct the Major Improvements. The PID Reimbursement Agreement also provides the right for the City,upon default by the Developer,to complete the Major Improvements. The PID Reimbursement Agreement also sets forth the review and approval process for the Developer to submit costs to the City for payment from the Trustee and for the inspection of completed Major Improvements and their acceptance by the City. The form of the PID Reimbursement Agreement is attached hereto as Exhibit G. City Facilities Agreement The PID Reimbursement Agreement also requires the Developer to enter into the City's standard community facilities agreement(the"City Facilities Agreement"), substantially in the form of Exhibit C attached to the PID Reimbursement Agreement, or such other form as the City may require, to ensure compliance with its "Community Facilities Agreement (CFA) Policy, Related Ordinance, and Street Design Criteria" last revised by M&C G-13181, March 20, 2001, as the same may be amended fiom time to time. The City Facilities Agreement will provide certain rules and regulations for design and construction of the Major Improvements and the process for the development of all property within the District. The City Facilities Agreement also obligates the Developer to construct the Major Improvements pursuant to City policies and sets forth the process for acceptance and payment for public improvements by the City. Finally,the City Facilities Agreement also contains indemnification of the City by the Developer for the construction for the Major Improvements. The City Facilities Agreement will also contain provisions for the donation of real property within the District by the Landowners for use by the City as a police, fire, or other public facility. Market Study Summary A market study was conducted by Metrostudy-Dallas/Ft. Worth, dated May 22, 2017. A summary of the findings in the Market Study is below. The market study is attached hereto as Exhibit H and should be read in its entirety. 42 #5470717.14 According to the market study, current housing demand exceeds housing supply. DFW's housing market is forecast to be 2.9%underbuilt by Year-end 2017 and undersupply will intensify over the next two years, peaking in 2019 but continuing through Year 2021. Any slowdown in the housing market will likely be more related to price and value as opposed to underlying demand. Distressed housing activity continues to fall in the DFW market. In Year 2014, 17.0%of all transactions in the market were distressed.In Year 2015 that percentage was down to 13.0% and by February 2017 it was down to 11.5%. By Year-end 2017, distressed housing inventory is expected to reach long-term norms. The high dollar is negatively impacting exports from Texas, potentially slowing the local economy. The ease of permitting in Texas markets and the high availability of land increases the market's ability to increase housing supply beyond where it should be. Though not as serious as in Houston,this market may become overstated in terms of housing supply and housing prices sooner than most areas of the nation. The market study concludes that the DFW economy will face challenges with housing affordability. Demand is forecasted to exceed supply through the Year 2021, but real estate is currently overvalued in DFW and will remain so through the Year 2022. The market study also states that housing sales volume is already slowing— not because of reduced demand as much as due to reduced affordability. Median home prices are projected to fall from Year 2019 through Year 2021. Speculative and investor buyers will stay away from this market but home prices will be sluggish for years. Based upon the most recent economic, socio-economic and demographic conditions and forecasts for the Dallas—Ft. Worth—Arlington Core Base Statistical Area ("CBSA"), the market study states that the housing market in this region was stable through 2016, but weak market conditions are expected starting in 2017 due primarily to significant overvaluation increasingly impacting buyers' decisions. Overvaluation of housing relative to household incomes creates increasing risk. The study also states that caution should be employed in future land purchases,and that builders should freeze base prices at their current levels and even increase incentives in some areas in anticipation of some market deterioration in Year 2017 and beyond. However, the market study does state that inflation of new home base prices has made the longing for an affordable home even greater. According to the market study, Rock Creek Ranch is primed to attract new home buyers as strong economic and job growth is expected well into 2018. Furthermore, increased land prices in more infill markets is driving traffic into the Fort Worth Area. The site's proximity to large area employers, the Chisholm Trail Parkway,the University,and nearby retail make it an excellent value location. Metrostudy expects annual starts within the Competitive Market Area surrounding the District("CMA")to remain fairly stagnant in market share between 2017 and 2019 because of the constrained inventory of vacant developed lots and expansion in other competing areas of the region. Overall, annual starts within the CMA are forecasted to average 711 —729 through 2019. 43 #5470717.14 The market study states that given the current market conditions, the location of the Rock Creek Ranch community, the recommended development program, and the performance of other communities nearby, it is the opinion of Metrostudy that the community could achieve the following prices and absorptions for homes on the mix of lot sizes: Rock Creek Ranch Price & Absorption Forecast Lot Average Finished Home Absorption Lot Width Base-Price Monthly Annual Distribution 22'-25' $163,450 - $173,830 3.00- 3.50 36- 42 16% 35' $179,867 - $191,380 2.50- 3.00 30- 36 14% 40' $203,033 - $215,960 2.00- 2.25 24- 27 11% 50' $232,333 - $247,150 2.00- 2.25 24 27 11% 55' $254,167 - $270,410 2.00- 2.25 24 27 11% 60' $273,133 - $290,590 2.00- 2.25 24 27 11% 65' $304,900 - $324,390 2.00- 2.50 24- 30 11% 70' $325,400 - $346,110 1.50- 1.75 18 - 21 8% 75' $365,000 - $388,240 1.50- 1.75 18- 21 8% TOTAL $243,972 - $259,534 18.5- 21.5 222- 258 1 100% Sotirce:Meirostudy The market study states that the CBSA job growth will continue to increase into 2040. The top employment centers—Dallas, Fort Worth, Irving, Plano, and Arlington are forecasted to have over a 70% employment increase from 2005 to 2040. The employment outlook appears robust in the CBSA. The CMA encompasses four of the five major employment centers. Metrostudy believes the CMA is well-located to encourage more home purchases. According to the market study, the greatest jump in housing starts occurred between $350,000 and $499,999 while starts above $500,000 reflect only nominal growth. Closings between $300,000 and $399,999 surged which aligns with builder feedback that homes priced below $400,000 are in the greatest demand. Builders also shared that buyers are becoming increasingly sensitive to escalating prices, putting downward pressure on margins.As costs of land, labor and materials continues to increase,builders expect their margins to take a hit in the coming quarters. Metrostudy states that on average, households within the CMA have slightly lower household incomes to those in the CBSA. The CMA's estimated average household income for Q1 2017 is $80,290. For comparison,the average household income in the CBSA is $87,176. The study believes that lower incomes can most likely be attributed to a more ample supply of new homes priced for entry-level income households. Metrostudy expects annual starts within the CMA to remain fairly stagnant in market share between 2017 and 2019 because of the constrained inventory of vacant developed lots and expansion in other competing areas of the region. Overall,annual starts within the CMA are forecasted to average 711-729 through 2019. The market study also included an analysis of the following aspects of Development. Proposed Lot and House Sales - Based upon information provided by the Developer, 100 percent of the single-family lots will be marketed to builders.Moreover,all lots are intended to provide primary housing to the end user. Location-The site is located in southwest Fort Worth,TX approximately 18 miles south of downtown Fort Worth.Dallas/Fort Worth International Airport is approximately 45 miles northeast from the subject site. Access -Rock Creek Ranch Master Planned Community is located in southwest Fort Worth, Texas, south of the intersection of the Chisholm Trail Parkway and McPherson Boulevard. The site is east of Benbrook Lake 44 #5470717.14 along Farm Road 1187 near Old Granbury, Stewart Feltz, and Cleburne Roads and is approximately 18 miles south of downtown Fort Worth on the Chisholm Trail Parkway. Schools—The District is served by the Crowley Independent School District. In order to assess District and campus performance,the Texas Education Agency sets minimum performance standards in four categories: student achievement, student progress, closure of performance gaps, and postsecondary readiness. The District exceeded the minimum targets in all four performance categories. For additional information on the TEA'S accountability ratings,visit their website at www.tea.state.tx.us. Character—Suburban low-density residential family housing and neighborhood retail are the predominant land uses throughout the CMA. The area is popular with entry-level homebuyers and families because of convenient access to the Chisholm Trail Parkway for travel to employment centers, existing amenities, and ample supply of quality and more affordable new homes. Medical Facilities - In addition to numerous clinics and doctors' offices in the CMA, the District will be supported by local medical facilities including Texas Health Harris and USMD. Churches - Due to the strong family orientation in the CMA (prominence of single family housing), churches of many denominations are located conveniently to the subject site. Shopping Facilities-A number of retail facilities are located within an acceptable commute of the site. The nearest retail of any type currently is about 3 miles from the center point of the site. The nearest significant concentration of retail facilities, including a full range of large-scale retailers, currently is near the intersection of Chisholm Trail Parkway and Interstate 80, approximately 6.5 miles away. Police and Fire Protection — The area is serviced through local, county, and constable public safety services,as well as fire stations throughout the area. None of the Underwriter, the Developer, or the City makes any representations as to the accuracy, completeness, assumptions or information contained in the Market Study. The assumptions or qualifications with respect to the Market Study are contained therein.There can be no assurance that any such assumptions will be realized, and the Developer, the City and the Underwriter make no representation as to the reasonableness of such assumptions. Prospective investors should read the complete Market Study in order to make an informed decision regarding any contemplated purchase of the Bonds. The complete Market Study is attached hereto as APPENDIX H. Engineer's Report Summary In connection with the issuance of the Bonds, Goodwin and Marshall (the "Engineer") prepared an engineering report dated June 2017 (the "Engineer's Report") containing the results of a preliminary study to determine the feasibility of the Development. The scope of the Engineer's Report includes, among other things, a detailed review of the proposed Development with respect to site and soils conditions; land use review and approvals, including zoning; construction permits and approvals; environmental conditions; zoning land use and proffers;and water,sewer and other utility access and availability. Prospective investors should read the complete Engineer's Report in order to make an informed decision regarding any contemplated purchase of the Bonds. The complete Engineer's Report is attached hereto as APPENDIX I. 45 #5470717.14 Zoning/Permitting The site is zoned for Single-Family Residential (A-5), Multi-Family Residential (D), Commercial (F, G, CF, E), and Mixed-Use (MU-2) uses in accordance with Ordinance No. 22269-06-2016, approved and adopted by the City of Fort Worth on June 14,2016. While the zoning of the Project is in place,no approvals have currently been obtained for the water,sanitary sewer, or paving improvement outlined herein. No FEMA submittals have been made relative to the Project to date. Construction Permits PERMIT APPROVAL AGENCY Grading Permit Fort Worth—Transportation&Public Works(TPW) Floodplain Permit FEMA and Fort Worth TPW Water Line Plan Approval Fort Worth Water Department —Sanitary Sewer Plan Approval Fort Worth Water Department Stormwater Management Plans Fort Worth TPW Roadway Plan Approval Fort Worth TPW Stormwater Pollution Fort Worth TPW and Texas Commission on Prevention Plan(SWPPP Environmental Quality Chisholm Trail Parkway Texas Department of Transportation(TXDOT),North Connection Texas Tollway Authority TTA),and Fort Worth Easement Documentation Fort Worth Real Property Department Road Final Plats Fort Worth Development Services Department Stream and Wetland Mitigation FEMA Floodplain Considerations The project is located on Flood Insurance Rate Map (FIRM)panel 48439C0410K. The floodplain is non- detailed, Zone A floodplain, which will not require the preparation of a Conditional Letter of Map Revision (CLOMR). However,upon completion of any grading improvements that impact the floodplain, it will be necessary to prepare a Letter of Map Revision (LOMR) in order to establish final floodplain delineations and Base Flood Elevations(BFEs). Wetland Considerations A preliminary Waters of the United States Determination was prepared by Integrated Environmental Solutions, LLC ("IES") on February 15, 2017. To summarize the determination, a total of 48 water features were identified, including thirteen linear wetlands, eight wetland complexes, eight tributaries, four impoundments, and fifteen swales. In the opinion of IES, all identified linear wetlands, wetland complexes, tributaries, and impoundments would meet a definition of a water of the United States and may be subject to regulation under Section 404 of the Clean Water Act. The fifteen swales would not meet a definition of a water of the United States and would not be regulated under Section 404 of the Clean Water Act. A complete copy of the preliminary Determination prepared by IES is included in Appendix F to the Engineering Report. A final Determination will be evaluated when construction activity in the vicinity of any of these areas is anticipated within six months of commencement of construction. Currently, the Developer intends to plan around any wetland features and does not anticipate remediation of any wetland sites. Soils brformation According to the Tarrant County Soil Survey, soils throughout the project site are generally composed of clays. Local standards and specifications for construction of water and sewer infrastructure should be adhered to by the development. Grading and subgrade preparation for construction of pavement should be performed according to 46 #5470717.14 site specific geotechnical recommendations from a licensed engineer. Please see Appendix C to the Engineering Report for Additional Soils Map information. Utilities The City intends to provide both water and wastewater service to the District. The City does not currently have adequate water distribution or sanitary sewer collection infrastructure in the ground to serve the Project. The City does have sufficient system capacities to serve the Project subsequent to the extension of the necessary water and sanitary sewer lines and associated appurtenances. Such appurtenances include a sanitary sewer lift station and force main, a water booster pump station and pressure reducing valve, a 24-inch water line for the Southside 3 service area(as set forth in the Engineer's Report), and a 20 inch water line for the Southside 4 service area(as set forth in the Engineer's Report). Utility Service Providers SERVICE PROVIDER Water City of Fort Worth Sanitary Sewer City of Fort Worth Trash City of Fort Worth Drainage City of Fort Worth Electric ONCOR Gas ATMOS Telephone/Internet AT&T None of the Underwriter, the Developer, or the City makes any representations as to the accuracy, completeness, assumptions or information contained in the Engineer's Report. The assumptions or qualifications with respect to the Engineer's Report are contained therein. There can be no assurance that any such assumptions will be realized, and the Developer, the City and the Underwriter make no representation as to the reasonableness of such assumptions. Prospective investors should read the complete Engineer's Report in order to make an informed decision regarding any contemplated purchase of the Bonds. The complete Engineer's Report is attached hereto as APPENDIX H. Environmental Rock Creek Rmtck West(Western Improvement Area) Walton Texas and WUSF4 obtained a Phase I ESA Dated December 12, 2013, from C&E Environmental, LLC ("C&E"), which identified a suspected cattle dip pesticide trough. C&E then performed a Phase II Limited Site Assessment regarding a Suspected Pesticide Trough dated February 26, 2014. Subsequently, a Limited Trenching,Test Pits and Sampling of Pesticide Trough report was obtained dated March 19, 2014,which identified an arsenic impact in the soil surrounding the former pesticide trough in excess of the Texas Commission on Environmental Quality ("TCEQ") Texas Risk Reduction Program ("TRRP") Tier I Residential standard for soil. On April 1,2014, C&E formally recommended that the Landowners remove the impacted soil to below TRRP Tier 1 Residential standards to allow for unrestricted future use of the entire project. The Landowner remediated the former cattle dip pesticide trough in September 2016 and removed approximately 1,240 cubic yards of impacted soils. Following completion of the remediation, C&E prepared a Response Action Completion Report dated December 5,2016("RACR"). Following its review of the RACR,TCEQ confirmed in a"No Further Action Letter" dated March 3,2017,that the TRRP Remedy Standard"A"Residential Protective Concertation Levels(PCLs)were achieved and,consequently,no institutional control or post-response action care is required. 47 #5470717.14 Rock Creek Rauch East(Eastern Improvement Area) Walton Texas and WUSF5 obtained a Phase I ESA was obtained from C&E on the Rock Creek Ranch East property, dated July 10, 2015. The Report found that there are three natural gas drilling and production facilities as well as connecting underground pipelines located in the Eastern Improvement Area that are leased and operated by natural gas companies. The report suggested that the Landowner have all contract and agreements with the gas companies reviewed to become comfortable with the environmental protection provided by the contracts. However, C&E in the report found no reason to suspect other recognized environmental conditions of concern on the property based upon the results of their assessment. THE DEVELOPER The following information has been provided by the Developer. Certain of the following information is beyond the direct knowledge of the City,the City's Financial Advisor and the Underwriter, and none of the City,the City's Financial Advisor or the Underwriter have any way of guaranteeing the accuracy of such information. The Developer has reviewed portions of this Limited Offering Memorandum and warrants and represents that neither(i) the information herein under the caption "THE DEVELOPER" nor (ii) the information relating to the Developer under the subcaption `BONDHOLDERS' RISKS — Dependence Upon Developer and Landowners" contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made herein,in the light of the circumstances under which they are made,not misleading. General In general, the activities of a developer in a development such as the District include purchasing the land, designing the subdivision, including the utilities and streets to be installed and any community facilities to be built, defining a marketing program and building schedule, securing necessary governmental approvals and permits for development, arranging for the construction of roads and the installation of utilities(including, in some cases,water, sewer, and drainage facilities, as well as telephone and electric service) and selling improved lots and commercial reserves to builders, developers, or other third parties. The relative success or failure of a developer to perform such activities within a development may have a material effect on the security of the revenue bonds, such as the Bonds, issued by a municipality for a public improvement district. A developer is generally under no obligation to develop the property which it owns in a development.Furthermore,there is no restriction on the developer's right to sell any or all of the land which the developer owns within a development. In addition, a developer is ordinarily the major tax and assessment payer within a district during its development. Description of the Developer The Developer is a member of the Walton Group of Companies, a multinational, privately-owned real estate investment and development group concentrating on the research, acquisition, administration, planning and development of strategically located land in major North American growth corridors. The Walton Group of Companies has more than 35 years of experience administering land investment projects, which has included over 100,000 acres of land in North America. The Developer is a wholly owned subsidiary of Walton Development & Management (USA), Inc., an Arizona corporation ("WDM USA"). WDM USA is wholly owned by Walton Global Holdings, Ltd., a Delaware corporation ("Walton Global"). WDM USA and its wholly-owned subsidiaries currently operate in more than a dozen states. As one of WDM USA's subsidiaries, the Developer administers, plans and/or develops land throughout the State of Texas. WDM USA's combined professional experience in land planning, development and project management services has the breadth and depth of experience required to seamlessly take land through the pre-planning, entitlement, development approval and construction process. That experience has included the following development projects in Colorado,North Carolina and Texas. 48 #5470717.14 Project #of Units/ Project Tvne 5F +/-"' Location Year Completed/Status BONTERRA Single-family 1,395 Town of Indian First three Phases have been completed residential Trail,Union Constructed Improvements are in the process County,NC of being dedicated to the Town of Indian Trail. CHISHOLM Single-family Phase 1: 169 City of Fort Phase I has been completed and development TRAIL residential Phase Il: 233 All Worth,Tarrant activities for Phase II are scheduled to RANCH Phases: 1,031 County,TX commence during the summer of 2017. SILVER Single-family Phase 1: 117 Town of Phase I was completed in December 2016. PEAKS residential Phase 11: 147 Lochbuie,Weld Development activities for Phase 11 All Phases: County,CO commenced in May 2017 with target 1,439 substantial completion of Phase II in March 2018 Developer Texas Projects The Developer is currently developing the residential portion of Chisholm Trail Ranch, a master-planned community of residential homes and commercial-retail properties located in Tarrant County,Texas. The Developer completed the first phase of its development earlier this year, and four local, established homebuilders (Antares Homes, Dunhill Homes, HistoryMaker Homes and Sandlin Homes) are currently constructing homes on the developed lots. In addition to the Chisholm Trail Ranch development project,the Developer is currently administering over 30,000 acres of pre-development land in the State of Texas: Project Name Location Anticipated Land Use Acres Anderson Hays County,Texas Residential 82 Bluff Springs 1 Ellis County,Texas Residential 662 Bluff Springs 2 Ellis County,Texas Residential 1,208 Caldwell Valley Caldwell County,Texas Mixed 3,635 Camino Real Hays County,Texas Mixed 1,737 Cornerstone Caldwell County,Texas Mixed 194 Cotton Center Caldwell County,Texas Mixed 3,217 Cottonwood Grayson County,Texas Residential 1,474 Elm Creek Grayson County,Texas Residential 1,061 Gas Lamp District San Marcos,Texas Mixed 495 Grayson Collinsville Grayson County,Texas Mixed 2,116 Greenway Trails Grand Prairie,Texas Mixed 357 Hunt County Hunt County,Texas Mixed 6,714 Kemp Ranch Waxahachie,Texas Mixed 2,813 Kimberlin Heights Grayson County,Texas Mixed 1,459 Kyle Estate Kyle,Texas Residential 629 Pecan Woods Hays County,Texas Mixed 763 Red Oak Crossing Red Oak,Texas Mixed 367 Rock Creek Ranch Fort Worth,Texas Mixed 1,756 Turner Crest Grayson County,Texas Mixed 681 Texas Total 31,419 49 #5470717.14 Bankruptcy of Certain Canadian Affiliates of Landowners and Developer Walton International Group Inc.("WIGI"),an Alberta Canada corporation and certain of its other Canadian affiliates, including affiliates of the Landowners and Developer(collectively, the "CCAA Entities"), announced in April 2017 that such entities obtained an Initial Order (the "Initial Order") from the Court of Queen's Bench of Alberta for creditor protection under the Companies' Creditors Arrangement Act ("CCAA"). The Initial Order authorizes the CCAA Entities to begin a court-supervised restructuring and provides for a broad stay of proceedings against the CCAA Entities and certain affiliated entities that are not parties to the CCAA proceedings. The Initial Order provides the opportunity for the CCAA Entities to finalize and present a CCAA plan to creditors for approval. The CCAA Entities do not include Walton Global Investments Ltd., Walton USA, WDM USA, Walton Development and Management USA, Walton Asia, Walton Europe, or the independent Canadian limited partnerships or US limited liability companies which own pre-development land and are managed by Walton affiliates,although Walton Global and Walton USA are covered by the stay of proceedings. All U.S. syndicated limited partnerships and limited liability companies (the "U.S. Issuers"), both pre- development and development project,are excluded from the CCAA proceedings,including the Landowners and the Developer. All CCAA Entities included in the CCAA proceedings are Canadian entities. Current Defaults The Landowners are not aware of any defaults with respect to any obligations to pay taxes or assessments on any property they own. Marketing of the Development The Landowners and Walton USA are parties to certain agreements related to the ownership, management and sale of the Property. Specifically, the Landowners engaged Walton USA to manage the Property. Walton USA will provide ongoing support for the Property on behalf of the Landowners. Walton USA has entered into funding agreements with Land Fund 4 and Land Fund 5. Pursuant to these agreements,Walton USA has agreed to fund each Land Fund's share of expenses to the extent the reserve raised by each Land Fund from investors is insufficient; provided however, Walton USA's obligation to fund any excess expenses is limited to 5%of gross proceeds raised by the Land Fund as part of their respective offerings. The limited partners owning Class A Units in Land Fund 4 and Land Fund 5 are not Walton-owned entities;those Class A limited partnership units were acquired by investors pursuant to private offerings of Land Fund 4 and Land Fund 5. In addition to their engagement of Walton USA,the Landowners engaged the Developer to perform certain preliminary development concept planning services for the Property. Wholly independent of the Major Improvements, the Developer will continue to provide such preliminary development concept planning services so long as Landowners own the Property. Walton USA and the Developer will continue to perform their responsibilities under such agreements to prepare the Property within the Development for sale. The Landowners have not yet engaged the Developer for development of the District, including the Private Improvements. The Developer provides ongoing support for its development projects and anticipates that it will continue to market the property within the Development after lots are sold. Historically, coordinated marketing programs for similar projects include some or all of the following: property signage, online media, print media, radio media, billboards,realtor appreciation programs, and marketing events(grand openings,realtor events, etc.)and third party brokerage companies. Marketing budgets will be created each year with the assistance of internal marketing professionals and third-party marketing companies. The budgets will be reviewed regularly during the year to make sure funds are being spent in the most effective manner. The WDM marketing program is in addition to the home builder's individual marketing programs. 50 #5470717.14 Executive Biography of Principals of the Developer John Vick, Regional President, West USA,for Walton Development&Management(USA), Inc. John Vick is the Regional President, West USA for Walton Development & Management (USA), Inc. ("WDM").John joined the Walton Group of Companies in 2012 as Regional Vice President of the D.C.Metro Area, bringing with him more than 30 years of experience and management in real estate. Prior to attaining his current role John held the position of President, Washington D.C. for WDM. In his current role, John is responsible for the activities for Walton Development & Management (USA), Inc. ("WDM") in Arizona, California, Colorado, Illinois, Oklahoma and Texas and South USA, including managing the entitlement process for residential, commercial and industrial projects, including both new master plans and existing developments. He also collaborates with agencies, governments, landowners and stakeholders in addition to participating in the land acquisition process. Prior to joining Walton, John was a Managing Director at Jones Lang LaSalle. In this role, he was responsible for the growth and development of the Development and Asset Strategy portion of the Capital Markets practice in the southeastern United States. The services provided include acquisitions, dispositions, advisory services and investments in land and land-based assets. Assignments for corporate and public sector clients included acquisitions, dispositions and advisory services for clients including Plum Creek Timber Company, Florida State University, Prudential Insurance Company, NCR, Whirlpool, BP, City of Miami, Mead/Westvaco, Motorola, Wachovia, Marriott, Lone Star Funds, Adidas, Sprint, Mercy Hospital, HealthSouth, Georgia Tech, Beers Construction,Bellsouth, Boston Ventures,and Pauahi Management Co. Previously, John was President and Chief Operating Officer of Perini Land & Development Company, a wholly owned subsidiary of Perini Corporation, responsible for operations nationwide. Reporting directly to the parent company chairman, John's duties included managing assets in Massachusetts, Georgia, Florida, Arizona and California,along with the supervision of area managers and all support operations. In addition,John was responsible for all Georgia division activities including planning, budgeting, construction, operations, sales and marketing for projects including mixed-use land development; high- rise condominium development and a garden apartment development. John holds a Bachelor of Science degree in Civil Engineering from Texas A&M University and a Masters of Business Administration from Georgia State University, with a concentration in Finance. He is a registered Professional Engineer in Texas, a licensed real estate broker in Georgia and has a Six Sigma Green Belt certification. Matt Robinson, General Manager of Dallas-Fort Worth (DFW), Walton Development and Management South USA. Matt Robinson is the General Manager of Dallas-Fort Worth (DFW) for Walton Development and Management South USA. Matt joined WDM in 2013 as a General Manager. Matt has 20 years of combined experience in the study and management of engineering, planning and entitlements, residential and commercial project management, construction management, and land acquisition and disposition. In his current role, Matt manages Walton's DFW land holdings, totaling over 20,000 acres and his responsibilities include conducting due diligence associated with the research and acquisition of land,managing teams of third-party consultants to facilitate the entitlement and development process, and providing support for various departments within the company by writing update materials and giving presentations to various internal and external audiences. Further,Matt assists in the compilation and completion of detailed development pro formas to assist with the development process. Prior to his career with WDM, Matt was Vice President of Development for Greater Texas Land Resources, L.P. (GTLR) in Frisco,Texas. In this role,he successfully managed over 4,000 acres of land throughout the Dallas and Fort Worth metroplex (DFW). This effort included the acquisition, entitlement, development and disposition of mix use properties managed by GTLR. 51 #5470717.14