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Ord 743 Authorizing the issuance and sale of Special Assessment Revenue Bonds, Series 2015 Solana Public Improvement District - EntradaORDINANCE NO. 743 AN ORDINANCE AUTHORIZING THE ISSUANCE OF THE "TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT)"; APPROVING AND AUTHORIZING AN INDENTURE OF TRUST, A BOND PURCHASE AGREEMENT, AN OFFICIAL STATEMENT, A CONTINUING DISCLOSURE AGREEMENT AND OTHER AGREEMENTS AND DOCUMENTS IN CONNECTION THEREWITH; MAKING FINDINGS WITH RESPECT TO THE ISSUANCE OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the Town of Westlake, Texas (the "Town"), pursuant to and in accordance with the terms, provisions and requirements of the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas Local Government Code (the "PID Act"), has previously established the "Solana Public Improvement District" (the "District"), pursuant to Resolution No. 14-07 adopted by the Town Council of the Town (the "Council') on February 24, 2014; and WHEREAS, the authorization creating the District became effective on February 28, 2014 upon publication of Resolution No. 14-07 in the Fort Worth Star Telegram, a newspaper of general circulation in the Town; and WHEREAS, no written protests of the District from any owners of record of property within the District were filed with the Town Secretary within 20 days after the date of publication of such notice; and WHEREAS, pursuant to the PID Act, on December 22, 2014, the Council published notice of the assessment hearing in the Fort Worth Star Telegram, a newspaper of general circulation in the Town, and held a public hearing on January 15, 2015, regarding the levy of special assessments within the District, and on January 15, 2015, the Council adopted Ordinance No. (the "Assessment Ordinance"); and WHEREAS, in the Assessment Ordinance, the Council approved and accepted the Service and Assessment Plan (as defined and described in the Assessment Ordinance, the "Service and Assessment Plan") relating to the District and levied the Assessments (as defined in the Service and Assessment Plan, the "Assessments") against the Assessment Roll (as defined and described in the Service and Assessment Plan, the "Assessment Roll'). Capitalized terms used in this preamble and not otherwise defined shall have the meaning assigned thereto in the Service and Assessment Plan; and WHEREAS, the Council has found and determined that it is in the best interests of the Town to issue its bonds to be designated "Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)" (the 'Bonds"), such Bonds to be payable from and secured by the Pledged Revenues, as defined in the Indenture (defined below); and Ordinance 743 Page 1 of 5 WHEREAS, the Town is authorized by the PID Act to issue the Bonds for the purpose of (i) paying the Costs, (ii) paying interest on the Bonds during and after the period of acquisition and construction of the Improvement Project A Improvements, (iii) funding a reserve fund for payment of principal and interest on the Bonds and (iv) paying the costs of issuance of the Bonds; and WHEREAS, in connection with the issuance of the Bonds, the Improvement Project A Improvements are located within the District, and the Town has determined that the Improvement Project A Improvements confer a special benefit on Improvement Area #1, Improvement Area #2 and Improvement Area #3 as provided in Section V.B. of the Service and Assessment Plan; and WHEREAS, the Council has found and determined to approve (i) the issuance of the Bonds to finance the Improvement Project A Improvements, (ii) the form, terms and provisions of an indenture of trust securing the Bonds authorized hereby, (iii) the form, terms and provisions of a Bond Purchase Agreement (defined below) between the Town and the purchaser of the Bonds, (iv) an Official Statement (defined below), and (v) a Continuing Disclosure Agreement (defined below); and WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and the public notice of the time, place and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; NOW, THEREFORE BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, THAT: Section 1. Findings. The findings and determinations set forth in the preamble hereof are hereby incorporated by reference for all purposes as if set forth in full herein. Section 2. Approval of Issuance of Bonds and Indenture of Trust. (a) The issuance of the Bonds in the principal amount of [$26,175,000] for the purpose of (i) paying a portion of the Costs, (ii) paying a portion of the interest on the Bonds during and after the period of acquisition and construction of the Improvement Project A Improvements, (iii) funding a reserve fund for payment of principal 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, is hereby authorized and approved. (b) The Bonds shall be issued and secured under that certain Indenture of Trust (the "Indenture") dated as of February 1, 2015, between the Town and U.S. Bank National Association, as trustee (the "Trustee"), with such changes as may be necessary or desirable to carry out the intent of this Ordinance and as approved by the Mayor or Mayor Pro Tem of the Town, such approval to be evidenced by the execution and delivery of the Indenture, which Indenture is hereby approved in substantially final form attached hereto as Exhibit A and incorporated herein as a part hereof for all purposes. Ordinance 743 Page 2 of 5 The Mayor or Mayor Pro Tem of the Town is hereby authorized and directed to execute the Indenture and the Town Secretary is hereby authorized and directed to attest such signature of the Mayor or Mayor Pro Tem. (c) The Bonds shall be dated, shall mature on the date or dates and in the principal amount or amounts, shall bear interest, shall be subject to redemption and shall have such other terms and provisions as set forth in the Indenture. The Bonds shall be in substantially the form set forth in the Indenture, with such insertions, omissions and modifications as may be required to conform the form of Bond to the actual terms of the Bonds. The Bonds shall be payable from and secured by the Pledged Revenues (as defined in the Indenture) and other assets of the Trust Estate (as defined in the Indenture) pledged to the Bonds, and shall never be payable from ad valorem taxes or any other funds or revenues of the Town. Section 3. Sale of Bonds; Approval of Bond Purchase Agreement. The Bonds shall be sold to Jefferies, LLC (the "Underwriter") at the price and on the terms and provisions set forth in that certain Bond Purchase Agreement (the "Bond Purchase Agreement"), dated the date hereof, between the Town and the Underwriter, attached hereto as Exhibit B and incorporated herein as a part hereof for all purposes, which terms of sale are declared to be in the best interest of the Town. The form, terms and provisions of the Bond Purchase Agreement are hereby authorized and approved and the Mayor or Mayor Pro Tem of the Town is hereby authorized and directed to execute and deliver the Bond Purchase Agreement. The Mayor's or Mayor Pro Tem's signature on the Bond Purchase Agreement may be attested by the Town Secretary. Section 4. Official Statement. The form and substance of the Preliminary Official Statement for the Bonds and any addenda, supplement or amendment thereto and the final Official Statement (the "Official Statement") presented to and considered at the meeting at which this Ordinance is considered are hereby in all respects approved and adopted. The Official Statement, with such appropriate variations as shall be approved by the Mayor or Mayor Pro Tem of the Town and the Underwriter, may be used by the Underwriter in the offering and sale of the Bonds. The Town Secretary is hereby authorized and directed to include and maintain a copy of the Preliminary Official Statement and Official Statement and any addenda, supplement or amendment thereto thus approved among the permanent records of this meeting. The use and distribution of the Preliminary Official Statement in the offering of the Bonds is hereby ratified, approved and confirmed. Notwithstanding the approval and delivery of such Preliminary Official Statement and Official Statement by the Council, the Council is not responsible for and proclaims no specific knowledge of the information contained in the Preliminary Official Statement and Official Statement pertaining to the Improvement Project A Improvements, the Developer or its financial ability, any builders, any landowners, or the appraisal of the property in the District. Section 5. Continuing Disclosure Agreement. The Continuing Disclosure Agreement (the "Continuing Disclosure Agreement") between the Town and U.S. Bank National Association is hereby authorized and approved in substantially final form attached hereto as Exhibit C and incorporated herein as a part hereof for all purposes and the Town Manager of the Town is hereby authorized and directed to execute and deliver such Continuing Disclosure Ordinance 743 Page 3 of 5 Agreement with such changes as may be required to carry out the purpose of this Ordinance and approved by the Town Manager, such approval to be evidenced by the execution thereof. Section 6. Additional Actions. The Mayor, the Mayor Pro Tem, the Town Manager and the Town Secretary are hereby authorized and directed to take any and all actions on behalf of the Town necessary or desirable to carry out the intent and purposes of this Ordinance and to issue the Bonds in accordance with the terms of this Ordinance. The Mayor, the Mayor Pro Tem, the Town Manager and the Town Secretary are hereby authorized and directed to execute and deliver any and all certificates, agreements, notices, instruction letters, requisitions, and other documents which may be necessary or advisable in connection with the sale, issuance and delivery of the Bonds and the carrying out of the purposes and intent of this Ordinance. Section 7. Severability. If any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. Section 8. Effective Date. This Ordinance is passed on one reading as authorized by Texas Government Code, Section 1201.028, and shall be effective immediately upon its passage and adoption. [Remainder of page left blank intentionally] Ordinance 743 Page 4 of 5 PASSED, APPROVED AND EFFECTIVE this January 15, 2015. ATTEST: Kelly tdwarQ Town Secretary APPROVED AS TO FORM: Laura Wheat, Mayor OF WEST a T 11,1111' L. St ton Lowry Town Attorney I 1111F • : B !n' Manager Signature page to Bond Or-dinance (Town Seal) Ordinance 743 Page 5 of 5 Exhibit A INDENTURE OF TRUST Electronic file in Laserfiche Ordinance 743 TRANSCRIPT OF PROCEEDINGS RELATING TO $26,175,000 Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) Date of Delivery: February 5, 2015 717 North Harwood, Ninth Floor • Dallas, Texas 75201 • Phone: (214) 754-9200 $26,175,000 TOWN OF WESTLAKE, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) TABLE OF CONTENTS CREATION PROCEEDINGS TAB Certified Copy of Petition of Property Owners ..................................................... 1 Affidavit of Publication of Notice of Public Hearing on Creation ........................ 2 Proof of Mailing of Notice of Public Hearing on Creation ................................... 3 Minutes of Public Hearing on Creation................................................................. 4 Certified Resolution Creating District................................................................... 5 Affidavit of Publication of Notice Creating District ............................................. 6 ASSESSMENT PROCEEDINGS Affidavit of Publication of Notice of Assessment Hearing ................................... 7 Proof of Mailing of Notice of Assessment Hearing....... ........................................ 8 Certified Ordinance Approving Service and Assessment Plan .............................. 9 BOND PROCEEDINGS Resolution Approving the Preliminary Official Statement for the Bonds ............. 10 Certified Ordinance Authorizing the Issuance of the Bonds ................................. 11 TrustIndenture....................................................................................................... 12 Preliminary Official Statement.............................................................................. 13 Final Official Statement......................................................................................... 14 Bond Purchase Agreement..................................................................................... 15 Continuing Disclosure Agreement of the Issuer .................................................... 16 Continuing Disclosure Agreement of the Developer ............................................. 17 CERTIFICATES AND LETTERS OF REPRESENTATION General Certificate................................................................................................. 18 Signature Identification and No -Litigation Certificate .......................................... 19 ClosingCertificate................................................................................................. 20 FederalTax Certificate.......................................................................................... 21 Trustee Certificate.................................................................................................. 22 Corporate Authority Certificate of Trustee............................................................ 23 Developer Closing Certificate............................................................................... 24 Developer Letter of Representation....................................................................... 25 General Certificate of Developer........................................................................... 26 Letter of Representation of Appraiser................................................................... 27 Letter of Representation of Municap, Inc.............................................................. 28 Letters of Representation of Development Consultant and Co -Developer ........... 29 MISCELLANEOUS Closing Instructions Letter..................................................................................... 30 Receiptof Trustee.................................................................................................. 31 Certified Ordinance Approving PID Agreements ................................................. 32 FundingAgreement............................................................................................... 33 Reimbursement Agreement................................................................................... 34 LandownerAgreement........................................................................................... 35 RedemptionAgreement......................................................................................... 36 Form8038-G.......................................................................................................... 37 Appraisal................................................................................................................ 38 DevelopmentAgreement....................................................................................... 39 Evidence of Filing of Special Assessment Ordinance ........................................... 40 OPINIONS Opinion of McCall, Parkhurst & Horton L.L.P..................................................... 41 Supplemental Opinion of McCall, Parkhurst & Horton L.L.P.............................. 42 Opinion of Underwriter's Counsel Andrews Kurth LLP ....................................... 43 Opinion of the Town Attorney of the Town of Westlake, Texas .......................... 44 Opinion of Developer's Counsel............................................................................ 45 Approving Opinion of the Attorney General of Texas with Comptroller's Registration Certificate.......................................................................................... 46 Town of Westlake CERTIFICATE OF TOWN SECRETARY STATE OF TEXAS § COUNTY OF TARRANT § CITY OF WESTLAKE § I, Kelly Edwards, the undersigned, Town Secretary and the lawful possessor and legal custodian of the Town's records of Westlake, Texas, a municipal corporation, in the performance of the functions of my office, hereby certify that the attached is a true and correct copy of the Petition of Property Owners regarding the creation of a Public Improvement District. Witness my hand and seal of the Town of Westlake, Texas, this the 19th day of May, 2014. ak I gix��14 A Kelly dwa s Town Secretary ,`p`ltN ��F rFxA 5 3 Village Circle, Suite 202 + Westlake, Texas 76262 Metro: 817-430-091 • Fax: 817-430-1812 + www.westlake-tx.org PETITION FOR THE CREATION OF A PUBLIC IMPROVEMENT DISTRICT WITHIN THE TOWN OF WESTLAKE, TEXAS, FOR THE WESTLAKE PUBLIC 1MPROVEMENT DISTRICT NO. T This petition ("Petitiom'D is submitted and filed with the Town Secretary of the Town of Westlake, Texas ("Westlake'), by Maguire Partners -Solana, Land, L.P., a Texas limited partnership (the "Develo ') acting pursuant to the provisions of Chapter 372, Texas Local Government Code, as amended (the "Act'), requesting that Westlake create a public improvement district ("District'), to include property owned by the Developer and located within the city limits of Westlake (the "Pro rt 1, more particularly described by a metes and bounds description in Exhibit A. In support of this petition the Developer would present the following. Section 1. General Nature of the Authorized Improvements. The purposes of the District include the design, acquisition, construction, and improvement of public improvement projects authorized by the Act that are necessary for the development of the Property, which public improvements will include; landscaping, entryway features, water, wastewater, sidewalks, streets, roadways, off-street parking, drainage system improvements, trails, parks and open space; special supplemental services for the improvement and promotion of the district; and payment of expenses incurred in the establishment, administration, and operation of the' district. Section 2. Estimated Cost of the Authorized Improvements. The Developer estimates that the cost to design, acquire, and construct the Authorized Improvements is $32,000,000.00_ Section 3. Boundaries of the Proposed District The District is proposed to include the Property. Section 4. Proposed Method of Assessment. Westlake shall levy assessments on each ' parcel within the District in a manner that results in imposing equal shares of the costs on property similarly benefited. All assessments may be paid in full at any time (including interest and debt), and certain assessments may be paid in annual installments (including interest and debt). If an assessment is allowed to be paid in installments, then the installments must be paid in amounts necessary to meet annual costs for those Authorized Improvements financed by the assessment, and must continue for a period necessary to retire the indebtedness of those Authorized Improvements (including interest). Section 5. bMsed Apportionment of Costs between the -District and Westlake. Westlake will not be obligated to provide any finds to finance the Authorized Improvements, other than from assessments levied on the public improvement district property, and possible tax increment reinvestment zone revenue. No municipal property in the public improvement district shall be assessed. Developer may also pay certain costs of the improvements from other finds available to the. Developer. Section 5. Management of the District. The Developer proposes that the District be managed by Westlake, with the assistance of a consultant, who shall, from time to time, advise Westlake regarding certain operations of the District Section 7. bevel_ per Requests Establishment of the District. The person(s) signing this Petition request the establishment of the District. Section 8. Advisory Board, The Developer proposes that the District be established and managed without the creation of an advisory board. This petition has been signed by (1) the owners of taxable real property representing more than 50 percent of the appraised value of taxable real property liable for assessment under the proposal, as determined by the current roll of the appraisal district in which the property is located; and (2) record owners of real property liable for assessment under the proposal who: (A) constitute more than 50 percent of all record owners of property that is liable for assessment under the proposal; or (B) own taxable real property that constitutes more than 50 percent of the arca of all taxable real property that is liable for assessment under the proposal. This Petition is hereby filed with the Town Secretary of Westlake in support of the creation of the District by the Town Council of Westlake as herein provided. The undersigned request that the Town Council of Westlake grant its consent as above stated. RESPECTFULLY SUBMITTED, on this the day of October, 2013. MAGUIRE PARTNERS — SOLANA LAND, L.P., a Texas limited partnership By: MMM Ventures, LLC, its general partner By: 2M Ventures, LLC, its manager Its: General Partner By:_ ./rr Date: ! �� l Tr -� t'✓ Mehrdad Moayedi, Manager EXHIBIT A Legal Description of the District 85.90 Acres BEING a tract of land situated in the C.M. Throop Survey, Abstract No. 1510, the W. Medlin Survey, Abstract No. 1958, the William Pea Survey, Abstract No. 1246 and the Joseph Henry Survey, Abstract No. 742, Tarrant County, Texas and being a portion of Tract 2 as described in the Special Warranty Deed to MAGUIRE PARTNERS — SOLANA LAND, L.P. as recorded in Volume 16858, Page 176 of the Deed Records of Tarrant County, Texas and being more particularly described as follows: BEGINNING at a 518 inch iron rod found with "Huitt-Zollars" cap at the southwest corner of Lot 2, Block 1, Westlake/Southlake Park Addition No. 1, an addition to the Town of Westlake, Texas as recorded in Volume 388-214, Page 78 of the Plat Records of Tarrant County, Texas, being on the northeasterly right-of-way line of Kirkwood Boulevard, a variable width right-of-way as dedicated by said Westlake/Southlake Park Addition No. 1 and being the beginning of a non - tangent curve to the left having a central angle of 9 degrees 13 minutes 11 seconds, a radius of 1428.00 feet and being subtended by a chord which bears North 47 degrees 49 minutes 50 seconds West a distance of 229.54 feet; THENCE along the northeasterly right-of-way line of Kirkwood Boulevard, a variable with right-of-way, as described in Dedication Deed to the Town of Westlake as recorded under instrument No. D208427746, Deed Records of Tarrant County, Texas the following: Along said curve to the left an are distance of 229.79 feet to a'/z inch rod found with Graham cap at the end of said curve; North 52 degrees 30 minutes 14 seconds west a distance of 32.60 feet to %2 inch iron rod found with Graham cup beginning of a curve to the right having a central angle of 18 degrees 54 minutes 48 seconds, a radius of 612.00 feet and being subtended by a chord which bears North 43 degrees 02 minutes 03 seconds West a distance of 201.11 feet; Along said curve to the right an arc distance of 202.02 feet to a'/z inch iron rod found with Graham cap at the beginning of a compound curve to the right having a central angle of 24 degrees 06 minutes 47 seconds, a radius of 812.00 feet and being subtended by a chord which bears North 21 degrees 32 minutes 03 seconds West a distance of 339.22 feet; Along said curve to the right an arc distance of 341.73 feet to a'/z inch iron rod found with Graham cap at the end of a said curve; North 09 degrees 28 minutes 39 seconds West a distance of 132.24 feet to a 1/z inch iron rod found with Graham cap at the beginning of a curve to the left having a central angle of 45 degrees 43 minutes 19 seconds, a radius of 708.00 feet and being subtended by a chord which bears North 32 degrees 20 minutes 19 seconds West a distance of 550.11 feet; Along said curve to the left an arc distance of 564.98 feet to a % inch iron rod found with Graham cap at the end of said curve; North 55 degrees 11 minutes 58 seconds West a distance of 190.50 feet to a %Z inch iron rod found with Graham cap; North 08 degrees 56 minutes 27 seconds West a distance off 21.41 feet to a'/2 inch iron rod found with Graham cap on the easterly right-of-way line of Precinct Line Road, a variable width right-of-way, as described in Dedication Deed to Town of Westlake as recorded under Instrument No. D208427746, Deed Records of Tarrant County, Texas and being the beginning of a non -tangent curve to the left having a central angle of 16 degrees 09 minutes 21 seconds, a radius of 1,432.50 feet and being subtended by a chord which bears North 27 degrees 07 minutes 42 seconds East a distance of 402.59 feet; THENCE along the easterly right-of-way line of Precinct Line Road, the following; Along said curve to the left an arc distance of 403.92 feet to a'/Z inch iron rod found with Graham cap at the end of said curve; North 18 degrees 47 minutes 24 seconds East a distance of 185.36 feet to a % inch iron rod found with Graham cap; North 17 degrees 03 minutes 03 seconds East a distance of 322.64 feet to a %Z inch iron rod found on the southerly right-of-way line of State Highway 114 (a variable width ROW); THENCE along the southerly right-of-way line of State Highway 114, the following; North 60 degrees 06 minutes 26 seconds East a distance of 44.54 feet to a Texas Department of Transportation brass disk in concrete found; South 71 degrees 03 minutes 32 seconds East a distance of 254.55 feet to a point for corner from which a Texas Department of Transportation brass disk in concrete found bears North 10 degrees 48 minutes 28 seconds West a distance of 0.43 feet; South 77 degrees 26 minutes 06 seconds East a distance of 746.74 feet to a Texas Department of Transportation brass disk in concrete found; South 71 degrees 03 minutes 31 seconds East a distance of 1443.85 feet to a Texas Department of Transportation brass disk in concrete found; South 62 degrees 34 minutes 19 seconds East a distance of 404.34 feet to a Texas Department of Transportation brass disk in concrete found at the beginning of a curve to the right having a central angle of 08 degrees 19 minutes 09 seconds, a radius of 2,709.79 feet and being subtended by a chord which bears South 58 degrees 24 minutes 45 seconds East a distance of 393.11 feet; Along said curve to the right an arc distance of 393.45 feet to a Texas Department of Transportation brass disk in concrete found; South 54 degrees 15 minutes 11 seconds East a distance of 399.24 feet to a Texas Department of Transportation brass disk in concrete found; South 64 degrees 19 minutes 50 seconds East a distance of 56.55 feet to a 518 inch iron rod found with "Huitt-Zollars" cap at the beginning of a non -tangent curve to the right having a central angle of 02 degrees 13 minutes 56 seconds, a radius of 2,754.79 feet and being subtended by a chord which bears South 43 degrees 17 minutes 37 seconds East a distance of 107.32 feet; Along said curve to the right n arc distance of 107.33 feet to a'/z inch rod found with "Huitt- Zollars" cap for the northeast corner of Lot 1, Block 1, of the aforementioned Westlake/Southlake Park Addition No. 1; THENCE departing the southerly right-of-way line of State Highway 114, North 90 degrees 00 minutes 00 seconds west along the north line of said Lot 1, Block 1, a distance of 2,132.54 feet to a 5/8 inch iron rod with "Carter -Burgess" cap found for the northwest corner of said Lot 2, Block 1, Westlake/Southlake Park Addition No. 1; THENCE South 52 degrees 00 minutes 00 seconds West along the northwesterly line said Lot 2, Block 1, a distance of 1000.00 feet to a 518 inch iron rod with "Carter & Burgess" cap found at an angle point in the west line of Lot 2, Block 1; THENCE along the west line of said Lot 2, Block 1, South 00 degrees 00 minutes 00 seconds East a distance of 168.55 feet to the POINT OF BEGINNING and containing 85.90 acres of land, more or less. INVOICE Star -Telegram 808 Throckmorton St. FORT WORTH, TX 76102 Customer ID: TOW27 Invoice Number: 328795351 (837} 390-7761 Invoice Date: 2/7/2014 Federal Tax ID 26-2674582 Terms: Net due in 21 days Due Date: 2/28/2014 Bill To: TOWN OF WESTLAKE PO Number: 3 VILLAGE CIR STE 202 Order Number: 32879535 WESTLAKE, TX 76262-7940Sales Rep: 073 r Description: TOWN OF WESTLA Publication Date: 2/7/2014 TOWN OF WESTLAKE, TEXAS NOTICE 13580 I 97 97 LINE $6.11 $592.82 Misc Fee Net Amount; THE STATE OF TEXAS County of Tarrant $10.00 $602.82 CHRISTY LYNNE HOLLAND notary putrlEc. State of Texas My commission Expires July 31, 2016 Before me, a Notary Public In and for said County and State, this day personally appeared Deborah Baylor, Bid and Legal Coordinator for the Star - Telegram, published by the Star -Telegram, Inc. at Fort Worth, In Tarrant County, Texas; and who, after being duly swom, did depose and say that the attached clipping of an advertisement was published In the a named paper on.the listed dates: BIDS S LEGAL DEPT. STAR TELEGRAM (817)215-2323 V \ — q SUBSCRIBED AND SWORN TO BEFORE ME, THIS Friday, Notary Thank You For Your Payment ------------------------------ -------------- Remit To: Star -Telegram Customer ID: TOW27 P.O. BOX 901051 Customer Name: TOWN OF WESTLAKE FORT WORTH, TX 76101-2051 Invoice Number: 328795351 Invoice Amount: $602.82 PO Number: Amount Enclosed: Res 14-04 Westraxe create a Puoric im- Moment distrkt {the "District') Inck* property owned by the Trend Place of the Hearing. The publk. hearing will start at 6:30 p m Fehrua 24 2014 at Westlake Town Hall, 3 VIkW Circle, West- lakk Texas 76262. Gow n) Nature of the Proposed , Authorized Improvements. The Ru of the DisMct Include the design, acquisition, mn, and Improvement of oubllc lm l pprovemeot projecks authorized by . the Ad that are necessary for the development of the property, which public improvements wlll Include. Iandscaping,eay features, water, wastew sidewa! stregts, roadways, offLsbree Parking, drainage srstem im- provements, =1 1, pa dnd open space; special supplemental ser- vkes for the Improvement and promotion of the district; and payment of expenses incurred In the establishmont,.admInIstradoN i ievar% as more parocuiany ve- scribed by a metes and bounds description available at Westlake Town Hall and avallable for public Inspection. . 'fa sed Method of Assessm@nt. Westlake shall levy assessments on each parcel within the District in a manner that results In imposing equal shares of the costs on property silnilariy benefited. All assessments may be paid In full at any time (including Interest and debt), and certain assessments maY be paid In annual Installments (Inciuding interest and debt). If an arse t Is allowed to bepaw in Installments, then the Install- ments must be paid in amounts necessary to meet annual costs for those Autlwrized improvements financed by the assessment, and must continue for a od neces- sary to retire the Indebtedness of those Authorized Improvements � (Including Apportionment of Cost Nestlake will not be obligated to rrovide any funds to finance the iiRlroriZBd Improvements, other :han from assessments leveed on :he public Improvement disMct reopen, and possible tax incm- nent re6estment zone revenue. go municipal property In the public mprovempeenvt ddfs shall be as- �ert�ain casts t the llnprovesommnts `rom other funds available to the )eveloper. Town of Westlake CERTIFICATE OF TOWN SECRETARY STATE OF TEXAS § COUNTY OF TARRANT § CITY OF WESTLAKE § I, Kelly Edwards, the undersigned, Town Secretary and the lawful possessor and legal custodian of the Town's records of Westlake, Texas, a municipal corporation, in the performance of the functions of my office, hereby certify that the attached is a true and correct copy of the proof of mailing the notice of the public hearing regarding the creation of the Public Improvement District. Witness my hand and seat of the Town of Westlake, Texas, this the le day of May, 2094. Kelly dwar Town Secretary 3 Village Circle, Suite 202 . Westlake, Texas 76262 Metro: 817-430-0941 • Fax: 917-430-1812 * www.westlake-tx.org i Town of Westlake 3 Village Circle, Suite 202 Westlake, Texas 76262 "Property Owner" Maguire Prtns-Solana Land LP 1221 N. Interstate 35E Suite 200 Carrollton, Texas 75006-3806 000,48' Town of Westlake CERTIFICATE OF TOWN SECRETARY STATE OF TEXAS COUNTY OF TARRANT CITY OF WESTLAKE till V I, Kelly Edwards, the undersigned, Town Secretary and the lawful possessor and legal custodian of the Town's records of Westlake, Texas, a municipal corporation, in the performance of the functions of my office, hereby certify that the attached is a true and correct copy of the Town Council minutes from February 24, 2014. Witness my hand and seal of the Town of Westlake, Texas, this the 19th day of May, 2014. KellyCdwardO �N OF we Town Secretary p . TFX AS 3 Village Circle, Suite 202 • Westlake, Texas 76262 Metro: 8174304)941 * Fax: 817430-1812 • www.wesdake-tx.org MINUTES OF THE TOWN OF WESTLAKE, TEXAS TOWN COUNCIL MEETING Febmary 24, 2014 PRESENT: Mayor Laura Wheat and Council Members, Michael Barrett, Clif Cox, Carol Langdon and Wayne Stoltenberg. Rick Rennhack arrived at 5:11 p.m. ABSENT: OTHERS PRESENT: Town Manager Tom Brymer, Town Secretary Kelly Edwards, Assistant Town Manager Amanda DeGan, Town Attorney Stan Lowry, Finance Director Debbie Piper, Planning and Development Dlrecbor Eddie Edwards, Facilities and Recreation Director Troy Meyer, Fire Chief Richard Whitten, , Public Works Director Jarrod Greenwood and Susan McFarland, Communications Specialist. 1. CALL TO ORDER Mayor Wheat called the work session to order at 5:07 p.m. 2. PLEDGE OF ALLEGIANCE Mayor Wheat led the pledge of allegiance to the United States and Texas flags. Town Council Mutes 02/24/14 Page 1 of 7 3. REVIEW OF CONSENT AGENDA ITEMS FOR THE FEBRUARY 24, 2014, TOWN COUNCIL REGULAR MEETING AGENDA. No additional discussion. 4. REPORTS a. Keller Police Department's 2013 State Required Racial Profiling Report. S. DISCUSSION ITEMS a. Discussion and presentation of the annual Comprehensive Annual Financial Report (CAFR) presented by Pattillo, Brown & Hill, L.L.P., Certified Public Accountants, for the fiscal year ended September 30, 2013. Mr. Greg Shropshire, Pattillo, Brown & Hili, L.LP., provided an overview of the audit as prepared. No additional discussion. b. Presentation and discussion regarding SH 114/170 interchange construction and safety issues. Director Greenwood provided an overview of the item and discussions with TxDot and West lake's County Commissioners. Discussion ensued regarding proposed options to relieve traffic on Ottinger Road and Statue Highway 170, the State's proposed final design plans which currently depict the Ottinger Road crossover eliminated, safety concerns of traffic crossing State Highway 170 to travel Northbound, Environmental Protection Agency (EPA) concerns that prevent the opening of a 3'd lane on State Highway 114 Eastbound, and the toll lane along State Highway 114 through Grapevine. c. Sanding lta w Update and discussion regarding Westlake Academy Phase I expansion project and enrollment projections. Director Meyer provided a presentation, overview and a project update. Discussion ensued regarding the availability of the academy during Spring Break, and closing the North driveway for driveway repairs. Town Goundl Minutes 02/24/14 Page 2 of 7 d. Discussion of a proposal from the City of Keller regarding Library Service. Assistant Town Manager DeGan provided an overview of the proposal and cost of service per household. Discussion ensued regarding the cost for non-residents, considering atrial year agreement, concerns regarding utilization of services, options for students to use the library, senior program offerings, and the number of residents currently using the library. Council requested Staff revisit the proposal and discuss additional utilization and options for residents and students. e. Discussion of the Process for Establishing a Public Improvement District (PID) for the Entrada Development, the Petition Submitted to Establish a PID for Entrada, and a Draft Service Assessment Plan for Same. Mr. Kirk Wilson, T. Wilson & Associates, stated that they could not provide any additional financial information since they cannot qualify expenses until the district is created. Discussion ensued regarding the appraisal approach and the timing of Infrastructure improvements. 6. EXECUTIVE SESSION The Council convened Into executive session at 6:03 p.m. The Council will conduct a dosed session pursuant to Texas Government Code, annotated, Chapter 551, Subchapter D for the following; a. Section 551.087. Deliberation Regarding Economic Development Negotiations (1) to disarm or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or other incentive to a business prospect described by Subdivision (1). Maguire Partners -Solana Land, L.P., related to Centurion's development known as Entrada b. Section 551.071(2) Consultation with Attomey on a matter in which the duty of the att irney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Chapter :including but are not limited to the following: Town of Westlake Certificate of Convenience & Necessity (CCN) for water and sewer service. c. Section 551.071(2) Consultation with Attomey - to seek advice of counsel on legal matters irnrolving pending or contemplated litigation, settlement offers, or other Town Coundi Knutes 02/24/14 Page 3 of 7 legal matters not related directly to litigation or settlement. Pending or contemplated litigation and settlement offers include but are not limited to the i following: Trophy Club Municipal District Number 1 7. RECONVENE MEETING Mayor Wheat reconvened the meeting at 7:15 p.m. 8. TAKE ANY ACTION, IF NEEDED, FROM EXECUTIVE SESSION ITEMS. No action taken. 9. COUNCIL RECAP / STAFF DIRECTION Revisit the proposal with the City of Keller regarding Ubrary services and discuss additional utilization and options for residents and students. 10. ADJOURNMENT Mayor Wheat adjourned the work session at 7:17 p.m. EWguiar Session 1. CALL TO ORDER Mayor called the regular session to order at 7:17 p.m. 2. CITIZEN PRESENTATIONS AND RECOGNITIONS Present Employee service awards. Mayor Wheat presented Mrs. Jaymi Ford with a 10 year Employee Service Award. Mayor Wheat presented Mr. Calvin Kniffen with an Employee Excellence Award for Fre & Emergency Medical Services. Town Coundl Minutes 42/24/14 Page 4 of 7 3. CONSENT AGENDA a. Consider approval of the minutes from the January 27, 2014, meeting. b. Consider approval of Resolution 14-05, Accepting the annual Comprehensive Annual Financial Report (CAFR) for the Fiscal year ended September 30, 2013. c. Consider approval of Resolution 14-06, Approving an Economic Development agreement regarding transportation with the Marriott Solana. MOTION: Council Member Langdon made a motion to approve consent agenda. Council Member Rennhack seconded the motion. The motion carried by a vote of 5-0. 4. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION 14-07, MAKING FINDINGS THAT THE PROPOSED SOLANA PUBLIC IMPROVEMENT DISTRICT AND THE PROPOSED PUBLIC IMPROVEMENTS WILL PROMOTE THE INTERESTS OF THE TOWN AND CONFER A SPECIAL BENEFIT ON A DEFINABLE PART OF THE TOWN; PROVIDING THAT THE DISTRICT AND THE PROPOSED PUBLIC IMPROVEMENTS AND ADVISABLE; PROVIDING FINDINGS WITH RESPECT TO THE NATURE AND ESTIMATED COST OF THE PROPOSED PUBLIC IMPROVEMENTS, THE BOUNDARIES OF THE DISTRICT, THE METHOD OF ASSESSMENT, AND APPORTIONMENT OF COSTS BETWEEN THE DISTRICT AND THE TOWN; AUTHORQING THE CREATION OF THE DISTRICT; DIRECTING THE TOWN SECRETARY TO PUBLISH NOTICE OF THE CREATION OF THE SOLANA PUBLIC IMPROVEMENT DISTRICT. Town Manager Brymer provided an overview of the item as presented. Mayor Wheat opened the public hearing at 7:23 p.m. Kirk Wilson, representing McGuire Partners Inc. 1221 N. IH 35, Carrollton, Texas, spoke in favor of the item W create the Public Improvement District. Mayor Wheat dosed the public hearing at the 7:23 p.m. Mayor Wheat opened discussion at 7:23 p.m. No additional discussion. MOTION: Council Member Langdon made a motion to approve Resolution 14-07. Council Member Stoltenberg seconded the motion. The motion carried by a vote of 5-0. Town Council Minutes 02/24/14 Page 5 of 7 S. EXECUTIVE SESSION C--,. The Council did not convene into executive session. i The Council will conduct a closed session pursuant to Texas Govemment Code, annotated, Chapter 551, Subchapter D for the following: a. Section 551.087. Deliberation Regarding Economic Development Negotiations (1) to discuss or deliberate regarding commercial or financial information that the govemmental body has received from a business prospect that the govemmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or other Incentive to a business prospect described by Subdivision (1). Maguire Partners - Solana Land, L.P., related tD Centurion's development known as Entrada b. Section 551.071(2) Consultation with Attomey on a matter in which the duty of the attomey W tate govemmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Chapter including but are not limited to the following: Town of Westlake Certificate of Convenience & Necessity (CCN) for water and sewer service. c. Section 551.071(2) Consultation with Attorney - to seek advice of counsel on legal matters Involving pending or contemplated litigation, settlement offers, or other legal matters not related directly to litigation or settlement. Pending or contemplated litigation and settlement offers include but are not limited to the following: Trophy Club Municipal District Number 1 6. RECONVENE MEETING 7. TAKE ANY ACTION, IF NEEDED, FROM EXECUTIVE SESSION ITEMS. MOTION: Council Member Cox made a motion pursuant to Executive Session Item fi, c of the Work Session agenda, to authorize the Town Manager and Town's attorneys to file any and all appeals to overtum the TCEQ Order to approve the Trophy Club Municipal Utility Districts No. 1 pending bond application. Council Member Barrett seconded the motion. The motion carried by a vote of 5-0. & FUTURE AGENDA ITEMS No items. 9. COUNCIL CALENDAR Town Coundl Minutes 02/24/14 Page 6 of 7 10. ADJOURNMENT There being no further business before the Council, Mayor Wheat asked for a motion to adjourn the meeting. MOTION; Council Member Rennhack made a motion to adjourn the meeting. Council Member Langdon seconded the motion. The motion carried by a vote of 40. Mayor Wheat adjourned the meeting at 7:29 p.m. APPROVED BY THE TOWN COUNCIL ON MARCH 24, 2014, ATTEST: _�, t#� J Laura Wheat Mayor Kelly'EdwakW, Town Secretary Town Council Minutes 02124/14 Page 7 of 7 Town of Westlake CERTIFICATE OF TOWN SECRETARY STATE OF TEXAS § COUNTY OF TARRANT § CITY OF WESTLAKE § 1, Kelly Edwards, the undersigned, Town Secretary and the lawful possessor and legal custodian of the Town's records of Westlake, Texas, a municipal corporation, in the performance of the functions of my office, hereby certify that the attached is a true and correct copy of Resolution 14-07. Witness my hand and seal of the Town of Westlake, Texas, this the 19th day of May, 2014. el! Edwa s Town Secretary o�N 4F h/Fs7. * .m TEXAS 3 Village Circle, Suite 202 • Westlake, Texas 76262 Metro: 817430-0941 . Fax: 817430-1812 • www.westlake-tx.org TOWN OF WESTLAKE, TEXAS RESOLUTION NO. 14-07 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, MAKING FINDINGS THAT THE PROPOSED SOLANA PUBLIC IMPROVEMENT DISTRICT AND THE PROPOSED PUBLIC IMPROVEMENTS WILL PROMOTE THE INTERESTS OF THE TOWN AND CONFER A SPECIAL BENEFIT ON A DEFINABLE PART OF THE TOWN; PROVIDING THAT THE DISTRICT AND THE PROPOSED PUBLIC IMPROVEMENTS AND ADVISABLE; PROVIDING FINDINGS WITH RESPECT TO THE NATURE AND ESTIMATED COST OF THE PROPOSED PUBLIC IMPROVEMENTS, THE BOUNDARIES OF THE DISTRICT, THE METHOD OF ASSESSMENT, AND APPORTIONMENT OF COSTS BETWEEN THE DISTRICT AND THE TOWN; AUTHORIZING THE CREATION OF THE DISTRICT; DIRECTING THE TOWN SECRETARY TO PUBLISH NOTICE OF THE CREATION OF THE SOLANA PUBLIC IMPROVEMENT DISTRICT; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the Town Council of the Town of Westlake, Texas (the "Town"), is authorized by Chapter 372, Texas Local Government Code, as amended (the "Act"), to create public improvement districts within the corporate limits and the extraterritorial ,jurisdiction of the Town; and WHEREAS, on October 18, 2013, Maguire Partners -Solana Land, L.P, a Texas limited partnership (the "Developer"), submitted and filed with the Town Secretary a petition (the "Petition") requesting the establishment of a public improvement district (the "District") for certain property within the Town; and WHEREAS, the Petition has been on file with the Town Secretary and available for public inspection at all times after it was submitted and filed; and WHEREAS, the Town Council has investigated and determined that the Petition complies with and is sufficient under the Act to create the District; and WHEREAS, the Town Council has investigated and determined that the matters set forth in the Petition are true and correct; and WHEREAS, the Town Council has investigated and determined that the public improvements described in the Petition ("Public Improvements") are authorized by the Act and will confer a special benefit on the Property; and WHEREAS, the Town Council has investigated and determined that the District may be created without the appointment of an advisory body; and Resolution 14 -XX Page 1 of 7 WHEREAS, the request for the creation of the District was made at the Town Council's regular meeting of February 24, 2014; and WHEREAS, a description and depiction of the Property which shall comprise the District (the "Property") are attached hereto as Exhibit A; and WHEREAS, at least fifteen days before the February 24, 2014 public hearing, the Town caused notice of the February 24, 2014 public hearing, addressed to "Property Owner," to be mailed to the current address, as reflected on the tax rolls, of owners of property subject to assessment under the proposed District; and WHEREAS, at least fifteen days before the February 24, 2014 public hearing, the Town caused notice of the February 24, 2014 public hearing to be published in a newspaper of general circulation in the area where the proposed District is located; and WHEREAS, on February 24, 2014, the Town Council held a public hearing, pursuant to Section 372.009 of the Texas Local Government Code, to receive public testimony and input relative to the creation of said District in the Town; and WHEREAS, the Town Council has investigated and determined that the published and mailed notices of the public hearing complied with the Act and were published and mailed before the 15th day before the date of the public hearing as required by the Act; and WHEREAS, the Town Council hereby determines that there has been full compliance with all requirements of the Act. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, THAT: SECTION 1: All of the above premises are hereby found to be true and correct legislative and factual findings of the Town of Westlake and they are hereby approved and incorporated into the body of this Resolution as if copied in their entirety. SECTION 2: All requirements of the Act with regard to the Petition and the mailed and published notices of the public hearing have been fully complied with, and are hereby ratified and approved. SECTION 3: The Town Council, after considering the Petition, the information provided by Town staff, and the evidence, information, and testimony presented at the public hearing, makes the following fundings, each of which represents the exercise by the Town Council of its legislative authority and discretion: (1) The creation of the District and the undertaking of the Public Improvements will promote the interests of the Town. (2) The creation of the District and the undertaking of the Public Improvements will confer a special benefit on a definable part of the Town identified herein as the Property. Resolution 14 -XX Page 2 of 7 (3) The purposes of the District include the design, acquisition, construction, and improvement of public improvement projects authorized by the Act that are necessary for the development of the Property, which public improvements will include: landscaping, entryway features, water, wastewater, sidewalks, streets, roadways, off-street parking, drainage system improvements, trails, parks and open space; special supplemental services for the improvement and promotion of the district; and payment of expenses incurred in the establishment, administration, and operation of the district. (4) The estimated cost of the proposed Public Improvements, including costs related to the design, acquisition and construction of the Public Improvements, is $32,000,000.00. (5) The District is proposed to include approximately 85.90 acres of land generally located south of State Highway 114, east of Davis Boulevard, and north of Solana Boulevard, as more particularly described by a metes and bounds description attached as Exhibit A. (6) The Town shall levy assessments on each parcel in the District in a manner that will impose equal shares of the costs on property similarly benefited. All assessments may be paid in fall or in part at any time, including accrued and unpaid interest; and if not paid in full, shall be paid in annual installments. If paid in installments, then the installments must be paid in amounts necessary to meet annual costs for the Public Improvements financed by the assessment, and must continue for a period necessary to retire any debt of those authorized Public Improvements, including interest. (7) The Town will not be obligated to provide any funds to finance the Public Improvements, other than from assessments levied on the public improvement district property, and possible tax increment reinvestment zone revenue. No municipal property in the public improvement district shall be assessed. Developer may also pay certain costs of the improvements from other funds available to the Developer. SECTION 4: The District is authorized, established, and created as a public improvement district under the Act. SECTION 5: The District shall be known as the Solana Public Improvement District. SECTION b: This Resolution is consistent with the Petition, has been approved by majority vote of all members of the Town Council, and constitutes the improvement order under the Act authorizing, establishing and creating the District in accordance with the Act and in accordance with the findings set forth in this Resolution. SECTION 7: The Town Secretary is authorized and directed to this Resolution (together with Exhibit A) to be published as required by the Act one (1) time in a newspaper of general circulation in the area where the District is located, and whereupon the authorization, establishment, and creation of the District shall take effect. Resolution 14 -XX Page 3 of 7 SECTION 8: This Resolution shall take effect immediately from and after its passage and publication, as required by this Resolution and the Act. DULY PASSED AND APPROVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, BY A VOTE OF _ TO ____, ON THIS THE 24TH DAY OF FEBRUARY, 2014. ATTEST: Kelly Edwards, Town Secretary APPROVED AS TO FORM: L. Stanton Lowry, Town Attorney Laura L. Wheat, Mayor Thomas E. Brymer, Town Manager Resolution 14 -XX Page 4 of 7 EXHIBIT A (Property Description and Depiction) LEGAL DESCRIPTION 85.90 Acres BEING a tract of land situated in the C.M. Throop Survey, Abstract No. 1510, the W. Medlin Survey, Abstract No. 1958, the William Pea Survey, Abstract No. 1246 and the Joseph Henry Survey, Abstract No. 742, Tarrant County, Texas and being a portion of Tract 2 as described in the Special Warranty Deed to MAGUIRE PARTNERS — SOLANA LAND, L.P. as recorded in Volume 16858, Page 176 of the Deed Records of Tarrant County, Texas and being more particularly described as follows: BEGINNING at a 518 inch iron rod found with "Huitt-Zollars" cap at the southwest corner of Lot 2, Block 1, Westlake/Southlake Park Addition No. 1, an addition to the Town of Westlake, Texas as recorded in Volume 388-214, Page 78 of the Plat Records of Tarrant County, Texas, being on the northeasterly right-of-way line of Kirkwood Boulevard, a variable width right-of-way as dedicated by said Westlake/Southlake Park Addition No. 1 and being the beginning of a non - tangent curve to the left having a central angle of 9 degrees 13 minutes 11 seconds, a radius of 1428.00 feet and being subtended by a chord which bears North 47 degrees 49 minutes 50 seconds West a distance of 229.54 feet; THENCE along the northeasterly right-of-way line of Kirkwood Boulevard, a variable with right-of-way, as described in Dedication Deed to the Town of Westlake as recorded under instrument No. D208427746, Deed Records of Tarrant County, Texas the following: Along said curve to the left an arc distance of 229.79 feet to a % inch rod found with Graham cap at the end of said curve; North 52 degrees 30 minutes 14 seconds west a distance of 32.60 feet to % inch iron rod found with Graham cup beginning of a curve to the right having a central angle of 18 degrees 54 minutes 48 seconds, a radius of 612.00 feet and being subtended by a chord which bears North 43 degrees 02 minutes 03 seconds West a distance of 201.11 feet; Along said curve to the right an arc distance of 202.02 feet to a 1/2 inch iron rod found with Graham cap at the beginning of a compound curve to the right having a central angle of 24 degrees 06 minutes 47 seconds, a radius of 812.00 feet and being subtended by a chord which bears North 21 degrees 32 minutes 03 seconds West a distance of 339.22 feet; Along said curve to the right an arc distance of 341.73 feet to a % inch iron rod found with Graham cap at the end of a said curve; Resolution 14 -XX Page 5 of 7 North 09 degrees 28 minutes 39 seconds West a distance of 132.24 feet to a %Z inch iron rod found with Graham cap at the beginning of a curve to the left having a central angle of 45 degrees 43 minutes 19 seconds, a radius of 708.00 feet and being subtended by a chord which bears North 32 degrees 20 minutes 19 seconds West a distance of 550.11 feet; Along said curve to the left an are distance of 564.98 feet to a '/2 inch iron rod found with Graham cap at the end of said curve; North 55 degrees 11 minutes 58 seconds West a distance of 190.50 feet to a %2 inch iron rod found with Graham cap; North 08 degrees 56 minutes 27 seconds West a distance off 21.41 feet to a '/2 inch iron rod found with Graham cap on the easterly right-of-way line of Precinct Line Road, a variable width right-of-way, as described in Dedication Deed to Town of Westlake as recorded under Instrument No. D208427746, Deed Records of Tarrant County, Texas and being the beginning of a non -tangent curve to the left having a central angle of 16 degrees 09 minutes 21 seconds, a radius of 1,432.50 feet and being subtended by a chord which bears North 27 degrees 07 minutes 42 seconds East a distance of 402.59 feet; THENCE along the easterly right-of-way line of Precinct Line Road, the following; Along said curve to the left an arc distance of 403.92 feet to a '/2 inch iron rod found with Graham cap at the end of said curve; North 18 degrees 47 minutes 24 seconds East a distance of 185.36 feet to a %z inch iron rod found with Graham cap; North 17 degrees 03 minutes 03 seconds East a distance of 322.64 feet to a 1/2 inch iron rod found on the southerly right-of-way line of State Highway 114 (a variable width ROW); THENCE along the southerly right-of-way line of State Highway 114, the following; North 60 degrees 06 minutes 26 seconds East a distance of 44.54 feet to a Texas Department of Transportation brass disk in concrete found; South 71 degrees 03 minutes 32 seconds East a distance of 254.55 feet to a point for corner from which a Texas Department of Transportation brass disk in concrete found bears North 10 degrees 48 minutes 28 seconds West a distance of 0.43 feet; South 77 degrees 26 minutes 06 seconds East a distance of 746.74 feet to a Texas Department of Transportation brass disk in concrete found; South 71 degrees 03 minutes 31 seconds East a distance of 1443.85 feet to a Texas Department of Transportation brass disk in concrete found; Resolution 14 -XX Page 6 of 7 South 62 degrees 34 minutes 19 seconds East a distance of 404.34 feet to a Texas Department of Transportation brass disk in concrete found at the beginning of a curve to the right having a central angle of 08 degrees 19 minutes 09 seconds, a radius of 2,709.79 feet and being subtended by a chord which bears South 58 degrees 24 minutes 45 seconds East a distance of 393.11 feet; Along said curve to the right an arc distance of 393.45 feet to a Texas Department of Transportation brass disk in concrete found; South 54 degrees 15 minutes 11 seconds East a distance of 399.24 feet to a Texas Department of Transportation brass disk in concrete found; South 64 degrees 19 minutes 50 seconds East a distance of 56.55 feet to a 518 inch iron rod found with "Huitt-Zollars" cap at the beginning of a non -tangent curve to the right having a central angle of 02 degrees 13 minutes 56 seconds, a radius of 2,754.79 feet and being subtended by a chord which bears South 43 degrees 17 minutes 37 seconds East a distance of 107.32 feet; Along said curve to the right n arc distance of 107.33 feet to a '/2 inch rod found with "Huitt- Zollars" cap for the northeast corner of Lot 1, Block 1, of the aforementioned Westlake/Southlake Park Addition No. 1; THENCE departing the southerly right-of-way line of State Highway 114, North 90 degrees 00 minutes 00 seconds west along the north line of said Lot 1, Block 1, a distance of 2,132.54 feet to a 518 inch iron rod with "Carter -Burgess" cap found for the northwest comer of said Lot 2, Block 1, Westlake/Southlake Park Addition No. 1; THENCE South 52 degrees 00 minutes 00 seconds West along the northwesterly line said Lot 2, Block 1, a distance of 1000.00 feet to a 518 inch iron rod with "Carter & Burgess" cap found at an angle point in the west line of Lot 2, Block 1; THENCE along the west line of said Lot 2, Block 1, South 00 degrees 00 minutes 00 seconds East a distance of 168.55 feet to the POINT OF BEGINNING and containing 85.90 acres of land, more or less. Resolution 14 -XX Page 7 of 7 INVOICE Star-Telegrao 8d8 T 61ockmorton St. FORT WORTH, TX 76102 (817) 390-7761 Federal Tax ID 26-2674582 Bill To: WN OF WESTLAKE VILLAGE C1R STE 202 WESTLAKE, TX 76262-7940 Customer ED: TOW27 ' ' Invoice Number: 329064431 Invoice Date: 2/28/2014 Terms: Net due in 21 days Dae Date: 2128/2014 PO Number: Order Number: 32906443 Sales Rep: 073 Description: TOWN OF WESTLA Publication Date: 2/28/2014 TOVrjOF WESTLAKE, TECAS RESOLU 13580 I 498 498 LINE $6.07 $3,022.88 Misc Fee $10.00 THE STATE OF TEXAS County of Tarrant Net Amount: $3,032.99 CHRISTY LYNNE HOLLAND �ryPutdc. Stote of Texos _. My Cornmisslon Expires July 31, 2014 Before me, a Notary Public in and for said Cou* and State, this day pereonalfSl appeared Deborah Baylor. 81d and Legal Coordl ]*W for the Star- Tdogram, pubiished by the Star Telegram, Ino. at Fort Worth, In Tarrant County, Teases; and who, after being duly sworn, did depose and say that the a4chad dipping of an ad+rertleement was published In .therive named paper on the I€sted dates: BIDS & LEC4L DEPT. STAR TELEGRAM (817) 215-2323 � SU13SCPJBED AND SWORN TO BEFORE ME, THIS Monday. Wr'Z'- g 2Tj'-', Notary Thank You For Your Payment --------------------------------------------- Remit To: Star -Telegram Customer ID: TOW27 P.O. BOX 901051 Customer Narne: TOWN OF WESTLAKE FORT WORTH, TX 76101-2051 Invoice Nuinber: 329064431 Invoice Amount: $3,032.88 PO Number: Amount Enclosed: f Nov .F�L.a *Md QW. �zc- d'iar. 6"'--': -'viz '" .? i I'.is�'1" 'i i.0 <"3ix'-7?E? 5$ ix 1'." �' i^r z'�, -. �'-3; '-i-4'"' -"aye ��� $� .� 3' � Z y�'i._.z' r� M `-S�£ €- "t 4 C �E 3�is» 'WD ": �£"r� t C NEW r- OR,VA 71 7 ur t-*£ ` ��6._ g''M. Ll e� r�,3� Tom,,. `f_ ?' eh° 4€` € XR sfdci'.c'-': ¢}"& 'ff� [R L. 'E �Ys�.xy..3"d ate3y�" @' Er g i x `4 "ra C 3n `4--, -� gnce Nov .F�L.a *Md QW. �zc- d'iar. 6"'--': -'viz '" .? i I'.is�'1" 'i i.0 <"3ix'-7?E? 5$ ix 1'." �' i^r z'�, -. �'-3; '-i-4'"' -"aye ��� $� .� 3' � Z y�'i._.z' r� M `-S�£ €- "t 4 C �E 3�is» 'WD ": �£"r� t C NEW r- OR,VA 71 7 t-*£ ` ��6._ g''M. Ll e� r�,3� Tom,,. `f_ ?' eh° 4€` € XR sfdci'.c'-': ¢}"& 'ff� [R L. 'E hI't i' -f. Er "ra C 3n `4--, -� gnce ''>_'6 £;mums .?• ^` A £ f `-`..'k:3T.�'- T ,�P NT €--_: zw4 ZW '-`-_` 't{AM£'i'Ej## .: M_- F.E y awl c` -x $i s't`;-c�'£a p-aa3€F-E; :i a I i I`s �Yq sC�7u �§` €-s`.-# �l �v" ..flx' V - kFe :i-T[.-fr.'kA�1b' �z .'£.p- ^E� ice€'i F 'F %: - -4� txr: i' S 40 -- r::.� zd£'k E ; s v, - - ki GF 0".1 Mc GLOSSA! _ 3r"f :'•� Vii` °z3 - L 6? � ,� � ti, e�� E=< �� 3 4 �'� Y vse5 ii ''`r E t `� f`� �Lz �€ iZ`i' �� f2€4 €s,L•1 y Pfd �..La i ar�"i� - a5 Nov �5:'F ", All Z AFFIDAVIT OF PUBLICATION THE STATE OF TEXAS § COUNTY OF TARRANT § BEFORE ME, the undersigned authority, on this day personally appeared the person whose name is subscribed below, who, being by me first duly sworn, upon oath deposed and said: 1. That this affiant is a duly authorized officer or employee of the Fort Worth Star Telegram, which is a newspaper of general circulation in the Town of Westlake, Texas. 2. That said newspaper is a newspaper as defined by Section 2051.044, Texas Government Code, as amended, and as such: (1) devotes not less than 25 percent of its total column lineage to general interest items; (2) is published at least once a week; (3) is entered as second-class postal matter in the county where published; and (4) has been published regularly and continuously for at least 12 months prior to publishing the notice referenced below. 3. That attached hereto is a true, full and correct copy of TOWN OF WESTLAKE, TEXAS, NOTICE OF PUBLIC HEARING which was published in said newspaper on the following date, to wit: December 22, 201'. Au 'zedicer or E yee SWORN TO AND SUBSCRIBED BEFORE ME 111 C - ESLIF 9UCKi �e . fart Notary Public. State of Texas W1 My Commission Expires Seplember 24, 2017 Notary Public, State of Texas [NOTARY SEAL] www.star-telegram.com LLegal Notices partment at 817-459.6566. THE WESTLAKE ACADEMY BOARD OF TRUSTEES WILL CONDUCT A PUBLIC HEARING TO PRESENT THE ANNUAL EDUCATIONAL KRFOR MANCE REPORT FOR WESTLAKE ACADEMY. ON JANUARY 72015 AT 600 P.M. THE PUSLiC H RING WILL BE HELD A 3 VILLAGE CIRCLE, IND FLOOR - COUNCIL CHAMBERS, WESTLAXE, TX 76262 hwft win be geld It n assessments to be nst the assessable ppr� ]n the Solana Pubik Im j ment District (the "Dls Pursuant to- the provisio i Chapter 372 of the Texas Government Code, as am" m be undertaken and the benefit of the hln the District (the Improvements") In - are not limited to, ant ay features, tewater, sidewalla railways, of�stree� rinage system im- tra8s, parks and open total costs of the Improvements to be urwaM to the Series seance (including the ding the District and N) The total costs of lent Authorized Im- (inciudino bond issu- as more ►Long;" i��,Hom "Now Building Homes in Your Community" Starting in the Low $100's Alvarado (817) 3308610 AzlelW'Ford (817) 3308552 Fort Worth (817) 385.7332 Lake Worth (817) 385-7251 Decatur (940)545-1647 Parker County For Sale ALEDO ISD - PHASE 2 2+ ACRES $100,000 & up. 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Ridglea Sq Apt 0 Malvey Ave.1 block S. of 1-30 @ Bryant Irvin Rd. 817-5709000 Apt - MidCities D 25" 76053 - Winter Speciall $249 MOVE-INI Close to NE Mall, Hurst 817-268-0730 Duplex Arlington For Rent 76015.4235 Wingrove 3-2-1 dpI 95 wbfp, fenced yrd MPI 817-483-8900 Azle For Rent C -or. Rent a. CERTIFICATE RELATING TO MAILING OF PUBLIC HEARING NOTICE I, the undersigned Town Secretary of the Town of Westlake, Texas, hereby certify that, on December 18, 2014, I mailed the notice of public hearing to the addresses shown in the attachments hereto. SIGNED AND SEALED THE 15TH DAY OF JANUARY, 2015. 4"�LWCL Towd Secr Town of Westlake (Town Seal)OF we, .m TEXAS 12/18/2014 Re: Tarrant County Parcel ID Nos. 05243351, OZIA27"2 nCIA-21n^7 nA110nQ-7 nn-7-70no-1 04519329,40888584,07121202,40778479,0431! Dear Property Owner: TOWN OF WEST. NOTICE OF PURI NOTICE IS HEREBY GIVEN THAT a public ht of Westlake, Texas on the 15th day of January, Village Circle, Suite 202, Westlake, Texas 76262 proposed assessments to be levied against the Improvement District (the "District") pursuant tc Local Government Code, as amended (the "Act"). The general nature of the proposed improvement financed for the benefit of the property within t include, but are not limited to, landscaping, entr streets, roadways, off-street parking, drainage s space. The total costs of the Authorized Improve 2015 Bond issuance (including the costs of cre $26,175,000.00. The total costs of the subsequcr issuance costs) are $10,215,000,00. The District includes approximately 85.90 acre Highway 114, east of Davis Boulevard, and nor described by a metes and bounds description avai Town Secretary, 3 Village Circle, Suite 202, West] All written or oral objections on the proposed ass at the public hearing. A copy of the Proposed Assessment Roll relal undertaken at this time, which includes the asses District, is available for public inspection at the o Suite 202, Westlake, Texas 76262. o'-�trNn o 0 M. 12/18/2014 Re: Tarrant County Parcel ID Nos. 05243351, 05''411AI nXIA1107 nA11anQ7 Afi77QdQ7 04519329, 40888584, 07121202, 40778479, 04319 Local Government Code, as amended (the "Act"). The general nature of the proposed improvement: financed for the benefit of the property within t) include, but are not limited to, landscaping, entr streets, roadways, off-street parking, drainage s, space. The total costs of the Authorized Improve: 2015 Bond issuance (including the costs of cre $26,175,000.00. The total costs of the subsequei issuance costs) are $10,215,000.00. The District includes approximately 85.90 acres Highway 114, east of Davis Boulevard, and norl described by a metes and bounds description avai Town Secretary, 3 Village Circle, Suite 202, Westl All written or oral objections on the proposed ass, at the public hearing. A copy of the Proposed Assessment Roll relat undertaken at this time, which includes the asses: District, is available for public inspection at the o Suite 202, Westlake, Texas 76262. 0 0 � m a� Lo ro w(n CU4., 3�>� a� 0 Cd Dear Property Owner: tl r TOWN OF WESTI �F NOTICE OI' PUBI NOTICE IS HEREBY GIVEN THAT a public he -tiI'fIZ of Westlake, Texas on the 15th day of January, Q G ;� Village Circle, Suite 202, Westlake, Texas 76262. proposed assessments to be levied against the a Improvement District (the "District") pursuant to Local Government Code, as amended (the "Act"). The general nature of the proposed improvement: financed for the benefit of the property within t) include, but are not limited to, landscaping, entr streets, roadways, off-street parking, drainage s, space. The total costs of the Authorized Improve: 2015 Bond issuance (including the costs of cre $26,175,000.00. The total costs of the subsequei issuance costs) are $10,215,000.00. The District includes approximately 85.90 acres Highway 114, east of Davis Boulevard, and norl described by a metes and bounds description avai Town Secretary, 3 Village Circle, Suite 202, Westl All written or oral objections on the proposed ass, at the public hearing. A copy of the Proposed Assessment Roll relat undertaken at this time, which includes the asses: District, is available for public inspection at the o Suite 202, Westlake, Texas 76262. 0 0 � m a� Lo ro w(n CU4., 3�>� a� 0 Cd Town of Westlake 3 Village Circle, Suite 202 Westlake, Texas 76262 Property Owner Maguire Prtns-Solana Land LP 1221 N interstate 35E Suite 200 Carrollton, TX 75006 4" 1 � �' � arxary uonr�s a z 1 000.480 0001736155 DEC 1 B 2014 {AAiLCQ FRVl ZIP CODE 76262 Town of Westlake 3 Village Circle, Suite 202 Westlake, Texas 76262 Property Owner Maguire Prtns-Solana Land LP 1800 Valley View Lane, Suite 300 Farmers Branch, TX 75234 � `may` �'•"r vl i"N[Y 8dw�3 02 IP $ 000.480 0001736157 DEC 18 2014 MAILED FROM ZIPGUDE 75267. 12/18/2014 Re: Tarrant County Parcel ID Nos. 05243351, 05243343, 05243297, 04319087, 40778487, 04519329, 40888584, 07121202, 40778479, 04319109,' 40778436. Dear Property Owner: TOWN OF WESTLAKE, TEXAS NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN THAT a public hearing will be conducted by the Town Council of Westlake, Texas on the 15th day of January, 2015 at 8.00 a.m. at Westlake Town Hall, 3 Village Circle, Suite 202, Westlake, Texas 76262. The public hearing will be held to consider proposed assessments to be levied against the assessable property within the Solana Public Improvement District (the "District") pursuant to the provisions of Chapter 372 of the Texas Local Government Code, as amended (the "Act"). The general nature of the proposed improvements authorized by the Act to be undertaken and financed for the benefit of the property within the District (the "Authorized Improvements") include, but are not limited to, landscaping, entryway features, water, wastewater, sidewalks, streets, roadways, off-street parking, drainage system improvements, trails, parks and open space. The total costs of the Authorized Improvements to be undertaken pursuant to the Series 2015 Bond issuance (including the costs of creating the District and issuing the bonds) is $26,175,000.00. The total costs of the subsequent Authorized Improvements (including bond issuance costs) are $10,215,000.00. The District includes approximately 85.90 acres of land generally located south of State Highway 114, cast of Davis Boulevard, and north of Solana Boulevard, as more particularly described by a metes and bounds description available for public inspection at the office of the Town Secretary, 3 Village Circle, Suite 202, Westlake, Texas 76262. All written or oral objections on the proposed assessment within the District will be considered at the public hearing. A copy of the Proposed Assessment Roll relating to the Authorized .Improvements to be undertaken at this time, which includes the assessments to be levied against each parcel in the District, is available for public inspection at the office of the Town Secretary, 3 Village Circle, Suite 202, Westlake, Texas 76262. CERTIFICATE FOR ORDINANCE I, the undersigned Town Secretary of the Town of Westlake, Texas ("Town"), hereby certify as follows: 1. The Town Council of said Town convened in a regular meeting on the I5th day of January, 2015, at the regular meeting place thereof, and the roll was called of the duly constituted officers and members of said Town Council, to wit: Laura Wheat, Mayor Carol Langdon, Mayor Pro Tem Michael Barrett, Council Member Alesa Belvedere, Council Member Wayne Stoltenberg, Council Member Rick Rennhack, Council Member Kelly Edwards, Town Secretary and all of said persons were present, except Rick Rennhack and Michael Barrett, thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE ACCEPTING AND APPROVING A SERVICE AND ASSESSMENT PLAN AND ASSESSMENT ROLL FOR THE SOLANA PUBLIC IMPROVEMENT DISTRICT; MAKING A FINDING OF SPECIAL BENEFIT TO THE PROPERTY IN THE DISTRICT; LEVYING SPECIAL ASSESSMENTS AGAINST PROPERTY WITHIN THE DISTRICT AND ESTABLISHING A LIEN ON SUCH PROPERTY; PROVIDING FOR PAYMENT OF THE ASSESSMENTS IN ACCORDANCE WITH CHAPTER 372, TEXAS LOCAL GOVERNMENT CODE, AS AMENDED; PROVIDING FOR THE METHOD OF ASSESSMENT AND THE PAYMENT OF THE ASSESSMENTS; PROVIDING PENALTIES AND INTEREST ON DELINQUENT ASSESSMENTS; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE was duly introduced for the consideration of said Town Council. It was then duly moved and seconded that said Ordinance be passed; and, after due discussion, said motion carrying with it the passage of said Ordinance, prevailed and carried by the following vote: AYES: NOES 2. That a true, full and correct copy of the aforesaid Ordinance passed at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; that said Ordinance has been duly recorded in said Town Council's minutes of said Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said Town Council's minutes of said Meeting pertaining to the passage of said Ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of said Town Council as indicated therein; that each of the officers and members of said Town Council was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and that said Ordinance would be introduced and considered for passage at said Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting for such purpose, and that said Meeting was open to the public and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code. SIGNED AND SEALED THE 15TH DAY OF JANUARY, 2015. Town Secre Town of Westlake (Town Seal) Signature page to Town Secretary Certificate for Assessment Ordinance TOWN OF WESTLAKE ORDINANCE 741 AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE ACCEPTING AND APPROVING A SERVICE AND ASSESSMENT PLAN AND ASSESSMENT ROLL FOR THE SOLANA PUBLIC IMPROVEMENT DISTRICT; MAKING A FINDING OF SPECIAL BENEFIT TO THE PROPERTY IN THE DISTRICT; LEVYING SPECIAL ASSESSMENTS AGAINST PROPERTY WITHIN THE DISTRICT AND ESTABLISHING A LIEN ON SUCH PROPERTY; PROVIDING FOR PAYMENT OF THE ASSESSMENTS IN ACCORDANCE WITH CHAPTER 372, TEXAS LOCAL GOVERNMENT CODE, AS AMENDED; PROVIDING FOR THE METHOD OF ASSESSMENT AND THE PAYMENT OF THE ASSESSMENTS; PROVIDING PENALTIES AND INTEREST ON DELINQUENT ASSESSMENTS; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE RECITALS WHEREAS, on October 18, 2013, a petition was submitted and filed with the Town Secretary (the "Town Secretary") of the Town of Westlake, Texas (the "Town") pursuant to the Public Improvement District Assessment Act, Chapter 372, Texas Local Government Code, as amended (the "PID Act"), requesting the creation of a public improvement district in the Town; and WHEREAS, the petition contained the signatures of the owner of taxable property representing more than fifty percent of the appraised value of taxable real property liable for assessment within the District, as determined by the then current ad valorem tax rolls of Tarrant County Central Appraisal District and the signature of the property owners who owns taxable real property that constitutes more than fifty percent of the area of all taxable property within the District that is liable for assessment; and WHEREAS, on February 24, 2014, after due notice, the Town Council of the Town (the "Town Council") held a public hearing in the manner required by law on the advisability of the public improvements and services described in the petition as required by Sec. 372.009 of the PID Act and made the findings required by Sec. 372.009(b) of the PID Act and, by Resolution No. 14- 07 (the "Authorization Resolution") adopted by a majority of the members of the Town Council, authorized and created the Solana Public Improvement District (the "District") in accordance with its finding as to the advisability of the Authorized Improvements; and WHEREAS, on February 28, 2014, the Town published the Authorization Resolution in The Star -Telegram, a newspaper of general circulation in the Town; and Ordinance 741 Page I of 9 WHEREAS, no written protests regarding the creation of the District from any owners of record of property within the District were filed with the Town Secretary within 20 days after February 28, 2014; and WHEREAS, on December 15, 2014, the Council adopted a resolution (the "Cost Resolution") determining the total costs of the Authorized Improvements, directing the filing of a proposed Assessment Roll, authorizing the publication of notice of a public hearing to consider the levying of the Assessments against the property within the District (the "Levy and Assessment Hearing") in a newspaper of general circulation in the Town, and directing related action; and WHEREAS, the Town Council, pursuant to Section 372.016(b) of the PID Act, published notice of the Levy and Assessment Hearing on December 22, 2014 in The Star-Telegram, a newspaper of general circulation in the Town; and WHEREAS, the Town Council, pursuant to Section 372.016(c) of the PID Act, mailed the notice of the Levy and Assessment Hearing to the last known address of the owners of the property liable for the Assessments; and WHEREAS, the Town Council convened the Levy and Assessment Hearing on January 15, 2015, at which all persons who appeared, or requested to appear, in person or by their attorney, were given the opportunity to contend for or contest the Assessment Roll, and the proposed Assessments, and to offer testimony pertinent to any issue presented on the amount of the Assessments, the allocation of the costs of the Authorized Improvements, the purposes of the Assessments, the special benefits of the Assessments, and the penalties and interest on annual installments and on delinquent annual installments of the Assessments; and WHEREAS, the Town Council finds and determines that the Assessment Roll and the Solana Public Improvement District Service and Assessment Plan, dated January 15, 2015 (the "Service and Assessment Plan"), attached as Exhibit A hereto and which is incorporated herein for all purposes, should be approved and that the Assessments should be levied as provided in this Ordinance and the Service and Assessment Plan and Assessment Roll attached thereto as Appendix E; and WHEREAS, the Town Council further finds that there were no written objections or evidence submitted to the Town Secretary in opposition to the Service and Assessment Plan, the allocation of the costs of the Authorized Improvements, the Assessment Roll, and the levy of the Assessments; and WHEREAS, prior to the issuance of bonds secured by the Assessments, the owners (the "Landowners" or the "Assessed Parties") of the majority of the privately-owned and taxable property located within the District, and who are the persons to be assessed pursuant to this Ordinance, will have executed and presented to the Town Council for approval and acceptance a landowner agreement (the "Landowner Agreement') in the form and substance acceptable to the Ordinance 741 Page 2 of 9 Town, in which the Assessed Parties acknowledge and accept the Service and Assessment Plan, approve the Assessment Roll, acknowledge and accept this Ordinance and acknowledge and accept the levy of the Assessments against their property located within the District, and agree to pay the Assessments when due and payable; and WHEREAS, the Town Council closed the hearing, and, after considering all written and documentary evidence presented at the hearing, including all written continents and statements filed with the Town, determined to proceed with the adoption of this Ordinance in conformity with the requirements of the PID Act. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: Terms. Terms not otherwise defined herein are as defined in the Service and Assessment Plan. SECTION 2: Findings. The findings and determinations set forth in the preambles hereof are hereby incorporated by reference and made a part of this Ordinance for all purposes as if the same were restated in full in this Section. The Town Council hereby finds, determines, and ordains, as follows: (a) The apportionment of the costs of the Authorized Improvements (as reflected in the Service and Assessment Plan, and the Administrative Expenses pursuant to the Service and Assessment Plan) is fair and reasonable, reflects an accurate presentation of the special benefit each assessed Parcel will receive from the construction of the Authorized Improvements identified in the Service and Assessment Plan, and is hereby approved; (b) The Service and Assessment Plan covers a period of at least five years and defines the annual indebtedness and projected costs for the Authorized Improvements; (c) The Service and Assessment Plan apportions the costs of the Authorized Improvements to be assessed against the property in the District and such apportionment is made on the basis of special benefits accruing to the property because of the Authorized Improvements; (d) All of the real property in the District which is being assessed in the amounts shown in the Assessment Roll will be benefited by the Authorized Improvements proposed to be constructed as described in the Service and Assessment Plan, and each assessed Parcel will receive special benefits in each year equal to or greater than each annual Assessments and will receive special benefits during the term of the Assessments equal to or greater than the total amount assessed; Ordinance 741 Page 3 of 9 (e) The method of apportionment of the costs of the Authorized Improvements and Administrative Expenses set forth in the Service and Assessment Plan results in imposing equal shares of the costs of the Authorized Improvements and Administrative Expenses on property similarly benefited, and results in a reasonable classification and formula for the apportionment of such costs; (f) The Service and Assessment Plan should be approved as the service plan and assessment plan for the District as described in Sections 372.013 and 372.014 of the PID Act; (g) The Assessment Roll in the form attached as Appendix E to the Service and Assessment Plan (the "Assessment Roll") should be approved as the Assessment Roll for the District; (h) The provisions of the Service and Assessment Plan relating to due and delinquency dates for the Assessments, interest on Annual Installments, interest and penalties on delinquent Assessments and delinquent Annual Installments, and procedures in connection with the imposition and collection of Assessments should be approved and will expedite collection of the Assessments in a timely manner in order to provide the services and improvements needed and required for the area within the District; and (i) A written notice of the date, hour, place and subject of this meeting of the Town Council was posted at a place convenient to the public for the time required by law preceding this meeting, as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended, and that this meeting has been open to the public as required by law at all times during which this Ordinance and the subject matter hereof has been discussed, considered, and formally acted upon. SECTION 3: Assessment Plan. The Service and Assessment Plan is hereby accepted and approved pursuant to Sections 372.013 and 372.014 of the PID Act as the service plan and the assessment plan for the District. SECTION 4: Assessment Roll. The Assessment Roll is hereby accepted and approved pursuant to Section 372.016 of the PID Act as the Assessment Roll of the District. SECTION 5: Levy and Payment of Special Assessments for Costs of the Authorized Improvements. (a) The Town Council hereby levies an assessment on each tract of property (excluding non -benefitted property) located within the District, as shown and described in the Service and Assessment Plan and the Assessment Roll, in the respective amounts Ordinance 741 Page 4 of 9 shown on the Assessment Roll as a special assessment on the properties set forth in the Assessment Roll. (b) The levy of the Assessments shall be effective on the date of execution of this Ordinance levying Assessments and strictly in accordance with the terms of the Service and Assessment Plan and the PID Act. (c) The collection of the Assessments shall be as described in the Service and Assessment Plan and the PID Act. (d) Each Assessment may be paid in a lump sum at any time or may be paid in Annual Installments pursuant to the terms of the Service and Assessment Plan. (e) Each Assessment shall bear interest at the rate or rates specified in the Service and Assessment Plan. (f) Each Annual Installment shall be collected each year in the manner set forth in the Service and Assessment Plan. (g) The Administrative Expenses for Assessed Properties shall be calculated pursuant to the terms of the Service and Assessment Plan. SECTION 6: Method of Assessment. The method of apportioning the costs of the Authorized Improvements and Administrative Expenses are set forth in the Service and Assessment Plan. SECTION 7: Penalties and Interest on Delinquent Assessments. Delinquent Assessments shall be subject to the penalties, interest, procedures, and foreclosure sales set forth in the Service and Assessment Plan and as allowed by law. The Assessments shall have lien priority as specified in the PID Act and the Service and Assessment Plan. SECTION 8: Prepayments of Assessments. As provided in Section VI(E) of the Service and Assessment Plan, the owner of any Assessed Property may prepay the Assessments levied by this Ordinance. SECTION 9: Lien Priority. As provided in the Landowner Agreement, the Town Council and the Landowners intend for the obligations, covenants and burdens on the landowners of Assessed Property, including without limitation such Landowners' obligations related to payment of the Assessments and the Annual Installments thereof, to constitute covenants that shall run with the land. The Assessments Ordinance 741 Page 5 of 9 and the Annual Installments thereof which are levied hereby shall be binding upon the Assessed Parties, as the owners of Assessed Property, and their respective transferees, legal representatives, heirs, devisees, successors and assigns in the same manner and for the same period as such parties would be personally liable for the payment of ad valorem taxes under applicable law. The Assessments shall have lien priority as specified in the Service and Assessment Plan and the PID Act. SECTION 10: Appointment of Administrator and Collector of Assessments. (a) Appointment of Administrator. MuniCap, Inc., of Columbia, Maryland, is hereby appointed and designated as the initial Administrator of the Service and Assessment Plan and of Assessments levied by this Ordinance. The administrator shall perform the duties of the Administrator described in the Service and Assessment Plan and in this Ordinance. The Administrator's fees, charges and expenses for providing such service shall constitute an Administrative Expense, The Mayor is hereby authorized to execute a PID Administration Services Agreement with MuniCap, Inc. (b) Appointment of Temporary Collector. The Town's Finance Director or other authorized Town official are each hereby authorized to act as the temporary collector of the Assessments (each such Town official is herein referred to as the "Collector"). The Collector shall serve in such capacity until such time as the Town shall arrange for the Collector's duties to be performed by the Tarrant County Tax Assessor, or another qualified collection agent selected by the Town. SECTION 11: Applicability of Tax Code. To the extent not inconsistent with this Ordinance, and not inconsistent with the PID Act or the other laws governing public improvement districts, the provisions of the Texas Tax Code shall be applicable to the imposition and collection of Assessments by the Town. SECTION 12: Filing in Land Records. The Town Secretary is directed to cause a copy of this Ordinance, including the Service and Assessment Plan, to be recorded in the real property records of Tarrant County. The Town Secretary is further directed to similarly file each Annual Service Plan Update approved by the Town Council. SECTION 13: Severability. If any provision, section, subsection, sentence, clause, or phrase of this Ordinance, or the application of same to any person or set of circumstances is for any reason held to be unconstitutional, void, or invalid, the validity of the remaining portions of this Ordinance or the Ordinance 741 Page 6 of 9 application to other persons or sets of circumstances shall not be affected thereby, it being the intent of the Town Council that no portion hereof, or provision or regulation contained herein shall become inoperative or fail by reason of any unconstitutionality, voidness, or invalidity or any other portion hereof, and all provisions of this ordinance are declared to be severable for that purpose. SECTION 14: Effective Date. This Ordinance shall take effect, and the levy of the Assessments and the provisions and terms of the Service and Assessment Plan shall be and become effective upon passage and execution hereof. However, the Service and Assessment Plan and this Ordinance shall automatically terminate if bonds secured by the Assessments are not issued by the Town on or before January 15, 2016. Ordinance 741 Page 7 of 9 PASSED AND APPROVED ON THIS THE 15TH DAY OF JANUARY, 2015. ATTEST: Kelly Edwa s, Town Secretary APPROVED AS TO FORM: L. Stanton Lowry, Town Attorney Laura L. Wheat, Mayor Thomas E. Brymer, o n Manager Ordinance 741 Page 8 of 9 PASSED AND APPROVED ON THIS THE 15TH DAY OF JANUARY, 2015. ATTEST: Kelly Edwards, Town Secretary Laura L. Wheat, Mayor Thomas E. Brymer, Town Manager Ordinance 741 Page 8 of 9 Exhibit A Service and Assessment Plan Ordinance 741 Page 9 of 9 SOLANA PUBLIC IMPROVEMENT DISTRICT SERVICE AND ASSESSMENT PLAN JANUARY 15, 2015 MuniCap Inc. v62.1 SOLANA PUBLIC IMPROVEMENT DISTRICT SERVICE AND ASSESSMENT PLAN Table of Contents Section I Plan Description and Defined Terms 1 Section II Property Included in the PID 7 Section III Description of Authorized Improvements 9 Section N Service Plan 13 Section V Assessment Plan 16 Section VI Terms of the Assessments 23 Section VII Assessment Roll 29 Section VIII Miscellaneous Provisions 30 List of Appendix Appendix A The PID Map Appendix B Estimated Costs of the Authorized Improvements Appendix C Diagrams of the Authorized Improvements Appendix D Land Use Class, Equivalent Units and Allocation of Assessment Part A Appendix E Assessment Rolls MuniCap, Inc. v6.2.1 Section I PLAN DESCRIPTION AND DEFINED TERMS A. Introduction On February 24, 2014, (the "Creation Date") the Town of Westlake Town Council ("Town Council") passed Resolution No. 14-07 approving and authorizing the creation of the Solana Public Improvement District (the "PID") to finance the costs of certain public improvements for the benefit of property in the PID, all of which is located within the boundaries of the Town of Westlake, Texas ("Town"). Upon application of the current property owners, the property within the PID was zoned by Ordinance No. 703 (the "Zoning Ordinance") adopted by the Town on April 22, 2013, as amended and including all required approvals. The Zoning Ordinance designates the type of land uses that are permitted within the project and includes development standards for each land use type. Chapter 372 of the Texas Local Government Code, "the Public Improvement Assessment Act" (as amended, the "PID Act"), governs the creation and operation of public improvement districts within the State of Texas. This Service and Assessment Plan has been prepared pursuant to the PID Act and specifically Sections 372.013, 372.014, 372.015 and 372.016, which address the requirements of a service and assessment plan and the assessment roll. According to Section 372.013 of the PID Act, a service plan "must cover a period of at least five years and must also define the annual indebtedness and the projected costs for improvements. The plan shall be reviewed and updated annually for the purpose of determining the annual budget for improvements." The service plan is described in Section IV of this Service and Assessment Plan. Section 372.014 of the PID Act states that "an assessment plan must be included in the annual service plan." The assessment plan is described in Section V of this Service and Assessment Plan. Section 372.015 of the PID Act states that "the governing body of the municipality or county shall apportion the cost of an improvement to be assessed against property in an improvement district." The method of assessing the PID Costs (herein after defined) and apportionment of such costs to the property in the PID is included in Section V of this Service and Assessment Plan. Section 372.016 of the PID Act states that "after the total cost of an improvement is determined, the governing body of the municipality or county shall prepare a proposed assessment roll. The roll must state the assessment against each parcel of land in the district, as determined by the method of assessment chosen by the municipality or county under this subchapter." The Assessment Rolls for the PID are included as Appendix E of this Service and Assessment Plan. The Assessments as shown on the Assessment Rolls are based on the method of assessment and apportionment of costs described in Section V of this Service and Assessment Plan. B. Definitions Capitalized terms used herein shall have the meanings ascribed to them as follows: "Actual Cost(s)" means, with respect to an Authorized Improvement, the demonstrated, reasonable, allocable, and allowable costs of constructing such Authorized Improvement, as specified in a Certification for Payment that has been reviewed and approved by the Town. Actual Cost may include but are not limited to (a) the costs for the design, planning, financing, administration, management, acquisition, installation, construction and/or implementation of such Authorized Improvement, including general contractor construction management fees, if any, (b) the costs of preparing the construction plans for such Authorized Improvement, (c) the fees paid for obtaining permits, licenses or other governmental approvals for such Authorized Improvement, (d) the costs for external professional costs associated with such Authorized Improvement, such as engineering, geotechnical, surveying, land planning, architectural landscapers, advertising, marketing and research studies, appraisals, legal, accounting and similar professional services, taxes (property and franchise) (e) the costs of all labor, bonds and materials, including equipment and fixtures, incurred by contractors, builders and material men in connection with the acquisition, construction or implementation of the Authorized Improvements, (f) all related permitting, zoning and public approval expenses, architectural, engineering, legal, and consulting fees, financing charges, taxes, governmental fees and charges (including inspection fees, County permit fees, development fees), insurance premiums, miscellaneous expenses, and all advances and payments for Administrative Expenses. Actual Costs include general contractor's fees in an amount up to a percentage equal to the percentage of work completed and accepted by the City or construction management fees in an amount up to five percent of the eligible Actual Costs described in a Certification for Payment (and subject to approval by the Town). General contractor's fees and construction management fees shall be budgeted in the project budget and itemized on each submittal on a payment request; and the amounts expended on legal costs, taxes, governmental fees, insurance premiums, permits, financing costs, and appraisals shall be excluded from the base upon which the general contractor and construction management fees are calculated. "Administrator" means the employee or designee of the Town who shall have the responsibilities provided for herein, in the Trust Indenture related to Bonds issued for the PID or otherwise approved by the Town Council. "Administrative Expenses" mean the costs associated with or incident to the administration, organization, maintenance and operation of the PID, including, but not limited to, the costs of (i) creating and organizing the PID, including conducting hearings, preparing notices and petitions, and all costs incident thereto, engineering fees, legal fees and consultant fees, (ii) the annual administrative, organization, maintenance, and operation costs and expenses associated with, or incident and allocable to, the administration, organization, maintenance and operation of the PID and the Authorized Improvements, (iii) computing, levying, billing and collecting Assessments or the installments thereof, (iv) maintaining the record of installments of the Assessments and the system of registration and transfer of the Bonds, (v) paying and redeeming the Bonds, (vi) investing or depositing of monies, (vii) complying with the PID Act and codes with respect to the Bonds, (viii) Trustee fees and expenses relating to the Bonds, (ix) legal counsel, engineers, accountants, financial advisors, investment bankers or other consultants and advisors providing services related to the Bonds, and (x) administering the construction of the Authorized Improvements. Administrative Expenses do not include payment of the actual principal of, redemption premium, and interest on the Bonds. Amounts collected in conjunction with Annual 2 Installments for Administrative Expenses and not expended for actual Administrative Expenses shall be carried forward and applied to reduce Administrative Expenses in subsequent years to avoid the over -collection of Administrative Expenses. "Annual Installment" means, with respect to each Parcel, each annual payment of. (i) the Assessments, including any applicable interest, as shown on the Assessment Rolls attached hereto as Appendix E, as applicable, or in an Annual Service Plan Update, and calculated as provided in Section VI of this Service and Assessment Plan, (ii) Administrative Expenses, (iii) the prepayment reserve described in Section IV of this Service and Assessment Plan, and (iv) the delinquency reserve as described in Section IV of this Service and Assessment Plan. "Annual Installment Part A" means, with respect to each Parcel, each annual payment of: (i) the Assessment Part A, including any applicable interest, as shown on the Assessment Roll attached hereto as Appendix E, as applicable, or in an Annual Service Plan Update, and calculated as provided in Section VI of this Service and Assessment Plan, (ii) Administrative Expenses, (iii) the prepayment reserve described in Section V of this Service and Assessment Plan, and (iv) the delinquency reserve as described in Section V of this Service and Assessment Plan. "Annual Installment Part B" means, with respect to each Parcel, each annual payment of: (i) the Assessment Part B, including any applicable interest, as shown on the Assessment Roll attached hereto as Appendix E, as applicable, or in an Annual Service Plan Update, and calculated as provided in Section VI of this Service and Assessment Plan, (ii) Administrative Expenses, (iii) the prepayment reserve described in Section V of this Service and Assessment Plan, and (iv) the delinquency reserve as described in Section V of this Service and Assessment Plan. "Annual Service Plan Update" has the meaning set forth in the first paragraph of Section IV of this Service and Assessment Plan. "Assessed Property" means the property within the PID that benefits from the Authorized Improvements, as determined by the Town Council, on which Assessments have been imposed as shown in the Assessment Rolls, as the Assessment Rolls are updated each year by the Annual Service Plan Update. Assessed Property includes all Parcels within the PID other than Non - Benefited Property. "Assessment" means the assessment(s) levied against Parcels within the PID imposed pursuant to the Assessment Ordinance and the provisions herein as shown on the Assessment Rolls, subject to reallocation upon the subdivision of such Parcel or reduction according to the provisions herein and the PID Act. "Assessment Ordinance" means an Ordinance adopted by the Town Council approving the Service and Assessment Plan (including updates, amendments or supplements to the Service and Assessment Plan) and levying the Assessments. "Assessment Part All means the portion of the Assessments levied for Improvement Project A as shown in the Assessment Rolls. 3 "Assessment Part B" means the portion of the Assessments levied for Improvement Project B as shown in the Assessment Rolls, as may be updated in the Annual Service Plan Updates. "Assessment Revenues" mean the revenues actually received by the Town from Assessments. "Assessment Roll" means an assessment roll included in Appendix E of this Service and Assessment Plan, as it may be updated, amended, or replaced by a supplement to this Service and Assessment Plan or an Annual Service Plan Update. "Authorized Improvements" mean those public improvements described in Section III and Appendix B of this Service and Assessment Plan and any future updates and/or amendments. "Authorized Improvement Costs" mean the actual or budgeted costs, as applicable, of all or any portion of the Authorized Improvements, as described in Section III and shown in Appendix B, as these costs may be updated from time to time. "Bonds" mean any bonds issued by the Town in one or more series and secured by the Assessment Revenues. "Bond Indenture" means the indenture, ordinance or similar document setting forth the terms and other provisions relating to the Bonds, as modified, amended, or supplemented from time to time. "Certification for Payment" means the document to be provided by the Developer tc substantiate the Actual Cost of one or more Authorized Improvements, as approved by the Town. "Delinquent Collection Costs" mean interest, penalties and expenses incurred or imposed with respect to any delinquent installment of an Assessment in accordance with the PID Act and the costs related to pursuing collection of a delinquent Assessment and foreclosing the lien against the Assessed Property, including attorney's fees. "Developer" means Maguire Partners — Solana Land, L.P. "Equivalent Units" mean, as to any Parcel, the number of dwelling units by Land Use Class or non-residential development by type expected to be built on the Parcel multiplied by the factors calculated and shown in Appendix D attached hereto, as Appendix D may be updated by an Annual Service Plan Update. "Improvement Area #I" means the area of the PID to be improved by Improvement Project A and Improvement Project B, consisting of the property shown within Improvement Area #1 on Appendix A, and commonly referred to as the Mixed -Use Core. "Improvement Area #2" means the area of the PID to be improved by Improvement Project A, consisting of the property shown within Improvement Area #2 on Appendix A, and commonly referred to as West Residential. 4 "Improvement Area #3" means the area of the PID to be improved by Improvement Project A, consisting of the property shown within Improvement Area #3 on Appendix A and commonly referred to as East Residential. "Improvement Area #1 Assessed Property" means the property within the PID that benefits from the Improvement Project A and Improvement Project B as determined by the Town Council on which Assessments Part A and Assessments Part B have been imposed as shown in the Assessment Roll, as the Assessment Roll is updated each year by the Annual Service Plan Update. Improvement Area #1 Assessed Property includes all Parcels within Improvement Area #1 of the PID other than Non -Benefited Property. "Improvement Area #2 Assessed Property" means the property within the PID that benefits from the Improvement Project A as determined by the Town Council on which Assessments Part A have been imposed as shown in the Assessment Roll, as the Assessment Roll is updated each year by the Annual Service Plan Update. Improvement Area #2 Assessed Property includes all Parcels within Improvement Area #2 of the PID other than Non -Benefited Property. "Improvement Area #3 Assessed Property" means the property within the PID that benefits from the Improvement Project A as determined by the Town Council on which Assessments Part A have been imposed as shown in the Assessment Roll, as the Assessment Roll is updated each year by the Annual Service Plan Update. Improvement Area #3 Assessed Property includes all Parcels within Improvement Area #3 of the PID other than Non -Benefited Property. "Improvement Project A" means the Authorized Improvements described as such in Section III and shown in Appendix B of this Service and Assessment Plan and any future updates and/or amendments. "Improvement Project B" means the portion of the Authorized Improvements described as such in Section III and shown in Appendix B of this Service and Assessment Plan and any future updates and/or amendments. "Land Use Class" means a classification of property with similar characteristics regarding the intended use of the property (e.g., residential, retail, office, hotel, etc.), as allowed by the Zoning Ordinance. "Lot" means a tract of land described as a "lot" in a subdivision plat recorded in the official public records of Tarrant County, Texas. "Non -Benefited Property" means Parcels within the boundaries of the PID that accrue no special benefit from the Authorized Improvements, as determined by the Town Council, including Property Owner Association Property, public property and easements that create an exclusive use for a public utility provider. Property identified as Non -Benefited Property at the time the Assessments (i) are imposed or (ii) are reallocated pursuant to a subdivision of a Parcel, is not assessed. Assessed Property converted to Non -Benefited Property, if the Assessments may not be reallocated pursuant to the provisions herein, remains subject to the Assessments and requires the Assessments to be prepaid as provided for in Section VI. C. 2. "Parcel" or "Parcels" means a parcel or parcels within the PID identified by either a tax map identification number assigned by the Tarrant Central Appraisal District for real property tax purposes or by lot and block number in a final subdivision plat recorded in the real property records of Tarrant County. "PID" has the meaning set forth in Section LA of this Service and Assessment Plan. "PID Act" means Texas Local Government Code Chapter 372, Public Improvement Assessment Act, Subchapter A, Public Improvement Districts, as amended. "PID Costs" means the Administrative Expenses and the Authorized Improvement Costs "Prepayment Costs" mean interest and expenses to the date of prepayment, plus any additional expenses related to the prepayment, reasonably expected to be incurred by or imposed upon the Town as a result of any prepayment of an Assessment. "Property Owners' Association" means that mandatory association of all property owners in the PID other than owners only of non -benefitted property, which shall be responsible for the operation and maintenance of the Property Owner's Association Property, public infrastructure, and the right-of-ways. "Property Owner Association Property" means property within the boundaries of the PID that is owned by or dedicated to, whether in fee simple or through an exclusive use easement, a property owners' association. All Property Owner Association Property will be identified on approved plats. "Property Owner Association Property — Public Access" means property (as shown in Exhibit_) within the boundaries of the PID that is owned or dedicated to, whether in fee simple or through an exclusive use easement, a property owners' association and that allows public access through public access easements or similar instruments. "Public Property" means property within the boundaries of the PID that is owned by or irrevocably offered for dedication to the federal government, the State of Texas, Tarrant County, the Town, a school district or any other public agency, whether in fee simple, through dedication by plat, or through an exclusive use easement. "Service and Assessment Plan" means this Service and Assessment Plan prepared for the PID pursuant to the PID Act, as the same may be amended from time to time. "Town" means the Town of Westlake, Texas. "Town Council" means the duly elected governing body of the Town. "Trustee" means the fiscal agent or trustee as specified in the Trust Indenture, including a substitute fiscal agent or trustee. "Zoning Ordinance" has the meaning set forth in Section I.A of this Service and Assessment Plan. 101 Section II PROPERTY INCLUDED IN THE PID Property Included in the PID The PID is presently located within the Town and contains approximately 85 acres of land. A map of the property within the PID is shown on Appendix A to this Service and Assessment Plan. At completion, the PID is expected to consist of approximately 322 residential units, approximately 1,158,299 square feet of commercial development, landscaping, and infrastructure necessary to provide roadways, drainage, and utilities for the property in the PID. The estimated number of lots and the classification of each lot are based upon the Zoning Ordinance. The property within the PID is proposed to be developed as follows: Table II -A Proposed Development The current Parcels in the PID are shown on the Assessment Roll included as Appendix E and the map included as Appendix A. Improvement Improvement Improvement Area #1 Area #2 Area #3 Planned Unit of Planned Unit of Planned Unit of No. of Measure No. of Measure No. of Measure Proposed Development Type Units Units Units Residential Condo Units (more than 3,600 sq. ft) 38 Units 0 Units 0 Units Condo Units (2,500 to 3,600sq. ft) 71 Units 0 Units 0 Units Condo Units (1,800 to 2,500 sq. ft) 6 Units 0 Units 0 Units Villa - West (more than 3,600 sq. ft) 0 Units 42 Units 0 Units Villa - West (2,500 to 3,600sq. ft) 0 Units 16 Units 0 Units Villa - West (1,800 to 2,500 sq. ft) 0 Units 69 Units 0 Units Villa - East (more than 3,600 sq. ft) 0 Units 0 Units 21 Units Villa - East (2,500 to 3,600sq. ft) 0 Units 0 Units 23 Units Villa - East 1,800 to 2,500 sq. ft 0 Units 0 Units 36 Units Subtotal - Residential 115 Units 127 Units 80 Units Commercial Commercial - Retail 372,099 Sq. Ft 0 Sq. Ft 0 Sq. Ft Commercial - Office 266,100 Sq. Ft 0 Sq. Ft 0 Sq. Ft Commercial - Hospitality 255,500 Sq. Ft 0 Sq. Ft 0 Sq. Ft Commercial - Institutional 264,600 SLFt:: 0 Sq. Ft 0 Sq. Ft Subtotal — Commercial 1,158,299 S_q____L Sq. Ft 0 Sq. Ft The current Parcels in the PID are shown on the Assessment Roll included as Appendix E and the map included as Appendix A. The estimated number of units at the build -out of the PID is based on the land use approvals for the property, the anticipated subdivision of property in the PID, and the Developer's estimate of the highest and best use of the property within the PID subject to the land use approvals. Section III DESCRIPTION OF THE AUTHORIZED IMPROVEMENTS A. Authorized Improvements Overview Section 372.003 of the PID Act defines the improvements that may be undertaken by a municipality or county through the establishment of a public improvement district, as follows: 372.003. Authorized Improvements (a) If the governing body of a municipality or county finds that it promotes the interests of the municipality or county, the governing body may undertake an improvement project that confers a special benefit on a definable part of the municipality or county or the municipality's extraterritorial jurisdiction. A project may be undertaken in the municipality or county or the municipality's extraterritorial jurisdiction. (b) A public improvement may include, among others: (i) landscaping; (ii) erection of fountains, distinctive lighting, and signs; (iii) acquiring, constructing, improving, widening, narrowing, closing, or rerouting of sidewalks or of streets, any other roadways, or their rights -of way; (iv) construction or improvement of pedestrian malls; (v) acquisition and installation of pieces of art; (vi) acquisition, construction, or improvement of libraries; (vii) acquisition, construction, or improvement of off-street parking facilities; (viii) acquisition, construction, or improvement of water, wastewater, or drainage facilities or improvements; (ix) the establishment or improvement of parks; (x) projects similar to those listed in Subdivisions (i) -(x); (xi) acquisition, by purchase or otherwise, of real property in connection with an authorized improvement; (xii) special supplemental services for improvement and promotion of the district, including services relating to advertising, promotion, health and sanitation, water and wastewater, public safety, security, business recruitment, development, recreation, and cultural enhancement; and (xiii) payment of expenses incurred in the establishment, administration and operation of the district. 7 After analyzing the public improvement projects authorized by the PID Act, the Town has determined that the Authorized Improvements as described in Appendix B and shown on the diagrams included as Appendix C should be undertaken by the Town for the benefit of the property within the PID. B. Description of the Authorized Improvements The Authorized Improvements are described below. The costs of the Authorized Improvements are shown in Table III -A. The costs shown in Table III -A are estimates and may be revised in Annual Service Plan Updates, including such other improvements as deemed necessary to further improve the properties within the PID. Improvement Pro'ect A The Authorized Improvements to be constructed as Improvement Project A include roadway improvements, water distribution system improvements, storm sewer collection system improvements, wastewater collection system improvements and landscaping & public park improvements that will provide service to the property intended for development within the PID. The Authorized Improvements benefit all of the property within Improvement Area #1, Improvement Area #2 and Improvement Area #3. As a result, Improvement Project A benefits all of the property within the PID proposed for development. Road Improvements The roadway improvements include approximately 49,116 SY of 6 -inch reinforced concrete pavement, 34,506 SY of 8 -inch reinforced concrete pavements, 89,500 SY of 8 -inch treated sub - grade compacted to 95% SPD, striping, street signage and signals, turn lanes and bridges. A detailed description of the roadway improvements and the related costs are provided in the engineering cost estimates included as Appendix B. All roadway improvements will be constructed according to the Town requirements. See Table III -A for cost details. Water Distribution System Improvements The water distribution system improvements consist of approximately 15,640 linear feet of 12 - inch water lines, approximately 6,149 linear feet of 8 -inch water lines, fire hydrants and trench safety procedures. A detailed description of the water distribution system improvements and the related costs are provided in the engineering cost estimates included as Appendix B. All water distribution system improvements will be constructed according to the Town requirements. This development will be served in its entirety by the Town for all water and sewer services. See Table III -A for cost details. Sanitarp Sewer Improvements The sanitary sewer collection system improvements consist of approximately 14,554 linear feet of 8 -inch PVC, including sewer laterals, manholes and trench safety procedures. A detailed description of the sanitary sewer collection system improvements and the related costs are provided in the engineering cost estimates included as Appendix B. All sanitary sewer collection 10 system improvements will be constructed according to the Town requirements. See Table III -A for cost details. Storm Drainage Improvements The storm sewer collection system improvements consist of approximately 6,014 linear feet of various sized RCP pipes, manholes, junction boxes, inlets, headwalls and trench safety procedures. A detailed description of the storm sewer collection system improvements and the related costs are provided in the engineering cost estimates included as Appendix B. All storm sewer collection system improvements will be constructed according to the Town requirements. See Table III -A for cost details. Landscaping Landscaping, which includes public park improvements, include the creation of a 12 -acre central lake, vineyards, trees, rubble stone walls and pathways on approximately nine acres, installation of over 21/2 miles of 8-12' wide concrete paths with seating areas, public art and public lighting details, including bollards, gathering area lighting and street lighting. All landscaping improvements will be constructed according to the Town requirements. See Table III -A for cost details. The water and sanitary sewer improvements listed above help create the grid for the water line system and the sanitary sewer collection system for the property. The storm sewer improvements collect and control the runoff created on each Parcel and conveys this runoff to the large central lake, which also serves as a storm water detention pond for the property in the PID. The road improvements provide for the traffic circulation within the property, allowing access to and from the adjacent roadways to each Parcel. Duct Bank Extension The duct bank extension improvements include 4,955 linear feet of double conduit with pull boxes and 13,891 linear feet of single conduit with pull boxes that runs parallel to the street network and to be used by franchise utilities such as cable and fiber. Improvement Project B The Authorized Improvements to be constructed as Improvement Project B include a parking structure with approximately 440 parking spaces. Improvement Project B will provide service to the property intended for development with the PTD. These Authorized Improvements benefit all of the property within Improvement Area #1. As shown in the map on Appendix A, the Improvement Area #1 boundary covers a portion of the property in the PID. As a result, Improvement Project B benefits the property within Improvement Area #1 of the PID proposed for development. 11 Table III -A Estimated Authorized Improvement Costs Authorized Improvements Improvement Project A Improvement Project B Total Estimated Costs Road improvements $4,389,900 $0 $4,389,900 Water distribution system improvements $1,061,720 $0 $1,061,720 Sanitary sewer collection system improvements $1,881,296 $0 $1,881,296 Storm sewer collection system improvements $1,733,872 $0 $1,733,872 Landscaping improvements $1,830,501 $0 $1,830,501 Duct bank improvements $733,954 $0 $733,954 Other costs (See Appendix B for details) $8,694,755 $0 $8,694,755 Parking facili improvements $0 $6,160,000 $6,160,000 Total — Estimated Authorized Improvement Costs $2013252998 $6,160,000_ $26 455,998 The detailed cost estimates are provided as Appendix B to this Service and Assessment Plan. The costs shown in Table Ill -A are current estimates and may be revised in Annual Service Plan Updates. Savings from one line item may be applied to a cost increase of an Authorized Improvement in another line item, to construct additional Authorized Improvements or to pay debt service on the Bonds, as determined by the Town. 12 Section IV SERVICE PLAN A. Sources and Uses of Funds The PID Act requires the service plan to cover a period of at least five years. The service plan is required to define the annual projected costs and indebtedness for the Authorized Improvements undertaken within the PID during the five year period. It is anticipated that it will take approximately 24 to 36 months for Improvement Project A to be constructed. The Authorized Improvement Costs of Improvement Project A and Improvement Project B, including costs related to the issuance of the Bonds and payment of expenses incurred in the establishment, administration and operation of the PID, are estimated at $36,390,000 as shown in Table IV -A. Improvement Project A is anticipated to be funded with the Series 2015 Bonds and a Reimbursement Agreement in the total amounts of $26,175,000 and $3,400,000, respectively, as shown in Table IV -A. Improvement Project B is anticipated to be funded in the total amount of $2,425,000, which shall be funded through a deferred Assessment Part B, as shown in Table IV -A. The service plan shall be reviewed and updated at least annually for the purpose of determining the annual budget for Administrative Expenses, updating the estimated Authorized Improvement costs, and updating the Assessment Rolls. Any update to this Service and Assessment Plan is herein referred as an "Annual Service Plan Update." Table IV -A summarizes the estimated sources and uses of funds required to construct the Authorized Improvements, establish the PID, and issue the Bonds. The sources and uses of funds shown in Table V-A shall be updated each year in the Annual Service Plan Update to reflect any changes including budget revisions and Actual Costs. The Bonds shown in Table IV -A (the "Series 2015 Bonds") are anticipated to be issued starting early 2015 and will be used to pay and/or reimburse the Developer for a portion of Improvement Project A. The remaining costs of Improvement Project A will be financed through a Reimbursement Agreement dated as of January 15, 2015 (the "Reimbursement Agreement"), which is anticipated to be replaced by one or more series of future Bonds ("Future Bonds"). The Future Bonds are anticipated to be issued in 2017 after some or all of the Authorized Improvements are constructed and will be used to replace the Town's obligations under the Reimbursement Agreement to reimburse the Developer for the remaining portion of the costs of the Authorized Improvements. 13 Table IV -A Estimated Sources and Uses B. Annual Projected Costs and Annual Projected Indebtedness The annual projected costs and annual projected indebtedness is shown by Table W -B. The annual projected costs and indebtedness are subject to revision and each shall be updated in the Annual Service Plan Update to reflect any changes in the costs or indebtedness expected for each year. 14 Deferred Series 2015 Reimbursement Assessment Total Bonds Agreement Part B Estimated Improvement Improvement Improvement Authorized Sources of Funds Project A Project A Project B Improvements Estimated Bond par amount $26,175,000 $3,400,000 $2,425,000 $32,000,000 Developer funds $0 $0 $4,390,000 $4,390,000 $26175,000 $334009000 $69815,000 $36,390,000 Total Sources Uses of Funds Authorized Improvements Road improvements $3,767,430 $622,470 $0 $4,389,900 Water distribution system improvements $890,040 $171,680 $0 $1,061,720 Sanitary sewer improvements $1,531,196 $350,100 $0 $1,881,296 Storm drainage improvements $1,154,306 $579,566 $0 $1,733,872 Landscaping improvements $1,830,501 $0 $0 $1,830,501 Duct bank improvements $640,304 $93,650 $0 $733,954 Other costs (See Appendix B) $8,120,860 $573,896 $0 $8,694,755 Parking facility improvement $0 $0 $6,160,000 $6,160,000 $17,934,637 $2,391,362 $61160,000 $26,485,998 Subtotal Bond issue costs Capitalized interest $3,216,750 $218,620 $170,000 $3,605,370 Debt service reserve $2,074,313 $340,000 $242,500 $2,656,813 Other Bond issuance related costs $2,949,301 $450,018 $242,500 $3,641,819 $8,240,364 $1,008,638 $655,000 $9,904,002 Subtotal Total Uses $26,175,000 $3,400,000 $6,815,000 $36,390,000 B. Annual Projected Costs and Annual Projected Indebtedness The annual projected costs and annual projected indebtedness is shown by Table W -B. The annual projected costs and indebtedness are subject to revision and each shall be updated in the Annual Service Plan Update to reflect any changes in the costs or indebtedness expected for each year. 14 Table IV -B Annual Projected Costs and Annual Projected Indebtedness Year Annual Projected Cost Annual Projected Indebtedness Sources other than PID Bonds 2014 $0 $0 $0 $26,175,000 $26,175,000 $0 $0 $0 $0 L $3,400,000 $3,400,000 $0 $6,815,000 $2,425,000 $4,390,000 $36,390,000 $32,000,000 $4,390,000 The annual projected costs shown in Table IV -B are the annual expenditures relating to the Authorized Improvement Costs shown in Table III -A, including costs associated with setting up the PID and Bond issuance costs, shown in Table IV -A. The difference between the total projected cost and the total projected indebtedness is the amount contributed by the Developer. The Town obtained an estimate of the cost of the Authorized Improvements, specifically, the parking garage, and an estimate of the appraised value of the property within the PID. As a result, the Town may, in compliance with the PID Act, in the Assessment Ordinance, defer the levy of an assessment to pay for the parking garage until a future date, specifically, at the date that the Town gives its final approval to a site plan and construction drawings for the construction of the Parking Garage. The estimated costs and related indebtedness for Improvement Project B are not shown in Table IV -B as a result of the Assessment Part B deferral. C. Maintenance of the Authorized Improvements Administrative and operation expenses of the PID shall include the expenses of maintaining and repairing the Authorized Improvements other than the water distribution system improvements, sanitary system improvements and duct bank extension in order to operate and maintain the applicable Authorized Improvements in a manner consistent with the Town's standards for maintenance of similar public improvements throughout the Town and as further described in the Development Agreement with the Developer dated as of January 15, 2015. The Town shall be responsible for the maintenance and repair expenses of the water distribution system improvements, sanitary system improvements and duct bank extension. The Annual Installments may include in Administrative Expenses a Maintenance Assessment as described in V.C.3 to pay such expenses. The Town may enter into an agreement (a "Maintenance Agreement") with a Property Owners' Association ("POA") wherein the POA agrees to operate, maintain and repair the applicable Authorized Improvements in accordance with the standards set forth in the Maintenance Agreement. In the event the POA fails to operate, maintain and repair the applicable Authorized Improvements in accordance with the standards set forth in the Maintenance Agreement, the Town may operate, maintain and repair the applicable Authorized Improvements or contract with another third party to operate, maintain and repair the applicable Authorized Improvements. 15 Section V ASSESSMENT PLAN A. Introduction The PID Act requires the Town Council to apportion the PID Costs on the basis of special benefits conferred upon the property because of the Authorized Improvements. The PID Act provides that the PID Costs may be assessed: (i) equally per front foot or square foot; (ii) according to the value of the property as determined by the governing body, with or without regard to improvements on the property; or (iii) in any other manner that results in imposing equal shares of the cost on property similarly benefited. The PID Act further provides that the governing body may establish by ordinance or order reasonable classifications and formulas for the apportionment of the cost between the municipality and the area to be assessed and the methods of assessing the special benefits for various classes of improvements. This section of this Service and Assessment Plan describes the special benefit received by each Parcel within the PID as a result of the Authorized Improvements, provides the basis and justification for the determination that this special benefit exceeds the amount of the Assessments, and establishes the methodologies by which the Town Council allocates and reallocates the special benefit of the Authorized Improvements to Parcels in a manner that results in equal shares of the Actual Costs being apportioned to Parcels similarly benefited. The determination by the Town Council of the assessment methodologies set forth below is the result of the discretionary exercise by the Town Council of its legislative authority and governmental powers and is conclusive and binding on the Developer and all future owners and developers of the Assessed Property. For purposes of this Service and Assessment Plan, the Town Council has determined that the Authorized Improvement Costs shall be allocated to the Assessed Property as described below: The Authorized Improvement Costs for Improvement Project A and Improvement Project B shall be allocated to the Improvement Area #1 Assessed Property, Improvement Area #2 Assessed Property and Improvement Area #3 Assessed Property respectively, on the basis of the total estimated improvement costs that benefit each Improvement Area ("Direct Improvement Costs") and the improvement costs that benefit the entire PID ("Common Improvement Costs), as allocated to each Improvement Area based on the ratio of the Direct Improvement Costs of each Improvement Area, and that such method of allocation will result in the imposition of equal shares of the Authorized Improvement Costs to Parcels similarly benefited. 2. The Town Council has concluded that larger more expensive homes are likely to be built on the larger lots, and that larger more expensive homes are likely to make greater use of and receive greater benefit from the Authorized Improvements. In determining the relative construction costs of Parcels, the Town Council has taken in to consideration (i) the type of development (i.e., residential, commercial, etc), (ii) residential lot sizes and the size of homes likely to be built on lots of different sizes, (iii) current and projected construction costs per square foot as provided by the Developer, (iv) the Authorized Improvements to be provided and the estimated costs, and (v) the ability of different property types to utilize and benefit from the improvements. 16 3. The Assessed Property is classified into different Land Use Classes as described in Appendix D based on the type and size of proposed development on each Parcel. 4. Equivalent Units are calculated for each Land Use Class in each Improvement Area based on the relative average construction cost per unit of each Land Use Class as shown in Appendix D. The average construction cost for each Land Use Class in each Improvement Area is calculated based on the estimated average square feet of each unit of residential Land Use Class or 1,000 square feet of each commercial Land Use Class, as applicable, and the estimated average construction cost per square foot of each Land Use Class. 5. The Authorized Improvement Costs of Improvement Project A and Improvement Project B that benefit the Improvement Area #1 Assessed Property, Improvement Area #2 Assessed Property and Improvement Area #3 Assessed Property, respectively, are proportionally allocated based on the total Equivalent Units estimated for each Parcel of Improvement Area #1 Assessed Property, Improvement Area #2 Assessed Property and Improvement Area #3 Assessed Property. Table V-A provides the estimated allocation of costs of the Authorized Improvements. B. Special Benefit Assessed Property must receive a direct and special benefit from the Authorized Improvements, and this benefit must be equal to or greater than the amount of the Assessments. For the purpose of this Service and Assessment Plan, special benefit means a specific and localized benefit, and a quantifiable amount of benefit, that infrastructure has on a tract of land. An example is a roadway providing a specific benefit to the tracts of land immediately in the vicinity of the roadway, for without its construction, the tracts near a proposed roadway would likely remain underdeveloped. The quantifiable benefit may be expressed as the increased value of the land and improvements located on the land because of the placement of public infrastructure near that land. The Authorized Improvements (more particularly described in line -item format in Appendix B to this Service and Assessment Plan) and the costs of issuance and payment of costs incurred in the establishment of the PID shown in Table IV -A are authorized by the Act. These improvements are provided specifically for the benefit of the Assessed Property. Each owner of the Assessed Property has acknowledged that the Authorized Improvements confer a special benefit on the Assessed Property and has consented to the imposition of the Assessments to pay for the Actual Costs associated therewith. Pursuant to the Landowner's Agreement, each owner of the Assessed Property has ratified, confirmed, accepted, agreed to and approved; (i) the determinations and finding by the Town Council as to the special benefits described in this Service and Assessment Plan and the Assessment Ordinance; (ii) the Service and Assessment Plan and the Assessment Ordinance, and (iii) the levying of Assessments on the Assessed Property. Each of the owners is acting in its interest in consenting to this apportionment and levying of the Assessments because the special benefit conferred upon the Assessed Property by the Authorized Improvements exceeds the amount of the Assessments. The public improvements provide a special benefit to the Assessed Property as a result of the close proximity of these improvements to the Assessed Property and the specific purpose of 17 these improvements of providing infrastructure for the Assessed Property so that the property may be developed as proposed. In other words, the Assessed Property could not be used in the manner proposed without the construction of the Authorized Improvements. The Authorized Improvements are being provided specifically to meet the needs of the Assessed Property as required for the proposed use of the property. The Assessments are being levied to provide the Authorized Improvements that are required for the highest and best use of the Assessed Property (i.e., the use of the property that is most valuable, including any costs associated with that use). Highest and best use can be defined as "the reasonably probable and legal use of property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value." (Dictionary of Real Estate Appraisal, Third Edition.) The Authorized Improvements are expected to be required for the proposed use of the Assessed Property to be physically possible, appropriately supported, financially feasible, and maximally productive. The Developer has evaluated the potential use of the property and has determined that the highest and best use of the property is the use intended and the legal use for the property as described in Section II of this Service and Assessment Plan. The use of the Assessed Property as described herein will require the construction of the Authorized Improvements. The special assessments will repay financing that is on advantageous terms, as the Bonds issued to finance the public improvements will pay interest that is exempt from federal income tax. As a result, all other terms being equal (e.g., maturity, fixed vs. variable rate, risk and credit quality), the tax-exempt bonds will have a lower interest rate than debt that is not tax-exempt. Use of the Assessed Property as described in this Service and Assessment Plan and as authorized by the Zoning Ordinance requires that Authorized Improvements be acquired, constructed, installed, or improved. Funding the Actual Costs through the PID has been determined by the Town Council to be the most beneficial means of doing so. Since the Authorized Improvements are required for the highest and best use of the property, and the PID provides the most beneficial means of financing the Authorized Improvements, the improvements provided by the PID will be equal to or greater than the cost of the Assessments levied on the property. Accordingly, the Assessments result in a special benefit to the Assessed Property, and this special benefit exceeds the amount of the Assessments. This conclusion is based on and supported by the evidence, information, and testimony provided to the Town Council. In summary, the Assessments result in a special benefit to the Assessed Property for the following reasons: The Authorized Improvements are being provided specifically for the use of the Assessed Property and a special benefit to the Assessed Property as a result; 2. The Developer has consented to the imposition of the Assessments for the purpose of providing the Authorized Improvements and the Developer is acting in its interest by consenting to this imposition; 18 3. The Authorized Improvements are required for the highest and best use of the property; 4. The highest and best use of the Assessed Property is the use of the Assessed Property that is most valuable (including any costs associated with the use of the Assessed Property); Financing of the PID Costs by establishing the PID is determined to be the most beneficial means of providing for the Authorized Improvements; and, 6. As a result, the special benefits to the Assessed Property from the Authorized Improvements will be equal to or greater than the Assessments. C. Assessment Methodology C.1 Assessment Part A The Actual Costs of Improvement Project A may be assessed using any methodology that results in the imposition of equal shares of the Actual Costs on the Assessed Property in each Improvement Area similarly benefited. For purpose of this Service and Assessment Plan, the Town Council has determined that the Actual Costs of Improvement Project A to be financed with the Series 2015 Bonds and the Reimbursement Agreement shall be allocated to the Improvement Area #1 Assessed Property by spreading the entire Assessment Part A across the Parcels based on the estimated Equivalent Units as calculated and shown in Appendix D using the types and number of lots anticipated to be developed on each Parcel of the Improvement Area #1 Assessed Property, Improvement Area #2 Assessed Property and Improvement Area #3 Assessed Property. As part of the determination as to the ability of different Land Use Classes to utilize and benefit from the Authorized Improvements, the Town Council has taken into consideration that larger, more expensive homes, on average, will create more vehicle trips and greater demands for water and wastewater consumption, and larger, more expensive homes are likely to be built on larger, more valuable lots. Based on the estimates of the costs of Improvement Project A that benefit the Assessed Property in all Improvement Areas, as provided by G&A Consultants, LLC., and set forth in Table III -A, the Town Council has determined that the benefit to the Assessed Property in each Improvement Area, is at least equal to the Assessment Part A levied on the Assessed Property in each Improvement Area. The Assessment Part A and Annual Installment Part A for each Parcel or Lot of the Assessed Property in each Improvement Area are shown on the Assessment Rolls, attached as Appendix E, and no Assessment Part A shall be changed except as authorized by this Service and Assessment Plan or the PID Act. Upon subdivisions of any Parcel, the Assessment Part A applicable to a Parcel will be apportioned pro rata to the resulting Parcels based on the Equivalent Units of each newly created Parcel. For residential Lots, when final residential building sites are platted, Assessment Part A will be apportioned proportionately among each Land Use Class based on the ratio of the Equivalent Unit applicable to each Land Use Class at the time Lots are platted to the total Equivalent Units of all Lots in the platted Parcel, as determined by the Administrator and confirmed by the Town Council. The result of this approach is that each final Lot within a recorded subdivision plat with similar values will have the same Assessment Part A, with larger, 19 more valuable Lots having a proportionately larger share of the Assessments than smaller, less valuable Lots. The detailed calculation of the Equivalent Units and allocation of Assessment Part A to each Improvement Area is shown in Appendix D. Table V-A below sets forth a summary of Assessment Part A per unit for each of the Land Use Classes in each Improvement Area of the PID. Table V-A Assessment Part A per Unit C.2 Assessment Part B The Actual Costs of Improvement Project B may be assessed using any methodology that results in the imposition of equal shares of the Actual Costs on Improvement Area #1 Assessed Property similarly benefited. The Town obtained an estimate of the cost of the Authorized Improvements, specifically, the parking garage, and an estimate of the appraised value of the property within the PID. As a result, the Town may, in compliance with the PID Act, in the Assessment Ordinance, defer the levy of an assessment to pay for the parking garage until a future date, specifically, at the date that the Town gives its final approval to a site plan and construction drawings for the construction of the Parking Garage. The methodology for allocating Assessment Part B to each 20 Assessment Planned Part A per Equivalent Total No. of Equivalent Unit Assessment Type Units Unit Factor Assessment Part A per Unit Part A Improvement Area #1 Land Use Class 1 38 $58,797.94 1.00 $58,797.94 per dwelling unit $2,234,321.65 Land Use Class 2 71 $58,79794 0.62 $36,454.72 per dwelling unit $2,588,285.24 Land Use Class 3 6 $58,797.94 0.60 $35,278.76 per dwelling unit $211,672.58 Land Use Class 10 372.10 $58,797.94 0.22 $12,93555 per 1,000 Sq. Ft $4,813,303.88 Land Use Class 11 266.10 $58,797.94 0.20 $11,759.59 per 1,000 Sq. Ft $3,129,226.27 Land Use Class 12 255.50 $58,797.94 0.21 $12,347.57 per 1,000 Sq. Ft $3,154,803.37 Land Use Class 13 264.60 $58,797.94 0.19 $11,171.61 per 1,000 Sq. Ft $2,956,007.55 Subtotal: Improvement Area #1 $19,087,620.54 Improvement Area #2 Land Use Class 4 42 $63,349.00 1.00 $63,349.00 per dwelling unit $2,660,658.15 Land Use Class 5 16 $63,349.00 0.68 $43,077.32 per dwelling unit $689,237.16 Land Use Class 6 69 $63,349.00 0.52 $32,941.48 per dwelling unit $2,272,962.25 Subtotal: Improvement Area #2 $5,622,857.55 Improvement Area #3 Land Use Class 7 21 $86,189.26 1.00 $86,189.26 per dwelling unit $1,809,974.49 Land Use Class 8 23 $86,189.26 0.68 $58,608.70 per dwelling unit $1,348,000.05 Land Use Class 9 36 $86,189.26 0.52 $47,404.09 per dwelling unit $1,706,547.37 Subtotal: Improvement Area #3 $4,864,521.90 Grand Total Assessment Part A $29,575,000.00 C.2 Assessment Part B The Actual Costs of Improvement Project B may be assessed using any methodology that results in the imposition of equal shares of the Actual Costs on Improvement Area #1 Assessed Property similarly benefited. The Town obtained an estimate of the cost of the Authorized Improvements, specifically, the parking garage, and an estimate of the appraised value of the property within the PID. As a result, the Town may, in compliance with the PID Act, in the Assessment Ordinance, defer the levy of an assessment to pay for the parking garage until a future date, specifically, at the date that the Town gives its final approval to a site plan and construction drawings for the construction of the Parking Garage. The methodology for allocating Assessment Part B to each 20 Parcel in Improvement Area #1 will be provided as part of an Annual Service Plan Update at the Assessment Part B is levied. C.3 Maintenance Assessment The annual Maintenance Assessment may be assessed using any methodology that results in the imposition of equal shares of the Maintenance Assessment on Assessed Property similarly benefited. For purpose of this Service and Assessment Plan, the Town Council has determined that the Maintenance Assessment to be collected in any given year shall be allocated to each Improvement Area based on a ratio of the total Equivalent Units for each Improvement Area. In recognition of the higher traffic generated by the non-residential Land Use Classes in Improvement Area #1 as compared to the residential Land Use Classes, the Town has determined approximately 65% of the total Maintenance Assessment allocated to Improvement Area #1 will be collected from the non-residential Land Use Classes and the remaining 35% of the total Maintenance Assessment allocated to Improvement Area #1 will be collected from the residential Land Use Classes. The total amount of Maintenance Assessment allocated to the non- residential Land Use Classes in Improvement Area #1 will then be allocated to each Land Use Class based on the relative Equivalent Unit of each Land Use Class. The total amount of Maintenance Assessment allocated to the residential Land Use Classes in Improvement Area #1 will be allocated to each residential unit equally based on the number of units. The total amount of Maintenance Assessment allocated to Improvement Area #2 and Improvement Area #3 will also be allocated to each residential unit equally based on the number of units. D. Assessments The Assessments for the Authorized Improvements will be levied on each Parcel according to the Assessment Rolls, attached hereto as Appendix E. The Assessment Part A and Assessment Part B on each Parcel was allocated as explained above based on the development to occur on each Parcel and the Assessment per unit by Land Use Class. The Annual Installment Part A and Annual Installment Part B will be collected at the time and in the amounts shown on the Assessment Rolls, subject to any revisions made during an Annual Service Plan Update. E. Administrative Expenses The cost of administering the PTD and collecting the Annual Installments shall be paid for on a pro rata basis by each Parcel based on the amount of Assessment levied against the Parcel. The Administrative Expenses shall be collected as part of and in the same manner as Annual Installments in the amounts shown on the Assessment Roll, which may be revised based on actual costs incurred in Annual Service Plan Updates. Administrative Expenses other than Maintenance Assessments shall be allocated among Parcels in proportion to the amount of the respective Annual Installments for the Parcels. G. Additional Interest Pursuant to the PID Act, the interest rate for Assessments may exceed the actual interest rate per annum paid on the Bonds by no more than one half of one percent (0.50%). The interest rate used to determine the Assessments is one half of one percent (0.50%) per annum higher than the actual rate paid on the Bonds. The Town may allocate up to 0.50% of the interest rate component 21 of the Annual Installments to pay for a prepayment reserve, delinquency reserve, Administrative Expenses, improvement costs, any other use that benefits the Assessed Property or reduce the Assessments, as determined by the Town Council. 1. Prepayment Reserve The Town Council has provided for up to 0.20% of the additional interest may be allocated to fund the associated interest charged between the date of prepayment of an Assessment and the date on which Bonds are prepaid. The actual amount of the additional interest to be set aside in the prepayment reserve shall be determined in the Annual Service Plan Updates in accordance with the provisions of the Bond Indentures. 2. Delinquency Reserve Up to 0.30% of the additional interest component of the Annual Installments may be allocated to offset any possible delinquent payments. The actual amount of the additional interest to be set aside in the delinquency reserve shall be determined in the Annual Service Plan Updates in accordance with the provisions of the Bond Indentures. 22 Section VI TERMS OF THE ASSESSMENTS A. Amount of Assessments and Annual Installments The Assessments and Annual Installments for each Parcel of Assessed Property located within the PID are shown on the Assessment Rolls, attached as Appendix E, and no Assessment shall be changed except as authorized by this Service and Assessment Plan and the PID Act. The Annual Installments shall be collected in an amount sufficient to pay principal and interest on the Bonds and amounts payable pursuant to the Reimbursement Agreement, to fund the prepayment reserve and delinquency reserve described in Section V and to pay Administrative Expenses. The annual Maintenance Assessments shall be collected in an amount sufficient to pay the estimated costs of maintenance included in the Authorized Improvements maintenance budget for the year and/or an amount sufficient to replenish withdrawals during the previous year(s), if any, from any funds or accounts established and maintained for such purpose. B. Reallocation of Assessments Subdivision Upon the subdivision of any Parcel, the Assessment Part A for the Parcel prior to the subdivision shall be reallocated among the new subdivided Parcels according to the following formula: A=Bx(C=D) Where the terms have the following meanings: A = the Assessment Part A for each new subdivided Parcel B = the Assessment Part A for the Parcel prior to subdivision C = the estimated Equivalent Units to be built on each new subdivided Parcel D = the sum of the estimated Equivalent Units to be built on all of the new subdivided Parcels Similarly, upon the subdivision of any Parcel, the Assessment Part B for the Parcel prior to the subdivision, if any, shall be reallocated among the new subdivided Parcels according to the following formula: A=Bx(C=D) Where the terms have the following meanings: A = the Assessment Part B for each new subdivided Parcel B = the Assessment Part B for the Parcel prior to subdivision C = the estimated Equivalent Units to be built on each new subdivided Parcel 23 D = the sum of the estimated Equivalent Units to be built on all of the new subdivided Parcels The calculation of the estimated number of units to be built on a Parcel shall be performed by the Administrator and confirmed by the Town Council based on the information available regarding the use of the Parcel. The estimate as confirmed shall be conclusive. The number of units to be built on a Parcel may be estimated by net land area and reasonable density ratios. The sum of the Assessment Part A for all newly subdivided Parcels shall equal the Assessment Part A for the Parcel prior to subdivision. The calculation shall be made separately for each newly subdivided Parcel. The reallocation of an Assessment Part A for a Parcel that is a homestead under Texas law may not exceed the Assessment Part A prior to the reallocation and to the extent the reallocation would exceed such amount, such excess shall be prepaid by the party requesting the subdivision of the Parcels. Any reallocation pursuant to this section shall be reflected in an Annual Service Plan Update approved by the Town Council. Similarly, the sum of the Assessment Part B for all newly subdivided Parcels shall equal the Assessment Part A for the Parcel prior to subdivision. The calculation shall be made separately for each newly subdivided Parcel. The reallocation of an Assessment Part B for a Parcel that is a homestead under Texas law may not exceed the Assessment Part B prior to the reallocation and to the extent the reallocation would exceed such amount, such excess shall be prepaid by the parry requesting the subdivision of the Parcels. Any reallocation pursuant to this section shall be reflected in. an Annual Service Plan Update approved by the Town Council. 2. Consolidation Upon the consolidation of two or more Parcels, the Assessment Part A for the consolidated Parcel shall be the sum of the Assessment Part A for the Parcels prior to consolidation. The reallocation of an Assessment Part A for a Parcel that is a homestead under Texas law may not exceed the Assessment Part A prior to the reallocation and to the extent the reallocation would exceed such amount, such excess shall be prepaid by the party requesting the consolidation of the Parcels. Any reallocation pursuant to this section shall be reflected in an Annual Service Plan Update approved by the Town Council. Similarly, upon the consolidation of two or more Parcels, the Assessment Part B for the consolidated Parcel shall be the sum of the Assessment Part B for the Parcels prior to consolidation. The reallocation of an Assessment Part B for a Parcel that is a homestead under Texas law may not exceed the Assessment Part B prior to the reallocation and to the extent the reallocation would exceed such amount, such excess shall be prepaid by the party requesting the consolidation of the Parcels. Any reallocation pursuant to this section shall be reflected in an Annual Service Plan Update approved by the Town Council. 3. Payment of Excess Assessment If a subdivision of a Parcel or consolidation of Parcels results in a reallocated Assessment Part A or Assessment Part B for a Parcel that would exceed the respective Assessment per Equivalent Unit shown in this Service and Assessment Plan for the applicable Land Use Class (the "Maximum Assessment"), the owner shall pay to the Town at the time of the subdivision or consolidation the amount by which the reallocated Assessment for the Parcel exceeds the 24 Maximum Assessment plus, if applicable, accrued interest through the date of such payment. Prepayment Costs, if any, that result from such owner -initiated subdivision or consolidation shall be paid by the owner to the Town at the time of the subdivision or consolidation. The Town Council will not approve for recordation any subdivision plat within the PID until subdivision regulation and platting requirements are fulfilled and the Administrator has notified the Town Council in writing that (a) the plat does not contain any Parcels for which the Assessment exceeds the Maximum Assessment, or (b) the appropriate payment has been received by the Town for any Parcel for which the allocated Assessment would have exceeded the Maximum Assessment. Payments made by an owner pursuant to this section shall be used to reduce the outstanding principal amount of Bonds and reduce the Assessments and Annual installments for the affected Parcels, which reductions shall be calculated by the Administrator in accordance with the applicable Bond Indenture and approved by the Town Council in the next Annual Service Plan Update. If Bonds have not been issued, payments made by an owner pursuant to this section shall be used to reduce the outstanding principal due under the Reimbursement Agreement and reduce the Assessments and Annual Installments for the affected Parcels, which reductions shall be calculated by the Administrator and approved by the Town Council in the next Annual Service Plan Update. C. Mandatory Prepayment of Assessments 1. If at any time the Assessment per Equivalent Unit on a Parcel exceeds the Maximum Assessment calculated in this Service and Assessment Plan as a result of any changes in Land Use Class, subdivision, consolidation or reallocation of the Assessment authorized by this Service and Assessment Plan and initiated by the owner of the Parcel, then such owner shall pay to the Town prior to the recordation of the document subdividing the Parcel the amount calculated by the Administrator by which the Assessment per Equivalent Unit for the Parcel exceeds the Maximum Assessment calculated in this Service and Assessment Plan. The Town shall not approve the recordation of a plat or other document subdividing a Parcel without a letter from the Administrator either (a) confirming that the Assessment per Equivalent Unit for any new Parcel created by the subdivision will not exceed the Maximum Assessment for each Parcel, or (b) confirming the payment of the Assessments, plus all Prepayment Costs, as provided for herein. 2. If a Parcel subject to Assessment Part A and/or Assessment Part B is transferred to a party that is exempt from the payment of the Assessments under applicable law, or if an owner causes a Parcel subject to Assessments to become Non -Benefited Property, the owner of such Parcel shall pay to the Town the full amount of the Assessment Part A and/or Assessment Part B on such Parcel, plus all Prepayment Costs, prior to any such transfer or act. 3. The payments required above shall be treated the same as any Assessment that is due and owing under the Act, the Assessment Ordinance, and this Service and Assessment Plan, including the same lien priority, penalties, procedures, and foreclosure specified by the Act. D. Reduction of Assessments 25 1. If after all Authorized Improvements to be funded with a series of Bonds have been completed and Actual Costs for such Authorized Improvements are less than the Actual Costs used to calculate the Assessments securing such series of Bonds, resulting in excess Bond proceeds being available to redeem Bonds of such series, then the Assessment securing such series of Bonds for each Parcel of Assessed Property shall be reduced by the Town Council pro rata such that the sum of the resulting reduced Assessments for all Assessed Properties equals the actual reduced Actual Costs and such excess Bond proceeds shall applied to redeem Bonds of such series. The Assessments shall not be reduced to an amount less than the related outstanding series of Bonds. 2. If all the Authorized Improvements are not undertaken, resulting in excess Bond proceeds being available to redeem Bonds, then the Assessments and Annual Installments for each Parcel shall be appropriately reduced by the Town Council to reflect only the amounts required to repay the Bonds, including interest on the Bonds and Administrative Expenses, and such excess Bond proceeds shall be applied to redeem Bonds. The Town Council may reduce the Assessments and the Annual Installments for each Parcel (i) in amounts that would result in the Assessments and Annual Installments to more accurately reflect the Authorized Improvements provided for each Parcel, (ii) by an equal percentage calculated based on Equivalent Units, or (iii) in another method if the Town Council determines such method would better reflect the benefit received by the Parcels from the Authorized Improvements provided to the Parcels. E. Payment of Assessments 1. Payment in Full (a) The Assessment Part A and/or Assessment Part B for any Parcel may be paid in full at any time. Such payment shall include all Prepayment Costs. If prepayment in full will result in redemption of Bonds, the payment amount shall be reduced by the amount, if any, of reserve funds applied to the redemption under the Trust Indenture, net of any other costs applicable to the redemption of Bonds. (b) If an Annual Installment has been billed prior to payment in full of an Assessment, the Annual Installment shall be due and payable and shall be credited against the payment -in -full amount. (c) Upon payment in full of the Assessment and all Prepayment Costs, the Town shall deposit the payment in accordance with the Trust Indenture; whereupon, the Assessment shall be reduced to zero, and the owner's obligation to pay the Assessment and Annual Installments thereof shall automatically terminate. (d) At the option of the owner, the Assessment Part A and/or Assessment Part B on any Parcel plus Prepayment Costs may be paid in part at any time. Such prepayment shall include all Prepayment Costs. Upon the payment of such amounts for a Parcel, the respective Assessment for the Parcel shall be reduced, the Assessment Roll shall be updated to reflect such partial payment, and the obligation to pay the respective Annual Installment for such Parcel shall be reduced to the extent the partial payment is made. W 2. Payment in Annual Installments The Act provides that an Assessment for a Parcel may be paid in full at any time. If not paid in full, the Act authorizes the Town to collect interest, administrative expenses and other authorized charges in Annual Installments. An Assessment for a Parcel that is not paid in full will be collected in Annual Installments each year in the amounts shown in the Assessment Rolls, as updated as provided for herein, which include interest, Administrative Expenses, prepayment reserve and delinquency reserve. Payment of the Annual Installments shall commence with tax bills mailed after the initial issuance of Bonds. Each Assessment shall include an interest component of equal to (i) the actual interest rate paid on the Bonds and (ii) up to 0.5% per annum. The Assessment Roll sets forth for each year the Annual Installment for each Parcel based on an interest rates of 5.5%, 6.125%, 6.25% and 6.375% on the Term 2025, 2035, 2040 and 2045, respectively, of Series 2015 Bonds, an interest rate of 6.43% on the Reimbursement Agreement and additional interest at the rate of 0.5% for administrative expenses, prepayment reserve and delinquency reserve. Furthermore, the Annual Installments may not exceed the amounts shown on the Assessment Rolls. The Assessment Rolls, as updated with the actual interest rates on the Bonds and the Reimbursement Agreement, are shown as Appendix E. The Annual Installment Part A and Annual Installment Part B shall be reduced in the Service and Assessment Plan or Annual Service Plan Updates to equal the actual costs of repaying the Bonds, the Reimbursement Agreement and actual Administrative Expenses (as provided for in the definitions of such terms), taking into consideration any other available funds for these costs, such as interest income on account balances. The Town reserves and shall have the right and option to refund the Bonds in accordance with Section 372.027 of the PID Act. In the event of such refunding, the Administrator shall recalculate the Annual Installments and , and if necessary, may adjust the amount of the Annual Installments so that total Annual Installments of Assessments will be produced in annual amounts that are required to pay the refunding bonds when due and payable as required by and established in the ordinance and/or the indenture authorizing and securing the refunding bonds, and such refunding bonds shall constitute Bonds for purposes of this Service and Assessment Plan. F. Collection of Annual Installments No less frequently than annually, the Administrator shall prepare, and the Town Council shall approve, an Annual Service Plan Update to allow for the billing and collection of Annual Installments Part A, Annual Installments Part B and annual Maintenance Assessments, if any. Each Annual Service Plan Update shall include updated Assessment Rolls and calculations of the Annual Installment Part A, Annual Installment Part B and Annual Parcel Maintenance Assessment for each Parcel. Each Annual Installment shall be reduced by any credits applied under the applicable Trust Indenture, such as capitalized interest, interest earnings on any account balances, and any other funds available to the Trustee for such purpose, including any existing deposits for a prepayment reserve. Annual Installments and annual Maintenance Assessments shall be collected by the Town in the same manner and at the same time as ad 27 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 Town. The Town Council may provide for other means of collecting the Annual Installments and annual Maintenance Assessments to the extent permitted under the PID Act. The Assessments shall have lien priority as specified in the Act. Any sale of property for nonpayment of the Annual Installments shall be subject to the lien established for the remaining unpaid Annual Installments 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 Annual Installments against such property as they become due and payable. Any parry taking title to a Parcel, including a buyer at a foreclosure sale, shall take title to the Parcel subject to the obligation to pay the Assessment on such Parcel thereafter as provided for herein. If for any reason the Assessment may not be collected thereafter, the Assessment for the Parcel, along with other charges and credits as would apply for a prepayment of the Assessment, shall be due and payable at the time of the transfer without further action required by the Town Council. 28 Section VII THE ASSESSMENT ROLL A. The Assessment Roll Each Parcel within the PID has been evaluated by the Town Council (based on the Zoning Ordinance, developable area, proposed Property Owner Association Property and Public Property, the Authorized Improvements, best and highest use of land, and other development factors deemed relevant by the Town Council) to determine the Assessed Property within each Parcel. The Assessed Property in each Improvement Area will be assessed for the special benefits conferred upon the property as a result of the Authorized Improvements that benefit the property within each Improvement Area of the PID. Table IV -A summarizes the $36,390,000 in special benefit received by the Assessed Property from the Authorized Improvements, the costs of the PID formation, and Bond issuance costs. The total amount of the Bonds and the Reimbursement Agreement is $29,575,000, which is less than the benefit received by the Assessed Property, and as such the total Assessment Part A for Improvement Area #1 Assessed Property, Improvement Area #2 Assessed Property and Improvement Area #3 Assessed Property is $29,575,000. The total amount of deferred Assessment Part B for Improvement Area #1 Assessed Property is $2,425,000, which shall be collected with annual Administrative Expenses and other authorized charges once levied. The Assessment Part A for each Parcel of Assessed Property in each Improvement Area is calculated based on the allocation methodologies described in Section V.0 and Appendix D of this Service and Assessment Plan. The Assessment Rolls for each Improvement Area are attached hereto as Appendix E. B. Annual Assessment Roll Updates The Administrator shall prepare, and shall submit to the Town Council for approval, annual updates to the Assessment Rolls in conjunction with the Annual Service Plan Update to reflect the following matters, together with any other changes helpful to the Administrator or the Town and permitted by the Act: (i) the identification of each Parcel (ii) the Assessment for each Parcel of Assessed Property, including any adjustments authorized by this Service and Assessment Plan or in the PID Act; (iii) the Annual Installment for the Assessed Property for the year (if the Assessment is payable in installments); (iii) the annual Maintenance Assessment the Assessed Property for the year (if any); and (iv) payments of the Assessment, if any, as provided by Section VI.E of this Service and Assessment Plan. Once the Bonds are issued and/or the Reimbursement Agreement is executed, the Assessment Rolls shall be updated, which update may be done in the next Annual Service Plan Update, to reflect any changes resulting from the issuance of the Bonds and/or execution of the Reimbursement Agreement. This update shall reflect the actual interest on the Bonds and/or the Reimbursement Agreement on which the Annual Installments shall be paid, any reduction in the Assessments, and any revisions in the Actual Costs to be funded by the Bonds and/or the Reimbursement Agreement and Developer funds. ►1' Section VIII MISCELLANEOUS PROVISIONS A. Administrative Review The Town may elect to designate a third party to serve as Administrator. The Town shall notify Developer in writing at least thirty (30) days in advance before appointing a third party Administrator. To the extent consistent with the Act, an owner of an Assessed Parcel claiming that a calculation error has been made in the Assessment Roll(s), including the calculation of the Annual Installment, shall send a written notice describing the error to the Town not later than thirty (30) days after the date any amount which is alleged to be incorrect is due prior to seeking any other remedy. The Administrator shall promptly review the notice, and if necessary, meet with the Assessed Parcel owner, consider written and oral evidence regarding the alleged error and decide whether, in fact, such a calculation error occurred. If the Administrator determines that a calculation error has been made and the Assessment Roll should be modified or changed in favor of the Assessed Parcel owner, such change or modification shall be presented to the Town Council for approval to the extent permitted by the Act. A cash refund may not be made for any amount previously paid by the Assessed Parcel owner (except for the final year during which the Annual Installment shall be collected or if it is determined there are sufficient funds to meet the expenses of the PID for the current year), but an adjustment may be made in the amount of the Annual Installment to be paid in the following year. The decision of the Administrator regarding a calculation error relating to the Assessment Roll may be appealed to the Town Council. Any amendments made to the Assessment Roll(s) pursuant to calculation errors shall be made pursuant to the PID Act. The decision of the Administrator, or if such decision is appealed to the Town Council, the decision of the Town Council shall be conclusive as long as there is a reasonable basis for such determination. This procedure shall be exclusive and its exhaustion by any property owner shall be a condition precedent to any other appeal or legal action by such owner. B. Termination of Collection of Assessments Each Assessment shall be extinguished on the date the Assessment is paid in full, including unpaid Annual Installments. After the extinguishment of an Assessment and the collection of any delinquent Annual Installments and Delinquent Collection Costs, the Town shall provide the owner of the affected Parcel a recordable notice of the satisfaction and release of the Assessment. C. Amendments Amendments to the Service and Assessment Plan can be made as permitted or required by the PID Act and under Texas law. The Town Council reserves the right to the extent permitted by the Act to amend this Service and Assessment Plan without notice under the Act and without notice to property owners of Parcels: (i) to correct mistakes and clerical errors; (ii) to clarify ambiguities; and (iii) to provide 30 procedures for the collection and enforcement of Assessments, Prepayment Costs, Collection Costs, and other charges imposed by the Service and Assessment Plan, D. Administration and Interpretation of Provisions The Town Council shall administer the PID, this Service and Assessment Plan, and all Annual Service Plan Updates consistent with the PID Act, and shall make all interpretations and determinations related to the application of this Service and Assessment Plan unless stated otherwise herein or in the Trust Indenture, such determination shall be conclusive. E. Severability If any provision, section, subsection, sentence, clause or phrase of this Service and Assessment Plan or the application of same to an Assessed Parcel or any person or set of circumstances is for any reason held to be unconstitutional, void or invalid, the validity of the remaining portions of this Service and Assessment Plan or the application to other persons or sets of circumstances shall not be affected thereby, it being the intent of the Town Council in adopting this Service and Assessment Plan that no part hereof or provision or regulation contained herein shall become inoperative or fail by reason of any unconstitutionality, voidness or invalidity of any other part hereof, and all provisions of this Service and Assessment Plan are declared to be severable for that purpose. If any provision of this Service and Assessment Plan is determined by a court to be unenforceable, the unenforceable provision shall be deleted from this Service and Assessment Plan and the unenforceable provision shall, to the extent possible, be rewritten to be enforceable and to give effect to the intent of the Town. 31 Draft Appendix A The PID MAP 0 LOS IMPROVEMENT AREA COMMON -TO -ALL ENTRADA TOWN OF WESTLAKE TARRANT COUNTY, TEXAS C 3 PLANKM WMENGaMM HATMO ism CONSULTANTS, LLC LMOSCilifMIM tANDWAMARCMTCrUM TSK Firm Na 7788 111 Me" mve • Le%isvRe, Tx 7G057 • P: 972.438.9712 • F: 972A3fi MS TBPLS Firm fi10 Byron Nelson Blvd, Ste t14 • Roerwlce, T7i 782fi2 • P: 682.831.9717 • F: 817.898.4043 No. 100477110 DRAWN BY: JCM DATE: 05/14/2014 SCALE. 1'@500' JOB. NO. 12139 IMPROVEMENT AREA #1 MIXED USE VILLAGE CORE ENTRADA TOWN OF WESTLAKE TARRANT COUNTY, TEXAS srs rLArI m amomaboom manm lam CONSUTAM2 LLC LOMMMUM LANDWANAMMIBC1 W TBpefkm ko.1798 111 F WW@ GMe • LewUvWe, TX 75057 - P. 972436.9712 • F: 972A3d9715 Tum Fkm 610 8MANalum &Nd, Ste 114 • Ft anQM, T% 76262 • P. 882.631.9712 • F: 617.890.4093 Ne,10047700 DRAWN BY: JCM DATE: 05/14/2014 SCALE -.l'-500' JW. NO, 12139 IMPROVEMENT AREA #2 WEST RESIDENTIAL ENTRADA TOWN OF WESTLAKE TARRANT COUNTY, TEXAS a+»mmm � s pLenmm avrl!!,1\ rMA7T 1 CONS LS, LLC LUMMAMMSA LANDSCMAX"ntcrm TBPEFbM Mo. 1789 111 F ohWe Orbe • Lexlswge, T% 76067 • P: 972.436.8712 - F: 972.498.977S TBPLS F"n 610 Byron Netw Bird. Ste f 14 • A4mvka TX 76262 No. IOM7700 DRAWN BY: JCM DATE: 05/14%2014 SCALE: 1'=500' JOB. N0. 12139 k Wjargl `�� IMPROVEMENT AREA #3 EAST RESIDENTIAL ENTRADA TOWN OF WESTLAKE TARRANT COUNTY, TEXAS 14CONSULTAMS, LLC UWSUNEYML4NDS . ffAX� TBPEFNM N0.1100 999 H*sM Me • Le,Nsvft, TX 75057 • P: 872.498.0712 • F; 972,438,0715 MLS FNM 810 Byron Nelson BWd, Stet 174 - F-mrmka, TX 78252 • P! 602,831-9712- F: 817.890.4043 wo. 94017700 DRAWN BY: JCM DATE; 05/14/2014 SCALE: 1"=500' JOB, NO, 12139 Draft Appendix B ESTIMATED COSTS OF AUTHORIZED IMPROVEMENTS Appendix B- Summary of Estimated Authorized Improvement Costs Notes: See attached engineering estimates fordetailed line item budgets. The parking facilities impmvememt cons am estimated by the developer at $14,000 per parking space for appmmitnatdy 440 parking spaces. B-1 Im rovement Pro ect A Improvement Project 8 Total Estimated (to be to be funded (initially funded Total Authorized with Series 2015 with Reimbursement Improvement Authorized Improvement Improvement Costa Bonds) Agreement) Project A (Deferred Assessments) Road improvements Paving, Striping, Traffic signal $4,389,900 $3,767,430 $622,470 $4,389,900 S Water improvements Water distribution system improvements 51,061,720 $990,040 3171,680 $1,061,720 S Sanitary sewer improvements Sewer collection system improvements $1,881,296 $1,531,196 5350,100 $1,881,296 S Storm drainage improvements Storm drainage collection system improvements $1,733,872 $1,154,306 $579,566 $1,733,872 5 Landscaping Perimeter landscape buffer improvements 51,830,501 51,830,501 So 51,830,501 $ Duct bank improvements Single duct bank $486,184 $392,534 $93,650 $486,184 S Double Duct Bank $247,770 $247,770 SO $247,770 $ Other costs So Public sidewalks $432,000 $432,000 SO $432,000 $ Retaining wall +!-10'average ht. $1,889,730 $1,889,730 $0 $1,889,730 S Unclassified excavation (cut bank yards) $1,155,000 $1,155,000 SO $1,155,000 S Streetlights $84,000 $84,000 $0 $84,000 S Bollard lights $150,000 $150,000 SO $150,000 S [ton ornament benches and other seating 5238,500 $238,500 So $238,500 $ Right-of-way SO $0 So $0 $ R.O,W Sod $9,758 $9,758 SO $9,758 Geotech 5430,000 $380,000 550,000 $430,000 $ Erosion control $260,000 $260,000 SO 5260,000 S Signs $75,000 570,000 55,000 $75,000 $ Large capacity well 30 $0 $0 $0 $ Engineering, surveying, construction management $1,882,831 $1,764,470 5118,361 $1,882,831 S Bonds 5181,335 5146,859 $34,476 5181,335 S hispection fees $922,078 S813,030 S109,048 $922,078 S Contingency & public parking 5984,523 $727,513 5257,011 $984,523 $ Subtotal: Other costs $8,694,755 $8,120,860 $573,896 $8,694,755 $ Parking facility improvements 56,160,000 SO $0 $0 56,160,0 Total Improvement costs $26,485,998 $17,934,637 $2,391,362 $20,325,998 $6,160,00 Estimated Bond issuance costs Capitalized interest $3,605,370 $3,216,750 $218,620 $3,435,370 $170,00 Debt Service Reserve Fund $2,656,813 $2,074,313 $340,000 $2,414,313 $242,501 Other bond issue costs $3,641,819 $2,949,301 $450,018 53,399,319 S242,5DOI Subtotal: Estimated Bond issuance costs 59,904,002 $8,240,364 $1,008,638 59,249,002 $655, Grand Total Authorized Improvement Costs $36,390,000 $26,175,000 $3,400,000 $29,575,000 $6,815,00 Less: Develo funded vests ($4,390,000 $O SO SO {54,390,000) Total Authorized Im rovements funded $32,000,000 $26,175,000 $3,400,000 S29,575,000 $2,425,00 Notes: See attached engineering estimates fordetailed line item budgets. The parking facilities impmvememt cons am estimated by the developer at $14,000 per parking space for appmmitnatdy 440 parking spaces. B-1 Entrada - PID Budget Summary Current Area 1, 2, & Common to All PID Common to All $ 5,439,422 Improvement Area #1 $ 9,089,967 Improvement Area X12 $ 2,677,735 Improvement Area iia (Future) $ 2,134,351 Current Area 1, 2, & Common to All PID Water $ 890,040 Sewer $ 1,531,196 Storm $ 1,154,306 Paving, Signs, Lights $ 4,353,430 Unclassified Excavation / Wall / Erosion $ 3,304,730 R.O.W. Sod $ 9,758 Duct Bank $ 640,304 Landscaping $ 2,213,001 Engineering, Surv, CA, & Geotech $ 2,144,470 Contingency & Public Parking $ 802,276 Bonds & Inspection Fees $ 959,890 Total $ 18,009,400 Future Area #3 PID Water $ 171,680 Sewer $ 350,100 Storm $ 579,566 Paving $ 627,470 Duct Bank $ 93,650 10% Contingency & Escalation $ 182,247 Remaining Sure, CA, & Geotech $ 168,361 Bonds & Inspection Fees $ 143,524 Total $ 2,316,598 RDBERT J. DOLUIK, JR.� 86898 111•.,C �. ENTRADA COMMON TO ALL PID Water $ 406,585 Sewer $ 910,910 Storm $ 861,975 Paving & 1 -Traffic Signal Intersection $ 1,603,070 Unclassified Excavation (Cut Bank Yards) $ 350,000 Double Duct Bank $ 247,770 Gectech $ 60,000 Erosion Control $ 40,000 Signs $ 5,000 Engineering, Surveying, Construction Management $ 613,243 Bonds $ 75,651 Inspection Fees $ 265,219 TOTAL 5 5.439.422 Item Unit ENTRADA COMMON TO ALL WATER LINE IMPROVEMENTS Na, Description ON Unit Price Total 1 LS Furnish and install connection to the Existing 12 -inch waterlines, 5 $ 1,500.00 $ 7,500-00 complete and in place, per Jump sum 2 LF Furnish and install 12 -inch PVC waterline, includes valves, taps and 10840 $ 30.00 $ 325,200.00 fittings, complete and in place, Per linear foot 3 LF Furnish and install B -inch PVC waterline, includes valves, taps and 495 $ 23.00 $ 11,385.00 fittin s com tete and in place, per linear foot 4 EA Furnish and install Standard Fire Hydrant Assembly Inc. 6 -inch 90 11 $ 3,500.00 $ 38,500.00 Deg. Bend complete and in glace, Mr each 5 EA Furnish and install single service water line, complete and in place, 10 $ 800.00 $ 8,000.00 6 EA L>er each 8 $ 750.00 $ 6,000.00 6 EA Furnish and install 12" blow -off valves, complete and in place, per 2 $ 8,000.00 $ 16,000.00 each Item Unit Total Water Line Improvements: $406,585.00 SANITARYSEWER LINE IMPROVEMENTS Description No. Qty Unit Price Total 1 EA Furnish and install lift station and wet well, complete and in place, 1 $ 287,000.00 $ 287,000.00 each 2 EA Funush and install TRA meter station and injection connection to the 1 $ 362,000.00 $ 362,000.00 existing sanitary sewer force main, complete and in place, per each 3 LF Furnish and install 4 -inch force main sanitary sewer line, complete 1300 $ 20.00 $ 26,000.00 and in place, per linear foot 4 LF Furnish and install 8 -inch SDR 35 PVC sanitary sewer line, complete 4485 $ 25.00 $ 112,125.00 and in place, per linear foot 5 EA Furnish and install Manhole, complete and in place, per each 32 $ 3,500.00 $ 112,000.00 6 EA Furnish and install single service sanitary sewer lateral, complete and 8 $ 750.00 $ 6,000.00 in place, per each Furnish and install Sanitary Sewer Line Trench Safety System in 7 LF accordance with current OSHA standards, complete and in place, per 5785 S 1.00 $ 5,785.00 linear foot Total Sanitary Sewer Line Improvements: $910,910-00 STORM SEWER IMPROVEMENTS Item Unit Description Qty Unit Price Total No. 1 LF Furnish and install various sizes of RCP storm pipe, complete and in 3540 $ 50.00 $ 177,000.00 lace r each 2 EA Furnish and install Junction Box, complete in place, per each 15 $ 2,500.00 $ 37,500.00 3 EA Furnish and install curb inlet complete and in place, per each 19 $ 3,000.00 $ 57,000.00 3 SY Furnish and install Storm Sewer Line Trench Safety System in 27535 $ 2.00 $ 55,070.00 4 LF accordance with current OSHA standards, complete and in place, per 2425 $ 1.00 $ 2,425.00 4 SY linear foot 13800 $ 2.25 $ 31,050.00 5 LF IFurnish and install retaining wall around perimeter of Lake, complete 6190 1 $ 95.00 1 $ 588,050.00 5 TON and in placejw each 460 $ 130.00 $ 59,$00.00 Storm Sewer Improvements Total: $861,975.00 PAVINGAND STRIPING IMPROVEMENTS Item Unit Description Qty Unit Price Total No. 1 SY Furnish and install 8 -inch 4200 PSI Concrete with ##3 bars 18 -inch on 12900 $ 36.00 $ 464,400.00 center each way, complete and in place, per square yard 2 SY Furnish and install 6 -inch 3600 PSI Concrete with N3 bars 18 -inch on 26225 $ 30.00 $ 786,750.00 center each way, complete and in place, per square yard 3 SY Famish and install 8 -inch Stabilized Subgrade, complete and in 27535 $ 2.00 $ 55,070.00 laceper square yajLd 4 SY Furnish and install 10 -inch Stabilized Subgrade, complete and in 13800 $ 2.25 $ 31,050.00 lace, er s uare yard 5 TON Furnish and install Lime, complete and in place, per ton 460 $ 130.00 $ 59,$00.00 6 IS Furnish Traffic Contol 1 $ 20,000.00 $ 20,000.00 7 EA Traffic Signal at Davis and Solana Blvd 1 $ 176,000.00 $ 176,000.00 8 LS Furnish and install misc pavement striping, complete and in place, 1 $ 10,000.00 $ 10,000.00 per i sum Paving and Striping Improvements 'Total: $1,603,070.00 Total Wet Utilities, & Paving: $3,782,540.00 MISC. Item Unit Description Qty Unit Price Total No. 1 CY Unclassified excavation (cut bank yards) 100000 $ 3.50 $ 350,000.00 2 LF Double Duct Bank 4955 $ 50.00 $ 247,769.50 3 LS Geotech 1 $ 60,000.00 $ 60,000.00 4 LS Erosion Control 1 $ 40,000.00 $ 40,000.00 5 LS Signs l $ 5,000.00 $ 5,000.00 6 LS Engineering, Surveying, Construction Management 1 $ 613,243.33 $ 613,243.33 7 LS Bonds @ 2% 1 $ 75,650.80 $ 75,650.80 8 LS Inspection Fees @ 6% 1 $ 265,218.57 $ 265,218.57 Miscellaneous Improvements Total: $1,656,882.20 ENTRADA IMPROVEMENT AREA #1 PAID Water $ 207,750 Sewer $ 242,916 Storm $ 177,300 Paving $ 1,750,100 Perimeter Landscaping Buffer Improvements $ 1,830,501 Public Sidewalks 4" 3600 PSI Reinforced w/ #3 Bars $ 432,000 Retaining Wall 5' Avera a Height $ 125,550 Retaining Wall +/-10' Avera a Height $ 1,090,980 Unclassified Excavation (Cut Bank Yards) $ 805,000 R.O.W. Sod $ 3,212 Street lights $ 84,000 Bollard lights $ 150,000 Iron Ornamental Benches and Other Seating $ 238,500 Single Duct Bank $ 201,609 Geotech $ 160,000 Erosion Control $ 120,000 Signs $ 45,000 Engineering, Surveying, Construction Management $ 958,966 Bonds $ 47,561 Inspection Fees $ 419,022 TOTAL $ 9,489,967 ENTRADA IMPROVEMENT AREA #1 WATER LINE IMPROVEMENTS Item Unit Description Qty Unit Price Total No. 1 LF Furnish and install 8 -inch PVC waterline, includes valves, taps and 4250 $ 23.00 $ 97,750.00 $ 115,000.00 fittin s com fete and in place, per linear foot laceper each 2 EA Furnish and install Standard Fire Hydrant Assembly Inc. 6 -inch 90 20 $ 3,500.00 $ 70,000.00 3 EA Dep,. Bend complete and in place, per each 50 $ 750.00 $ 37,500.00 3 EA Furnish and install single service water line, complete and in place, 50 $ 500.00 $ 40,000.00 $ 45,000.00 per each Furnish and install Storm Sewer line Trench Safety System in Item Unit No. Total Water Line Improvements: $207,750.00 SANITARY SEWER LINE IMPROVEMENTS Description Qty Unit Price Total 1 LF Furnish and install 8 -inch SDR 35 PVC sanitary sewer line, complete 3300 $ 25.00 $ 82,500.00 $ 115,000.00 and in place, per linear foot laceper each 2 EA Furnish and install Manhole, complete and in place, per each 33 $ 3,500.00 $ 115,500.00 3 EA Furnish and install single service sanitary sewer lateral, complete and 50 $ 750.00 $ 37,500.00 1. EA in place, per each 15 $ 3,000.00 $ 45,000.00 Furnish and install Sanitary Sewer Line Trench Safety System in Furnish and install Storm Sewer line Trench Safety System in 4 1 LF accordance with current OSHA standards, complete and in place, per 7416 $ 1.00 $ 7,416.00 accordance with current OSHA standards, complete and in place, per 2300 linear foot 1.00 $ 2,300.00 Item Unit No. Total Sanitary Sewer Line Improvements: $242,916.00 STORM SEWER IMPROVEMENTS Description Qty Unit Price Total 1 I LFFurnish and install various sizes of RCP storm pipe, complete and in 2300 $ 50.00 $ 115,000.00 laceper each 2 EA Furnish and install Junction Box, complete in place, per each 6 $ 2,500.00 $ 15,000.00 3 EA Furnish and install curb inlet complete and in place, per each 15 $ 3,000.00 $ 45,000.00 Furnish and install Storm Sewer line Trench Safety System in 4 LF accordance with current OSHA standards, complete and in place, per 2300 $ 1.00 $ 2,300.00 linear foot Storm Sewer Improvements Total: $177,300.00 PA VING AND STRIPING IMPROVEMENTS Item Unit Description Qty Unit Price Total No. 1 SY Furnish and install 6 -inch 3600 PSI Concrete with #3 bars 18 -inch on 13940 $ 30.00 $ 418,200.00 $ 98,709.00 center each way, complete and in place, per square yard LS Vineyards 1 Plantings along Davis Blvd. and Solana Blvd. 1 2 SY Furnish and install 8 -inch Stabilized Subgrade, complete and in 14900 $ 2.00 $ 29,800.00 Trees along Davis Blvd_ and Solana Blvd. 1 lace and per square 330,003.00 $ 330,003.00 3 TON Furnish and install Lime, complete and in place, per ton 170 $ 130.00 $ 22,100.00 4 EA Plaza Bridge 1 $ 840,000.00 $ 840,000.00 5 IAA Mercado Ricardo Pedestrian Bridge 1 $ 425,000.00 $ 425,000.00 6 LS Furnish Traffic Contol 1 $ 5,000.00 $ 5,000.00 7 LS Furnish and install misc pavement striping, complete and in place, 1 $ 10,000.00 $ 10,000.00 $ 117,800.00 r jump sum LS Vineyards I Plantings along 114 Frontage 1 Paving and Striping Improvements Total: $1,750,100.00 Total Wet Utilities, & Paving: $2,378,066.00 PERIMETER LANDSCAPE BUFFER IMPROVEMENTS Item toUnit Description Qty Unit Price Total 1 LS Irrigation along Davis Blvd. and Solana Blvd. 1 $ 98,709.00 $ 98,709.00 2 LS Vineyards 1 Plantings along Davis Blvd. and Solana Blvd. 1 $ 146,731.00 $ 146,731.00 3 LS Trees along Davis Blvd_ and Solana Blvd. 1 $ 330,003.00 $ 330,003.00 4 LS Rubble Walls along Davis Blvd. and Solana Blvd. 1 $ 128,700.00 $ 128,700.00 5 LS Walks along Davis Blvd. and Solana Blvd. 1 $ 110,880.00 $ 110,880.00 6 LS Rest Areas along Davis Blvd. and Solana Blvd. 1 $ 176,977.00 $ 176,977.00 7 LS Irrigation along 114 Frontage 1 $ 117,800.00 $ 117,800.00 8 LS Vineyards I Plantings along 114 Frontage 1 $ 274,866.00 $ 274,866.00 9 LS Trees along 114 Frontage 1 $ 47,120.00 $ 47,120.00 10 LS Rubble Walls along 114 Frontage 1 $ 78,533.00 $ 78,533.00 11 LS Rest Areas along 114 Frontage 1 $ 39,182.00 $ 39,182.00 12 LS lFour small wells (25 gmp each) 4 $ 62,000.00 $ 248,000.00 13 LS I lake bubblers (3) for aeriation 3 $ 11,000.00 $ 33,000.00 Perimeter Landscape Buffer Improvements Total: $1,830,501.00 Mrrsc. Item Unit Description Qty Unit Price Total No. 1 SY Public Sidewalks 4" 3500 PSI reinforced w/ #3 bars 12000 $ 36.00 $ 432,000.00 2 LF Retaining wall +/- 5' average ht. 1674 $ 75.00 $ 125,550.00 3 LF Retaining wall t/-10' average ht. 5510 $ 198.00 $ 1,090,980.00 4 CY Unclassified excavation (cut bank yards) 230000 $ 3.50 $ 805,000.00 5 SF R.O.W. Sod 10705 $ 0.30 $ 3,211.50 6 EA Street lights 21 $ 4,000.00 $ 84,000.00 7 EA Bollard lights 60 $ 2,500,OD $ 150,000.00 8 EA Iron ornamental benches and other seating 45 $ 5,300.00 $ 238,500.00 9 LF Single Duct Bank 5760 $ 35.00 $ 201,609.45 10 LS Geotech 1 $ 160,000.00 $ 160,000.00 11 LS Erosion Control 1 $ 120,000.00 $ 120,000.00 12 LS Signs 1 $ 45,000.00 $ 45,000.00 13 LS Engineering, Surveying, Construction Management 1 $ 958,965.70 $ 958,965.70 14 LS Bonds @ 2% 1 $ 47,561.32 $ 47,561.32 15 LS inspection Fees @ 6% 1 $ 419,022.39 $ 419,022.39 Miscellaneous Improvements Total: $4,881,400.36 ENTRADA IMPROVEMENT AREA #2 PID Water $ 275,705 Sewer $ 377,370 Storm $ 115,031 Paving $ 414,260 Retaining Wall +/-10' Average Height $ 673,200 R.O.W. Sod $ 6,546 Single Duct Bank $ 1.90,925 Geotech $ 160,000 Erosion Control $ 100,000 Signs $ 20,000 Engineering, Surveying, Construction Management $ 192,261 Bonds $ 23,647 Inspection Fees $ 128,784 TOTAL $ 2,677,735 ENTRADA IMPROVEMENT AREA #2 WATER LINE IMPROVEMENTS Item Unit Description Qty Unit Price Total No. 1 LF Furnish and install 8 -inch PVC waterline, includes valves, taps and 5135 $ 23.00 $ 118,105.00 $ 74,050.00 fittin s corn fete and in place, per linear foot laceper each 2 EA Furnish and install Standard Fixe Hydrant Assembly Inc. 6 -inch 90 16 $ 3,500.00 $ 56,000.00 3 EA Deg. Bend complete and in place, per each 127 $ 750.00 $ 95,250.00 3 EA Furnish and install single service water line, complete and in place, 127 $ $00.00 $ 101,600.00 $ 27,000.00 r each Furnish and install Storm Sewer Line Trench Safety System in Item Unit Total Water Line improvements: $275,705.00 SANITARYSEWER LINE IMPR 0 VEMENTS Description No Qty Unit Price Total 1 LF Furnish and install 8 -inch SDR 35 PVC sanitary sewer line, complete 4120 $ 25.00 $ 103,000.00 $ 74,050.00 and in pIace, per linear foot laceper each 2 EA Furnish and install Manhole, complete and in place, per each 50 $ 3,500.00 $ 175,000.00 3 EA Furnish and install single service sanitary sewer lateral, complete and 127 $ 750.00 $ 95,250.00 3 EA in place, per each 9 $ 3,000.00 $ 27,000.00 Furnish and install Sanitary Sewer Line Trench Safety System in Furnish and install Storm Sewer Line Trench Safety System in 4 LF accordance with current OSHA standards, complete and in place, per 4120 $ 1.00 $ 4,120.00 accordance with current OSHA standards, complete and in place, per 1481 linear foot 1.00 $ 1,481.00 Item Unit Total Sanitary Sewer Line Improvements: $377,370.00 STORM SEWER IMPROVEMENTS Description No. Qty Unit Price Total 1 LF Furnish and install various sizes of RCT storm pipe, complete and in 1481 $ 50.00 $ 74,050.00 laceper each 2 EA Furnish and install Junction Box, complete in place, per each 5 $ 2,500.00 $ 12,500.00 3 EA Furnish and install curb inlet complete and in place, per each 9 $ 3,000.00 $ 27,000.00 Furnish and install Storm Sewer Line Trench Safety System in 4 LF accordance with current OSHA standards, complete and in place, per 1481 $ 1.00 $ 1,481.00 linear foot Storm Sewer Improvements Total: $115,031,00 PA VING AND STRIPING .IMPROVEMENTS Item Unit Description Qty Unit Price Total No. 1 SY Furnish and install 6 -inch 3600 PSI Concrete with #3 bars 18 -inch on 11655 $ 30.00 $ 349,650.00 center each way, complete and in place, per square yard 2 SY Furnish and install 8 -inch Stabilized Subgmde, complete and in 12455 $ 2.00 $ 24,910.00 lace square yard 3 1 TON Furnish and install Lime, complete and in place, per ton 190 $ 130.00 $ 24,700.00 6 LS Furnish Traffic Contol 1 $ 5,000.00 $ 5,000.00 7 LS Furnish and install mise pavement striping, complete and in place, I $ 10,000.00 $ 10,000.00 1per Jumpsum Paving and Striping Improvements Total: $4145260.00 Total Wet Utilities, & Paving: $171829366.00 MISS Item Unit Description Qty Unit Price Total No. 1 LF Retaining wall +/-10' average ht. 3400 $ 198.00 $ 673,200.00 2 SF R.O.W. Sod 21820 $ 0.30 $ 6,546.00 3 LF Single Duct Bank 5455 $ 35.00 $ 190,925.00 4 LS Geatech 1 $ 160,000.00 $ 160,000.00 5 LS Erosion Control 1 $ 100,000.00 $ 100,000.00 6 LS Signs 1 $ 20,000.00 $ 20,000.00 7 LS Engineering, Surveying, Construction Management 1 $ 192,260.74 $ 192,260.74 8 LS 18onds @ 2% 1 $ 23,647.32 $ 23,647.32 9 LS Inspection Fees @ 6% 1 $ 128,783.46 $ 128,789.46 Miscellaneous Improvements Total: $1,495,368.52 ENTRADA IMPROVEMENT AREA #3 PID Water $ 171,680 Sewer $ 350,100 Storm $ 579,566 Paving & 2 -Offsite Traffic Light Intersections $ 622,470 Single Duct Bank $ 93,650 Geotech $ 50,000 Signs $ 5,000 Engineering, Surveying, Construction Management $ 118,361 Bonds I $ 34,476 inspection Fees 1 $ 109,04$ TOTAL $ 2,134,351 ENTRADA IMPROVEMENT AREA 3 WATER LINE IMPROVEMENTS Item Unit Description Qty Unit Price Total No. - I LF Furnish and install 8 -inch PVC waterline, includes valves, taps and 3160 $ 23.00 $ 72,680.00 fittin s corn lete and in place, per linear foot 2 EA Furnish and install Standard Fire Hydrant Assembly Inc. 6 -inch 90 10 $ 3,500.00 $ 35,000.00 Deg. Bend complete and in place, per each 3 EA Furnish and install single service water line, complete and in place, 80 $ $00.00 "4,000-00 pereach Total Water Line Improvements: $171,680.00 SANITARY SEWER LINE IMPROVEMENTS Item Unit Description Qty Unit Price Total No. 1 EA Furnish and install lift station and wet well, complete and in place, 1 $ 125,000.00 $ 125,000.00 per each 2 LF Furnish and install 4 -inch force main sanitary sewer lime, complete 1550 $ 20.00 $ 31,000.00 and in place, er linear foot 3 LF Furnish and install 8 -inch SDR 35 PVC sanitary sewer tine, complete 2675 $ 25.00 $ 66,875.00 and in place, ver linear foot 4 EA Furnish and install Manhole, complete and in place, per each 18 $ 3,500.00 $ 63,000.00 5 EA Furnish and install single service sanitary sewer lateral, complete and 80 $ 750.00 $ 60,000.00 in laceper each Furnish and install Sanitary Sewer Line Trench Safety System in 6 LF accordance with current OSHA standards, complete and in place, per 4225 $ 1.00 $ 4,225.00 linear foot Total Sanitary Sewer Line Improvements: $350,100 Item Unit No. STORM SEWER IMPROVEMENTS Description ON Unit Price Total 1 LF Furnish and install various sizes of RCP storm pipe, complete and in 741 $ 50.00 $ 37,050.00 laceper each 2 EA Furnish and install Junction Box, complete in place, per each 1 $ 2,500.00 $ 2,500.00 3 EA Furnish and install curb inlet complete and in place, per each 12 $ 3,000.00 $ 36,000.00 3 TON Furnish and install Storm Sewer Line Trench Safety System in 115 $ 130.00 $ 14,950.00 4 LF accordance with current OSHA standards, complete and in place, per 741 $ 1.00 $ 741.00 linear foot 5 LS Culvert Crossing & Waterfall 1 $ 100,000.00 $ 100,000.00 6 LF Furnish and install retaining wall around perimeter of Lake, complete 4,245 $ 95.00 $ 403,275.00 and in lace er each 7 L5 two small wells (25 gmp each) 2 $ 62,000.00 $ 124,000.F00 8 LS Lake bubblers (2) for aeriation 2 $ 11,000.00 $ 22,000.00 Item Unit Storm Sewer Improvements Total: 579,566 PA VING AND STRIPING IMPROVEMENTS Description No. Qty Unit Price Total 1 SY Furnish and install 6 -inch 3600 PSI Concrete with 03 bars 18 -inch on 7,950 $ 30.00 $ 238,500.00 center each way, complete and in place, per square yard 2 SY Furnish and install 8 -inch Stabilized Subgrade, complete and in 8,510 $ 2.00 $ 17,020.00 lace per square yard 3 TON lFurnish and install Lime, complete and in place, per ton 115 $ 130.00 $ 14,950.00 4 EA ITraffic Signal at Solana Blvd & at 114 pending warrant 2 $ 176,000.00 $ 352,000.00 Paving and Striping Improvements Total: 622,470 Total Wet Utilities & Paving 1,723,816 MISC. Item Unit Description Qty Unit Price Total No. I LF Sin le Duct Bank 2676 $ 35.00 $ 93,650.20 2 LS Geotech 1 $ 50,000.00 $ 50,000.00 3 LS Signs 1 $ 5,000.00 $ 5,000.00 4 LS Engineering, Surveying, Construction Management 1 $ 118,361.00 $ 118,361.00 5 1 LS Bonds @ 2% 1 $ 34,476.32 $ 34,476.32 b LS Inspection Fees @ 6% 1 $ 109,047.97 $109,047.97 Miscellaneous Improvements Total: $410,535 Draft Appendix C DIAGRAM OF THE AUTHORIZED IMPROVEMENTS Common -to -All: Roads, Water, Sanitary Sewer, and Drainage West Residential: Roads, Water, Sanitary Sewer, and Drainage East Residential: Roads, Water, Sanitary Sewer, and Drainage �� rratae I F 7f'IT if X w . —S rrarfFr t W r1►.rr it WOO I.1 WOO fT � �y �� �� �� ■�s�raru r o jr� r ' . H. A S E IOn W.8 WOW t �/ +.ice Atr • � Q __ � ��` ^ r� �� p' r r • "i..,lr �.'•`� , � i s m+i�s l � n.. `� .� � 8 W`I�IC F f WSWo f •F i -lie r d6Rf�••rr�� �. a. P^s y/ � aw F � 'n .ns% ��i:..�.a �� ■ fRflr'M".tR - ;ni -.y ,,,s �-'�-� w ifdld� tab ITOW d Wlh t wr 6[ F ' EAST RESIDENTIAL O n.•.�•w±r..eo re.,,i �Tiiwx•n "lor \` / IMPROVEMENTS 969OW It Q Q a ..... .. ... .. ---- ..�,__. ,.....e.. .+ J Common -To -,411: Landscape COLUMNAR EVENGReEEN TREES: Vi CiJ E Cll 0 1 A�� mm 2 Common -To -All: Lighting Sie Lighring 5omtlon 2707 UT9UYW -_ iPAtr-1�6, TX 75279 Project Prot JAM 1 3 -- Q TOWN OF TROPHY CLUB EXHIBIT_ A M.U.I. WATER LINE PID COST ESTIMATE TOWN of WESTLAKF WATER FOR WATER IMPROVEMENTS LINE IMPROVEMENTS ENTRADA PHASE I 0 TOWN OF WEST.. EKE DENTON COUNTY, TEXAS SLTE1'LA "G crvn,rMDEt"c PLAT NG gw CONSULTANTS, LLC 3 � LANIiMMS7LYf:* WM.W..AAARC19TEC'nM "FIE p tm 3 tia. 1789 �.& 114 H IM& [hive - t"MvWo, TX 75651 • P_ 972A36,9712 • F:972A,46,9715 TBPI..S Firm r v Bib Byron Nelson Blvd. file 114 • #ioanok8, U 76252 < P; 882.851-W12 • F: 817.696.4943 No, 10"7700 vx 'g DPAWN D :JC!i (),M 04/14/20:4 SCALE:1 500' JOH. NO, 12139 �s .n EXHIBIT A PID COST ESTIMATE. FOR SEWER IMPROVEMENTS ENTRADA PHASE Tl-`-)V'VN OF WESTLAKE DENTON COUNTY, TEX, DR;,WN RY. K.M D,;TL 04/14/9011, 5C•. E: i"-51,[3' J08. NO. 12139 PLA, NG CrM ENGINPWMG PtA ['I G jq47ArCONSULTANTS, LLC IAM SURVEYM LAMWAPP,ARCH ii-M3n I BPE Fhm Ha 1799 111 HBtside Drive - Lewlsvl;a, TX 75M, P: 872.436,2712 • F: 574436.9715 7RPLS Fkm 610 Byw Nal*on 81vd, Ste 114 - Roanckc, TX 76262 • P. 892.H33:8712 - F: 817.890.401:1 Uo 1 D047700 DR;,WN RY. K.M D,;TL 04/14/9011, 5C•. E: i"-51,[3' J08. NO. 12139 <:1 1po X29 �Y a m� EXHIBIT A PID COST ESTIMATE FOR STORM IMPROVEMENTS ENTRADA PHASE TOWN OF Vj'ESTL'l-:l.KE DENTON COUNTY, TEXA, SMPLAN14NG MUENGINEERtRG nAjTFNG imik CONSULTANTS, LLC L&WSURVriWG LANDW-0EARCHrECrURR TBPEfrm No. 1798 111 JVWd@ Nve • levirfi6, TX 1"57 - V,, 9m436.9112- f: 972.436.9116 TsKs FFm 610 9Y.Mh NebOq Blvd, Ste 114 • Roanoke, TX 76� . P: 662.E31.91i3 - F: 817.69 AU3 No. 10047700 DRA4�1N BY:XN4 0ATEE 04/14/2014 SCALE,1•=500• X09. NO. 12139 7 .......... v ey A SANTILLANA DEL MAR ARTA a] />��" \— GIUDAD REAL EXHIBIT A PID COST ESTIMATE FOR PAVEMENT IMPROVEMENTS ENTRADA PHASE I TOWN OF WESTL/-.KE DENTON COUNTY, TEX�.-o SnFLAMMG KArITNG CONSULTANTS, LLC. LeMSUrAWM l.WDSCM.-MCHn'ncnw TM Finn: Ne. 1798 111 KfskleDf?ve- LnwLwVL-,'tXl.5*57- PA7Z436.9112 4: 972A36.9716 TBPLSfkm 610 Byron NfW DW, Ste 114 - Roanoke, TX 74261- P: 6$2-831.9712 - F: W.996.4943 No. IW477DO DRAWN BY: J0 I DATE: 64/14/2014 SC—LF-l"500' JOB NO 12139 114 Taus r� l 0 EXHIBIT A PID COST ESTIMATE LIMITS OF GRADING a� ENTRADA PHASE I T0VVN OF VJESTL r:.KE a; DEN TION COUNTY, TE'l�-,lc; W � ;a�"L� PLAI3NII']G 41V Ct �,NGTI4Tr`G i'T.AT'iTi+iG CONSULTANTS, LLC »WRQ �� a # 9AE Punt 1758 _ tit fWskle DAa • LeAsv' &, TX 76Q57 • F: 972,438.5712 • F: 972 4M,9715 TBPLS Firm hN 559 Byron N01W Blvd. ft 114 • Rm3no". TX 76262 • P; 882.631.8712 • F: 817,89a.4P49 N0.10047700 El t BY:JCti D&TF: CA/14/20-14 wC•,i.F:1"=Si�C� JOB. NO 12139 �b I •■ i EXHIBIT A PID COST ESTIMATE FOR WATER IMPROVEMENTS ENTRADA PHASE LI TOV ,,'N OF VVE TL"'.KE DENTON COUNTY, TEXAS S'1U A ANKmG CNEL 3'.NC,ftdEERWG P7.A' TING CONSULTANTS, LLC I A I©S 1RVitlMG I Algl?Sc 1sP axCaITrrCzi7R8 gpr: f:fallis No. 1749so 1t1 M&Ws Rdvo - LoWisvdp. TX 7WW • P; 972.435.9712 - F: 972.438:9715 TBPLS Fft 510 Byron Nohxm Vvd. Slc 114 • Awoke. TX7r.M • P, 682,839.9718.. F_ 817.690.4043 N0,1004.7700 DRAWN EY: JCM D TC: 44/14/2014 SCALE: 7"=50U' JOB. NO. 12139 0 m� EXHIBIT A PID COST ESTIMATE FOR SEWER IMPROVEMENTS ENTRADA PHASE II TOWN OF'ESTL �.KE DENTON COUNTY "E k -4S MPEG CMENGD&MUNG PLATnNG CONSULTANTS, LLC LAMSURMWU LAND.&C"EARi�il7747 LW MPL Flmt Na: 4758 113 Msi&e Dive • ie»VsvBhD, TX 75057 . P; 872.435.8712 • P: 972.438:9715 TMS FFm 616 tlyian NeL%O ©Iv3, Ste T14 + Ruamke, 7X78282 • P 682,831.9742 • V 817.8W.4843 Na 100MOD DRAWN BY: JCI.! DATE: 04/14/2014 SCALE.1"==500' JOB W0. 1 21 ]] _ �. p 0 kilo 1 EXHIBIT A PID COST ESTIMATE FOR STORM IMPROVEMENTS ENTRADA PRASE II TOV'M OF WE T 'A.KE DENTON COUNT',', TEXAS SiIT PLANNING CIVi#. k�iGiNEFdGNG PI.AT1'ING . � CONSULTANTS, LLC LAMSMVEMG UNDSCAPRARCHMC'PW TBPEFlrIn Na. 1798 111 HW.4de ptire • LevhswR-, 7X 75MI • fp; 972438.9712 • F: 912.436.8715 URS Rlml 810 &Aia l NP."OML Stu 114 • Roanaka, TX 16262 � rl; 682.831.8712 • P BVA90.4043 Na. IW4770D DRAWN 8y:JCll DATE. 04/14/2014 SCatF:1"=-s00' JOB, NO. 12139 1A SITGES NERJA `" EI-CHE �- -- �---- 114 ~ - ARAGON` BAEZA _ SANTILLANA DEL MAR CADAQUES —` CARMONA COMI % so t� � ~ CIUDAD REAL CALISTEO C LAS $ ^■ EXHIBIT A PID COST ESTIMATE FOR PAVEMENT IMPROVEMENTS ENTRADA PHASE 11 TOWN OF WEST k,KE ENTON COUNTY, TEX:�, Sl7E PLANMNG CR UENCriW$1 RMG MA 405 CONSULTANTS, LLC 1"D WRVEMC; LAMSCAM-aCU3'MF"C1MM TRPE Finn No. 1796 111 Kbide Drive • towi6vWa, T% 7,Q57 • P. 972,539,9712 - F: 972.436.9715 TERES Fkm 610 9y{on NdWn Md, Ste 114 • Am"ke, T% 76202 • R 862.83$.9712 • F: 847.690.4043 No. i 0887700 DRAl,'44 BY: JCC. DATE. 44/14/201. SC-tE:''=SOO' J04. No. 12139 -- EXHIBIT A a 'a PID COST ESTIMATE LIMITS OF GRADING �tl I ENTRADA PHASE fI TOWN OF WESTLAKE DENTON COUNTY, TEkL:S � `a e 517'�FiANhiIAIG C1V'Q.Ir3+€GIPTP.�T.Rii+IG YLAT17hfG n CONSULTANTS, LLC 1Aidf MRV sFMG LATDSCAK ARCFiITBmmE Tape Fkm iVo.1788 �d_ 11 t Haside DO o • LeWsvft, TX 75457 • P: 812.438.9712 - F: 972.430 9715 TBPLS Fhm =.n 610 Byron Nelson VIA, Ste 114 • Roanoke. TX 76282. A: WS31.9712 • F: 817.8DO.4043 Nu. 16A4774D [,A E: 04/E4iK14 SCALE;;- -500' JOB. NG. 12139 M 3;4 4Q- ' m 1po C9�9 6 1 ED EXHIBIT A PID COST ESTIMATE FOR WATER IMPROVEMENTS ENTRADA PHASE III TOWN OF WEST ?-"EKE DENTON COUNTY,. TEX-ns CONSULTANTS, LLC L&MSURVM D G l ANbSCAMAHC#i nCnMX TBPE Firm No,. 3798 111 HEI$ O Far% • Lewisao. TX 75057 • P- 972 d35 G 2 • F. 972.A38.9715 T8F'i.S �6'ITF 8 t D Syron iJelsxx3 Blvd, Ste 17A • tiuetsolte. FSi 782b2 • p; 697.831.8712 • F: 617.E90.ISIa3�. 186477(36 DRA' N BY: JGtl 'W,TF: 04/1 + f2Ct 4 GCAi-f: C-5DD' j0B. NO. 12139 2139 0 114 � sw / FORCE MAIN � 1 GRAVITY GRAVITY � Ci N a \ c i I1 EXHIBIT A PID COST ESTIMATE FOR SEWER IMPROVEMENTS s ENTRADA PHASE Iii Ei5 TOVM OF WESTLAKE t EN T ON COUNTY, TE)(AS ESMILAMING CMLENQWEaMG PIAA'C` ING CONSULTANTS, LLC M k LMM SOPM-NG i.ANDSCAR ARCiiiTF,GiUO TePE Fi m No. 1799 111 HiFWde DSve • LaMsviRe. 7%75057 • P, 972.436.6112 • f: 972.436.9715 TBPL5 Film k1f1 #}y,ors Nelson eh!d, 51a 114 • Rosnohe, 7X 76262 • P: 582.631.9712. • F: 8i7.69U.Ag43 No, IMK7704 "$ ........... DRI'AN 8Y:17C:H CA;E: 04/34/2014 SCA F:1"=500' JOU. NO -12139 7 EXHIBIT A PID COST ESTIMATE FOR STORM IMPROVEMENTS ENTRADA PHASE III TOWN OF IESTL�.KE DENTON COUNT, TEX11 AS UMPLU4NWr3 CfVUWGUMBMG PUM4r. GONSULT`ANA LLC LANtt35iiRvEMG LWDSCAPEARCIMWW" TBPE Finn No,IY04 114 f fflsiE6 Odvs • LawlsvRe, TX 7557> P: 872,436.8712 • x.872.43$.8715 TRPS Flan 610 Byrw Nelson Blvd, Ste 114 • Raw• ", TX 76262 • P: W.831.9712 • F: 817,89QA043 No. IVA77M JP's -.SNP. BY: JIC. ,, GATE: 0411412014 SCALE:1 .000' JoB. NO. 12139 `5 J EXHIBIT A PID COST ESTIMATE FOR PAVEMENT IMPROVEMENTS ENTRADA PHASE III TOWN 0' V ESTUXE DENTON COUNTY, TEXAS mi'mAmwG cwxEKGiNE w(3 P%ATriNG CONSULTANTS, LLC IANDSURVEYING UJMSCAMAACVr1ECM= TOPE Ftm No. 1798 111 MsOe Onve • Lewisv*o, TX 750.53 • P: 972.4%,9712 , F: 972,430L$71g TOP15 Firm 616 Syron N �Hd, 5l@ 114 • Rf�anoYa, TX 38262 • P; F82.Bat.p712 • F' g11,8gp.4p43 Nn, 13fi477p6 DRAWN BY„Xlt DATF; (;4/14/2014 S A[..E:1 ,500' .100. N0. 12139 i of s 0 X929 /% 1 0 \ EXHIBIT A PID COST ESTIMATE LIMITS OF GRADING ENTRADA PHASE III TO N OF WESTUI-XE DENTON COUNTY, TEXAS WI.6 PI.t+N2+1iNG 4+��`k11S.`^�µ�1a FLS•[•11NCY CONSULTANTS, LLC T^RM90MrZCM LVMSCANARTEIPGFIrm Na 3768 111 us1de DAyeov&' AVa, T%75057 • P: 672.494.9712 • F: 472.438.8716 TOKS Fb" 5701?Yru^ Nelson Blvd, 31e 3t4 • Rnennke, TX T82d2 • P: 882.tl3t.9792 • F: ei7,698.-0478 No. 100}47704 DRAWN EY;JCH ()--`E_: 04/1410,q 4 CCALL:I"=50c, J05. 'NO. 12139 Draft Appendix_ D LAND USE CLASSS, EQUIVALENT UNITS AND ALLOCATION OF ASSESSMENTS Appendix D Land Use Classes, Equivalent Units and Allocation of Assessments For purposes of allocating the Assessments, the Assessed Property in each Improvement Area has been classified in one of thirteen Land Use Classes. The following table shows the proposed residential and non-residential development planned within the PID. Table D-1 Proposed Development within the PID — All Improvement Areas Land Use Class Description Proposed Development Residential Land Use Class 10 Commercial Land Use Class I Condo Units (more than 3,600 sq. ft) 38 Units Land Use Class 2 Condo Units (2,500 to 3,600sq. ft) 71 Units Land Use Class 3 Condo Units (1,800 to 2,500 sq. ft) 6 Units Land Use Class 4 Villa - West (more than 3,600 sq. ft) 42 Units Land Use Class 5 Villa - West (2,500 to 3,600sq. ft) 16 Units Land Use Class 6 Villa - West (1,800 to 2,500 sq. ft) 69 Units Land Use Class 7 Villa - East (more than 3,600 sq, ft) 21 Units Land Use Class 8 Villa - East (2,500 to 3,600sq. ft) 23 Units Land Use Class 9 Villa - East (1,800 to 2,500 sq, ft) 36 Units Total - Residential 322 Units Non Residential Land Use Class 10 Commercial - Retail 372,099 Sq. Ft Land Use Class 11 Commercial - Office 266,100 Sq. Ft Land Use Class 12 Commercial - Hospitality 255,500 Sq. Ft Land Use Class 13 Commercial - Institutional 264,600 Sq. Ft Total — Non-residential 1,158,299 Sq. Ft The .following table shows the proposed residential and non-residential Land Use Classes within Improvement Area #1 of the PID. D - 1 v6.2.1 Table D-2 Proposed Development within the PID — Improvement Area #1 (Mixed -Use Core) Land Use Class Description Proposed Development Residential Land Use Class 10 Commercial - Retail 372,099 Land Use Class 1 Condo Units (more than 3,600 sq. ft) 38 Units Land Use Class 2 Condo Units (2,500 to 3,600sq. ft) 71 Units Land Use Class 3 Condo Units (1,$00 to 2,500 sq. ft) 6 Units Sq. Ft Total - Residential 115 Units Non -Residential Description Proposed Development Residential Land Use Class 10 Commercial - Retail 372,099 Sq. Ft Land Use Class 11 Commercial - Office 266,100 Sq, Ft Land Use Class 12 Commercial - Hospitality 255,500 Sq. Ft Land Use Class 13 Commercial - Institutional 264,600 Sq. Ft Total - Residential Total — Non-residential 1.158.299 So. Ft The following table shows the proposed residential Land Use Classes within Improvement Area #2 of the PID. Table D-3 Proposed Development within. the PID — Improvement Area #2 (West Residential) Land Use Class Description Proposed Development Residential Land Use Class 4 Villa - West (more than 3,600 sq. ft) 42 Units Land Use Class 5 Villa - West (2,500 to 3,600sq. ft) 16 Units Land Use Class 6 Villa - West (1,800 to 2,500 sq. ft) 69 Units Total - Residential 127 Units The following table shows the proposed residential Land Use Classes within Improvement Area #3 of the PID. D - 2 v6.2.1 Table D-4 Proposed Development within the PID -- Improvement Area #3 (East Residential) Land Use Class Description Proposed Development Residential Land Use Class 7 Villa - East (more than 3,600 sq. ft) 21 Units Land Use Class 8 Villa - East (2,500 to 3,600sq, ft) 23 Units Land Use Class 9 Villa - East (1,800 to 2,500 sq. ft) 36 Units Total - Residential 80 Units The Land Use Classes shown in the above tables are defined as follows: "Land Use Class I" means lots identified as such on the Assessment Roll, which are referred to as condominium residential units in the Zoning Ordinance and being generally lots for a condominium dwelling unit placed over retail and office uses, having more than 3,600 square feet area with structured parking provided. "Land Use Class 2" means lots 'identified as such on the Assessment Roll, which are referred to as condominium residential units in the Zoning Ordinance and being generally lots for a condominium dwelling unit placed over retail and office uses, having between 2,500 and 3,600 square feet area with structured parking provided. "Land Use Class 3" means lots identified as such on the Assessment Roll, which are referred to as condominium residential units in the Zoning Ordinance and being generally lots for a condominium dwelling unit placed over retail and office uses, having 1,800 to 2,500 square feet area with structured parking provided. "Land Use Class 4" means lots identified as such on the Assessment Roll, which are referred to as single-family residential units in the Zoning Ordinance and being generally lots for a single family residential units, having more than 3,600 square feet area and located in the development commonly referred to as West Residential. "Land Use Class 5" means lots identified as such on the Assessment Roll, which are refcrred to as single-family residential units in the Zoning Ordinance and being generally lots for a single family residential units, having between 2,500 and 3,600 square feet area and located in the development commonly referred to as West Residential. "Land Use Class 6" means lots identified as such on the Assessment Roll, which are referred to as single -fancily residential units in the Zoning Ordinance and being generally lots for a single family residential units, having 1,800 to 2,500 square feet area and located in the development commonly referred to as West Residential. "Land Use Class 7" means lots identified as such on the Assessment Roll, which are referred to as single-family residential units in the Zoning Ordinance and being generally lots for a single D - 3 v6.2.1 family residential units, having more than 3,600 square feet area and located in the development commonly referred to as East Residential, "Land Use Class 8" means lots identified as such on the Assessment Roll, which are referred to as single-family residential units in the Zoning Ordinance and being generally lots for a single family residential units, having between 2,500 and 3,600 square feet area and located in the development commonly referred to as East Residential. "Land Use Class 9" means lots identified as such on the Assessment Roll, which are referred to as single-family residential units in the Zoning Ordinance and being generally lots for a single family residential units, having 1,800 to 2,500 square feet area and located in the development commonly referred to as East Residential. "Land Use Class 10" means lots identified as such on the Assessment Roll, which are referred to as commercial in the Zoning Ordinance, and being generally parcels used for retail purposes that may be comprised of a single tenant or multiple tenants that make up a retail establishment and are generally located on the ground floor of buildings or in a single building. "Land Use Class 11" means lots identified as such on the Assessment Roll, which are refen-ed to as commercial in the Zoning Ordinance, and being generally parcels used for office purposes that may include a group of offices or a single office and are generally located in a single building, on one or more floors, or multiple buildings. "Land Use Class 1.2" means lots identified as such on the Assessment Roll, which are referred to as commercial in the Zoning Ordinance, and being generally a building or group of buildings designed and occupied for hospitality uses. "Land Use Class 13" means lots identified as such on the Assessment Roll, which are referred to as commercial in the Zoning Ordinance, and being generally parcels used institutional purposes such as assisted living, nursing and other similar residential uses that are either on the water or on the central plaza. As explained under Section V, for put -pose of this Service and Assessment Plan, the Town Council has determined that the Actual Costs of the Authorized Improvements to be financed with the Bonds shall be allocated to the Assessed Property by spreading the entire Assessment across the Parcels based on the estimated Equivalent Units. For purposes of this Service and Assessment Plan, the Town Council has determined that the Authorized Improvement Costs shall be allocated to the Assessed Property in each Improvement Area spreading the entire Assessment across the Parcels of Assessed Property in each Improvement Area on the basis of the Direct Improvement Costs and Common Improvement Costs excluding estimated right-of—way costs, as allocated to each Improvement Area based on the ratio of the Direct Improvement Costs of each Improvement Area, and that such method of allocation will result in the imposition of equal shares of the Authorized Improvement Costs to Parcels similarly benefited. Table D-5 below shows the allocation of the Common Improvement D - 4 v62.1 Costs to each Improvement Area and the resulting ratio for allocating Assessment Part A to each Improvement Area. Table D-5 Allocation of Common Improvement Costs and Calculation of Assessment Part A Allocation Ratio For purposes of this Service and Assessment Plan, the Town Council has determined that the Assessment Part A allocated to the Assessed Property in each Improvement Area based on the above calculated Assessment allocation ratio is spread to each Land Use Class on the basis of the estimated Equivalent Units as calculated for each Land Use Class in each Improvement Area. The estimated Equivalent Units will be calculated based on the relative average construction cost per unit of each Land Use Class as shown herein. The average construction cost for each Land Use Class in each Improvement Area is calculated based on the estimated average square feet of each unit of residential Land Use Class or 1,000 square feet of commercial Land Use Class, as applicable, and the estimated average construction cost per square foot of each Land Use Class. Upon subsequent divisions of any Parcel, the Assessment applicable to it will then be apportioned pro rata based on the Equivalent Units of each newly created Parcel. E uivalent Units — Improvement Area #1 Having taken into consideration the matters described above, the Town Council has determined that allocating the Assessments among Parcels based on estimated average construction cost per unit is best accomplished by creating classifications of benefited Parcels in each Improvement Area based on the "Land Use Class" defined above. These classifications representing the estimated average construction cost per unit relative to the highest estimated average construction cost per unit of Land Use Class I in Improvement Area #1 are set forth in Table D-6 below. The total Assessment Part A allocated to Improvement Area #1 is spread to each Land D - 5 16.2.1 CIC Total Assessment Improvement Estimated Allocation Allocation of Estimated Allocation Area Description Cost Ratio CIC Costs Ratio Common Improvement All Costs (CIC) $6,241,698 -100.0% ($6,241,698) $0 Direct Improvement 1 Costs $9,089,967 64.5% $4,028,374 $13,118,342 64.5% Direct Improvement 2 Costs $2,677,735 19.0% $1,186,684 $3,864,419 19.0% Direct Improvement 3 Costs $2,316,598 16.4% $1,026,640 $3,343,238 16.4% Subtotal: Pant A $20,325,998 100.0% $0 $20,325,999 100.00% 1 Parking Garage $6,160,000 $0 $6,160,000 100.00% Subtotal: Part B $6,160,000 $0 $6,160,000 Total $26,4851998 $0 $26,485,998 For purposes of this Service and Assessment Plan, the Town Council has determined that the Assessment Part A allocated to the Assessed Property in each Improvement Area based on the above calculated Assessment allocation ratio is spread to each Land Use Class on the basis of the estimated Equivalent Units as calculated for each Land Use Class in each Improvement Area. The estimated Equivalent Units will be calculated based on the relative average construction cost per unit of each Land Use Class as shown herein. The average construction cost for each Land Use Class in each Improvement Area is calculated based on the estimated average square feet of each unit of residential Land Use Class or 1,000 square feet of commercial Land Use Class, as applicable, and the estimated average construction cost per square foot of each Land Use Class. Upon subsequent divisions of any Parcel, the Assessment applicable to it will then be apportioned pro rata based on the Equivalent Units of each newly created Parcel. E uivalent Units — Improvement Area #1 Having taken into consideration the matters described above, the Town Council has determined that allocating the Assessments among Parcels based on estimated average construction cost per unit is best accomplished by creating classifications of benefited Parcels in each Improvement Area based on the "Land Use Class" defined above. These classifications representing the estimated average construction cost per unit relative to the highest estimated average construction cost per unit of Land Use Class I in Improvement Area #1 are set forth in Table D-6 below. The total Assessment Part A allocated to Improvement Area #1 is spread to each Land D - 5 16.2.1 Use type in Improvement Area 41 on the basis of the estimated average construction cost for each Land Use Class. This is accomplished by giving each Land Use Class in Improvement Area #1 an Equivalent Unit factor. Equivalent Units are the ratio of the estimated average value at build -out within each Land Use Class, setting the Equivalent Unit factor for Land Use Class I in Improvement Area 41 to 1.0. The Equivalent Unit factor for Land Use Class 2 is calculated to be 0.62 ($468,350 _ $756,210 = 0.62). The Equivalent Unit factor for each of the remaining Land Use Classes in Improvement Area #1 is calculated accordingly and shown in Table D-6. Table D-6 Estimated Equivalent Units — Improvement Area #1. The total estimated Equivalent Units for Improvement Area #1 of the PID are shown in Table D- 7 below as calculated based on the Equivalent Unit factors shown above, estimated Land Use Class and number of units estimated to be built within Improvement Area #I. Table D-7 Total Equivalent Units — Improvement Area #1 Land Use Class Planned No. of Units Estimated Estimated Land Use Class 1 38 Estimated Average Average 71 0.62 Average Construction Construction 0.60 3.60 Square Feet Cost per Cost per Equivalent Unit Land Use Class per Unit Square Foot Unit Factor Land Use Class 1 3,601 $210 $756,210 1.00 per dwelling unit Land Use Class 2 2,755 $170 $468,350 0.62 per dwelling unit Land Use Class 3 1,800 $250 $450,000 0.60 per dwelling; unit Land Use Class 10 1,000 $165 $165,000 0.22 per 1,000 sq. ft Land Use Class I1 1,000 $150 $150,000 0.20 per 1,000 sq. ft Land Use Class 12 1,000 $161 $161,000 0.21 per 1,000 sq. ft Land Use Class 13 1,000 $141 $141,000 0.19 per 1,000 sa. ft The total estimated Equivalent Units for Improvement Area #1 of the PID are shown in Table D- 7 below as calculated based on the Equivalent Unit factors shown above, estimated Land Use Class and number of units estimated to be built within Improvement Area #I. Table D-7 Total Equivalent Units — Improvement Area #1 Land Use Class Planned No. of Units Equivalent Unit Factor Total Equivalent Units Land Use Class 1 38 1.00 38.00 Land Use Class 2 71 0.62 44.02 Land Use Class 3 6 0.60 3.60 Land Use Class 10 (in 1,000 sq. ft) 372.1 0.22 81.86 Land Use Class 11 (in 1,000 sq. ft) 266.1 0.20 53.22 Land Use Class 12 (in 1,000 sq. ft) 255.5 0.21 53.66 Land Use Class 13 (in 1,000 scl. ft) 264.6 0.19 50.27 Total 324.63 D - 6 v6.2.1 Equivalent Units — Improvement Area #2 The classifications representing the estimated average construction cost per unit relative to the highest estimated average construction cost per unit of Land Use Class 4 in Improvement Area #2 are set forth in Table D-8 below, The total Assessment part A allocated to Improvement Area #2 is spread to each Land Use type in Improvement Area #2 the basis of the estimated average construction cost for each Land Use Class. This is accomplished by giving each Land Use Class in Improvement Area #2 an Equivalent Unit factor. Equivalent Units are the ratio of the estimated average value at build -out within each Land Use Class, setting the Equivalent Unit factor for Land Use Class 4 in Improvement Area #2 to 1.0. The Equivalent Unit factor for Land Use Class 5 is calculated to be 0.68 ($485,280 $708,750 = 0.68). The Equivalent Unit factor for each of the remaining Land Use Classes in Improvement Area #2 is calculated accordingly and shown in Table D-8. Table D-8 Estimated Equivalent Units Improvement Area #2 The total estimated Equivalent Units for Improvement Area 41 of the PID are shown in Table D- 9 below as calculated based on the Equivalent Unit factors shown above, estimated Land Use Class and number of units estimated to be built within Improvement Area Q. Table D-9 Total Equivalent Units — Improvement Area #2 Planned Estimated Estimated No. of Estimated Average Average Units Factor Average Construction Construction 1.00 42.00 Square Feet Cost per Cost per Equivalent Unit Land Use Class er Unit S uare Foot Unit Factor Land Use Class 4 4,050 $175 $708,750 1.00 per dwelling unit Land Use Class 5 2,696 $180 $485,280 0.68 per dwelling unit Land Use Class 6 2,069 $178 $368,282 0.52 per dwelling unit The total estimated Equivalent Units for Improvement Area 41 of the PID are shown in Table D- 9 below as calculated based on the Equivalent Unit factors shown above, estimated Land Use Class and number of units estimated to be built within Improvement Area Q. Table D-9 Total Equivalent Units — Improvement Area #2 D - 7 v6.2. I Planned Equivalent Total No. of Unit Equivalent Land Use Class Units Factor Units Land Use Class 4 42 1.00 42.00 Land Use Class 5 16 0.68 10.88 Land Use Class 6 69 0.52 35.88 Total 127 88.76 D - 7 v6.2. I Equivalent Units — Improvement Area #3 The classifications representing; the estimated average construction cost per unit relative to the highest estimated average construction cost per unit of Land Use Class 7 in Improvement Area #3 are set forth in Table D-10 below. The total Assessment Part A allocated to Improvement Area #3 is spread to each Land Use type in Improvement Area #3 the basis of the estimated average construction cost for each Land Use Class. This is accomplished by giving each Land Use Class in Improvement Area 93 an Equivalent Unit factor. Equivalent Units are the ratio of the estimated average value at build -out within each Land Use Class, setting the Equivalent Unit factor for Land Use Class 7 in Improvement Area 43 to 1.0. The Equivalent Unit factor for Land Use Class 8 is calculated to be 0.68 ($464,112 . $681,596 = 0.68). The Equivalent Unit factor for each of the remaining; Land Use Classes in Improvement Area #3 is calculated accordingly and shown in Table D-10. Table D-10 Estimated Equivalent Units — Improvement Area #3 The total estimated Equivalent Units for Improvement Area #3 of the PID are shown in Table D- 11 below as calculated based on the Equivalent Unit factors shown above, estimated Land Use Class and number of units estimated to be built within Improvement Area 0. Table D -I I Total Equivalent Units — Improvement Area #3 Planned Estimated Estimated No. of Estimated Average Average Units Factor Average Construction Construction 1.00 21.00 Square Feet Cost per Cost per Equivalent Unit Land Use Class per Unit Square Foot Unit Factor Land Use Class 7 4,106 $166 $681,596 1.00 per dwelling unit Land Use Class 8 2,637 $176 $464,112 0.68 per dwelling unit Land Use Class 9 2,054 $184 $377,936 0.55 per dwellin unit The total estimated Equivalent Units for Improvement Area #3 of the PID are shown in Table D- 11 below as calculated based on the Equivalent Unit factors shown above, estimated Land Use Class and number of units estimated to be built within Improvement Area 0. Table D -I I Total Equivalent Units — Improvement Area #3 Allocation of Assessments As shown in Section IV of this Service and Assessment flan, the total amount of the Series 2015 Bonds and the Reimbursement Agreement for Improvement Project A, which represents the total D - 8 v6.2.I Planned Equivalent Total No. of Unit Equivalent Land Use Class Units Factor Units Land Use Class 7 21 1.00 21.00 Land Use Class 8 23 0.68 15.64 Land Use Class 9 36 0.55 19.80 Total 80 56.44 Allocation of Assessments As shown in Section IV of this Service and Assessment flan, the total amount of the Series 2015 Bonds and the Reimbursement Agreement for Improvement Project A, which represents the total D - 8 v6.2.I Assessment Part A to be allocated on all Parcels within the PID, is $29,575,000. As shown in Table D-5 above, the Assessment Part A allocation ratio for Improvement Area #1, Improvement Area #2 and Improvement Area #3 are 64.5%, 19.0% and 16.4%, respectively. As a result, the total Assessment Part A allocated to Improvement Area 41 is calculated to be $19,087,620.54 ($29,575,000 X 64.5% = $19,087,620.54), the total Assessment Part A allocated to Improvement Area #2 is calculated to be $5,622,857.55 ($29,575,000 x 19.0% = $5,622,857.55) and the total Assessment Part A allocated to Improvement Area #3 is calculated to be $4,864,521.90 ($29,575,000 X 16.4% — $4,864,521.90). Improvement Area #1 As described above, the total amount of Assessment Part A allocated to Improvement Area #1 is $19,087,620.54. As shown in Table D-7 above, there are a total of 324.63 estimated Equivalent Units in Improvement Area #1 of the PID, resulting in an Assessment Part A per Equivalent Unit of $58,797.94 ($19,087,621 - 324.63 = $58,797.94). The Assessment Part A for each Parcel in Improvement Area #1 is calculated as the product of (i) $58,797.94 multiplied by (ii) the applicable Equivalent Unit value for each Land Use Class to be developed on each Parcel. For example, the Assessment Part A for a Land Use Class I (Condo Residential — more than 3,600 square feet) dwelling unit is $58,797.94 (i.e. $58,797.94 x 1.00). A Lot to be developed with a single dwelling unit in Land Use Class I would, therefore, have an Assessment of $58,797.94. Table D-12 below sets forth the Assessment Part A per unit for each of the Land Use Classes in Improvement Area #1. Table D-12 Assessment Part A per Unit — Improvement Area #1 Assessment Planned Part A per Equivalent Total No. of Equivalent Unit Assessment Type Units Unit Factor Assessment Part A per Unit Part A Residential Land Use Class 1 38 $58,797.94 1.00 $58,797.94 per dwelling unit $2,234,321.65 Land Use Class 2 71 $58,797.94 0.62 $36,454.72 per dwelling unit $2,588,285.24 Land Use Class 3 6 $58,797.94 0.60 $35,278.76 per dwelling unit $211,672.58 Land Use Class 10 372.10 $58,797.94 0.22 $12,935.55 per 1,000 Sq. Ft $4,813,303.88 Land Use Class 11 266.10 $58,797.94 0.20 $11,759.59 per 1,000 Sq. Ft $3,129,226.27 Land Use Class 12 255.50 $58,797.94 0.21 $12,347.57 per 1,000 Sq. Ft $3,154,803.37 Land Use Class 13 264.60 $58,797.94 0.19 $11,1.71.61 per 1,000 Sq. Ft $2,956,007.55 Total $19,087.620.54 D - 9 M.2.1 Improvement Area #2 As described above, the total amount of Assessment Part A allocated to Improvement Area #2 is $5,622,857.55. As shown in Table D-9 above, there are a total of 88.76 estimated Equivalent Units in Improvement Area #2 of the PID, resulting in an Assessment Part A per Equivalent Unit of $63,349.00 ($5,622,858 _ 88.76 = $63,349.00). The Assessment Part A for each Parcel in Improvement Area #2 is calculated as the product of (i) $63,349.00 multiplied by (ii) the applicable Equivalent Unit value for each Land Use Class to be developed on each Parcel. For example, the Assessment Part A for a Land Use Class 4 (Villa West — more than 3,600 square feet) dwelling unit is $63,349.00 (i.e. $63,349.00 X 1.00), A Lot to be developed with a single dwelling unit in Land Use Class 4 would therefore have an Assessment of $63,349.00. Table D-13 below sets forth the Assessment Part A per unit for each of the Land Use Classes in Improvement Area #2. Table D-13 Assessment Part A per Unit µ- Improvement Area #2 ImprovementArea #3 As described above, the total amount of Assessment Part A allocated to Improvement Area #3 is $4,864,521.90. As shown in Table D -I I above, there are a total of 56.44 estimated Equivalent Units in Improvement Area #3 of the PID, resulting in an Assessment Part A per Equivalent Unit of $86,189.26 ($4,864,521.90 -= 56.44 = $86,189.26). The Assessment Pari A for each Parcel in Improvement Area #3 is calculated as the product of (i) $86,189.26 multiplied by (ii) the applicable Equivalent Unit value for each Land Use Class to be developed on each Parcel. For example, the Assessment Part A for a Land Use Class 7 (Villa East — more than 3,600 square feet) dwelling unit is $86,189.26 (i.e. $86,189.26 X 1.00). A Lot to be developed with a single dwelling unit in Land Use Class 7 would therefore have an Assessment of $86,189.26. D - 10 v5.2.1 Assessment Planned Part A per Equivalent Total No. of Equivalent Unit Assessment Type Units Unit Factor Assessment Part A per Unit Part A Residential Land Use Class 4 42 $63,349.00 1.00 $63,349.00 per dwelling unit $2,660,658.15 Land Use Class 5 16 $63,349.00 0.68 $43,077.32 per dwelling unit $689,237.16 Land Use Class 6 69 $63,349.00 0.52 $32,941.48 per dwelling unit $2,272,962.25 Total 127 $5,622,857.55 ImprovementArea #3 As described above, the total amount of Assessment Part A allocated to Improvement Area #3 is $4,864,521.90. As shown in Table D -I I above, there are a total of 56.44 estimated Equivalent Units in Improvement Area #3 of the PID, resulting in an Assessment Part A per Equivalent Unit of $86,189.26 ($4,864,521.90 -= 56.44 = $86,189.26). The Assessment Pari A for each Parcel in Improvement Area #3 is calculated as the product of (i) $86,189.26 multiplied by (ii) the applicable Equivalent Unit value for each Land Use Class to be developed on each Parcel. For example, the Assessment Part A for a Land Use Class 7 (Villa East — more than 3,600 square feet) dwelling unit is $86,189.26 (i.e. $86,189.26 X 1.00). A Lot to be developed with a single dwelling unit in Land Use Class 7 would therefore have an Assessment of $86,189.26. D - 10 v5.2.1 Table D-14 below sets forth the Assessment Part A per unit for each of the Land Use Classes in Improvement Area #3. Table D-14 Assessment Part A per Unit — Improvement Area #3 D - 11 v6.2.1 Assessment Planned Part A per Equivalent Total No. of Equivalent Unit Assessment Tye Units Unit Factor Assessment Part A per Unit Part A Residential Land Use Class 7 2I $86,189.26 1.00 $86,189.26 per dwelling unit $1,809,974.49 Land Use Class 8 23 $86,189.26 0.68 $58,608.70 per dwelling unit $1,348,000.05 Land Use Class 9 36 $86,189.26 0.52 $47,404.09 per dwelling unit $1,706,547.37 Total 80 $4,864,521.90 D - 11 v6.2.1 Draft Appendix E ASSESSMENT ROLL Assessment Roll Improvement Area #1 Parcel All Assessment Part A $19,087,621 Total Equivalent Units 324.63 Administrative Expenses Total $40,592,850 $5,682,263 $292,822 $794,706 $47,362,641 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% on the tenn 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reirnhursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-1-1 Principal and Principal and Maintenance Other Administrative Annual Year Interests Interest Assessment Expenses Installment Part A 1 $642,323 $173,912 $6,910 $19,362 $842,506 2 $1,122,507 $152,068 $7,048 $19,749 $1,301,372 3 $1,332,261 $152,714 $7,189 $20,144 $1,512,308 4 $1,335,811 $155,251 $7,332 $20,547 $1,518,941 5 $1,338,392 $157,609 $7,479 $20,958 $1,524,438 6 $1,340,006 $159,788 $7,629 $21,377 $1,528,799 7 $1,340,651 $162,433 $7,781 $21,805 $1,532,670 8 $1,340,329 $164,855 $7,937 $22,241 $1,535,361 9 $1,339,038 $167,699 $8,096 $22,686 $1,537,518 10 $1,336,779 $170,274 $8,258 $23,139 $1,538,450 11 $1,333,552 $169,010 $8,423 $23,602 $1,534,586 12 $1,345,492 $171,703 $8,591 $24,074 $1,549,860 13 $1,337,041 $174,738 $8,763 $24,556 $1,545,097 14 $1,343,656 $177,425 $8,938 $25,047 $1,555,067 15 $1,331,999 $181,056 $9,117 $25,548 $1,547,719 16 $1,335,407 $184,252 $9,299 $26,059 $1,555,018 17 $1,336,678 $187,660 $9,485 $26,580 $1,560,403 18 $1,335,811 $191,235 $9,675 $27,111 $1,563,832 19 $1,332,806 $194,934 $9,869 $27,654 $1,565,262 20 $1,343,798 $198,714 $10,066 $28,207 $1,580,784 21 $1,335,448 $202,531 $10,267 $28,771 $1,577,017 22 $1,341,095 $206,987 $10,473 $29,346 $1,587,901 23 $1,342,668 $210,705 $10,682 $29,933 $1,593,989 24 $1,340,974 $215,621 $10,896 $30,532 $1,598,023 25 $1,336,012 $220,314 $11,114 $31,142 $1,598,582 26 $1,343,919 $224,740 $11,336 $31,765 $1,611,759 27 $1,331,333 $230,146 $11,563 $32,401 $1,605,443 28 $1,346,561 $235,757 $11,794 $33,049 $1,627,160 29 $1,340,107 $240,841 $12,030 $33,71.0 $1,626,687 30 $1,345,351 $247,291 $12,270 $34,384 $1,639,295 31 $1,345,048 $0 $12,516 $9,230 $1,366,794 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 Total $40,592,850 $5,682,263 $292,822 $794,706 $47,362,641 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% on the tenn 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reirnhursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-1-1 Parcel Assessment Part A Total Equivalent Units Assessment Rall Improvement Area #1 Administrative E 40778436 $1,462,775 24.88 (1) The principal and interest rates are based on the Series 2015 Bonds, interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% on the term 2025, 2035, 2040 and 2045 Bonds, The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per anmum. (3) The Administrative Expense amounts are estimated and wilt he updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based an the actual budget for maintenance of the improvements. E-1-2 Principal and Principal and Maintenance Other Administrative Annual Year Interest' Interest Assessment Expenses Installment Part A 1 $49,224 $13,328 $530 $1,484 $64,565 2 $86,023 $11,654 $540 $1,513 $99,730 3 $102,097 $11,703 $551 $1,544 $115,895 4 $102,370 $11,898 $562 $1,575 $116,404 5 $102,567 $12,078 $573 $1,606 $116,825 6 $102,691 $12,245 $585 $1,638 $117,159 7 $102,740 $12,448 $596 $1,671 $117,456 8 $102,716 $12,634 $608 $1,704 $117,662 9 $102,617 $12,852 $620 $1,739 $117,827 10 $102,444 $13,049 $633 $1,773 $117,899 11 $102,196 $12,952 $645 $1,809 $117,603 12 $103,111 $13,158 $658 $1,845 $118,773 13 $102,464 $13,391 $672 $1,882 $118,408 14 $102,971 $13,597 $685 $1,919 $119,172 15 $102,077 $13,875 $699 $1,958 $118,609 16 $102,339 $14,120 $713 $1,997 $119,168 17 $102,436 $14,381 $727 $2,037 $119,581 18 $102,370 $14,655 $741 $2,078 $119,844 19 $102,139 $14,939 $756 $2,119 $119,953 20 $102,982 $15,228 $771 $2,162 $121,143 21 $102,342 $15,521 $787 $2,205 $120,854 22 $102,774 $15,862 $803 $2,249 $121,688 23 $102,895 $16,147 $819 $2,294 $122,155 24 $102,765 $16,524 $835 $2,340 $122,464 25 $102,385 $16,884 $852 $2,387 $122,507 26 $102,991 $17,223 $869 $2,434 $123,517 27 $102,026 $17,637 $886 $2,483 $123,033 28 $103,193 $18,067 $904 $2,533 $124,697 29 $102,699 $18,457 $922 $2,583 $124,661 30 $103,101 $18,951 $940 $2,635 $125,627 31 $103,077 $0 $959 $707 $104,744 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 Total $3,110,823 $435,459 $22,440 $60,902 $3,629,624 (1) The principal and interest rates are based on the Series 2015 Bonds, interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% on the term 2025, 2035, 2040 and 2045 Bonds, The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per anmum. (3) The Administrative Expense amounts are estimated and wilt he updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based an the actual budget for maintenance of the improvements. E-1-2 Assessment Roll Improvement Area #1 Parcel 40778479 Assessment Part A $2,160,824 Total Equivalent Units 36.75 Administrative Expenses (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6 25% and 0.375% on the teen 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per ammm. (3) The Administrative Expense amounts are estimated and will he updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-1-3 Principal and Principal and Maintenance Other Administrative Annual Year Interests Interest2 Assessment Expenses Installment Part A 1 $72,715 $19,688 $782 $2,192 $95,376 2 $127,074 $17,215 $798 $2,236 $147,323 3 $150,819 $17,288 $814 $2,280 $171,202 4 $151,221 $17,575 $830 $2,326 $171,953 5 $151,513 $17,842 $847 $2,373 $172,575 6 $151,696 $18,089 $864 $2,420 $173,069 7 $151,769 $18,388 $881 $2,468 $173,507 8 $151,733 $18,663 $898 $2,518 $173,811 9 $151,586 $18,984 $916 $2,568 $174,056 10 $151,331 $19,276 $935 $2,619 $174,161 11 $150,965 $19,133 $953 $2,672 $173,724 12 $152,317 $19,438 $973 $2,725 $175,453 13 $151,360 $19,781 $992 $2,780 $174,914 14 $152,109 $20,086 $1,012 $2,835 $176,042 15 $150,790 $20,497 $1,032 $2,892 $175,210 16 $151,176 $20,858 $1,053 $2,950 $176,037 17 $151,319 $21,244 $1,074 $3,009 $176,646 18 $151,221 $21,649 $1,095 $3,069 $177,034 19 $150,881 $22,068 $1,117 $3,131 $177,196 20 $152,125 $22,495 $1,140 $3,193 $178,953 21 $151,180 $22,928 $1,162 $3,257 $178,527 22 $151,819 $23,432 $1,186 $3,322 $179,759 23 $151,997 $23,853 $1,209 $3,389 $180,448 24 $151,806 $24,410 $1,233 $3,456 $180,905 25 $151,244 $24,941 $1,258 $3,525 $180,968 26 $152,139 $25,442 $1,283 $3,596 $182,460 27 $150,714 $26,054 $1,309 $3,668 $181,745 28 $152,438 $26,689 $1,335 $3,741 $184,204 29 $151,707 $27,265 $1,362 $3,816 $184,150 30 $152,301 $27,995 $1,389 $3,892 $185,577 31 $152,267 $0 $1,417 $1,045 $154,729 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 Total $4,595,335 $643,264 $33,149 $89,965 $5,361,713 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6 25% and 0.375% on the teen 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per ammm. (3) The Administrative Expense amounts are estimated and will he updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-1-3 Assessment Roll Improvement Area #1 Parcel 07121202 Assessment Part A $1,292,614 Total Equivalent Units 21.98 Administrative Expenses Year 1 2 3 4 5 6 7 8 9 to 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Principal and Interest' $43,498 $76,016 $90,221 $90,461 $90,636 $90,745 $90,789 $90,767 $90,680 $90,527 $90,308 $91,117 $90,544 $90,992 $90,203 $90,434 $90,520 $90,461 $90,258 $91,002 $90,437 $90,819 $90,92.5 $90,811 $90,475 $91,010 $90,158 $91,189 $90,752 $91,107 $91,087 $0 $0 $0 Principal and Interest $11,777 $10,298 $10,342 $10,514 $10,673 $10,821 $11,000 $11,164 $11,357 $11,531 $11,445 $11,628 $11,833 $12,015 $12,261 $12,478 $12,708 $12,950 $13,201 $13,457 $13,715 $14,017 $14,269 $14,602 $14,920 $15,219 $15,585 $15,965 $16,310 $16,747 $0 $0 $0 $0 Maintenance Assessment $468 $477 $487 $497 $506 $517 $527 $537 $548 $559 $570 $582 $593 $605 $617 $630 $642 $655 $668 $682 $695 $709 $723 $738 $753 $768 $783 $799 $815 $831 $848 $0 $0 $0 Other Administrative Expenses $1,311 $1,337 $1,364 $1,391 $1,419 $1,448 $1,477 $1,506 $1,536 $1,567 $1,598 $1,630 $1,663 $1,696 $1,730 $1,765 $1,800 $1,836 $1,873 $1,910 $1,948 $1,987 $2,027 $2,068 $2,109 $2,151 $2,194 $2,238 $2,283 $2,328 $625 $0 $0 $0 Annual Installment Part A $57,055 $88,129 $102,413 $102,863 $103,235 $103,530 $103,792 $103,975 $104,121 $104,184 $103,922 $104,957 $104,634 $105,309 $104,812 $105,306 $105,670 $105,903 $106,000 $107,051 $106,796 $107,533 $107,945 $108,218 $108,256 $109,148 $108,721 $110,1.91 $110,159 $111,013 $92,559 $o $0 $0 Total $2,748,948 $384,803 $19,830 $53,817 $3,207,399 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6,375% on the term 2025, 2035, 2040 and 2045 Bolds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-1-4 Assessment Roll Improvement Area #1 Parcel 04319087 Assessment Part A $1,809,271 Total Equivalent Units 30.77 Administrative Expenses Principal and Principal and Maintenance Other Administrative Annual Year Interest' Interest Assessment Expenses Installment Part A 1 $60,884 $16,485 $655 $1,835 $79,859 2 $106,400 $14,414 $668 $1,872 $123,354 3 $126,282 $14,475 $681 $1,909 $143,348 4 $126,618 $14,716 $695 $1,948 $143,977 5 $126,863 $14,939 $709 $1,987 $144,498 6 $1.27,016 $15,146 $723 $2,026 $144,911 7 $127,077 $15,397 $738 $2,067 $145,278 8 $127,047 $15,626 $752 $2,108 $145,533 9 $126,924 $15,896 $767 $2,150 $145,738 10 $126,710 $16,140 $783 $2,193 $145,826 11 $126,404 $16,020 $798 $2,237 $145,460 12 $127,536 $16,275 $814 $2,282 $146,908 13 $126,735 $16,563 $831 $2,328 $146,456 14 $127,362 $16,818 $847 $2,374 $147,401 15 $126,257 $17,162 $864 $2,422 $146,705 16 $126,580 $17,465 $881 $2,470 $147,397 17 $126,701 $17,788 $899 $2,519 $147,907 18 $126,618 $18,127 $917 $2,570 $148,232 19 $126,334 $18,477 $935 $2,621 $148,368 20 $127,375 $18,836 $954 $2,674 $149,839 21 $126,584 $19,197 $973 $2,727 $149,482 22 $127,119 $19,620 $993 $2,782 $150,513 23 $127,268 $19,972 $1,013 $2,837 $151,090 24 $1.27,108 $20,438 $1,033 $2,894 $151,473 25 $126,638 $20,883 $1,053 $2,952 $151,526 26 $127,387 $21,303 $1,074 $3,011 $152,775 27 $126,194 $21,815 $1,096 $3,071 $152,176 28 $127,637 $22,347 $1,118 $3,133 $154,235 29 $127,026 $22,829 $1,140 $3,195 $154,190 30 $127,523 $23,440 $1,163 $3,259 $155,385 31 $127,494 $0 $1,186 $875 $129,555 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 Total $3,847,702 $538,609 $27,756 $75,328 $4,489,395 (1) The principal and interest rates are based on the Series 2015 Bonds, interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% on the tern 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-1-5 Parcel Assessment Part A Total Equivalent Units Assessment Roll Improvement Area #1 Administrative 40778487 $437,457 7.44 (I) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125°/x, 6.25% and 6.375% on the term 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. 'Flre estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-1-6 Principal and Principal and Maintenance Other Administrative Annual Year Interest' Interest2 Assessment Expenses Installment Part A 1 $14,721 $3,986 $158 $444 $19,309 2 $25,726 $3,485 $162 $453 $29,825 3 $30,533 $3,500 $165 $462 $34,660 4 $30,615 $3,558 $168 $471 $34,812 5 $30,674 $3,612 $171 $480 $34,938 6 $30,711 $3,662 $175 $490 $35,038 7 $30,726 $3,723 $178 $500 $35,126 8 $30,718 $3,778 $182 $510 $35,188 9 $30,689 $3,843 $186 $520 $35,237 10 $30,637 $3,902 $189 $530 $35,259 11 $30,563 $3,873 $193 $541 $35,170 12 $30,836 $3,935 $197 $552 $35,520 13 $30,643 $4,005 $201 $563 $35,411 14 $30,794 $4,066 $205 $574 $35,640 15 $30,527 $4,150 $209 $586 $35,471 16 $30,605 $4,223 $213 $597 $35,638 17 $30,634 $4,301 $217 $609 $35,762 18 $30,615 $4,383 $222 $621 $35,840 19 $30,546 $4,468 $226 $634 $35,873 20 $30,798 $4,554 $231 $646 $36,229 21 $30,606 $4,642 $235 $659 $36,143 22 $30,736 $4,744 $240 $673 $36,392 23 $30,772 $4,829 $245 $686 $36,532 24 $30,733 $4,942 $250 $700 $36,624 25 $30,619 $5,049 $255 $714 $36,637 26 $30,800 $5,151 $260 $728 $36,939 27 $30,512 $5,275 $265 $743 $36,794 28 $30,861 $5,403 $270 $757 $37,292 29 $30,713 $5,520 $276 $773 $37,281 30 $30,833 $5,667 $281 $788 $37,570 31 $30,826 $0 $287 $212 $31,325 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 Total $930,321 $130,228 $6,711 $18,213 $1,085,473 (I) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125°/x, 6.25% and 6.375% on the term 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. 'Flre estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-1-6 Parcel Assessment Part A Total Equivalent Units Assessment Roll Improvement Area ##1 Administrative 05243297 $6,168,021 104.90 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6,125%, 6.25% and 6,375% on the tern 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-1-7 Principal and Principal and Maintenance Other Administrative Annual Year Interest, Interest Assessment Expenses Installment Part A 1 $207,562 $56,198 $2,233 $6,257 $272,250 2 $362,730 $49,140 $2,277 $6,382 $420,529 3 $430,510 $49,348 $2,323 $6,509 $488,691 4 $431,657 $50,168 $2,369 $6,640 $490,834 5 $432,491 $50,930 $2,417 $6,772 $492,611 6 $433,013 $51,634 $2,465 $6,908 $494,020 7 $433,221 $52,489 $2,514 $7,046 $495,271 8 $433,117 $53,272 $2,565 $7,187 $496,140 9 $432,700 $54,191 $2,616 $7,331 $496,837 10 $431,970 $55,023 $2,668 $7,477 $497,139 11 $430,927 $54,614 $2,722 $7,627 $495,890 12 $434,786 $55,485 $2,776 $7,779 $500,826 13 $432,055 $56,465 $2,832 $7,935 $499,287 14 $434,192 $57,334 $2,888 $8,094 $502,508 15 $430,425 $58,507 $2,946 $8,256 $500,134 16 $431,527 $59,540 $3,005 $8,421 $502,492 17 $431,937 $60,641 $3,065 $8,589 $504,232 18 $431,657 $61,796 $3,126 $8,761 $505,340 19 $430,686 $62,991 $3,189 $8,936 $505,803 20 $434,238 $64,213 $3,253 $9,115 $510,818 21 $431,540 $65,446 $3,318 $9,297 $509,601 22 $433,365 $66,886 $3,384 $9,483 $513,118 23 $433,873 $68,088 $3,452 $9,673 $515,085 24 $433,326 $69,676 $3,521 $9,866 $516,389 25 $431,722 $71,193 $3,591 $10,063 $516,570 26 $434,277 $72,623 $3,663 $10,265 $520,828 27 $430,210 $74,370 $3,736 $10,470 $518,787 28 $435,131 $76,183 $3,811 $10,679 $525,805 29 $433,045 $77,826 $3,887 $10,893 $525,652 30 $434,740 $79,910 $3,965 $11,111 $529,726 31 $434,642 $0 $4,044 $2,983 $441,669 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 Total $13,117,275 $1,8361181 $94,623 $256,803 $15,304,882 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6,125%, 6.25% and 6,375% on the tern 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-1-7 Assessment Roll Improvement Area ##1 Parcel 05243343 Assessment Part A $3,487,071 Total Equivalent Units 59.31 Administrative Expenses (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% am the term 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annutn. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements E-1-8 Principal and Principal and Maintenance Other Administrative Annual Year Interest' Interest Assessment Expenses Installment Part A 1 $117,344 $31,771 $1,262 $3,537 $153,915 2 $205,068 $27,781 $1,288 $3,608 $237,745 3 $243,388 $27,899 $1,313 $3,680 $276,280 4 $244,036 $28,362 $1,340 $3,754 $277,492 5 $244,508 $28,793 $1,366 $3,829 $278,496 6 $244,802 $29,191 $1,394 $3,905 $279,293 7 $244,920 $29,675 $1,422 $3,983 $280,000 8 $244,861 $30,117 $1,450 $4,063 $280,491 9 $244,626 $30,636 $1,479 $4,144 $280,885 10 $244,213 $31,107 $1,509 $4,227 $281,056 11 $243,623 $30,876 $1,539 $4,312 $280,350 12 $245,805 $31,368 $1,569 $4,398 $283,140 13 $244,261 $31,922 $1,601 $4,486 $282,270 14 $245,469 $32,413 $1,633 $4,576 $284,091 15 $243,340 $33,077 $1,666 $4,667 $282,749 16 $243,962 $33,661 $1,699 $4,761 $284,082 17 $244,194 $34,283 $1,733 $4,856 $285,066 18 $244,036 $34,936 $1,768 $4,953 $285,693 19 $243,487 $35,612 $1,803 $5,052 $285,954 20 $245,495 $36,303 $1,839 $5,153 $288,790 21 $243,970 $37,000 $1,876 $5,256 $288,101 22 $245,001 $37,814 $1,913 $5,361 $290,090 23 $245,289 $38,493 $1,951 $5,468 $291,202 24 $244,979 $39,391 $1,990 $5,578 $291,939 25 $244,073 $40,249 $2,030 $5,689 $292,041 26 $245,517 $41,057 $2,071 $5,803 $294,448 27 $243,218 $42,045 $2,112 $5,919 $293,294 28 $246,000 $43,070 $2,155 $6,038 $297,262 29 $244,821 $43,999 $2,198 $6,158 $297,176 30 $245,779 $45,177 $2,242 $6,281 $299,479 31 $245,724 $0 $2,286 $1,686 $249,696 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 Total $7,415,808 $1,038,079 $53,495 $145,183 $8,652,565 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% am the term 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annutn. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements E-1-8 Parcel Assessment Part A Total Equivalent Units Assessment Roll Improvement Area #1 Administrative 04319109 $2,269,587 38.60 (1)'T'he principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 0375% on the term 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per anmmri, (3) The. Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plats Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget ibr maintenance of the improvements. E-1-9 Principal and Principal and Maintenance Other Administrative Annual Year Interest' Interest2 Assessment Expenses Installment Part A 1 $76,375 $20,679 $822 $2,302 $100,177 2 $133,470 $18,081 $838 $2,348 $154,738 3 $158,411 $18,158 $855 $2,395 $179,819 4 $158,833 $18,460 $872 $2,443 $180,608 5 $159,140 $18,740 $889 $2,492 $181,261 6 $159,332 $18,999 $907 $2,542 $181,780 7 $159,408 $19,314 $925 $2,593 $182,240 8 $159,370 $19,602 $944 $2,645 $182,560 9 $159,216 $19,940 $963 $2,697 $182,816 10 $158,948 $20,246 $982 $2,751 $182,927 11 $158,564 $20,096 $1,001 $2,806 $182,468 12 $159,984 $20,416 $1,022 $2,862 $184,284 13 $158,979 $20,777 $1,042 $2,920 $183,718 14 $159,766 $21,097 $1,063 $2,978 $184,903 15 $158,380 $21,528 $1,084 $3,038 $184,029 16 $158,785 $21,908 $1,106 $3,098 $184,897 17 $158,936 $22,313 $1,128 $3,160 $185,538 18 $158,833 $22,738 $1,150 $3,224 $185,945 19 $158,475 $23,178 $1,173 $3,288 $186,115 20 $159,782 $23,628 $1,197 $3,354 $187,961 21 $158,790 $24,082 $1,221 $3,421 $187,513 22 $159,461 $24,612 $1,245 $3,489 $188,807 23 $159,648 $25,054 $1,270 $3,559 $189,531 24 $159,447 $25,638 $1,296 $3,630 $190,011 25 $158,857 $26,196 $1,321 $3,703 $190,077 26 $159,797 $26,722 $1,348 $3,777 $191,644 27 $158,300 $27,365 $1,375 $3,853 $190,893 28 $160,111 $28,032 $1,402 $3,930 $193,475 29 $159,344 $28,637 $1,430 $4,008 $193,419 30 $159,967 $29,404 $1,459 $4,088 $194,918 31 $159,931 $0 $1,488 $1,097 $162,517 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 Total $4,826,638 $675,642 $34,818 $94,493 $5,631,590 (1)'T'he principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 0375% on the term 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per anmmri, (3) The. Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plats Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget ibr maintenance of the improvements. E-1-9 Assessment Roll Improvement Area #2 Parcel All Assessment Part A $5,622,858 Total Equivalent Units 88.76 Administrative Expenses ( 1) The principal and interest rates are based on the Series 2015 Bonds. [merest rates on the bonds are 5.5%, 6.125'!/n, 6.25% and 6.375% on the tern 2025. 2035, 2040 and 2045 Bonds, The interest amounts also include the additional 0.5%a interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part ofthe Annual Service Pian Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-2-1 Principal and Principal and Maintenance Other Administrative Annual Year Interest' Interest2 Assessment Expenses Installment Part A 1 $189,217 $5I,231 $1,889 $5,704 $248,040 2 $330,670 $44,797 $1,927 $5,818 $383,211 3 $392,459 $44,987 $1,966 $5,934 $445,346 4 $393,505 $45,734 $2,005 $6,053 $447,297 5 $394,265 $46,429 $2,045 $6,174 $448,913 6 $394,741 $47,070 $2,086 $6,297 $450,194 7 $394,931 $47,850 $2,128 $6,423 $451,331 8 $394,836 $48,563 $2,170 $6,552 $452,121 9 $394,456 $49,401 $2,213 $6,683 $452,753 10 $393,790 $50,160 $2,258 $6,816 $453,024 11 $392,840 $49,787 $2,303 $6,953 $451,882 12 $396,357 $50,581 $2,349 $7,092 $456,378 13 $393,867 $51,475 $2,396 $7,234 $454,971 14 $395,816 $52,266 $2,444 $7,378 $457,904 15 $392,382 $53,336 $2,493 $7,526 $455,736 16 $393,386 $54,277 $2,543 $7,676 $457,882 17 $393,760 $55,281 $2,593 $7,830 $459,465 18 $393,505 $56,334 $2,645 $7,987 $460,471 19 $392,620 $57,424 $2,698 $8,146 $460,888 20 $395,858 $58,537 $2,752 $8,309 $465,456 21 $393,398 $59,662 $2,807 $8,475 $464,342 22 $395,062 $60,975 $2,863 $8,645 $467,544 23 $395,525 $62,070 $2,921 $8,818 $469,333 24 $395,026 $63,518 $2,979 $8,994 $470,517 25 $393,564 $64,900 $3,039 $9,174 $470,677 26 $395,893 $66,204 $3,099 $9,357 $474,554 27 $392,186 $67,797 $3,161 $9,545 $472,689 28 $396,672 $69,450 $3,225 $9,735 $479,082 29 $394,770 $70,947 $3,289 $9,930 $478,937 30 $396,315 $72,847 $3,355 $10,129 $482,646 31 $396,226 $0 $3,422 $2,719 $402,367 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 Total $11,957,898 $1,673,889 $80,063 $234,106 $13,945,955 ( 1) The principal and interest rates are based on the Series 2015 Bonds. [merest rates on the bonds are 5.5%, 6.125'!/n, 6.25% and 6.375% on the tern 2025. 2035, 2040 and 2045 Bonds, The interest amounts also include the additional 0.5%a interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part ofthe Annual Service Pian Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-2-1 Parcel Assessment Part A Total Eauivalent Units Assessment Roll Improvement Area #2 Administrative 04519329 $5,622,858 88.76 _...... ..... . . Total $11,957,898 $1,673,889 $80,063 $234,1.06 $13,945,955 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% on the term 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0,5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-2-2 Principal and Principal and Maintenance Other Administrative Annual Year Interest Interest Assessment Expenses Installment Part A 1 $189,217 $51,231 $1,889 $5,704 $248,040 2 $330,670 $44,797 $1,927 $5,818 $383,211 3 $392,459 $44,987 $1,966 $5,934 $445,346 4 $393,505 $45,734 $2,005 $6,053 $447,297 5 $394,265 $46,429 $2,045 $6,174 $448,913 6 $394,741 $47,070 $2,086 $6,297 $450,194 7 $394,931 $47,850 $2,128 $6,423 $451,331 8 $394,836 $48,563 $2,170 $6,552 $452,121 9 $394,456 $49,401 $2,213 $6,683 $452,753 10 $393,790 $50,160 $2,258 $6,816 $453,024 11 $392,840 $49,787 $2,303 $6,953 $451,882 12 $396,357 $50,581 $2,349 $7,092 $456,378 13 $393,867 $51,475 $2,396 $7,234 $454,971 14 $395,816 $52,266 $2,444 $7,378 $457,904 15 $392,382 $53,336 $2,493 $7,526 $455,736 16 $393,386 $54,277 $2,543 $7,676 $457,882 17 $393,760 $55,281 $2,593 $7,830 $459,465 18 $393,505 $56,334 $2,645 $7,987 $460,471 19 $392,620 $57,424 $2,698 $8,146 $460,888 20 $395,858 $58,537 $2,752 $8,309 $465,456 21 $393,398 $59,662 $2,807 $8,475 $464,342 22 $395,062 $60,975 $2,863 $8,645 $467,544 23 $395,525 $62,070 $2,921 $8,818 $469,333 24 $395,026 $63,518 $2,979 $8,994 $470,517 25 $393,564 $64,900 $3,039 $9,174 $470,677 26 $395,893 $66,204 $3,099 $9,357 $474,554 27 $392,186 $67,797 $3,161 $9,545 $472,689 28 $396,672 $69,450 $3,225 $9,735 $479,082 29 $394,770 $70,947 $3,289 $9,930 $478,937 30 $396,315 $72,847 $3,355 $10,129 $482,646 31 $396,226 $0 $3,422 $2,719 $402,367 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 _...... ..... . . Total $11,957,898 $1,673,889 $80,063 $234,1.06 $13,945,955 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% on the term 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0,5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) The Administrative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-2-2 Parcel Assessment Part A Total Equivalent Units Assessment Roll Improvement Area #3 Administrative All $4,864,522 56.44 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% on the term 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) ,The Adminis€rative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-3-1 Principal and Principal and Maintenance Other Administrative Annual Year Interests Interest Assessment Expenses Installment Part A 1 $163,698 $44,322 $1,201 $4,934 $214,155 2 $286,073 $38,755 $1,225 $5,033 $331,087 3 $339,530 $38,919 $1,250 $5,134 $384,833 4 $340,434 $39,566 $1,275 $5,236 $386,512 5 $341,092 $40,167 $1,300 $5,341 $387,901 6 $341,503 $40,722 $1,326 $5,448 $389,000 7 $341,668 $41,396 $1,353 $5,557 $389,974 8 $341,586 $42,014 $1,380 $5,668 $390,647 9 $341,257 $42,738 $1,407 $5,781 $391,184 10 $340,681 $43,395 $1,436 $5,897 $391,409 11 $339,859 $43,072 $1,464 $6,015 $390,410 12 $342,902 $43,759 $1,494 $6,135 $394,289 13 $340,748 $44,532 $1,524 $6,258 $393,062 14 $342,434 $45,217 $1,554 $6,383 $395,588 15 $339,463 $46,143 $1,585 $6,511 $393,701 16 $340,331 $46,957 $1,617 $6,641 $395,546 17 $340,655 $47,825 $1,649 $6,774 $396,904 18 $340,434 $48,737 $1,682 $6,909 $397,762 19 $339,668 $49,679 $1,716 $7,048 $398,111 20 $342,470 $50,643 $1,750 $7,189 $402,051 21 $340,342 $51,615 $1,785 $7,332 $401,075 22 $341,781 $52,751 $1,821 $7,479 $403,832 23 $342,182 $53,699 $1,857 $7,629 $405,366 24 $341,750 $54,952 $1,894 $7,781 $406,377 25 $340,486 $56,147 $1,932 $7,937 $406,502 26 $342,501 $57,275 $1,971 $8,095 $409,842 27 $339,293 $58,653 $2,010 $8,257 $408,214 28 $343,174 $60,083 $2,050 $8,423 $413,730 29 $341,529 $61,379 $2,091 $8,591 $413,591 30 $342,866 $63,023 $2,133 $8,763 $416,784 31 $342,788 $0 $2,176 $2,352 $347,317 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 Total $10,345,177 $1,448,137 $50,910 $202,533 $12,046,756 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% on the term 2025, 2035, 2040 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves. (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annum. (3) ,The Adminis€rative Expense amounts are estimated and will be updated each year as part of the Annual Service Plan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-3-1 Parcel Assessment Part A Total Eauivalent Units Assessment Roll Improvement Area #3 Administrative Expenses' 05243351 $4,864,522 56.44 2025, 2035, 20€0 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annutn. (3) The Administrative Expense amounts arc estimated and will be updated each year as part of the Annual Service Phan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-3-2 Principal and Principal and Maintenance Other Administrative Annual Year Interests Interest Assessment Expenses Installment Part A 1 $163,698 $44,322 $1,201 $4,934 $214,155 2 $286,073 $38,755 $1,225 $5,033 $331,087 3 $339,530 $38,919 $1,250 $5,134 $384,833 4 $340,434 $39,566 $1,275 $5,236 $386,512 5 $341,092 $40,167 $1,300 $5,341 $387,901 6 $341,503 $40,722 $1,326 $5,448 $389,000 7 $341,668 $41,396 $1,353 $5,557 $389,974 8 $341,586 $42,014 $1,380 $5,668 $390,647 9 $341,257 $42,738 $1,407 $5,781 $391,184 10 $340,681 $43,395 $1,436 $5,897 $391,409 11 $339,859 $43,072 $1,464 $6,015 $390,410 12 $342,902 $43,759 $1,494 $6,135 $394,289 13 $340,748 $44,532 $1,524 $6,258 $393,062 14 $342,434 $45,217 $1,554 $6,383 $395,588 15 $339,463 $46,143 $1,585 $6,511 $393,701 16 $340,331 $46,957 $1,617 $6,641 $395,546 17 $340,655 $47,825 $1,649 $6,774 $396,904 18 $340,434 $48,737 $1,682 $6,909 $397,762 19 $339,668 $49,679 $1,716 $7,048 $398,111 20 $342,470 $50,643 $1,750 $7,189 $402,051 21 $340,342 $51,615 $1,785 $7,332 $401,075 22 $341,781 $52,751 $1,821 $7,479 $403,832 23 $342,182 $53,699 $1,857 $7,629 $405,366 24 $341,750 $54,952 $1,894 $7,781 $406,377 25 $340,486 $56,147 $1,932 $7,937 $406,502 26 $342,501 $57,275 $1,971 $8,095 $409,842 27 $339,293 $58,653 $2,010 $8,257 $408,214 28 $343,174 $60,083 $2,050 $8,423 $413,730 29 $341,529 $61,379 $2,091 $8,591 $413,591 30 $342,866 $63,023 $2,133 $8,763 $416,784 31 $342,788 $0 $2,176 $2,352 $347,317 32 $0 $0 $0 $0 $0 33 $0 $0 $0 $0 $0 34 $0 $0 $0 $0 $0 Total $10,345,177 $1,448,137 $50,910 $202,533 $12,046,756 (1) The principal and interest rates are based on the Series 2015 Bonds. Interest rates on the bonds are 5.5%, 6.125%, 6.25% and 6.375% on the term 2025, 2035, 20€0 and 2045 Bonds. The interest amounts also include the additional 0.5% interest for prepayment reserve and delinquency reserves (2) Interest rates on the Reimbursement Agreement are calculated at 6.43% per annutn. (3) The Administrative Expense amounts arc estimated and will be updated each year as part of the Annual Service Phan Update. The estimated Maintenance Assessment amount shown will be updated each year based on the actual budget for maintenance of the improvements. E-3-2 TOWN OF WESTLAKE RESOLUTION NO. 14-45 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, APPROVING THE FORM AND AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT FOR "TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT)" WHEREAS, this Town Council (the "Council") of the Town of Westlake, "Texas (the "Town") has adopted a resolution authorizing the creation of the Solana Public Improvement District (the "District"); and WHEREAS, this Council intends to issue "Town of Westlake, "Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)" (the "Bonds"), to fund public improvements within the District; and WHEREAS, there has been presented to this Council a Preliminary Official Statement relating to the Bonds (the "Preliminary Official Statement"); and WHEREAS, this Council finds and determines that it is necessary and in the best interests of the Town to approve the form and content of the Preliminary Official Statement and authorize the use of the Preliminary Official Statement in the offering and sale of the Bonds by the Underwriter of the Bonds, .lefferies, LLC; and WHEREAS, the Council finds that the passage of this Resolution is in the best interest of the citizens of the Town; NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: That all matters stated in the Recitals hereinabove are found to be true and correct and are incorporated herein by reference as if copied in their entirety. SECTION 2: That this Council hereby approves the form and content of the Preliminary Official Statement and deems the Preliminary Official. Statement final, except for the omission of such information which is dependent upon the final pricing of the Bonds for completion, all as permitted to be excluded by Section (b)(1) of Rule l 5c2- 12 under the Securities Exchange Act of 1934, with such changes, addenda, supplements or amendments as may be approved by the Town Manager. The "]Town hereby authorizes the Preliminary Official Statement to be used by the Underwriter in connection with the .marketing and sale of the Bonds. SECTION 3: If any portion of this Resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the Resolution 14-45 Page 1 oi' 2 hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. SECTION 4: That this Resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 15""' DAY OF DECEMBER 2014. ATTEST": Kell Edw s, 'Town Secretary APPROVED AS TO DORM: -? St on Lowry, own Attorney Laura L. Wheat, Mayor r/At w Thomas E. Brym r, own Manager Resolution 14-45 Page 2 of 2 CERTIFICATE FOR ORDINANCE, 1, the undersigned Town Secretary of Town of Westlake, Texas ("Town"), hereby certify as follows: I. The Town Council of said Town convened in a regular meeting on the 15th day of January, 2015, at the regular meeting place thereof, and the roll was called of the duly constituted officers and members of said Town Council, to wit: I.,aura Wheat, Mayor Carol Langdon, Mayor Pro Tem Michael Barrett, Council Member Alesa Belvedere, Council Member Wayne Stoltenberg, Council Member Rick Rennhack, CounFIeil Member Kelly Edwards, Town Secretary and all of said persons were present, except Rick Rennhack and Michael Barrett, thus constituting a quorum. Whereupon, among other business, the following was transacted at said ineeting: a written AN ORDINANCE AUTHORIZING THE ISSUANCE OF THE "TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT)"; APPROVING AND AUTHORIZING AN INDENTURE OF TRUST, A BOND PURCHASE AGREEMENT, AN OFFICIAL STATEMENT, A CONTINUING DISCLOSURE AGREEMENT AND OTHER AGREEMENTS AND DOCUMENTS IN CONNECTION THEREWITH; MAKING FINDINGS WITH RESPECT TO THE ISSUANCE OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE was duly introduced for the consideration of said Town Council. It was then duly moved and seconded that said Ordinance be passed; and, after due discussion, said motion carrying with it the passage of said Ordinance, prevailed and carried by the following vote: AYES NOES: 2. That a true, full and correct copy of the aforesaid Ordinance passed at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; that said Ordinance has been duly recorded in said Town Council's minutes of said Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said Town Council's minutes of said Meeting pertaining to the passage of said Ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of said 'Town Council as indicated therein; that each ofthe officers and members of said Town Council was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and that said Ordinance would be introduced and considered for passage at said Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting for such purpose, and that said Meeting was open to the public and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code. SIGNED AND SEALED THE 15TH DAY OF JANUARY, 2015. Town Secreta Town of Westlake (Town Seal) -1A �0 M Signature page to Town Secretary Cenifacate for Bona Ordinance ORDINANCE NO. 733 AN ORDINANCE AUTHORIZING THE ISSUANCE ON THE "TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT)"; APPROVING AND AUTHORIZING AN INDENTURE OF TRUST, A BOND PURCHASE AGREEMENT, AN OFFICIAL STATEMENT, A CONTINUING DISCLOSURE AGREEMENT AND OTHER AGREEMENTS AND DOCUMENTS IN CONNECTION THEREWITH; MAKING FINDINGS WITH RESPECT TO THE ISSUANCE OF SUCH BONDS, AND PROVIDING AN EFFECTIVE DATE WHEREAS, theTown of Westlake, Texas (the "Town"), pursuant to and in accordance with the terms, provisions and requirements of the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas focal Government Code (the "PID Act"), has previously established tine "Solana Public Improvement District" (the "District"), pursuant to Resolution No. 14-07 adopted by the Town Council ofthe `town (the "Council") on February 24, 2014; and WHEREAS, the authorization creating the District became effective on February 28, 2014 upon publication of Resolution No. 14-07 in the Fort Worth Star Telegraryr, a newspaper of general circulation in the Town; and WHEREAS, no written protests of the District from any owners of record of property within the District were filed with the Town Secretary within 20 days after the date of publication of such notice; and WHEREAS, Pursuant to the PID Act, on December 22, 2014, the Council published notice of the assessment hearing in the 1,ort Worlh Star Telegram, a newspaper of general circulation in the Town, and held a public hearing oil January 15, 2015, regarding the levy of special assessments within the District, and on January 15, 2015, the Council adopted Ordinance No. 741 (the "Assessment Ordinance"); and WHEREAS, in the Assessment Ordinance, the Council approved and accepted the Service and Assessment Plan (as defined and described in the Assessment Ordinance, the "Service and Assessment Plan") relating to the District and levied the Assessments (as defined in the Service and Assessment Plan, the "Assessments") against the Assessment Roll (as defined and described in the Service and Assessment Plan, the "Assessment Roll"). Capitalized terms used in this preamble and not otherwise defined shall have the meaning assigned thereto in the Service and Assessment Plan; and WHEREAS, the Council has found and determined that it is in the best interests of the Town to issue its bonds to be designated "Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)" (the "Bonds"), such Bonds to be payable from and secured by the Pledged Revenues, as defined in the Indenture (defined below); and Ordinance 743 Page I ors WHEREAS, the Town is authorized by the FID Act to issue the Bonds for the purpose of (i) paying the Costs, (ii) paying; interest on the Bonds during and after the period of acquisition and construction of the Improvement Project A Improvements, (iii) funding a reserve fund for payment of principal and interest on the Bonds and (iv) paying the costs of issuance of the Bonds; and WHEREAS, in connection with the issuance of the Bonds, the Improvement Project A Improvements are located within the District, and the Town has determined that the Improvement Project A Improvements conter a special benefit on Improvement Area #1, Improvement Area 42 and Improvement Area #3 as provided in Section V.B. of the Service and Assessment Plan: and WHEREAS, the Council has found and determined to approve (i) the issuance of the Bonds to finance the Improvement Project A Improvements, (ii) the form, terms and provisions of an indenture of trust securing the Bonds authorized hereby, (iii) the form, terms and provisions of Bond Purchase Agreement (defined below) between the Town and the purchaser of the Bonds, (iv) an Official Statement (defined below), and (v) a Continuing Disclosure Agreement (defined below); and WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and the public notice of the time, place and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; NOW, THEREFORE BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, THAT: Section I . Findings. The findings and determinations set forth in the preamble hereof are hereby incorporated by reference for all purposes as if set forth in full herein. Section 2. Approval of Issuance of Bonds and Indenture of Trust. (a) The issuance of the Bonds in the principal amount of $26,175,000 for the purpose of (i) paying a portion of the Costs, (ii) paying a portion of the interest on the Bonds during and after the period of acquisition and construction of the Improvement Project A Improvements, (iii) funding; a reserve fund for payment of principal 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, is hereby authorized and approved. (b) The Bonds shall be issued and secured under that certain Indenture of Trust (tile "Indenture") dated as of February 1, 2015, between the Town and U.S. Batik National Association, as trustee (the "Trustee"), with such changes as may be necessary or desirable to carry out the intent of this Ordinance and as approved by the Mayor or Mayor Pro Tem of the "Town, such approval to be evidenced by the execution and delivery of the Indenture, which Indenture is hereby approved in substantially final form attached hereto as Exhibit A and incorporated herein as a part hereof for all purposes. Ordinance 743 Page 2 o('5 The Mayor or Mayor Pro Tem of the Town is hereby authorized and directed to execute the Indenture and the "Down Secretary is hereby authorized and directed to attest such signature of the Mayor or Mayor Pro Tem. (c) The Bonds shall be dated, shall mature on the date or dates and in the principal amount or amounts, shall bear interest, shall be subject to redemption and shall have such other terms and provisions as set forth in the Indenture. The Bonds shall be ill substantially the form set forth in the Indenture, with such insertions, omissions and modifications as may be required to conform the form of Bond to the actual terms of the Bonds. The Bonds shall be payable from and secured by the Pledged Revenues (as defined in the Indenture) and other assets of the Trust Fstate (as defined in the Indenture) pledged to the Bonds, and shall never be payable from ad valorem taxes or any other funds or revenues of the ']`own_ Section 3. Sale of Bonds; Approval of Bond Purchase Agreement. The Bonds shall be sold to Jefferies, LLC (the "Underwriter") at the price and on the terms and provisions set forth in that certain Bond Purchase Agreement (the "Bond Purchase Agreement"), dated the date hereof, between the Town and the Underwriter, attached hereto as Exhibit B and incorporated herein as a part hereof for all purposes, which terms of sale are declared to be in the best interest of the Town. The form, terms and provisions of the Bond Purchase Agreement are hereby authorized and approved and the Mayor or Mayor Pro Tem of the Town is hereby authorized and directed to execute and deliver the Bond Purchase Agreement. The Mayor's or Mayor Pro 'hem's signature on the Bond Purchase Agreement may be attested by the Town Secretary. Section 4. Official Statement. The form and substance of the Preliminary Official Statement for the Bonds and any addenda, supplement or amendment thereto and the final Official Statement (the "Official Statement") presented to and considered at the meeting; at which this Ordinance is considered are hereby in all respects approved and adopted. The Official Statement, with such appropriate variations as shall be approved by the Mayor or Mayor Pro 'fern of the Town and the Underwriter, may be used by the Underwriter in the offering and sale of the Bonds. The Town Secretary is hereby authorized and directed to include and maintain a copy of the Preliminary Official Statement and Official Statement and any addenda, supplement or amendment thereto thus approved among the permanent records of this meeting. The use and distribution of the Preliminary Official Statement in the offering of the Bonds is hereby ratified, approved and confirmed. Notwithstanding the approval and delivery of such Preliminary Official Statement and Official Statement by the Council, the Council is not responsible for and proclaims no specific knowledge of the information contained in the Preliminary Official Statement and Official Statement pertaining to the Improvement Project A Improvements, the Developer or its financial ability, any builders, any landowners, or the appraisal of the property in the District. Section 5. Continuing Disclosure Agreement. The Continuing; Disclosure Agreement (the "Continuing Disclosure Agreement") between the Town and U.S. Bank National Association is hereby authorized and approved in substantially final form attached hcreto as Exhibit C and incorporated herein as a part hereof for all purposes and the Town Manager of the Town is hereby authorized and directed to execute and deliver such Continuing Disclosure Ordinance 743 Page 3 of 5 Agreement with such changes as may be required to carry out the purpose of this Ordinance and approved by the Town Manager, such approval to be evidenced by the execution thereof. Section 6. Additional Actions. The Mayor, the Mayor Pro Tem, the Town .Manager and the Town Secretary are hereby authorized and directed to take any and all actions on behalf of the Town necessary or desirable to carry out the intent and purposes of this Ordinance and to issue the Bonds in accordance with the terms of this Ordinance. The Mayor, the Mayor Pro Tem, the Town Manager and the Town Secretary are hereby authorized and directed to execute and deliver any and all certificates, agreements, notices, instruction letters, requisitions, and other documents which may be necessary or advisable in connection with the sale, issuance and delivery of the bonds and the carrying out ol'the purposes and intent of this Ordinance. Section 7. Severability. if any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. Section S. Effective Date. This Ordinance is passed on one reading as authorized by Texas Government Code, Section 1201.028, and shall be effective immediately upon its passage and adoption. JRefnainder of page left blank intentionrallyl Ordinance 743 Page 4 of 5 PASSED, APPROVED AND EFFECTIVE this January 15, 2015. ATTEST: Kelly Edwa , Town Secretary APPROVED AS TO FORM: L. Stainton Lowry, 'town Attorney R r L ura Wheat, Mayor Thomas E. Bryne a; own Manager (Town Seal) Signalure page to Bend Ordinance Ordinance 743 Page 5 01-5 PASSED, APPROVED AND EFFECTIVE this January 15, 2015. Laura Wheat, Mayor ATTEST: Kelly Edwards, Town Secretary Thomas E. Brymer, Town Manager APPROVED AS TO FORM: (Town Seal) Signamm page to Bond Ordinance Ordinance 743 Page 5 of 5 EXHIBIT A INDENTURE OF TRUST See Tab No. 12 A-1 EXHIBIT B BOND PURCHASE AGREEMENT See Tab No. 15 ME EXHIBIT C CONTINUING DISCLOSURE AGREEMENT See Tab No. 16 C -r INDENTURE OF TRUST By and Between TOWN OF WESTLAKE, TEXAS and U.S. BANK NATIONAL ASSOCIATION, as Trustee DATED AS OF FEBRUARY 1, 2015 SECURING $261175,000 TOWN OF WESTLAKE, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) TABLE OF CONTENTS Page ARTICLE I DEFINITIONS, FINDINGS AND INTERPRETATION ...................................... 4 SectionI.1. Definitions...........................................................................................................4 Section1.2. Findings............................................................................................................. 13 Section 1.3. Table of Contents, Titles and Headings............................................................ 13 Section 1.4. Interpretation..................................................................................................... 13 ARTICLE Il THE BONDS......................................................................................................... 14 Section 2.1. ............................................. Security for the Bonds. ........................... -- ........ 14 Section 2.2. Limited Obligations......................................................................... ... 14 Section 2.3. Authorization for Indenture. ... .......... ................................ I ... —­­­ ................. 14 Section 2.4. Contract with Owners and Trustee................................................................... 15 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THEBONDS................................................................................................................................ 15 Section 3.1. Authorization.................................................................................................... 15 Section 3.2. Date, Denomination, Maturities, Numbers and Interest ................................... 15 Section 3.3. Conditions Precedent to Delivery of Bonds. ...... -- ................................ .......... 16 Section 3.4, Medium, Method and Place of Payment... ....................................................... . 16 Section 3.5. Execution and Registration ofBonds............................................................... 17 Section3.6. Ownership. ............. 1111— ........... .......................... ...... ......... ­­ ................ 18 Section 3.7. Registration, Transfer and Exchange. .............................................................. . 18 Section 3.8. Cancellation...................................................................................................... 19 Section 3.9. Temporary Bonds.............................................................................................. 19 Section 3.10. Replacement Bonds.......................................................................................... 20 Section 3.11. Book -Entry Only System ....... .......................................... _.... ............. ............. 21 Section 3.12. Successor Securities Depository: Transfer Outside Book -Entry -Only System.22 Section 3.13. Payments to Cede & Co.................................................................................... 22 ARTICLE IV REDEMPTION OF BONDS BEFORE MATURITY ......................................... 22 Section 4.1. Limitation on Redemption................................................................................ 22 Section 4.2. Mandatory Sinking Fund Redemption.............................................................. 22 Section 4.3. Optional Redemption........................................................................................ 24 Section 4.4. Extraordinary Optional Redemption................................................................. 24 Section 4.5. Partial Redemption............................................................................................ 24 Section 4.6. Notice of Redemption to Owners..................................................................... 25 Section 4.7. Payment Upon Redemption.............................................................................. 25 Section 4.8. Effect of Redemption........................................................................................ 25 ARTICLE V FORM OF THE BONDS..................................................................................... 26 Section5.1. Form Generally................................................................................................. 26 Section 5.2. Form of the Bonds............................................................................................ 26 Section 5.3. CUSIP Registration........................................................................................... 34 Section5.4. Legal Opinion................................................................................................... 34 ARTICLE VI FUNDS AND ACCOUNTS................................................................................ 34 Section 6.l. Establishment of Funds and Accounts.............................................................. 34 Section 6.2. Initial Deposits to Funds and Accounts ................................................... I .... .... 36 Section 6.3. Pledged Revenue Fund..................................................................................... 36 Section6.4. Bond Fund......................................................................................................... 37 Section6.5. Project Fund...................................................................................................... 38 Section 6.6. Redemption Fund.............................................................................................. 39 Section 6.7. Reserve Fund.................................................................................................... 39 Section 6.8. Rebate Fund: Rebatable Arbitrage.................................................................... 42 Section 6.9. Administrative Fund... . ...................................... ... — ................................... 42 Section 6.10. Developer Property Tax Reserve Fund........................................................... 432 Section 6.11. Investment of Funds.......................................................................................... 43 Section 6.12. Security of Funds............................................................................................ 434 Section 6.13. Reimbursement Fund...................................................................................... 435 ARTICLEVII COVENANTS.................................................................................................... 45 Section 7.1. Confirmation of Assessments........................................................................... 45 Section 7.2. Collection and Enforcement of Assessments.................................................... 45 Section 7.3. Against Encumbrances.. .................... ........... ........................ .......................... 46 Section 7.4. Records, Accounts, Accounting; Reports .................................... ...................... 46 Section 7.5. Covenants Regarding Tax Exemption of Interest on Bonds ............................. 46 ARTICLE VIII LIABILITY OF TOWN..................................................................................... 49 Section 8.1. Liability of Town.............................................................................................. 49 ARTICLE IX THE TRUSTEE.................................................................................................. 50 Section 9.1. Acceptance of Trust; Trustee as Registrar and Paying Agent.......... Section 9.2. Trustee Entitled to Indemnity... ....... .......................................... Section 9.3. Responsibilities of the Trustee.......................................................... Section 9.4. Property Held in Trust...................................................................... Section 9.5. Trustee Protected in Relying on Certain Documents ........................ Section 9.6. Compensation-- ....... ............................................ ......................... Section 9.7. Permitted Acts................................................................................... Section 9.8. Resignation of Trustee...................................................................... Section 9.9. Removal of Trustee........................................................................... Section 9.10. Successor Trustee.............................................................................. Section 9.11. Transfer of Rights and Property to Successor Trustee ...................... Section 9.12. Merger, Conversion or Consolidation of Trustee. . ............... ........ Section 9.13. Trustee To Pile Continuation Statements ......................................... Section 9.14. Accounts, Periodic Reports and Certificates. ... ................... ........ Section 9.15. Construction of Indenture................................................................. ARTICLE X MODIFICATION OR AMENDMENT OF THIS INDENTURE...... Section 10.1. Amendments Permitted Section 10.2. Owners' Meetings........ 31 ....... 50 ................ 51 ................ 51 ................ 51 ........ 52 ............ 53 ................ 53 ................ 53 ................ 54 ................ 55 ..I ............. 55 ............... 55 ....... 55 55 ................ 55 ................ 56 Section 10.3. Procedure for Amendment with Written Consent of Owners............ Section 10.4. Procedure for Amendment Not Requiring Owner Consent ............... Section 10.5. Effect of Supplemental Indenture........ — -- ........ — ........................... Section 10.6. Endorsement or Replacement of Bonds Issued After Amendments.. Section 10.7. Amendatory Endorsement of Bonds .................................................. Section 10.8. Waiver of Default.............................................................................. Section 10.9. Execution of Supplemental Indenture ................................................ ARTICLE XI DEFAULT AND REMEDIES............................................................. Section 1 1.1. Events of Default............................................................................... Section 11.2. Immediate Remedies for Default....................................................... Section 11.3. Restriction on Owner's Action. .......................................... — ............. Section 11 A. Application of Revenues and Other Moneys After Default ............... Section11.5. Effect of Waiver................................................................................. Section 11.6. Evidence of Ownership of Bonds ...................................................... Section 11.7. No Acceleration... ........................... .................. ............................ Section 11-8. Mailing of Notice............................................................................... Section 11 9 Exclusion of Bonds 56 59 ............. 59 ........... 59 ARTICLE X11 GENERAL COVENANTS AND REPRESENTATIONS ................................ 63 Section 12.1. Representations as to Pledged Revenues....... ... ........................................ ...... 63 Section12.2. General.............................................................................................................. 63 ARTICLE XIII SPECIAL COVENANTS.................................................................................. 64 Section 13.1. Further Assurances; Due Performance............................................................. 64 Section 13.2. Other Obligations or Other Liens; Additional Bonds ....................................... 64 Section 13.3. Books of Record............................................................................................... 65 ARTICLE XIV PAYMENT AND CANCELLATION OF THE BONDS AND SATISFACTION OFTHE INDENTURE................................................................................................................. 66 Section 14.1. Trust Irrevocable. ............... -- ................................................................ ......... 66 Section 14.2. Satisfaction of Indenture................................................................................... 66 Section 14 3 Bonds Deerned Paid......................................................................... 66 ARTICLEXV MISCELLANEOUS........................................................................................... 67 Section 15.1. Benefits of Indenture Limited to Parties. .................. ....................................... 67 Section 15.2. Successor is Deemed Included in All References to Predecessor .................... 67 Section 15.3. Execution of Documents and Proof of Ownership by Owners ......................... 67 Section ISA. No Waiver of Personal Liability. -- .... - ........ ............................. -- .... ............. 68 Section 15.5. Notices to and Demands on Town and Trustee. . ......................... --- ............. 68 Section 15.6. Partial Invalidity.,.... .............. .................... ...... ..... - ......................... .............. 69 Section15.7. Applicable Laws............................................................................................... 69 Section 15.8. Payment on Business Day................................................................................. 69 Section15.9. Counterparts...................................................................................................... 69 EXHIBIT A DESCRIPTION OF THE PROPERTY WITHIN THE SOLANA PUBLIC IMPROVEMENT DISTRICT INDENTURE OF TRUST THIS INDENTURE, dated as of February 1, 2015, is by and between the TOWN OF WESTLAKE, TEXAS (the "Town"), and U.S. Bank National Association, as trustee (together with its successors, the "Trustee"). Capitalized terms used in the preambles, recitals and granting clauses and not otherwise defined shall have the meanings assigned thereto in Article 1. WHEREAS, on October 18, 2013, a petition was submitted and filed with the Town Secretary of the Town (the "Town Secretary") pursuant to the Public Improvement District Assessment Act, Chapter 372, Texas Local Government Code, as amended (the "PID Act"), requesting the creation of a public improvement district located within the corporate limits of the Town to be known as Westlake Public Improvement District No. I (later renamed the "Solana Public Improvement District") (the "District" or "PID"); and WHEREAS, the petition contained the signatures of the owners of taxable real property representing more than fifty percent of the appraised value of taxable real property liable for assessment within the District, as deterrnincd by the then current ad valorem tax rolls of the Tarrant Appraisal District, and the signatures of record property owners who own taxable real property that constitutes more than fifty percent of the area of all taxable property that is liable for assessment by the District; and WHEREAS, on February 24, 2014, after due notice, the Town Council of the Town (the "Town Council") held the public hearing in the manner required by law on the advisability of the improvement projects and services described in the petition as required by Section 372.009 of the PID Act and on February 24, 2014, the Town Council made the findings required by Section 372.009(b) of the PID Act and, by Resolution No. 14-07, adopted by a majority of the members of the Town Council, authorized the District in accordance with its finding as to the advisability of the improvement projects and services; and WHEREAS, following the adoption of Resolution No. 14-07, the Town published notice of its authorization of the District in the Fort Worth Star Telegram, a newspaper of general circulation in the Town; and WHEREAS, no written protests of the District from any owners of record of property within the District were filed with the Town Secretary within 20 days after the date of publication of such notice; and WHEREAS, the Town Council, pursuant to Section 372.016(b) of the PID Act, published notice of a public hearing in a newspaper of general circulation in the Town to consider the proposed "Assessment Roll" and the "Service and Assessment Plan" and the levy of the "Assessments" on property in the District; and WHEREAS, the Town Council, pursuant to Section 372.016(c) of the PID Act, mailed notice of the public hearing to consider the proposed Assessment Roll and the Service and Assessment Plan and the levy of Assessments on property in the District to the last known address of the owners of the property liable for the Assessments; and WHEREAS, the Town Council convened the hearing on January 15, 2015, at which all persons who appeared, or requested to appear, in person or by their attorney, were given the opportunity to contend for or contest the Service and Assessment Plan, the Assessment Roll, and the Assessments, and to offer testimony pertinent to any issue presented on the amount of the Assessment, the allocation of Costs, the purposes of the Assessments, the special benefits of the Assessments, and the penalties and interest on annual installments and on delinquent annual installments of the Assessment; and WHEREAS, at the January 15, 2015 public hearing referenced above, there were no written objections or evidence submitted to the Town Secretary in opposition to the Service and Assessment flan, the allocation of Costs, the Assessment Roll, or the levy of the Assessments; and WHEREAS, the Town Council closed the hearing and, after considering all written and documentary evidence presented at the hearing, including all written comments and statements filed with the Town, at a meeting held on January 15, 2015, approved and accepted the Service and Assessment Plan in conformity with the requirements of the PID Act and adopted the Assessment Ordinance, which Assessment Ordinance approved the Assessment Roll and levied the Assessments; and WHEREAS, the Assessment Ordinance also approved the levy and collection of maintenance assessments (the "Maintenance Assessments") in the event such Maintenance Assessments ever become required under the provisions of the Service and Assessment Plan; and WHEREAS, the Maintenance Assessments are not pledged to the payment of the Bonds and are not a part of the Trust Estate; and WHEREAS, on January 15, 2015, the Town Council adopted a resolution approving the execution of the Financing Agreement, the Redemption Waiver Agreement and the Reimbursement Agreement; and WHEREAS, the Town Council is authorized by the PID Act to issue its revenue bonds payable from the Assessments for the purpose of (i) paying the Costs, (ii) paying, interest on the Bonds during and after the period of acquisition and construction of the Improvement Project A Improvements, (iii) funding a reserve fund for payment of principal and interest on the Bonds and (iv) for funding other funds as provided in Section 6.2; and WHEREAS, the Town Council now desires to issue its revenue bonds, in accordance with the PID Act, such bonds to be entitled "Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)" (the "Bands"), such Bonds being payable solely from the Assessments and other funds pledged under this Indenture to the payment of the Bonds and for the purposes set forth in this preamble; and WHEREAS, the Trustee has agreed to accept the trusts herein created upon the terms set forth in this Indenture; NOW, THEREFORE, the Town, in consideration of the foregoing premises and acceptance by the Trustee of the trusts herein created, of the purchase and acceptance of the 2 Bonds by the Owners thereof, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby GRANT, CONVEY, PLEDGE, TRANSFER, ASSIGN, and DELIVER to the Trustee for the benefit of the Owners, a security interest in all of the moneys, rights and properties described in the Granting Clauses hereof, as follows (collectively, the "Trust F_state"); FIRST GRANTING CLAUSE The Pledged Revenues, as herein defined, including all moneys and investments held in the Pledged Funds, but excluding any moneys held in the Developer Improvement Account of the Project Fund, including any contract or any evidence of indebtedness related thereto or other rights of the Town to receive any of such moneys or investments, whether now existing or hereafter coming into existence, and whether now or hereafter acquired; and SECOND GRANTING CLAUSE Any and all other property or money of every name and nature which is, from time to time hereafter by delivery or by writing of any kind, conveyed, pledged, assigned or transferred, to the Trustee as additional security hereunder by the Town or by anyone on its behalf or with its written consent, and the Trustee is hereby authorized to receive any and all such property or money at any and all times and to hold and apply the same subject to the terms thereof, and THIRD GRANTING CLAUSE Any and all proceeds of the foregoing property and proceeds from the investment of the foregoing property; TO HAVE AND TO HOLD the Trust Estate, whether now owned or hereafter acquired, unto the Trustee and its successors or assigns; IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the benefit of all present and future Owners of the Bonds from time to time issued under and secured by this Indenture, and for enforcement of the payment of the Bonds in accordance with their terms, and for the performance of and compliance with the obligations, covenants, and conditions of this Indenture; PROVIDED, HOWEVER, if the Town or its assigns shall well and truly pay, or cause to be paid, the principal or Redemption Price of and the interest on the Bonds at the times and in the manner stated in the Bonds, according to the true intent and meaning thereof, then this Indenture and the rights hereby granted shall cease, terminate and be void; otherwise this Indenture is to be and remain in full force and effect; IN ADDITION, the Bonds are special obligations of the Town payable solely from the Pledged Revenues, as and to the extent provided in this Indenture. The Bonds do not give rise to a charge against the general credit or taxing powers of the Town and are not payable except as provided in this Indenture. Notwithstanding anything to the contrary herein, the Owners of the Bonds shall never have the right to dernand payment thereof out of any funds of the Town other than the Pledged Revenues. The Town shall have no legal or moral obligation to pay for the Bonds out of any funds of the Town other than the Pledged Revenues. THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all Bonds issued and secured hereunder are to be issued, authenticated, and delivered and the Trust Estate hereby created, assigned, and pledged is to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses, and purposes as hereinafter expressed, and the Town has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the respective Owners from time to time of the Bonds as follows: ARTICLE I DEFINITIONS, FINDINGS AND INTERPRETATION Section I.1. Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise in this Indenture, the following terms shall have the meanings specified below: "Account", in the singular, means any of the accounts established pursuant to Section 6.1 of this Indenture, and "Accounts", in the plural, means, collectively, all of the accountb established pursuant to Section 6.1 of this Indenture. "Additional Bonds" means the additional parity bonds that are authorized to be issued in accordance with the terms and conditions prescribed in Section 13.2(c) of this Indenture. "Administrative Fund" means that Fund established by Section 6.1 and administered pursuant to Section 6.9. "Administrative Expenses" means the costs associated with or incident to the administration, organization, maintenance and operation of Improvement Area #1, Improvement Area #2 and Improvement Area #3, including, but not limited to, the costs of: (i) creating and organizing the PID, including conducting hearings, preparing notices and petitions, and all costs incident thereto, engineering fees, legal fees and consultant fees, (ii) the annual administrative, organization, maintenance and operation costs and expenses associated with, or incident and allocable to, the administration, organization, maintenance and operation of Improvement Area #1, Improvement Area #2 and Improvement Area #3 in relation to the Improvement Project A Improvements, (iii) computing, levying, billing and collecting Assessments or the installments thereof, (iv) maintaining the record of installments of the Assessments and the system of registration and transfer of the Bonds, (v) paying and redeeming the Bonds, (vi) investing or depositing of monies, (vii) complying with the PID Act and codes with respect to the Bonds, (viii) Trustee fees and expenses relating to the Bonds, (ix) legal counsel, engineers, accountants, financial advisors, investment bankers or other consultants and advisors providing services related to the Bonds, and (x) administering the construction of the Improvement Project A Improvements. Administrative Expenses do not include payment of the actual principal of, redemption premiurn, and interest on the Bonds. Amounts collected in conjunction with Annual Installments for Administrative Expenses and not expended for actual 4 Administrative Expenses shall be carried forward and applied to reduce Administrative Expenses in subsequent years to avoid the over -collection of Administrative Expenses. "Administrator" means an employee or designee of the Town who shall have the responsibilities provided in the Service and Assessment Plan, this Indenture, or any other agreement or document approved by the Town related to the duties and responsibilities of the administration of the District. "Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year (excluding interest paid from funds on deposit in the Capitalized Interest Account of the Bond Fund), assuming that the Outstanding Bonds are retired as scheduled (including by reason of Sinking Fund Installments), and (ii) the principal amount of the Outstanding Bonds due in such Bond Year (including any Sinking Fund Installments due in such Bond Year). "Annual Installment" means, with respect to each Improvement Area #1 Assessed Parcel, Improvement Area #2 Assessed Parcel and Improvement Area #3 Assessed Parcel each annual payment of. (i) the Assessments as shown on the Assessment Rolls or in an Annual Service Plan Update, and calculated as provided in Section VI of the Service and Assessment Plan, (ii) Administrative Expenses, (iii) the prepayment reserve, and (iv) the delinquency reserve. "Annual Service Plan Update" means the annual review and update of the Service and Assessment Plan required by the PID Act and the Service and Assessment Plan. "Applicable Laws" means the PID Act, and all other laws or statutes, rules, or regulations, and any amendments thereto, of the State or of the United States, by which the Town and its powers, securities, operations, and procedures are, or may be, governed or from which its powers may be derived. "Assessment Ordinance" means Ordinance No. 741 adopted by the Town Council on January 15, 2015, as may be amended or supplemented, that levied the Assessments on the Improvement Area #1 Assessed Parcels, Improvement Area 92 Assessed Parcels and Improvement Area #3 Assessed Parcels. "Assessment Revenues" means the revenues received by the Town from the collection of Assessments, including Prepayments, Annual Installments and Foreclosure Proceeds. "Assessment Roll" means the document attached as Appendix E to the Service and Assessment Plan, showing the total amount of the Assessments against each Improvement Area #1 Assessed Parcel, Improvement Area #2 Assessed Parcel and Improvement Area #3 Assessed Parcel, as updated, modified, or amended from time to time in accordance with the terms of the Service and Assessment Plan and the PID Act. "Assessments" means the "Assessment Part A" (as defined in the Service and Assessment Plan) levied against the Improvement Area #1 Assessed Parcels, the Improvement Area #2 Assessed Parcels and the Improvement Area #3 Assessed Parcels based on the special benefit conferred on such Parcels by the Improvement Project A Improvements. 5 "Attorney General" means the Attorney General of the State. "Authorized Denomination" means $25,000 and any integral multiple of $5,000 in excess thereof. The Town prohibits any Bond to be issued in a denomination of less than $25,000 and further prohibits the assignment of a CUS1P number to any Bond with a denomination of less than $25,000, and any attempt to accomplish either of the foregoing shall be void and of no effect. "Authorized Improvements" mean those public improvements described in Section 1II.B. and Appendix B of the Service and Assessment Plan and any future updates and/or amendments. "Bond" means any of the Bonds. "Bond Counsel" means McCall, Parkhurst & Horton L.L.P. or any other attorney or firm of attorneys designated by the Town that are nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities. "Bond Date" means the date designated as the initial date of the Bonds by Section 3.2(a) of this Indenture. "Bond Fund" means the Fund established pursuant to Section 6.1 and administered pursuant to Section 6.4. "Bond Ordinance" means Ordinance No. 743 adopted by the Town Council on January 15, 2015 authorizing the issuance of the Bonds pursuant to this Indenture. "Bond Year" means the one-year period beginning on October 1 in each year and ending on the day prior to October 1 in the following year. "Bonds" means the Town's bonds authorized to be issued by Section 3.1 of this Indenture entitled "Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)." "Bonds Similarly Secured" means, collectively, any Outstanding Bonds and Additional Bonds. "Business Day" means any day other than a Saturday, Sunday or legal holiday in the State observed as such by the Town or the Trustee or any national holiday observed by the Trustee. "Certification for Payment" means a certificate executed by an engineer, construction manager or other person or entity acceptable to the Town, as evidenced by the signature of a Town Representative, specifying the amount of work performed and the cost thereof, presented to the Trustee to request funding for Costs from money on deposit in the Project Fund. Each Certification for Payment shall be substantially in the form attached to the Financing Agreement as Exhibit B. "Closing Datc" means the date of the initial delivery of and payment for the Bonds. i! "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings and court decisions. "Comptroller" means the Comptroller of Public Accounts of the State. "Costs" means the costs of the Improvement Project A Improvements to be assessed against the Improvement Area #1 Assessed Parcels, the Improvement Area #2 Assessed Parcels and the Improvement Area #3 Assessed Parcels. "Defeasance Securities" means Investment Securities then authorized by applicable law for the investment of funds to defease public securities. "Delinquency Reserve Requirement" means an amount equal to 4% of the principal amount of the then Outstanding Bonds, which amount will be funded from Assessments and Annual Installments deposited to the Pledged Revenue Fund in accordance with the terms of this Indenture. "Delinquent Collection Costs" means, for a Parcel, interest, penalties and attorneys' fees that are authorized by the PID Act and by the Assessment Ordinance and that directly or indirectly relate to the collection of delinquent Assessments, delinquent Annual Installments, or any other delinquent payments due under the SAP, including costs and expenses related to the foreclosure of liens. "Designated Payment/Transfer Of means (i) with respect to the initial Paying Agent/Registrar named in this Indenture, the transfer/payment office designated by the Paying Agent/Registrar and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the Town and such successor. "Developer" means Solana Partners - Solana Land, L.P., a Texas limited partnership, and any successor thereto under the Financing Agreement. "Developer Property Tax Delinquency Amount" means, as of any date of determination, any amount of ad valorem taxes levied by any taxing entity on Parcels located in Improvement Area #1, Improvement Area #2 and Improvement Area #3 subject to an agricultural valuation for purposes of such ad valorem taxes remaining unpaid on or after February I of the year after such ad valorem taxes are due. "Developer Property Tax Reserve Fund" means that fund established pursuant to Section 6.1 and administered pursuant to Section 6.10. "Developer Property Tax Reserve Fund Release Date" means the March I specified in Section 6.10(b). "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. "DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Financing Agreement" means the Construction, Funding, and Acquisition Agreement between the Town and the Developer, dated as of January 15, 2015, as may be amended and supplemented from time to time. "Foreclosure Proceeds" means the proceeds, including interest and penalty interest, received by the Town from the enforcement of the Assessments against any Improvement Area #1 Assessed Parcel(s), Improvement Area #2 Assessed Parcel(s) or Improvement Area 43 Assessed Parcel(s), whether by foreclosure of lien or otherwise, but excluding and net of all Delinquent Collection Costs. "Fund", in the singular, means any of the funds established pursuant to Section 6.1 of this Indenture, and "Funds", in the plural, means, collectively, all of the funds established pursuant to Section 6.1 of this Indenture. "Improvement Area #1" means the area of the District to be improved by the Improvement Project A Improvements and the Improvement Project B Improvements, consisting; of the property depicted in Appendix A to the Service and Assessment Plan. "Improvement Area #1 Asscsscd Parcels" means the property that benefits from the Improvement Project A Improvements and the Improvement Project B Improvements to be provided by the PID as determined by the Town Council on which, (i) with respect to the Improvement Project A Improvements, the Assessments have been imposed as shown in the Assessment Roll, as the Assessment Roll is updated each year by the Annual Service Plan Update and, (ii) with respect to the Improvement Project B Improvements, the "Assessment Part B" (as defined in the Service and Assessment Plan), which may be imposed in the future. The Assessment Part B is not part of the Trust Estate and shall not be security for the Bonds. "Improvement Area 42" means the area of the District to be improved by the Improvement Project A Improvements, consisting; of the property depicted in Appendix A to the Service and Assessment Plan. "Improvement Area #2 Assessed Parcels" means the property that benefits from the Improvement Project A Improvements to be provided by the PID as determined by the Town Council on which the Assessments have been imposed as shown in the Assessment Roll, as the Assessment Roll is updated each year by the Annual Service Plan Update. "Improvement Area 0" means the area of the District to be improved by the Improvement Project A Improvements, consisting of the property depicted in Appendix A to the Service and Assessment Plan, "Improvement Area #3 Assessed Parcety" means the property that benefits from the Improvement Project A Improvements to be provided by the PID as determined by the Town Council on which the Assessments have been imposed as shown in the Assessment Roll, as the Assessment Roll is updated each year by the Annual Service Plan Update. 8 "Improvement Project A Improvements" means the portion of the Authorized Improvements which will benefit Improvement Area #1, Improvement Area #2 and Improvement Area 43 (defined as "Improvement Project A" in the Service and Assessment Plan) and are more particularly described Section III.B. of the Service and Assessment Plan and any future updates and/or amendments thereto. "Improvement Project B Improvements" means the portion of the Authorized Improvements which will benefit Improvement Area #1 (defined as "Improvement Project B" in the Service and Assessment Plan) and are more particularly described Section III.B. of the Service and Assessment Plan and any future updates and/or amendments thereto. The Improvement Project B Improvements will not be funded from Bond proceeds. "Indenture" means this Indenture of Trust as originally executed or as it may be from time to time supplemented or amended by one or more indentures supplemental hereto and entered into pursuant to the applicable provisions hereof. "Independent Financial Consultant" means any consultant or firrn of such consultants appointed by the Town who, or each of whom; (i) is judged by the Town, as the case may be, to have experience in matters relating to the issuance and/or administration of the Bonds; (ii) is in fact independent and not under the domination of the Town; (iii) does not have any substantial interest, direct or indirect, with or in the Town, or any owner of real property in the District, or any real property in the District; and (iv) is not connected with the Town as an officer or employee of the Town, but who may be regularly retained to make reports to the Town. "Initial Bonds" means the Initial Bonds authorized by Section 5.2 of this Indenture. "Interest Payment Date" means the date or dates upon which interest on the Bonds is scheduled to be paid until their respective dates of maturity or prior redemption, such dates being on March 1 and September 1 of each year, commencing September 1, 2015. "Investment Securities" means those authorized investments described in the Public Funds Investment Act, Chapter 2256, Government Code, as amended, which investments are, at the time made, included in and authorized by the Town's official investment policy as approved by the Town Council from time to time. "Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds. "Outstanding" means, as of any particular date when used with reference to Bonds, all Bonds authenticated and delivered under this Indenture except (i) any Bond that has been canceled by the Trustee (or has been delivered to the Trustee for cancellation) at or before such date, (ii) any Bond for which the payment of the principal or Redemption Price of and interest on such Bond shall have been made as provided in Article IV, (iii) any Bond in lieu of or in substitution for which a new Bond shall have been authenticated and delivered pursuant to Section 3.10 and (iv) Bond alleged to have been mutilated, destroyed, cost or stolen which have been paid as provided in this Indenture. "Owner" means the Person who is the registered owner of a Bond or Bonds, as shown in the Register, which shall be Cede & Co., as nominee for DTC, so long as the Bonds are in book - entry only form and held by DTC as securities depository in accordance with Section 3.11. The term "Owner", when used in connection with the Bonds Similarly Secured, shall also include the Person who is the registered owner of a Bond Similarly Secured under the terms of any indenture relating to any Additional Bonds. "Parcel" or "Parcels" means a parcel or parcels within the District identified by either a tax map identification number assigned by the Tarrant Appraisal District for real property tax purposes or by lot and block number in a final subdivision plat recorded in the real property records of Tarrant County. "Paying Agent/Registrar" means initially the Trustee, or any successor thereto as provided in this Indenture. "Person" or "Persons" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "PID Act" means Chapter 372, Improvement Districts in Municipalities and Counties, Subchapter A, Public Improvement Districts, Texas Local Government Code, as amended. "Pledged Funds" means, collectively, the Pledged Revenue Fund, the Bond Fund, the Project Fund (but excluding the Developer Improvement Account), the Reserve Fund, and the Redemption Fund. "Pledged Revenue Fund" means that fund established pursuant to Section 6.1 and administered pursuant to Section 6.3. "Pledged Revenues" means, collectively, the (i) Assessment Revenues (excluding the portion of the Assessments and Annual Installments collected for the payment of Administrative Expenses and Delinquent Collection Costs, as set forth in the Service and Assessment Plan), (ii) the moneys held in any of the Pledged Funds and (iii) any additional revenues that the Town may pledge to the payment of the Bonds and Additional Bonds. "Prepayment" means the payment of all or a portion of an Assessment before the due date thereof. Amounts received at the time of a Prepayment which represent a payment of principal, interest or penalties on a delinquent installment of an Assessment are not to be considered a Prepayment, but rather are to be treated as the payment of the regularly scheduled Assessment. "Prepayment Costs" means interest and expenses to the date of Prepayment, plus any additional expenses related to the Prepayment, reasonably expected to be incurred by or imposed upon the Town as a result of any Prepayment. "Prepayment Reserve Requirement" means an amount equal to 1.5% of the principal amount of the then Outstanding Bonds, which amount will be funded from Assessments and Annual Installments deposited to the Pledged Revenue Fund in accordance with the terms of this Indenture. 10 "Project Fund" means that fund established pursuant to Section 6.1 and administered pursuant to Section 6.5. "Purchaser" means the initial purchaser of the Bonds. "Rebatable Arbitrage" means rebatable arbitrage as defined in Section 1.148-3 of the Treasury Regulations. "Rebate Fund" means that fund established pursuant to Section 6.1 and administered pursuant to Section 6.8. "Record Date" means the close of business on the fifteenth calendar day of the month next preceding an Interest Payment Date. "Redemption Fuad" means that fund established pursuant to Section 6.1 and administered pursuant to Section 6.6. "Redemption Price" means, when used with respect to any Bond or portion thereof, the principal amount of such Bond or such portion thereof plus the applicable premium, if any, plus accrued and unpaid interest on such Bond to the date fixed for redemption payable upon redemption thereof pursuant to this Indenture. "Redemption Waiver Agreement" means the Maguire Partners -Solana Land, L.P. Agreement Regarding Conveyance of Right of Redemption and Waiver of Agricultural Valuation - Solana FID by and between the Town, the Developer and the Trustee, dated as of January 15, 2015, as may be amended and supplemented from time to time. "Register" means the register specified in Article III of this Indenture. "Reimbursement Agreement" means the Reimbursement Agreement by and between the Town and the Developer, dated as of January 15, 2015, as may be amended and supplemented from time to time. "Reimbursement Fund" means that fund established pursuant to Section 6.1 and administered pursuant to Section 6.13 herein. "Resevve Fund" means that fund established pursuant to Section 6.1 and administered pursuant to Section 6.7. "Reserve Fund Obligations" means cash or Investment Securities. "Reserve Fund Requirement" means the least of. (i) Maximum Annual Debt Service on the Bonds Similarly Secured as of the date of issuance, (ii) 125% of average Annual Debt Service on the Bonds Similarly Secured as of the date of issuance, and (iii) 10% of the proceeds of the Bonds Similarly Secured; provided, however, that such amount shall be reduced by the amount of any transfers made pursuant to Section 6.7(c); and provided further that as a result of (1) a mandatory sinking fund redemption pursuant to Section 4.2, (2) an optional redemption I1 pursuant to Section 43 or (3) an extraordinary optional redemption pursuant to Section 4.4, the Reserve Fund Requirement shall be reduced by a percentage equal to the pro rata principal amount of Bonds Similarly Secured redeemed by such optional redemption divided by the total principal amount of the Outstanding Bonds Similarly Secured prior to such redemption. As of the date of delivery of the Bonds, the Reserve Fund Requirement is $2,074,312.50 which is an amount equal to Maximum Annual Debt Set -vice on the Bonds Similarly Secured as of the date of issuance. "Service and Assessment Plan" and "SV" each mean the document, including the Assessment Roll, which is attached as Exhibit B to the Assessment Ordinance, as may be updated, amended and supplemented from time to titne. "Service Plan Updates" means the updates to the Service and Assessment Plan defined as "Service Plan Updates" in the Service and Assessment Plan. "Sinking Fund Installment" means the amount of money to redeem or pay at maturity the principal of a Stated Maturity of Bonds payable from such installments at the times and in the amounts provided in Section 4.2, "State" means the State of Texas. "Stated Maturity" means the date the Bonds, or any portion of the Bonds, as applicable are scheduled to mature without regard to any redemption or prepayment. "Subaccount" means any of the subaccounts established pursuant to Section 6.1 of this Indenture. "Supplemental Indenture" means an indenture which has been duly executed by the Town Representative pursuant to an ordinance adopted by the Town Council and which indenture amends or supplements this Indenture, but only if and to the extent that such indenture is specifically authorized hereunder. "Town Certificate" means a certificate signed by the Town Representative and delivered to the Trustee. "Toi n Order" means written instructions by the Town, executed by a Town Representative. "Town Representative" means that official or agent of the Town authorized by the Town Council to undertake the action referenced herein. "Treasury Regulations" shall have the meaning assigned to such term in Section 7.5(c). "Trust E.stute" means the Trust Estate described in the granting clauses of this Indenture. "Trustee" means U.S. Bank National Association and its successors, and any other corporation or association that may at any time be substituted in. its place, as provided in Article IX, such entity to serve as Trustee and Paying Agent/Registrar for the Bonds. 12 "Value ref Investment Securities" means the amortized value of any Investment Securities, provided, however, that all United States of America, United States Treasury Obligations — State and Local Government Series shall be valued at par and those obligations which are redeemable at the option of the holder shall be valued at the price at which such obligations are then redeemable. The computations shall include accrued interest on the investment securities paid as a part of the purchase price thereof and not collected. For the purposes of this definition "amortized value," when used with respect to a security purchased at par means the purchase price of such security and when used with respect to a security purchased at a premium above or discount below par, means as of any subsequent date of valuation, the value obtained by dividing the total premium or discount by the number of interest payment dates remaining to maturity on any such security after such purchase and by multiplying the amount as calculated by the number of interest payment dates having passed since the (late of purchase and (i) in the case of a security purchased at a premium, by deducting the product thus obtained from the purchase price, and (ii) in the case of a security purchased at a discount, by adding the product thus obtained to the purchase price. Section 1.2. Findings. The declarations, determinations and findings declared, made and found in the preamble to this Indenture are hereby adopted, restated and made a part of the operative provisions hereof. Section 1.3. Table of Contents, Titles and Headings. The table of contents, titles, and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Indenture or any provision hereof or in ascertaining intent, if any question of intent should arise. Section 1 A. Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) Words importing persons include any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or agency or political subdivision thereof. (c) Any reference to a particular Article or Section shall be to such Article or Section of this Indenture unless the context shall require otherwise. (d) When used in Article Xl of this Indenture in connection with the Bonds Similarly Secured, any reference to this Indenture, Article XI of this Indenture or any Section thereunder, and/or any events of default or remedies set forth therein, such terms and references shall be read 13 and interpreted to include any indenture relating to any Additional Bonds, the related Article or Section in such indenture, and/or the events of default and remedies set forth therein. (e) This Indenture and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein to sustain the validity of this Indenture. ARTICLE II THE BONDS Section 2.1. Security for the Bonds. (a) The Bonds, as to both principal and interest, are and shall be equally and ratably secured by and payable from a first lien on and pledge of the Trust Estate. (b) The lien on and pledge of the fledged Revenues shall be valid and binding and fully perfected from and after the Closing Date, which is the date of the delivery of this Indenture, without physical delivery or transfer of control of the Pledged Revenues, the filing of this Indenture or any other act; all as provided in Chapter 1208 of the Texas Government Code, as amended, which applies to the issuance of the Bonds and the pledge of the fledged Revenues granted by the Town under this Indenture, and such pledge is therefore valid, effective and perfected. If Texas law is amended at any time while the Bonds are Outstanding such that the pledge of the Pledged Revenues granted by the Town under this Indenture is to be subject to the filing requirements of Chapter 9, Business and Commerce Code, then in order to preserve to the registered owners of the Bonds the perfection of the security interest in said pledge, the Town agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Business and Commerce Code and enable a filing to perfect the security interest in said pledge to occur. Section 2.2. Limited Obligations. The Bonds are special and limited obligations of the Town, payable solely from and secured solely by the Trust Estate, including the Pledged Revenues and the fledged Funds; and the Bonds shall never be payable out of funds raised or to be raised by taxation or from any other revenues, properties or income of the Town. Section 2.3. Authorization for Indenture. The terms and provisions of this Indenture and the execution and delivery hereof by the Town to the Trustee have been duly authorized by official action of the Town Council of the Town. The Town has ascertained and it is hereby determined and declared that the execution and delivery of this Indenture is necessary to carry out and effectuate the purposes set forth in the preambles of this Indenture and that each and every covenant or agreement herein contained and made is necessary, useful and/or convenient in order to better- secure the Bonds and is a contract or agreement necessary, useful and/or convenient to carry out and effectuate the purposes herein described. 14 Section 2.4. Contract with Owners and Trustee. (a) The purposes of this Indenture are to establish a lied and the security for, and to prescribe the minimum standards for the authorization, issuance, execution and delivery of, the Bonds and to prescribe the rights of the Owners, and the rights and duties of the Town and the Trustee. (b) In consideration of the purchase and acceptance of any or all of the Bonds by those who shall purchase and hold the same from time to time, the provisions of this Indenture shall be a part of the contract of the Town with the Owner, and shall be deemed to be and shall constitute a contract among the Town, the Owners, and the Trustee. ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section 3.1. Authorization. The Bonds are hereby authorized to be issued and delivered in accordance with the Constitution and Iaws of the State, including particularly the PID Act, as amended. The Bonds shall be issued in the aggregate principal amount of $26,175,000 for the purpose of (i) paying a portion of the Costs, (ii) paying a portion of the interest on the Bonds during and after the period of acquisition and construction of the Improvement Project A Improvements, (iii) funding a reserve fund for payment of principal 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. Section 3.2. Date, Denomination, Maturities, Numbers and Interest. (a) The Bonds shall be dated the date of the initial delivery thereof (the "Bond Date") and shall be issued in Authorized Denominations. The Bonds shall be in fully registered form, without coupons, and shall be numbered separately from R-1 upward, except the Initial Bond, which shall be numbered T-1. (b) Interest shall accrue and be paid on each Bond from the later of the Bond Date or the most recent Interest Payment Date to which interest has been paid or provided for, at the rate per annum set forth below until the principal thereof has been paid on the maturity date specified below or otherwise provided for. Such interest shall be payable semiannually on March 1 and September 1 of each year, commencing September 1, 2015, computed on the basis of a 360 -day year of twelve 30 -day months. 15 (c) The Bonds shall mature on September I in the years and in the principal amounts and shall bear interest at the rates set forth below: (d) The Bonds shall be subject to mandatory sinking fund redemption, optional redemption, and extraordinary optional redemption prior to maturity as provided in Article IV, and shall otherwise have the terms, tenor, denominations, details, and specifications as set forth in the form of Bond set forth in Section 5.2. Section 3.3. Conditions Precedent to Delivery of Bonds. The Bonds shall be executed by the Town and delivered to the Trustee, whereupon the Trustee shall authenticate the Bonds and, upon payment of the purchase price of the Bonds, shall deliver the Bonds upon the order of the Town, but only upon delivery to the Trustee of: (a) a certified copy of the Assessment Ordinance; (b) a certified copy of the Bond Ordinance, (c) a copy of the executed Financing Agreement; (d) a copy of the executed Reimbursement Agreement; (e) a copy of a Continuing Disclosure Agreement between the Town and the Trustee (in its capacity as dissemination agent thereunder) and a Continuing Disclosure Agreement between the Developer and the Trustee (in its capacity as dissemination agent thereunder); (f) a copy of this Indenture executed by the Trustee and the Town; and (g) a Town Certificate directing the authentication and delivery of the Bonds, describing the Bonds to be authenticated and delivered, designating the purchasers to whom the Bonds are to be delivered, stating the purchase price of the Bonds and stating that all items required by this Section are therewith delivered to the Trustee in form and substance satisfactory to the Town. Section 3.4. Medium, Method and Place of Payment. (a) Principal of and interest on the Bonds shall be paid in lawful money of the United States of America, as provided in this Section. (b) Interest on the Bonds shall be payable to the Owners thereof as shown in the Register at the close of business on the relevant Record Date. 16 Principal Interest Year Amount Rate 2025 $ 3,825,000 5.500% 2035 7,650,000 6.125 2040 6,150,000 6.250 2045 8,550,000 6.375 (d) The Bonds shall be subject to mandatory sinking fund redemption, optional redemption, and extraordinary optional redemption prior to maturity as provided in Article IV, and shall otherwise have the terms, tenor, denominations, details, and specifications as set forth in the form of Bond set forth in Section 5.2. Section 3.3. Conditions Precedent to Delivery of Bonds. The Bonds shall be executed by the Town and delivered to the Trustee, whereupon the Trustee shall authenticate the Bonds and, upon payment of the purchase price of the Bonds, shall deliver the Bonds upon the order of the Town, but only upon delivery to the Trustee of: (a) a certified copy of the Assessment Ordinance; (b) a certified copy of the Bond Ordinance, (c) a copy of the executed Financing Agreement; (d) a copy of the executed Reimbursement Agreement; (e) a copy of a Continuing Disclosure Agreement between the Town and the Trustee (in its capacity as dissemination agent thereunder) and a Continuing Disclosure Agreement between the Developer and the Trustee (in its capacity as dissemination agent thereunder); (f) a copy of this Indenture executed by the Trustee and the Town; and (g) a Town Certificate directing the authentication and delivery of the Bonds, describing the Bonds to be authenticated and delivered, designating the purchasers to whom the Bonds are to be delivered, stating the purchase price of the Bonds and stating that all items required by this Section are therewith delivered to the Trustee in form and substance satisfactory to the Town. Section 3.4. Medium, Method and Place of Payment. (a) Principal of and interest on the Bonds shall be paid in lawful money of the United States of America, as provided in this Section. (b) Interest on the Bonds shall be payable to the Owners thereof as shown in the Register at the close of business on the relevant Record Date. 16 (c) Interest on the Bonds shall be paid by check, dated as of the Interest Payment Date, and sent, first class United States mail, postage prepaid, by the Paying Agent/Registrar to each Owner at the address of each as such appears in the Register or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, the Owner shall bear all risk and expense of such other banking arrangement. (d) The principal of each Bond shall be paid to the Owner of such Bond on the due date thereof, whether at the maturity date or the date of prior redemption thereof, upon presentation and surrender of such Bond at the Designated Payment/Transfer Office of the Paying Agent/Registrar. (e) If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall for all purposes be deemed to have been made on the due date thereof as specified in Section 3.2 of this .Indenture. (fl Unclaimed payments of amounts due hereunder shall be segregated in a special account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owner of the Bonds to which such unclaimed payments pertain. Subject to any escheat, abandoned property, or similar law of the State, any such payments remaining unclaimed by the Owners entitled thereto for three (3) years after the applicable payment or redemption date shall be applied to the next payment or payments on the Bonds thereafter coming due and, to the extent any such money remains after the retirement of all Outstanding Bonds, shall be paid to the Town to be used for any lawful purpose. Thereafter, none of the Town, the Paying Agent/Registrar, or any other Person shall be liable or responsible to any holders of such Bonds for any further payment of such unclaimed moneys or on account of any such Bonds, subject to any applicable escheat law or similar law of the State. Section 3.5. Execution and Registration of Bonds. (a) The Bonds shall be executed on behalf of the Town by the Mayor and Town Secretary, by their manual or facsimile signatures, and the official seal of the Town shall be impressed or placed in facsimile thereon such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the Town had been manually impressed upon each of the Bonds. (b) In the event that any officer of the Town whose manual or facsimile signature appears on the Bonds ceases to be such officer before the authentication of such Bonds or before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. 17 (c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Indenture unless and until there appears thereon the Certificate of Trustee substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Trustee. It shall not be required that the same officer or authorized signatory of the Trustee sign the Certificate of Trustee on all of the Bonds. In lieu of the executed Certificate of Trustee described above, the Initial Bond delivered at the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided herein, manually executed by the Comptroller, or by her duly authorized agent, which certificate shall be evidence that the Initial Bond has been duly approved by the Attorney General, is a valid and binding obligation of the Town, and has been registered by the Comptroller. (d) On the Closing Date, one Initial Bond representing the entire principal amount of all Bonds, payable in stated installments to the Purchaser, or its designee, executed with the manual or facsimile signatures of the Mayor and the Town Secretary, approved by the Attorney General, and registered and manually signed by the Comptroller, will be delivered to the Purchaser or its designee. Upon payment for the Initial Bond, the Trustee shall cancel the Initial Bond and deliver to DTC on behalf of the Purchaser one registered definitive Bond for each year of maturity of the Bonds, in the aggregate principal amount of all Bonds for such maturity, registered in the name of Cede & Co., as nominee of DTC. Section 3.6. Ownership. (a) The Town, the Trustee, the Paying Agent/Registrar and any other Person may treat the Person in whose name any Bond is registered as the absolute owner of such Bond for the purpose of making and receiving payment as provided herein (except interest shall be paid to the Person in whose name such Bond is registered on the Record Date) and for all other purposes, whether or not such Bond is overdue, and none of the Town, the Trustee or the Paying Agent/Registrar shall be bound by any .notice or knowledge to the contrary. (b) All payments made to the Owner of any Bond shall be valid and effectual and shall discharge the liability of the Town, the Trustee and the Paying Agent/Registrar upon such Bond to the extent of the sums paid. Section 3.7. Registration, Transfer and Exchange. (a) So long as any Bond remains outstanding, the Town shall cause the Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a Register in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Bonds in accordance with this Indenture. The Paying Agent/Registrar represents and warrants that it will maintain a copy of the Register, and shall cause the Register to be current with all registration and transfer information as from time to time may be applicable. (b) A Bond shall be transferable only upon the presentation and surrender thereof at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the raying Agent/Registrar. No transfer of any Bond shall be effective until entered in the Register. in (c) The Bonds shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/Transfer Office of the Paying Agent/Registrar for a Bond or Bonds of the same maturity and interest rate and in any Authorized Denomination and in an aggregate principal amount equal to the unpaid principal amount of the Bond presented for exchange. The Trustee is hereby authorized to authenticate and deliver Bonds exchanged for other Bonds in accordance with this Section. (d) The Trustee is hereby authorized to authenticate and deliver Bonds transferred or exchanged in accordance with this Section. A new Bond or Bonds will be delivered by the Paying Agent/Registrar, in lieu of the Bond being transferred or exchanged, at the Designated Payment/Transfer Office, or sent by United States mail, first class, postage prepaid, to the Owner or his designee. Each transferred Bond delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the Town and shall be entitled to the benefits and security of this Indenture to the same extent as the Bond or Bonds in lieu of which such transferred Bond is delivered. (e) Each exchange Bond delivered in accordance with this Section shall constitute an original contractual obligation of the Town and shall be entitled to the benefits and security of this Indenture to the same extent as the Bond or Bonds in Iieu of which such exchange Bond is delivered. (f) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for a different denomination of any of the Bonds. The Paying Agent/Registrar, however, may require the Owner- to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer, or exchange of a Bond. (g) Neither the Town nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Bond or portion thereof called for redemption prior to maturity within forty-five (45) days prior to the date fixed for redemption; provided, however, such limitation shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Bond. Section 3.8. Cancellation. All Bonds paid or redeemed before scheduled maturity in accordance with this Indenture, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance with this Indenture, shall be cancelled, and proper records shall be made regarding such payment, redemption, exchange, or replacement. Whenever in this Indenture provision is made for the cancellation by the Trustee of any Bonds, the Trustee shall destroy such Bonds and deliver a certificate of such destruction to the Town. Section 3.9. Temporary Bonds, (a) Following the delivery and registration of the Initial Bond and pending the preparation of definitive Bonds, the proper officers of the Town may execute and, upon the Town's request, the Trustee shall authenticate and deliver, one or more temporary Bonds that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, 19 substantially of the tenor of the definitive Bonds in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers of the Town executing such temporary Bonds may determine, as evidenced by their signing of such temporary Bonds. (b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the benefit and security of this Indenture. (e) The Town, without unreasonable delay, shall prepare, execute and deliver to the Trustee the Bonds in definitive form; thereupon, upon the presentation and surrender of the Bond or Bonds in temporary .form to the Paying Agent/Registrar, the Paying Agent/Registrar shall cancel the Bonds in temporary form and the Trustee shall authenticate and deliver in exchange therefor a Bond or Bonds of the same maturity and series, in definitive form, in the Authorized Denomination, and in the same aggregate principal amount, as the Bond or Bonds in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. Section 3.10. Replacement Bonds. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Bond, the Trustee shall authenticate and deliver in exchange therefor a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding. The Town or the Paying Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the Trustee, pursuant to the applicable laws of the State and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Bond of like tenor and principal amount bearing a number not contemporaneously outstanding, provided that the Owner first complies with the following requirements: (i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction or theft of such Bond; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar and the Trustee to save them and the Town harmless; (iii) pays all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Trustee and the Paying Agent/Registrar and any tax or other- governmental charge that is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the Town and the Trustee. (c) After the delivery of such replacement Bond, if a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the Town and the Paying Agent/Registrar shall be entitled to recover such 20 replacement Bond from the Person to whom it was delivered or any Person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost, or expense incurred by the Town, the Paying Agent/Registrar or the Trustee in connection therewith. (d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and payable or may pay such Bond when it becomes due and payable. (e) Each replacement Bond delivered in accordance with this Section shall constitute an original additional contractual obligation of the Town and shall be entitled to the benefits and security of this Indenture to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. Section 3.11. Book -Entry Only System. (a) The Bonds shall initially be issued in book -entry -only form and shall be deposited with DTC, which is hereby appointed to act as the securities depository therefor, in accordance with the letter of representations from the Town to DTC. On the Closing Date the definitive Bonds shall be issued in the form of a single typewritten certificate for each maturity thereof registered in the name of Cede & Co., as nominee for DTC. (b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the Town and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any Person on behalf of whore such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the Town and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant will respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other Person, other than an Owner, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other Person, other than an Owner, as shown in the Register of any amount with respect to principal of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of this Indenture to the contrary, the Town and the Paying Agent/Registrar shall be entitled to treat and consider the Person in whose name each Bond is registered in the Register as the absolute owner of such Bond for the purpose of payment of principal of, premium, if any, and interest on Bonds, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfer with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owners as shown in the Register, as provided in this Indenture, and all such payments shall be valid and effective to fully satisfy and discharge the Town's obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the Register, shall receive a Bond certificate evidencing the obligation of the Town to make payments of amounts due pursuant to this Indenture. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in this Indenture with respect to interest checks or 21 drafts being mailed to the registered owner at the close of business on the Record Date, the word "Cede & Co." in this Indenture shall refer to such new nominee of DTC. Section 3.12. Successor Securities Depository: Transfer Outside Book -Entry -Only System. In the event that the Town determines that DTC is incapable of discharging its responsibilities described herein and in the letter of representations from the Town to DTC, the Town shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository; or (ii) notify DTC and DTC Participants of the availability through DTC of certificated Bonds and cause the Paying Agent/Registrar to transfer one or more separate registered Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Indenture. Section 3.13. Payments to Cede & Co. Notwithstanding any other provision of this Indenture to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such Bonds shall be made and given, respectively, in the manner provided in the blanket letter of representations from the Town to DTC. ARTICLE IV REDEMPTION OF BONDS BEFORE MATURITY Section 4.1. Limitation on Redemption. The Bonds shall be subject to redemption before their scheduled maturity only as provided in this Article IV. Section 4.2. Mandatory Sinking Fund Redemption. (a) The Bonds maturing on September 1 in the years 2025, 2035, 2040 and 2045 (collectively, "Term Bonds"), arc subject to mandatory sinking fund redemption prior to their respective maturities and will be redeemed by the Town in part at the redemption price equal to the principal amount of the Bonds called for redemption, plus accrued and unpaid interest to the date fixed for redemption from moneys available for such purpose in the Principal and Interest Account of the Bond Fund pursuant to Article VI, on the dates and in the respective sinking fund installments as set forth in the following schedule: 22 Term Bonds Maturing September 1, 2025 Redemption Date September 1, 2017 September 1, 2018 September 1, 2019 Septernber 1, 2020 September 1, 2021 September 1, 2022 September 1, 2023 September 1, 2024 September 1, 2025" Principal Amount $ 325,000 350,000 375,000 400,000 425,000 450,000 475,000 500,000 525,000 Term Bonds Maturing September 1, 2035 Redemption Date September 1, 2026 September 1, 2027 September 1, 2028 September 1, 2029 September 1, 2030 September 1, 2031 September 1, 2032 September 1, 2033 September 1, 2034 September 1, 2035* Principal Amount $ 575,000 600,000 650,000 675,000 725,000 775,000 825,000 875,000 950,000 1,000,000 Term Bonds Maturing September 1, 2040 Redemption Date September 1, 2036 September 1, 2037 September 1, 2038 September 1, 2039 September 1, 2040 Principal Amount $ 1,075,000 1,150,000 1,225,000 1,300,000 1,400,000 Terni Bonds Maturing September 1, 2045 Redemption Date September 1, 2041 September 1, 2042 September 1, 2043 September 1, 2044 September 1, 2045` Stated maturity. Principal Amount $ 1,475,000 1,600,000 1,700,000 1,825,000 1,950,000 (b) At least thirty (30) days prior to each sinking fund redemption date, the Trustee shall select a principal amount of Bonds of such maturity equal to the Sinking Fund Installment 23 amount of such Bonds to be redeemed, shall call such Bonds for redemption on such scheduled mandatory redemption date, and shall give notice of such redemption, as provided in Section 4.6. (c) The principal amount of Bonds required to be redeemed on any redemption date pursuant to subparagraph (a) of this Section 4.2 shall be reduced, at the option of the Town, by the principal amount of any Bonds of such maturity which, at least 30 days prior to the sinking fund redemption date shall have been acquired by the Town 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. (d) The principal amount of Bonds required to be redeemed on any redemption date pursuant to subparagraph (a) of this Section 4.2 shall be reduced on a pro rata basis among Sinking Fund Installments by the principal amount of any Bonds which, at least 30 days prior to the sinking fund redemption date, shall have been redeemed pursuant to the optional redemption provisions in Section 4.3 hereof or the extraordinary optional redemption provisions in Section 4.4 hereof and not previously credited to a mandatory sinking fund redemption, Section 4.3. Optional Redemption. The Bonds may be redeemed prior to their scheduled maturities on any date on or after September 1, 2025, at the option of the Issuer, with funds derived from any available and lawful source, as a whole, or in part, and, if in part, the particular Bonds, or portions thereof, to be redeemed shall be selected and designated by the Issuer, at a redemption price equal to the principal amount to be redeemed plus accrued interest to the date fixed for redemption. Section 4.4. Extraordinary Optional Redemption. The Town reserves the right and option to redeem Bonds before their respective scheduled maturity dates, in whole or in part, on the fifteenth day of any month, at a redemption price equal to the principal amount of the Bonds called for redemption, plus accrued and unpaid interest to the date fixed for redemption, from amounts on deposit in the Redemption Fund as a result of Prepayments (including related transfers to the Redemption Fund as provided in Section 6.7(c)) or any other transfers to the Redemption Fund under the terms of this Indenture. Section 4.5. Partial Redemption. (a) If less than all of the Bonds are to be redeemed pursuant to either Sections 4.2, 4.3 or 4.4, Bonds shall be redeemed in increments of $5,000 by any method selected by the Trustee that results in a random selection, provided that no redemption shall cause the principal amount of any Bond to be less than the minimum Authorized Denomination for such Bond. Each Bond shall be treated as representing the number of Bonds that is obtained by dividing the principal amount of such Bond by the minimum Authorized Denomination for such Bond. (b) Upon surrender of any Bond for redemption in part, the Trustee in accordance with Section 3.7 of this Indenture, shall authenticate and deliver an exchange Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered, such exchange being without charge. 24 Section 4.6. Notice of Redemption to Owners. (a) The Trustee shall give notice of any redemption of Bonds by sending notice by first class United States snail, postage prepaid, not less than 30 days before the date fixed for redemption, to the Owner of each Bond or portion thereof to be redeemed, at the address shown in the Register. (b) The Notice shall state the redemption date, the Redemption Price, the place at which the Bonds are to be surrendered for payment, and, if less than all the Bonds Outstanding are to be redeemed, and subject to Section 4.5, an identification of the Bonds or portions thereof to be redeemed, any conditions to such redemption and that on the redemption date, if all conditions, if any, to such redemption have been satisfied, such Bond shall become due and payable. (c) Any notice given as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. (d) The Town has the right to rescind any optional redemption or extraordinary optional redemption described in Section 4.3 or 4.4 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 this Indenture. The Trustee shall mail notice of rescission of redemption in the same manner notice of redemption was originally provided. Section 4.7. Payment Upon Redemption. (a) The Trustee shall make provision for the payment of the Bonds to be redeemed on such date by setting aside and holding in trust an amount from the Redemption Fund or otherwise received by the Trustee from the Town and shall use such funds solely for the purpose of paying the Redemption Price on the Bonds being redeemed. (b) Upon presentation and surrender of any Bond called for redemption at the designated corporate trust office of the Trustee on or after the date fixed for redemption, the Trustee shall pay the Redemption Price on such Bond to the date of redemption from the moneys set aside for such purpose. Section 4.8. Effect of Redemption. Notice of redemption having been given as provided in Section 4.6 of this 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 principal amount plus accrued unpaid interest on 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. 25 ARTICLE V FORM OF THE BONDS Section 5.1. Form Generally. (a) The Bonds, including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Certificate of the Trustee, and the Assignment to appear on each of the Bonds, (i) shall be substantially in the form set forth in this Article with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Indenture, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the Town or by the officers executing such Bonds, as evidenced by their execution thereof. (b) Any portion of the text of any Bonds may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Bonds. (c) The definitive Bonds shall be typewritten, printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Bonds, as evidenced by their execution thereof. (d) The Initial Bond submitted to the Attorney General may be typewritten and photocopied or otherwise reproduced. Section 5.2. Form of the Bonds. (a) Form of Bond. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF TEXAS, THE TOWN, OR ANY OTHER POLITICAL CORPORATION, SUBDIVISION OR AGENCY THEREOF, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THIS BOND. REGISTERED United States of America NO. State of Texas TOWN OF WESTLAKE, TEXAS SPECIAL ASSESSMENT REVENUE BOND, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) INTEREST RATE MATURITY DATE DATE OF DELIVERY % September 1, 20 26 February 5, 2015 REGISTERED CUSIP NUMBER The Town of Westlake, Texas (the "Tnwn"), for value received, hereby promises to pay, solely from the Pledged Revenues, to or registered assigns, on the Maturity Date, as specified above, the sura of DOLLARS unless this Bond shall have been sooner called for redemption and the payment of the principal hereof shall have been paid or provision for such payment shall have been made, and to pay interest on the unpaid principal amount hereof from the later of the Date of Delivery, as specified above, or the most recent Interest Payment Date to which interest has been paid or provided for until such principal amount shall have been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360 -day year of twelve 30 -day months, such interest to be paid semiannually on March 1 and September 1 of each year, commencing September 1, 2015. Capitalized terms appearing herein that are defined terms in the Indenture (defined below), have the meanings assigned to them in the Indenture. Reference is made to the Indenture for such definitions and for all other purposes. The principal of this Bond shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Bond at the corporate trust office in St. Paul, Minnesota (the "Designated Payment/Transfer Office"), of U.S. Bank National Association, as trustee and paying agent/registrar (the "Trustee"), or, with respect to a successor trustee and paying agent/registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Bond is payable by check dated as of the Interest Payment Date, mailed by the Trustee to the registered owner at the address shown on the registration books kept by the Trustee or by such other customary banking; arrangements acceptable to the Trustee, requested by, and at the risk and expense of, the Person to whom interest is to be paid. For the purpose of the payment of interest on this Bond, the registered owner shall be the Person in whose name this Bond is registered at the close of business on the "Record Date," which shall be the fifteenth calendar day of the month next preceding such Interest Payment Date; provided, however, that in the event of nonpayment of interest on a scheduled Interest Payment Date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Trustee, if and when funds for the payment of such interest have been received from the Town. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five Business Days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Owner- of a Bond appearing on the books of the Trustee at the close of business on the last Business Day preceding the date of mailing such notice. If a date for the payment of the principal of or interest on the Bonds is a Saturday, Sunday, legal holiday, or a day on which banking institutions in the city in which the Designated Payrnent/Transfer Office is located are authorized by law or executive order to close, then the 27 date for such payment shall be the next succeeding Business Day, and payment on such date shall have the same force and effect as if made on the original date payment was due. This Bond is one of a duly authorized issue of assessment revenue bonds of the Town having the designation specified in its title (herein referred to as the "Bonds"), dated as of the Date of Delivery and issued in the aggregate principal amount of $26,175,000 and issued, with the limitations described herein, pursuant to an Indenture of Trust, dated as of February 1, 2015 (the "Indenfure"), by and between the Town and the Trustee, to which Indenture reference is hereby made for a description of the amounts thereby pledged and assigned, the nature and extent of the lien and security, the respective rights thereunder to the holders of the Bonds, the Trustee, and the Town, and the terms upon which the Bonds are, and are to be, authenticated and delivered and by this reference to the terms of which each holder of this Bond hereby consents. All Bonds issued under the Indenture are equally and ratably secured by the amounts thereby pledged and assigned. The Bonds are being issued for the purpose of (i) paying a portion of the Costs, (ii) paying a portion of the interest on the Bonds during and after the period of acquisition and construction of the Improvement Project A Improvements, (iii) funding a reserve fund for payment of principal and interest ori the Bonds, (i.v) paying a portion of the costs incidental to the organization of the District, and (v) paying the costs of issuance of the Bonds. The Bonds are litnited obligations of the Town payable solely from the fledged Revenues. Reference is hereby made to the Indenture, copies of which are on file with and available upon request from the Trustee, for the provisions, among others, with respect to the nature and extent of the duties and obligations of the Town, the Trustee and the Owners. The Owner of this Bond, by the acceptance hereof, is deemed to have agreed and consented to the terms, conditions and provisions of the Indenture. Notwithstanding any provision hereof, the Indenture may be released and the obligation of the Town to make money available to pay this Bond may be defeased by the deposit of money and/or certain direct or indirect Defeasance Securities sufficient for such purpose as described in the Indenture. The Bonds are issuable as fully registered bonds only in denominations of $25,000 and any multiple of $5,000 in excess thereof ("Authorized Denominations"). The Town prohibits the breaking up or allocation of CUSIP numbers to any Bond or Bonds in denominations of less than $25,000, and any attempt to do so will be void and of no effect. The Bonds maturing on September I in the years 2025, 2035, 2040 and 2045 (collectively, "Teem Bonds"), are subject to mandatory sinking fund redemption prior to their respective maturities and will be redeemed by the Town in part a redemption price equal to the principal amount thereof plus accrued and unpaid interest thereon to the date set for redemption from moneys available for such purpose in the Principal and Interest Account of the Bond Fund pursuant to Article V1 of the Indenture, on the dates and in the respective sinking fund installments as set forth in the following schedule: 28 Term Bonds Maturing September 1, 2025 Redemption Date September 1, 2017 September 1, 2018 September 1, 2019 September 1, 2020 September 1, 2021 September 1, 2022 September 1, 2023 September 1, 2024 September 1, 2025 Principal Amount $ 325,000 350,000 375,000 400,000 425,000 450,000 475,000 500,000 525,000 Term Bonds Maturing September 1, 2035 Redemption Date September 1, 2026 September 1, 2027 September 1, 2028 September 1, 2029 September 1, 2030 September 1, 2031 September 1, 2032 September 1, 2033 September 1, 2034 September 1, 2035` P_rineipaI Amount $ 575,000 600,000 650,000 675,000 725,000 775,000 825,000 875,000 950,000 1,000,000 Tenn Bonds Maturing September 1, 2040 Redemption_ Date September 1, 2036 September 1, 2037 September 1, 2038 September 1, 2039 September 1, 2040 Principal Amount $ 1,075,000 1,150,000 1,225,000 1,300,000 1,400,000 Term Bonds Maturing September 1, 2045 Redemption Date September 1, 2041 September 1, 2042 September 1, 2043 September 1, 2044 September 1, 2045* - Stated maturity. Principal Amount $ 1,475,000 1,600,000 1,700,000 1,825,000 1,950,000 At least thirty (30) days prior to each sinking fund redemption date, the Trustee shall select for redemption by lot, or by any other customary method that results in a random selection, 29 a principal amount of Bonds of such maturity equal to the sinking fund installments of such Bonds to be redeemed, shall call such Bonds for redemption. on such scheduled mandatory sinking fund redemption date, and shall give notice of such redemption, as provided in Section 4.6 of the Indenture. The principal amount of Bonds required to be redeemed on any sinking fund redemption date shall be reduced, at the option of the Town, by the principal amount of any Bonds of such maturity which, at least 30 days prior to the sinking fund redemption date shall have been acquired by the Town at a price not exceeding the principal amount of such Bonds plus accrued and 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 sinking fund redemption date shall be reduced on a pro rata basis among Sinking Fund Installments by the principal amount of any Bonds which, at least 30 days prior to the sinking fund redemption date, shall have been redeemed pursuant to the optional redemption or extraordinary optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption, The Bonds may be redeemed prior to their- scheduled maturities on any date on or after September 1, 2025, at the option of the Issuer, with funds derived from any available and lawful source, as a whole, or in part, and, if in part, the particular Bonds, or portions thereof, to be redeemed shall be selected and designated by the Issuer, at a redemption price equal to the principal amount to be redeemed plus accrued interest to the date fixed for redemption. The Bonds are subject to extraordinary optional redemption prior to maturity in whole or in part, on the fifteenth day of any month, at a redemption price equal to the principal amount of the Bonds called for redemption, plus accrued and unpaid interest to the date fixed for redemption from amounts on deposit in the Redemption Fund as a result of Prepayments or any other transfers to the Redemption Fund under the terms of the Indenture. The Trustee shall give notice of any redemption of Bonds by sending notice by first class United States mail, postage prepaid, not less than 30 days before the date fixed for redemption, to the Owner of each Bond (or part thereof) to be redeemed, at the address shown on the Register. The notice shall state the redemption date, the Redemption Price, the place at which the Bonds are to be surrendered for payment, and, if less than all the Bonds Outstanding are to be redeemed, an identification of the Bonds or portions thereof to be redeemed. Any notice so given shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. 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 the Town 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 Town shall not redcem 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. 30 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Town and the rights of the holders of the Bonds under the Indenture at any time Outstanding affected by such modification. The Indenture also contains provisions permitting the holders of specified percentages in aggregate principal amount of the Bonds at the time Outstanding, on behalf of the holders of all the Bonds, to waive compliance by the Town with certain past defaults under the Bond Ordinance or the Indenture and their consequences. Any such consent or waiver by the holder of this Bond or any predecessor Bond evidencing the same debt shall be conclusive and binding upon such holder and upon all future holders thereof and of any Bond issued upon the transfer thereof or in exchange therefor or in lieu thereof, whether or not notation of such consent or waiver is made upon this Bond. As provided in the Indenture, this Bond is transferable upon surrender of this Bond for transfer at the Designated Payment/Transfer Office, with such endorsement or other evidence of transfer as is acceptable to the Trustee, and upon delivery to the Trustee of such certifications and/or opinion of counsel as may be required under the Indenture for the transfer of this Bond. Upon satisfaction of such requirements, one or more new fully registered Bonds of the same Stated Maturity, of Authorized Denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. Neither the Town nor the Trustee shall be required to issue, transfer or exchange any Bond called for redemption where such redemption is scheduled to occur within 45 calendar days of the transfer or exchange date; provided, however, such limitation shall not be applicable to an exchange by the registered owner of the uncalled principal balance of a Bond. The Town, the Trustee, and any other Person may treat the Person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except interest shall be paid to the Person in whose name this Bond is registered on the Record Date or Special Record Date, as applicable) and for all other purposes, whether or not this Bond be overdue, and neither the Town nor the Trustee shall be affected by notice to the contrary. The Town has reserved the right to issue Additional Bonds on the terms and conditions spec. if in the Indenture. NEITHER THE FULL FAITH AND CREDIT NOR THE GENERAL TAXING POWER OF THE TOWN OF WESTLAKE, TEXAS, TARRANT COUNTY, TEXAS OR THE STATE OF TEXAS, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE BONDS. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the series of which it is a part is duly authorized by law; that all acts, conditions and things required to be done precedent to and in the issuance of the Bonds have been properly done and performed and have happened in regular and due time, form and manner, as required by law; and that the total indebtedness of the Town, including the Bonds, does not exceed any Constitutional or statutory limitation. 31 IN WITNESS WHEREOF, the Town Council of the Town has caused this Bond to be executed under the official seal of the Town. Town Secretary, Town of Westlake, Texas Mayor, Town of Westlake, Texas [TOWN SEAL] (b) Form of Comptroller's Registration Certificate. The following Registration Certificate of Comptroller of Public Accounts shall appear on the Initial Bond: REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO. THE STATE OF TEXAS § I HEREBY CERTIFY THAT there is on file and of record in my office a certificate to the effect that the Attorney General of the State of Texas has approved this Bond, and that this Bond has been registered this day by me. WITNESS MY SIGNATURE AND SEAL OF OFFICE this Comptroller of Public Accounts of the State of Texas [SEAL] (c) Form of Certificate of Trustee. CERTIFICATE OF TRUSTEE It is hereby certified that this is one of the Bonds of the series of Bonds referred to in the within mentioned Indenture. DATED: U.S. Bank National Association, as Trustee M 32 Authorized Signatory (d) Foam of Assignment. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (print or typewrite naive and address, including zip code, of Transferee.) (Social Security or other identifying number: ) the within Bond and all rights hereunder, and hereby irrevocably constitutes and appoints , attorney, to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed by: Authorized Signatory NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular and must be guaranteed in a manner acceptable to the Trustee. (e) The Initial Bond shall be in the form set forth in paragraphs (a) through (d)..of this section, except for the following alterations: (i) immediately under the name of the Bond the heading "INTEREST RATE" and "MATURITY DATE" shall both be completed with the expression "As Shown Below," and the reference to the "CUSIP NUMBER" shall be deleted; (ii) the Initial Bond shall be numbered T-1; and (ii) in the first paragraph of the Bond, the words "on the Maturity Date, as specified above, the sum of DOLLARS" shall be deleted and the following will be inserted: "on September 1 in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: 33 Section 5.3. CUSIP Registration. The Town may secure identification numbers through the CUSIP Service Bureau Division of Standard & Pool's Corporation, New York, New York, and may authorize the printing of such numbers on the face of the Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds shall be of no significance or effect as regards the legality thereof and none of the Town, the attorneys approving said Bonds as to legality or the Trustee are to be held responsible for CUSIP numbers incorrectly printed on the Bonds. The Town prohibits any Bond to be issued in a denomination of less than $25,000 and further prohibits the assignment of a CUSIP number to any Bond with a denomination of less than $25,000, and any attempt to accomplish either of the foregoing shall be void and of no effect. The Trustee may include in any redemption notice a statement to the effect that the CUSIP numbers on the Bonds have been assigned by an independent service and are included in such notice solely for the convenience of the Bondholders and that neither the Town nor the Trustee shall be liable for any inaccuracies in such numbers. Section 5.4. Legal Opinion. The approving legal opinion of Bond Counsel may be printed on or attached to each Bond over the certification of the Town Secretary of the Town, which may be executed in facsimile. ARTICLE VI FUNDS AND ACCOUNTS Section 6.1. Establishment of Funds and Accounts. (a) Creation of Funds. The following Funds are hereby created and established under this Indenture: (i) Pledged Revenue Fund; (ii) Bond Fund; (iii) Project Fund; (iv) Reserve Fund; (v) Redemption Fund; 34 Principal Interest Years Installments Rates 2025 $ 3,825,000 5,500% 2035 7,650,000 6.125 2040 6,150,000 6.250 2045 8,550,000 6.375 Section 5.3. CUSIP Registration. The Town may secure identification numbers through the CUSIP Service Bureau Division of Standard & Pool's Corporation, New York, New York, and may authorize the printing of such numbers on the face of the Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds shall be of no significance or effect as regards the legality thereof and none of the Town, the attorneys approving said Bonds as to legality or the Trustee are to be held responsible for CUSIP numbers incorrectly printed on the Bonds. The Town prohibits any Bond to be issued in a denomination of less than $25,000 and further prohibits the assignment of a CUSIP number to any Bond with a denomination of less than $25,000, and any attempt to accomplish either of the foregoing shall be void and of no effect. The Trustee may include in any redemption notice a statement to the effect that the CUSIP numbers on the Bonds have been assigned by an independent service and are included in such notice solely for the convenience of the Bondholders and that neither the Town nor the Trustee shall be liable for any inaccuracies in such numbers. Section 5.4. Legal Opinion. The approving legal opinion of Bond Counsel may be printed on or attached to each Bond over the certification of the Town Secretary of the Town, which may be executed in facsimile. ARTICLE VI FUNDS AND ACCOUNTS Section 6.1. Establishment of Funds and Accounts. (a) Creation of Funds. The following Funds are hereby created and established under this Indenture: (i) Pledged Revenue Fund; (ii) Bond Fund; (iii) Project Fund; (iv) Reserve Fund; (v) Redemption Fund; 34 (vi) Rebate Fund, (vii) Administrative Fund; (viii) Reimbursement Fund; and (ix) Developer Property Tax Reserve Fund. (b) Creation. of Accounts and Subaccounts. (i) The following Accounts are hereby created and established under the Bond Fund: (A) Capitalized Interest Account; and (B) Principal and Interest Account. (ii) The following Accounts are hereby created and established under the Reserve Fund: (A) Reserve Account; (B) Prepayment Reserve Account; and (C) Delinquency Reserve Account. (iii) The following Accounts are hereby created and established under the Project Fund: (A) Improvement Project A Improvement Account, (B) Developer Improvement Account; and (C) Costs of Issuance Account. (iv) The following Accounts are hereby created and established under the Pledged Revenue Fund: (A) Bond Pledged Revenue Account; and (B) Developer Reimbursement Pledged Revenue Account. (c) Each Fund, each Account and each Subaccount created within such Fund shall be maintained by the Trustee separate and apart from all other funds and accounts of the Town. The Pledged Funds shall constitute trust funds which shall be held in trust by the Trustee as part of the Trust Estate solely for the benefit of the Owners of the Bonds, Amounts on deposit in the Funds, Accounts and Subaccounts shall be used solely for the purposes set forth herein. 35 (vi) Rebate Fund, (vii) Administrative Fund; (viii) Reimbursement Fund; and (ix) Developer Property Tax Reserve Fund. (b) Creation. of Accounts and Subaccounts. (i) The following Accounts are hereby created and established under the Bond Fund: (A) Capitalized Interest Account; and (B) Principal and Interest Account. (ii) The following Accounts are hereby created and established under the Reserve Fund: (A) Reserve Account; (B) Prepayment Reserve Account; and (C) Delinquency Reserve Account. (iii) The following Accounts are hereby created and established under the Project Fund: (A) Improvement Project A Improvement Account, (B) Developer Improvement Account; and (C) Costs of Issuance Account. (iv) The following Accounts are hereby created and established under the Pledged Revenue Fund: (A) Bond Pledged Revenue Account; and (B) Developer Reimbursement Pledged Revenue Account. (c) Each Fund, each Account and each Subaccount created within such Fund shall be maintained by the Trustee separate and apart from all other funds and accounts of the Town. The Pledged Funds shall constitute trust funds which shall be held in trust by the Trustee as part of the Trust Estate solely for the benefit of the Owners of the Bonds, Amounts on deposit in the Funds, Accounts and Subaccounts shall be used solely for the purposes set forth herein. 35 (d) Interest earnings and profit on each respective Fund and Account established by this Indenture shall be applied or withdrawn for the purposes of such Fund or Account as specified below. Section 6.2. Initial Deposits to Funds and Accounts. (a) The proceeds from the sale of the Bonds shall be paid to the Trustee and deposited or transferred by the Trustee as follows: (i) to the Capitalized Interest Account of the Bond Fund: $3,216,750.00; (ii) to the Reserve Account of the Reserve Fund $2,074,312.50, which is equal to the initial Reserve Fund Requirement; (iii) to the Costs of Issuance Account of the Project Fund: $2,425,801.00; and (iv) to the Improvement Project A Improvement Account of the Project Fund: $1.7,934,636.50. (b) Funds received from the Developer or other sources on the Closing Date pursuant to the terms of the Reimbursement Agreement in the amount of $0 shall be deposited to the Developer Improvement Account of the Project Fund. (c) Funds received from the Developer on the Closing Date in the amount of $106.59 (the "Initial Deposit", as defined by the Redemption Waiver Agreement) shall be deposited to the Developer Property Tax Reserve Fund. Section 6.3, Pledged Revenue Fund. (a) Immediately upon receipt thereof, the Town shall transfer to the Trustee for deposit to the Pledged Revenue Fund the Assessments and Annual Installments (other than the portion of the Assessments and Annual Installments allocated to the payment of Administrative Expenses and Delinquent Collection Costs, which shall be deposited to the Administrative Fund pursuant to Section 6.9 hereof), as set forth in the Service and Assessment Plan. Specifically, the Town shall deposit or cause to be deposited the foregoing amounts as follows: (i) first, to the Bond Pledged Revenue Account of the Pledged Revenue Fund in an amountsufficient to pay debt service on the Bonds next coming due, (ii) second, to the Reserve Account of the Reserve Fund in an amount to cause the amount in the Reserve Account to equal the Reserve Fund Requirement, (iii) third to the Developer Reimbursement Pledged Revenue Account of the Pledged Revenue Fund to pay and reimburse the Developer for costs of Improvement Project A Improvements that have been paid from the Developer Improvement Account of the Project Fund (pursuant to the terms of the Reimbursement Agreement), (iv) fourth to pay other costs of the Authorized Improvements, and (v) fifth to pay other costs permitted by the PID Act. Notwithstanding the foregoing, 0.50% of the interest rate component of the Annual Installments shall only be utilized for the purposes set forth in Section 6.7(a) hereof and, immediately following the initial deposit to the Pledged Revenue Fund, such 0.50% of the interest rate component of the Annual Installments will be deposited into the Prepayment Reserve Account, the Delinquency Reserve Account and/or the Redemption Fund, as applicable. Moneys 36 transferred to the Developer Reimbursement Pledged Revenue Account shall not be a part of the Trust Estate and are not security for the Bonds. (b) From time to time as needed to pay the obligations relating to the Bonds, but no later than five (S) 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 from 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. (c) Subject to the provisions of the Reimbursement Agreement, from time to time as needed to pay the obligations relating to costs of Improvement Project A Improvements that are paid with funds withdrawn from the Developer Improvement Account of the Project Fund the Trustee shall withdraw from the Developer Reimbursement Pledged Revenue Account and transfer to the Reimbursement Fund such amount needed to reimburse the Developer for funds withdrawn from the Developer Improvement Account of the Project Fund used to fund costs of Improvement Project A Improvements. (c) If, after the foregoing transfers and any transfer from the Reserve Fund as provided in Section 6.7, there are insufficient funds to make the payments provided in paragraph (b) above, 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. (d) The Trustee shall transfer Prepayments to the Redemption Fund promptly after deposit of such amounts into the Pledged Revenue Fund. (e) Upon receipt of Foreclosure Proceeds, the Trustee shall transfer such Foreclosure Proceeds first to the Reserve Fund to restore any transfers from the Reserve Fund made with respect to the Improvement Area #1 Assessed Parcel(s), the Improvement Area #2 Assessed Parcel(s) and the Improvement Area #3 Assessed Parcel(s) to which the Foreclosure Proceeds relate, and second, to the Redemption Fund. (f) After satisfaction of the requirement to provide for the payment of the principal and interest on the Bonds and to fund any deficiency that may exist in the Reserve Fund and to fund any obligations due to the Developer with funds deposited to the Reimbursement Fund, the Trustee shall transfer any Pledged Revenues remaining in the Pledged Revenue Fund to the Town, which monies may be used for any lawful purpose for which Assessments may be used under the PID Act. Section 6.4. Bond Fund. (a) 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 37 pay interest on the Bonds on such Interest Payment Date from the Capitalized Interest Account as provided below. (b) If amounts in the Principal and Interest Account are insufficient for the purposes set forth in paragraph (a) above, the Trustee shall withdraw from the Reserve Fund amounts to cover the amount of such insufficiency. Amounts so withdrawn from the Reserve Fund shall be deposited in the Principal and Interest Account and transferred to the Paying Agent/Registrar. (c) Moneys in the Capitalized Interest Account shall be used for the payment of all interest due on the Bonds on September 1, 2015, March 1, 2016, September 1, 2016 and 85.56% of the interest due on March 1, 2017. Any amounts on deposit to the Capitalized Interest Account after the payment of interest on the dates and in the amounts listed above shall be transferred to the Project Fund, or if the Project Fund has been closed as provided in Section 6.5(d), such amounts shall be transferred to the Redemption Fund to be used to redeem Bonds and the Capitalized Interest Account shall be closed. Section 6.5. Project Fund. (a) Money on deposit in the Project Fund shall be used for the purposes specified in Section 3.1. (b) 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 Town Certificates. Disbursements from all other Accounts of the Project Fund to pay Costs shall be made by the Trustee upon receipt by the Trustee of a properly executed and completed Certification for Payment. The disbursement of funds from the Project Fund pursuant to a Certification for Payment shall be pursuant to and accordance with the disbursement procedures described in the Financing Agreement. Each such Town Certificate shall include a list of the payees and the payments (not to exceed) to be made to such payees as well as a statement that all payments shall be made by check or wire transfer in accordance with the payment instructions set forth in such written request or in the invoices submitted in accordance therewith and the Trustee may rely on such payment instructions though given by the Town with no duty to investigate or inquire as to the authenticity of or authorization for the invoice or the payment instructions contained therein. (c) Except as provided in Section 6.5(d) and (f), money on deposit in the Improvement Project A Improvement Account shall be used solely to pay Costs. (d) If the Town Representative determines in his or her sole discretion that amounts then on deposit in the Project Fund are not expected to be expended for purposes of the Project Fund due to the abandonment, or constructive abandonment, of one or more of the Improvement Project A Improvements such that, in the opinion of the Town .Representative, it is unlikely that the amounts in the Project Fund will ever be expended for the purposes of the Project Fund, the Town Representative shall file a Town Certificate with the Trustee which identifies the amounts then on deposit in the Project Fund that are not expected to be used for purposes of the Project Fund. If such Town Certificate is so filed, the amounts on deposit in the Project Fund shall be transferred to the Redemption Fund to redeem Bonds on the earliest practicable date after notice 38 of redemption has been provided in accordance with this Indenture. Upon such transfers, the Project Fund shall be closed. (e) In making any determination pursuant to this Section, the Town Representative may conclusively rely upon a certificate of an Independent Financial Consultant. (f) Upon the filing of a Town Certificate stating that all Improvement Project A Improvements have been completed and that all Costs have been paid, or that any Costs are not required to be paid from the Project Fund pursuant to a Certification for Payment, the Trustee shall transfer the amount, if any, remaining within the Project Fund to the Bond Fund or to the Redemption Fund as directed by the Town Representative in a Town Certificate filed with the Trustee and shall transfer any remaining amount in the Developer Improvement Account of the Project Fund to the Developer. Upon such transfers, the Project Fund shall be closed. (g) Upon a determination by the Town Representative that all costs of issuance of the Bonds have been paid, any amounts remaining; in the Costs of Issuance Account shall be transferred to another Account or Subaccount in the Project Fund and used to pay Costs or to the Principal and Interest Account and used to pay interest on the Bonds, as directed in a Town Certificate filed with the Trustee. Section 6.6. Redemption Fund. The Trustee shall cause to be deposited to the Redemption Fund from the Pledged Revenue Fund an amount sufficient to redeem Bonds as provided in Sections 4.3 and 4.4 on the dates specified for redemption as provided in Sections 4.3 and 4.4. Amounts on deposit in the Redemption Fund shall be used and withdrawn by the Trustee to redeem Bonds as provided in Article IV. Section 6.7. Reserve Fund. (a) The Town agrees with the Owners of the Bonds to accumulate and, when accumulated, maintain in the Reserve Account of the Reserve Fund, an amount equal to not less than the Reserve Fund Requirement. All amounts deposited in the Reserve Account of the Reserve Fund shall be used and withdrawn by the Trustee for the purpose of making transfers to the Principal and Interest Account of the Bond Fund as provided in this Indenture. The Trustee will transfer from the Pledged Revenue Fund to the Prepayment Reserve Account on March I and September I of each year, commencing; September 1, 2015, an amount equal to 0,20% of the interest rate component of the Annual Installments in the Prepayment Reserve Account until the Prepayment Reserve Requirement has accumulated in the Prepayment Reserve Account. Once the Prepayment Reserve Requirement has accumulated in the Prepayment Reserve Account, such 0.20% of the interest rate component of the Annual Installments will be deposited into the Delinquency Reserve Account until the Delinquency Reserve Requirement has been accumulated in the Delinquency Reserve Account., provided, however, that at any time the amount on deposit in the Prepayment Reserve Account is less than Prepayment Reserve Requirement, the Trustee shall resume depositing such 0.20% into the Prepayment Reserve Account until the Prepayment Reserve Requirement has accumulated in the Prepayment Reserve Account. Furthermore, once the Prepayment Reserve Requirement has accumulated in the Prepayment Reserve Account, any amounts in excess of the Prepayment Reserve Requirement 39 shall be transferred by the Trustee first to the Delinquency Reserve Account in the event such account contains less than the Delinquency Reserve Requirement, or, if the Delinquency Reserve Account contains the Delinquency Reserve Requirement, then to the Redemption Fund to redeern Bonds as provided in Article IV. In addition, the Trustee shall deposit from the Pledged Revenue Fund to the Delinquency Reserve Account on March 1 and September 1, cornmencing September 1, 2015, an amount equal to 0.30% of the interest rate component of the Annual Installments. Once the Delinquency Reserve Requirement has accumulated in the Delinquency Reserve Account, any amounts in excess of the Delinquency Reserve Requirement in the Delinquency Reserve Account shall be transferred by the Trustee to the Redemption Fund to redeem Bonds as provided in Article IV; provided, however, that at any time the amount on deposit in the Delinquency Reserve Account is less than Delinquency Reserve Requirement, the Trustee shall resume depositing such 0.30% into the Delinquency Reserve Account until the Delinquency Reserve Requirement has accumulated in the Delinquency Reserve Account. Once the Prepayment Reserve Requirement has accumulated in the Prepayment Reserve Account and the Delinquency Reserve Requirement has accumulated in the Delinquency Reserve Account, such 0.50% of the interest rate component of the Annual Installments will be deposited into Redemption Fund to redeem Bonds as provided in Article IV; provided, however, that (i) at any tirne the amount on deposit in the Prepayment Reserve Account is less than Prepayment Reserve Requirement, the Trustee shall resume depositing 0.20% of the interest rate component of the Annual Installments into the Prepayment Reserve Account until the Prepayment Reserve Requirement has accumulated in the Prepayment Reserve Account and (ii) at any time the amount on deposit in the Delinquency Reserve Account is less than Delinquency Reserve Requirement, the Trustee shall resume depositing 0.30% of the interest rate component of the Annual Installments into the Delinquency Reserve Account until the Delinquency Reserve Requirement has accumulated in the Delinquency Reserve Account. In calculating the amounts to be transferred pursuant to this Section, the Trustee may conclusively rely on the Annual Installments as shown on the Assessment Roll in the Service and Assessment Plan unless it receives a Town Order specifying that a different amount be used. (b) Whenever a transfer is made from the Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund, the Trustee shall provide written notice thereof to the Town, specifying the amount withdrawn and the source of said funds. (c) In the event of an extraordinary optional redemption of Bonds from the proceeds of a Prepayment pursuant to Section 4.4, the Trustee, pursuant to written directions from the Town, shall transfer from the Reserve Account of the Reserve Fund to the Redemption Fund the amount specified in such directions, which shall be an amount equal to the principal amount of Bonds to be redeemed multiplied by the lesser of. (i) the amount required to be in the Reserve Account of the Reserve Fund divided by the principal amount of Outstanding Bonds prior to the redemption, and (ii) the arnount actually in the Reserve Account of the Reserve Fund divided by the principal amount of Outstanding Bonds prior to the redemption. If after such transfer, and after applying investment earnings on the Prepayment toward payment of accrued interest, there are insufficient funds to pay the principal amount plus accrued and unpaid interest on such Bonds to the date fixed for redemption of the Bonds to be redeemed as a result of such Prepayment, the Trustee shall transfer an amount equal to the shortfall from the Prepayment Reserve Account to the Redemption Fund to be applied to the redemption of the Bonds. 40 (d) Whenever, on any interest Payment Date, or on any other date at the request of a Town Representative, the value of cash and Value of Investment Securities on deposit in the Reserve Account exceeds the Reserve Fund Requirement, the Trustee shall provide written notice to the Town Representative of the amount of the excess. Such excess shall be transferred to the Principal and Interest Account to be used for the payment of interest on the Bonds on the next Interest Payment Date in accordance with Section 6.4, unless within thirty days of such notice to the Town Representative, the Trustee receives a Town Order instructing the Trustee to apply such excess: (i) to pay amounts due under Section 6.8 hereof, (ii) to the Administrative Fund in an amount not more than the Administrative Expenses for the Bonds or (iii) to the Project Fund to pay Costs if such application and the expenditure of funds is expected to occur within three years of the date hereof. (e) Whenever, on any Interest Payment Date, or on any other date at the written request of the Town Representative, the amount in the Prepayment Reserve Account exceeds the Prepayment Reserve Requirement, the Trustee shall provide written notice to the Town of the amount of the excess, and the Trustee shall transfer such excess pursuant to Section 6.7(a) hereof. (f) Whenever, on any Interest Payment Date, or on any other date at the written request of the Town Representative, the amount in the Delinquency Reserve Account exceeds the Delinquency Reserve Requirement, the Trustee shall provide written notice to the Town of the amount of the excess, and the Trustee shall transfer such excess pursuant to Section 6.7(a) hereof. (g) Whenever, on any Interest Payment Date, the amount on deposit in the Bond Fund is insufficient to pay the debt service on the Bonds Similarly Secured due on such date, the Trustee shall transfer first from the Delinquency Reserve Account of the Reserve Fund, second from the Reserve Account of the Reserve Fund and third from the Prepayment Reserve Account to the Bond Fund the arnounts necessary to cure such deficiency. (h) At the final maturity of the Bonds Similarly Sccured, the amount on deposit in the Reserve Account, the Prepayment Reserve Account and the Delinquency Reserve Account shall be transferred to the Redemption Fund and applied to the payment of the principal of the Bonds Similarly Secured. (i) If, after a Reserve Account withdrawal, the amount on deposit in the Reserve Account is less than the Reserve Fund Requirement, the Trustee shall transfer from the Pledged Revenue Fund to the Reserve Account the amount of such deficiency, but only to the extent that such amount is not required for the timely payment of principal, interest, or Sinking Fund Installments. (j) if 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 Similarly Secured on the next date the Bonds Similarly Secured may be optionally redeemed by the Town at a redemption price of par, together with the unpaid interest accrued on such Bonds Similarly Secured as of such date, the moneys shall be transferred to the Redemption Fund and thereafter used to redeem all Bonds Similarly Secured on such date. 41 Section 6.8. Rebate Fund. Rebatable Arbitrage. (a) The Rebate Fund is to be held by the Trustee in accordance with the ten -ns and provisions of this Indenture. Amounts on deposit in the Rebate Fund shall be used solely for the purpose of paying amounts due the United States Government in accordance with the Code. The Rebate bund shall not be part of the Trust Estate and shall not be security for the Bonds. (b) In order to assure that Rebatable Arbitrage is paid to the United States rather than to a third party, investments of funds on deposit in the Rebate Fund shall be made in accordance with the Code and the Tax Certificate. (c) The Trustee conclusively shall be deemed to have complied with the provisions of this Section and shall not be liable or responsible if it follows the instructions of the Town and shall not be required to take any action under this Section in the absence of instructions from the Town. (d) If, on the date of each annual calculation, the amount on deposit in the Rebate Fund exceeds the amount of the Rebatable Arbitrage, the Town may direct the Trustee, pursuant to a Town Order, to transfer the amount in excess of the Rebatable Arbitrage to the Bond Fund. Section 69, Administrative Fund. (a) Immediately upon receipt thereof, the Town shall deposit or cause to be deposited to the Administrative Fund the portion of the Assessments and Annual Installments allocated to the payment of Administrative Expenses and Delinquent Collection Costs, as set forth in the Service and Assessment Plan. (b) Moneys in the Administrative Fund shall be held by the Trustee separate and apart from the other Funds created and administered hereunder and used as directed by a Town Order solely for the purposes set forth in the Service and Assessment Plan, including payment of 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. Section 6.10. Developer Property Tax Reserve Fund. (a) The Developer shall deposit or cause to be deposited the Initial Deposit into the Developer Property Tax Reserve Fund on or prior to the issuance of the Bonds. Prior to the Developer Property Tax Reserve Fund Release Date, and upon receipt by the Trustee of a Town Order specifying (1) the amount to be transferred and that such amount is equal to all outstanding Developer Property Tax Delinquency Amounts and (2) the dates on which such transfer shall be made, funds deposited in the Developer Property Tax Reserve Fund shall be transferred by the Trustee in an aggregate amount equal to all outstanding Developer Property Tax Delinquency Amounts to the Town for payment of the related unpaid delinquent ad valorem taxes levied by any taxing entity on any property located in Improvement Area #1, Improvement Area #2 and Improvement Area #3 and any penalties, costs and interest related thereto. The Town shall use amounts received by the Trustee from the Developer Property Tax Reserve Fund solely for payment of outstanding Developer Property Tax Delinquency Amounts and any penalties, costs 42 and interest related thereto, all in accordance with the Redemption Waiver Agreement. Prior to the Developer Property Tax Reserve Fund Release Date, upon any transfer of funds deposited in the Developer Property Tax Reserve Fund to the Town in accordance with this clause (a), the Developer shall deposit or cause to be deposited an equivalent amount of funds into the Developer Property Tax Reserve Fund to replenish such Fund, all in accordance with the Redemption Waiver Agreement. (b) Any amounts deposited in the Developer Property Tax Reserve Fund shall be released to the Developer, except during the occurrence of an ongoing current Event of Default, on or after March I of the first year after the tax year in which no property located in Improvement Area #1, Improvement Area #2 and Improvement Area #3 is subject to an agriculture valuation for purposes of ad valorem taxes levied by any taxing entity. Such amounts shall be released only upon the filing of evidence satisfactory to the Town of payment of all ad valorem taxes due and owing with respect to property located in Improvement Area #1, Improvement Area #2 and Improvement Area #3 subject to an agriculture valuation. The Town shall provide the Trustee with a Town Certificate to this effect, upon which the Trustee may conclusively rely. At such time as the condition for release is met, any amounts deposited in the Developer Property Tax Reserve Fund shall be irrevocably and unconditionally released to the Developer, or to the Developer's successors and assigns or designees as identified in a written notice from the Developer to the Trustee and the Town. The Town and the Trustee shall solely and conclusively rely as to payment of amounts released from the Developer Property Tax Reserve Fund on any such written notice from the Developer as to their successors and assigns or designees. The Town shall provide written notice of the release to the Trustee and Developer, or to the Developer's successors and assigns. Section 6.11. Investment of Funds. (a) Money in any Fund or Account, other than the Reserve Account, shall be invested by the Trustee as directed by the Town pursuant to a Town Order filed with the Trustee in Investment Securities; provided that all such deposits and investments shall be made in such manner that the money required to be expended from any Fund or Account will be available at the proper time or times. Money in the Reserve Account shall be invested in such Investment Securities as directed by the Town pursuant to a Town Order filed with the Trustee, provided that the final maturity of any individual Investment Security shall not exceed 270 days and the average weighted maturity of any investment pool or no-load money market mutual fund shall not exceed 40 days. Each such Town Order shall be a certification that the investment directed therein constitutes an Investment Security and that such investments meet the maturity and average weighted maturity requirements set forth in the preceding sentence. Such investments shall be valued each year in terms of the Value of Investment Securities as of September 30. For purposes of maximizing investment returns, to the extent permitted by law, money in the Funds and Accounts may be invested in common investments of the kind described above, or in a common pool of such investment which shall be kept and held at an official depository bank, which shall not be deemed to be or constitute a commingling of such money or funds provided that safekeeping receipts or certificates of participation clearly evidencing the investment or investment pool in which such money is invested and the share thereof purchased with such money or owned by such Fund or Account are held by or on behalf of each such Fund or 43 Account. If necessary, such investments shall be promptly sold to prevent any default under this Indenture. To ensure that cash on hand is invested, if the Town does not give the Trustee written or timely instructions with respect to investments of funds, the Trustee may invest cash balances in obligations the principal and interest on which are unconditionally guaranteed by, the United States of America, in obligations of any agencies or instrumentalities thereof, or in such other investments as are permitted under the Public Funds Investment Act, Texas Government Code, Chapter 2256, as amended, or any successor law, as in effect from time to time, so long as such investments constitute Investment Securities and the money required to be expended from any Fund will be available at the proper tirne or times. (b) Obligations purchased as an investment of moneys in any Fund or Account shall be deemed to be part of such Fund or Account, subject, however, to the requirements of this Indenture for transfer of interest earnings and profits resulting from investment of amounts in Funds and Accounts. Whenever in this Indenture any moneys are required to be transferred by the Town to the Trustee, such transfer may be accomplished by transferring a like amount of Investment Securities. (c) The Trustee and its affiliates may act as sponsor, advisor, depository, principal or agent in the acquisition or disposition of any investment. The Trustee shall not incur any liability for losses arising from any investments made pursuant to this Section. The Trustee shall not be required to determine the legality of any investments. (d) Investments in any and all Funds and Accounts may be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular Funds or Accounts of amounts received or held by the Trustee hereunder, provided that the Trustee shall at all times account for such investments strictly in accordance with the Funds and Accounts to which they are credited and otherwise as provided in this Indenture. (c) The Trustee will furnish to the Town, upon the Town's written request, periodic cash, transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the Town. Upon the Town's election, such statements will be delivered via the Trustee's online service and upon electing such service, paper statements will be provided only upon request. The Town waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by law. The Town further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker. Section 6.12. Security of Funds. All Funds heretofore created or reaffirmed, to the extent not invested as herein permitted, shall be secured in the manner and to the fullest extent required by law for the security of public funds, and such Funds shall be used only for the purposes and in the manner permitted or required by this Indenture. 44 Section 6.13 Reimbursement Fund. Money on deposit in the Reimbursement Fund shall be used to reimburse the Developer for funds withdrawn from the Developer Improvement Account of the Project Fund and used to pay costs of Improvement Project A Improvements as provided in the Reimbursement Agreement. When all amounts due to the Developer to reimburse it for the funds withdrawn from the Developer Improvement Account of the Project Fund have been paid to the Developer, whether through Assessments received and applied in accordance with the Service and Assessment Plan or an Annual Service Plan Update or through the proceeds of Additional Bonds, no further deposits shall be made to the Reimbursement Fund and the Reimbursement Fund shall be closed. ARTICLE VII COVENANTS Section 7.1. Confirmation of Assessments. The Town hereby confirms, covenants, and agrees that, in the Assessment Ordinance, it has levied the Assessments against the respective Improvement Area #1 Assessed Parcels, Improvement Area #2 Assessed Parcels and Improvement Area #3 Assessed Parcels from which the Assessment Revenues will be collected and received. Section 7.2. Collection and Enforcement of Assessments. (a) For so long as any Bonds are Outstanding and amounts are due to the Developer under the Reimbursement Agreement to reimburse it for its finds it has contributed to pay Costs of the Improvement Project A Improvements, the Town covenants, agrees and warrants that it will take and pursue all reasonable actions pemissib 1 e under Applicable Laws to cause the 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 in the Assessments. (b) To the extent permitted by law, notice of the Annual Installments shall be sent by, or on behalf of, the Town to the affected property owners on the same statement or such other mechanism that is used by the Town, 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 Town. (c) The Town will determine or cause to be determined, no later than February 15 of each year, whether or not any Annual Installment is delinquent and, if such delinquencies exist, the Town 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 Town shall not be required under any circumstances to purchase or make payment for the purchase of the delinquent Assessments or the corresponding Improvement Area #1 Assessed Parcel, Improvement Area #2 Assessed Parcel and Improvement Area 43 Assessed Parcel. 45 (d) The Town shall not be required under any circumstances to expend any funds for Delinquent Collection Costs or Administrative Expenses in connection with its covenants and agreements under this Section or otherwise other than funds on deposit in the Administrative Fund. Section 7.3. Against Encumbrances. (a) The Town shall not create and, to the extent Pledged Revenues are received, shall not suffer to remain, any lien, encumbrance or charge upon the Pledged Revenues or upon any other property pledged under this Indenture, except the pledge created for the security of the Bonds Similarly Secured, and other than a lien or pledge subordinate to the lien and pledge of such property related to the Bonds Similarly Secured. (b) So long as Bonds Similarly Secured are Outstanding hereunder or under any indenture relating to any Additional Bonds, the Town shall not issue any bonds, notes or other evidences of indebtedness, other than the Bonds and Additional Bonds, secured by any pledge of or other lien or charge on the Pledged Revenues or other property pledged under this Indenture or under any indenture relating to any Additional Bonds, other than a lien or pledge subordinate to the lien and pledge of such property related to the Bonds Similarly Secured. Section 7.4. Records, Accounts, Accounting Reports. The Town hereby covenants and agrees that so long as any Bonds are Outstanding and amounts are due to the Developer under the Reimbursement Agreement to reimburse it for its funds it has contributed to pay Costs of the Improvement Project A Improvements, it will keep and maintain a proper and complete system of records and accounts pertaining to the Assessments. The Trustee and holder or holders of any Bonds or any duly authorized agent or agents of such holders shall have the right at all reasonable times to inspect all such records, accounts, and data relating thereto, upon written request to the Town by the Trustee or duly authorized representative, as applicable. The Town shall provide the Trustee or duly authorized representative, as applicable, an opportunity to inspect such books and records relating to the Bonds during the Town's regular business hours and on a mutually agreeable date not later than thirty clays after the Town receives such request. Section 7.5. Covenants Regarding Tax Exemption of Interest on Bonds. (a) The Town covenants to take any action necessary to assure, or refrain from any action that would adversely affect, the treatment of the Bonds as an obligation described in section 103 of the Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the Town covenants as follows: (1) to take any action to assure that no more than 10 percent of the proceeds of the Bonds (less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds or the projects financed therewith are so used, such amounts, whether or not received by the Town, with respect to such private business use, do not, under the terms 46 of this Article or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the Bonds, in contravention of section 141(b)(2) of the Code; (2) to take any action to assure that in the event that the "private business use" described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a "private business use" that is "related" and not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use; (3) to take any action to assure that no amount that is greater than the lesser of $5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code; (4) to refrain from taking any action that would otherwise result in the Bonds being treated as a "private activity bond" within the meaning of section 141(b) of the Code; (5) to refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code; (6) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) that produces a materially higher yield over the term of the Bonds, other than investment property acquired with — (A) proceeds of the Bonds invested for a reasonable temporary period of 3 years or less or, in the case of an advance refunding bond, for a period of 30 days or less until such proceeds are needed for the purpose for which the Bonds is issued, and in the case of a current refunding bond, for a period of 90 days or less, (B) amounts invested in a bona fide dent service fund, within the meaning of section 1.148-1(b) of the Treasury Regulations, and (C) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Bonds; (7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, so that the Bonds does not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); and 47 (8) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Bonds has been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code. (b) In order to facilitate compliance with the above covenant (a)(8), the Rebate Fund is established by the Town pursuant to Section 6.1 for the sole benefit of the United States of America, and such Rebate Fund shall not be subject to the claim of any other person, including without limitation the Registered Owner. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. (c) The Town understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the Bonds. It is the understanding of the Town that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto (the "Treasury Regulations"). In the event that regulations or rulings are hereafter promulgated that modify or expand provisions of the Code, as applicable to the Bonds, the Town will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated that impose additional requirements applicable to the Bonds, the Town agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance of such intention, the Town hereby authorizes and directs the Mayor to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the Town, that may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. (d) The Town covenants to account for the expenditure of sale proceeds and investment earnings to be used for Costs on its books and records in accordance with the requirements of the Code. The Town recognizes that in order for the proceeds to be considered used for the reimbursement of costs, the proceeds frust be allocated to expenditures within 18 months of the later of the date that (1) the expenditure is made, or (2) the Improvement Project A Improvements are completed; but in no event later than three years after the date on which the original expenditure is paid. The foregoing notwithstanding, the Town recognizes that in order for proceeds to be expended under the Code, the sale proceeds or investment earnings must be expended no more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Bonds, or (2) the date the Bonds is retired. The Town agrees to obtain the advice of nationally - recognized bond counsel if such expenditure fails to comply with the foregoing to assure that such expenditure will not adversely affect the tax-exempt status of the Bonds. For purposes hereof, the Town shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. 48 (e) The Town covenants that the projects funded with the proceeds of the Bonds will not be sold or otherwise disposed in a transaction resulting in the receipt by the Town of cash or other compensation, unless the Town obtains an opinion of nationally -recognized bond counsel that such sale or other disposition will not adversely affect the tax-exempt status of the Bonds. For purposes of the foregoing, the portion of the property comprising personal property and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the Town shall not be obligated to comply with this covenant if it obtains a legal opinion that such failure to comply will not adversely affect the excludability for federal income tax proposes from gross income of the interest. ARTICLE VIII LIABILITY OF TOWN Section 8.1. Liability of Town. (a) Neither the full faith and credit nor the general taxing power of the Town is pledged to the payment of the Bonds, and no Town taxes, fee or revenues from any source are pledged to the payment of, or available to pay any portion of, the Bonds or any other obligations relating to the District. The Town shall never be liable for any obligations relating to the Bonds or other obligations relating to the District, other than as specifically provided for in this Indenture. (b) The Town shall not incur any responsibility in respect of the Bonds or this Indenture other than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it. The Town shall not be liable in connection with the performance of its duties hereunder, except for its own willful default or act of bad faith. The Town shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions covenants or agreements of the Trustee herein or of any of the documents executed by the Trustee in connection with the Bonds, or as to the existence of a default or event of default thereunder. (c) In the absence of bad faith, the Town may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Town and conforming to the requirements of this Indenture. The Town shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts. (d) No provision of this Indenture, the Bonds, the Assessment Ordinance, or any agreement, document, instrument, or certificate executed, delivered or approved in connection with the issuance, sale, delivery, or administration of' the Bonds (collectively, the "Bond Documents"), shall require the Town to expend or risk its own general funds or other funds or otherwise incur any financial liability (other than with respect to the Pledged Revenues) in the performance of any of its obligations hereunder, or in the exercise of any of its rights or powers, if in the judgment of the Town there are reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it. 49 (e) Neither the Owners nor any other Person shall have any claim against the Town or any of its officers, officials, agents, or employees for damages suffered as a result of the Town's failure to perform in any respect any covenant, undertaking, or obligation under any Bond Documents or as a result of the incorrectness of any representation in, or ornission from, any of the Bond Documents, except to the extent that any such claim relates to an obligation, undertaking, representation, or covenant of the Town, in accordance with the Bond Documents and the PID Act_ Any such claim shall be payable only from Pledged Revenues. Nothing contained in any of the Bond Documents shall be construed to preclude any action or proceeding in any court or before any governmental body, agency, or instruinentality against the Town or any of its officers, officials, agents, or employees to enforce the provisions of any of the Bond Documents or to enforce all rights of the Owners of the Bonds by mandamus or other proceeding at law or in equity. (f) The Town may rely on and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, wan -ant, bond, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Town may consult with counsel with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. Whenever in the administration of its duties wider this Indenture the Town shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifieally prescribed) may, in the absence of willful misconduct on the part of the Town, be deemed to be conclusively proved and established by a certificate of the Trustee, an Independent Financial Consultant, an independent inspector or Town Manager or other person designated by the Town Council to so act on behalf of the Town, and such certificate shall be full warrant to the Town for any action taken or suffered under the provisions of this Indenture upon the faith thereof, but in its discretion the Town may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. (g) In order to perform its duties and obligations hereunder, the Town may employ such persons or entities as it deems necessary or advisable. The Town shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations, and directions of such persons or entities. ARTICLE IX THE TRUSTEE Section 9.1. Acceptance of Trust; Trustee as Registrar and Paying Agent. (a) The Trustee accepts and agrees to execute the respective trusts imposed upon it by this Indenture, but only upon the teens and conditions and subject to the provisions of this Indenture to all of which the parties hereto and the respective Owners of the Bonds agree. (b) The Trustee is hereby designated and agrees to act as Paying Agent/Registrar for and in respect to the Bonds. 50 Section 9.2. Trustee Entitled to Indemnity. The Trustee shall be under no obligation to institute any suit, or to undertake any proceeding under this Indenture, or to enter any appearance or in any way defend in any suit in which it may be made defendant, or to take any steps in the execution of the trusts hereby created or in the enforcement of any rights and powers hereunder, until it shall be indemnified to its satisfaction by the Owners against any and all costs and expenses, outlays, and counsel fees and other reasonable disbursements, and against all liability except as a consequence of its own negligence or willful misconduct; provided, however, that in no event shall the Trustee request or require indemnification as a condition to making any deposits, payments or transfers when required hereunder, or to deliver any notice when required hereunder. Nevertheless, the Trustee may begin suit, or appear in and defend suit, or do anything else in its judgment proper to be done by it as the Trustee, without indernnity, and in such case the Trustee may make transfers from the Pledged Revenue Fund and Administrative Fund to pay all costs and expenses, outlays, and counsel fees and other reasonable disbursements properly incurred in connection therewith and shall be entitled to a preference therefor over any Bonds Outstanding hereunder. Section 9.3. Responsibilities of the Trustee. (a) The recitals contained in this Indenture and in the Bonds shall be taken as the statements of the Town and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or the Bonds or with respect to the security afforded by this Indenture, and the Trustee shall incur no liability with respect thereto. Except as otherwise expressly provided in this Indenture, the Trustee shall have no responsibility or duty with respect to: (i) the issuance of Bonds for value; (ii) the application of the proceeds thereof, except to the extent that such proceeds are received by it in its capacity as Trustee; (iii) the application of any moneys paid to the Town or others in accordance with this Indenture, except as to the application of any moneys paid to it in its capacity as Trustee; or (iv) any calculation of arbitrage or rebate under the Code. (b) The duties and obligations of the Trustee shall be determined by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture. (c) The Trustee shall not be liable for any action taken or omitted by it in the performance of its duties under this Indenture, except for its own negligence or willful misconduct. In no event shall the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising from this Indenture for the existence, furnishing or use of the Project. Section 9.4. Property Held in Trust. All moneys and securities field by the Trustee at any time pursuant to the terns of this Indenture shall be held by the Trustee in trust for the purposes and under the terms and conditions of this Indenture. 51 Section 9.5. Trustee Protected in Relying on Certain Documents. (a) The Trustee may rely upon any order, notice, request, consent, waiver, certificate, statement, affidavit, requisition, bond, or other document provided to the Trustee in accordance with the terms of this Indenture that it shell in good faith reasonably believe to be genuine and to have been adopted or signed by the proper board or Person or to have been prepared and furnished pursuant to any of the provisions of this Indenture, or upon the written opinion of any counsel, architect, engineer, insurance consultant, management consultant, or accountant believed by the Trustee to be qualified in relation to the subject matter, and the Trustee shall be under no duty to make any investigation or inquiry into any statements contained or matters referred to in any such instrument. Subject to Section 9.1 and 9.3, the Trustee may consult with counsel selected by the Trustee with due care, who may or may not be Bond Counsel, and any advice from such counsel with respect to compliance, with the provisions of this Indenture shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder, reasonably and in good faith, in accordance with such advice. (b) Whenever the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under this Indenture, such matter may be deemed to be conclusively proved and established by a Town Certificate, unless other evidence in respect thereof be hereby specifically prescribed. Such Town Certificate shall be full wan -ant for any action taken or suffered in good faith under the provisions hereof, but in its discretion the Trustee may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as it may deem reasonable. Except as otherwise expressly provided herein, any request, order, notice, or other direction required or permitted to be furnished pursuant to any provision hereof by the Town to the Trustee shall be sufficiently executed if executed in the name of the Town by the Town Representative. (c) The Trustee shall not be under any obligation to see to the recording or filing of this Indenture, or otherwise to the giving to any Person of notice of the provisions hereof except as expressly required in Section 9.13. Section 9.6, Compensation. Unless otherwise provided by contract with the Trustee, the Trustee shall transfer from the Administrative Fund, from time to time, reasonable compensation for all services rendered by it hereunder, including its services as Paying Agent/Registrar, together with all its reasonable expenses, charges, and other disbursements and those of its counsel, agents and employees, incurred in and about the administration and execution of the trusts hereby created and the exercise of its powers and the performance of its duties hereunder, all pursuant to a Town Order and subject to any limit on the amount of such compensation or recovery of expenses or other charges as shall be prescribed by such Town Order, and the Trustee shall have a lien therefor on any and all funds at any time held by it hereunder prior to any Bonds Outstanding. None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if in the judgment of the Trustee there are reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it. if the Town shall fail to make any payment required by this Section, the Trustee may make such payment 52 from any moneys in its possession under the provisions of this Indenture and shall be entitled to a preference therefor over any Bonds Outstanding hereunder. Section 9.7. Permitted Acts. The Trustee and its directors, officers, employees, or agents may become the owner of or may in good faith buy, sell, own, hold and deal in Bonds and may join in any action that any Owner of Bonds may be entitled to take as fully and with the same rights as if it were not the Trustee. The Trustee may act as depository, and permit any of its officers or directors to act as a mcntber of, or in any other capacity with respect to, the Town or any committee formed to protect the rights of holders of Bonds or to effect or aid in any reorganization growing out of the enforcement of the Bonds or this Indenture, whether or not such committee shall represent the holders of a majority of the Bonds. Section 9.8. Resignation of Trustee. The Trustee may at any time resign and be discharged of its duties and obligations hereunder by giving not fewer than 60 days' notice, specifying the date when such resignation shall tame effect, to the Town and each Owner of any Outstanding Bond. Such resignation shall take effect upon the appointment of a successor as provided in Section 9.10 and the acceptance of such appointment by such successor. Section 9.9. Removal of Trustee. The Trustee may be removed at any time by (i) the Owners of at least a majority of the Bonds by an instrument or concurrent instruments in writing signed and acknowledged by such Owners or by their attorneys -in -fact, duly authorized and delivered to the Town, or (ii) so long as the Town is not in default under this Indenture, the Town. Copies of each such instrument shall be delivered by the Town to the Trustee and any successor thereof The Trustee may also be removed at any time for any breach of trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provision of this Indenture with respect to the duties and obligations of the Trustee by any court of competent jurisdiction upon the application of the Town or the Owners of not less than 10% of the Bonds. Section 9.10. Successor Trustee. (a) If the Trustee shall resign, be removed, be dissolved, or become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator, or conservator of the Trustee or of its property shall be appointed, or if any public officer shall take charge or control of the Trustee or of its property or affairs, the position of the Trustee hereunder shall thereupon become vacant. (b) If the position of Trustee shall become vacant for any of the foregoing reasons or for any other reason, a successor Trustee may be appointed within one year after any such vacancy shall have occurred by the Owners of at least 25% of the Bonds by an instrument or concurrent instruments in writing signed and acknowledged by such Owners or their attorneys - in -fact, duly authorized and delivered to such successor Trustee, with notification thereof being given to the predecessor Trustee and the Town. 53 (c) Until such successor Trustee shall have been appointed by the Owners of the Bonds, the Town shall forthwith appoint a Trustee to act hereunder. Copies of any instrument of the Town providing for any such appointment shall be delivered by the Town to the Trustee so appointed. The Town shall snail notice of any such appointment to each Owner of any Outstanding Bonds within 30 days after such appointment. Any appointment of a successor Trustee made by the Town immediately and without further act shall be superseded and revoked by an appointment subsequently made by the Owners of Bonds. (c) If in a proper case no appointment of a successor Trustee shall be made within 45 days after the giving by any Trustee of any notice of resignation in accordance with Section 9.8 or after the occurrence of any other event requiring or authorizing such appointment, the Trustee or any Owner of Bonds may apply to any court of competent jurisdiction for the appointment of such a successor, and the court may thereupon, after such notice, if any, as the court may deem proper, appoint such successor and the Town shall be responsible for the costs of such appointment process. (e) Any successor Trustee appointed under the provisions of this Section shall be a commercial bank or trust company or national banking association (i) having; a capital and surplus and undivided profits aggregating at least $50,000,000, if there be such a commercial bank or trust company or national banking association willing and able to accept the appointment on reasonable and customary terms, and (ii) authorized by law to perform all the duties of the Trustee required by this Indenture. (f) Each successor Trustee shall mail, in accordance with the provisions of the Bonds, notice of its appointment to the Trustee, any rating agency which, at the time of such appointment, is providing a rating on the Bonds and each of the Owners of the Bonds. Section 9.11. Transfer of Rights and Property to Successor Trustee. Any successor Trustee appointed under the provisions of Section 9.10 shall execute, acknowledge, and deliver to its predecessor and the Town an instrument in writing accepting such appointment, and thereupon such successor, without any further act, deed, or conveyance, shall become fully vested with all moneys, estates, properties, rights, immunities, powers, duties, obligations, and trusts of its predecessor hereunder, with like effect as if originally appointed as Trustee. However, the Trustee then ceasing to act shall nevertheless, on request of the Town or of such successor, execute, acknowledge, and deliver such instruments of conveyance and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor all the rights, immunities, powers, and trusts of such Trustee and a]I the right, title, and interest of such Trustee in and to the Trust Estate, and shall pay over, assign, and deliver to such successor any moneys or other properties subject to the trusts and conditions herein set forth. Should any deed, conveyance, or instrument in writing from the Town be required by such successor for more fully and certainly vesting in and confirming to it any such moneys, estates, properties, rights, powers, duties, or obligations, ally and all such deeds, conveyances, and instruments in writing, on request and so far as may be authorized by law, shall be executed, acknowledged, and delivered by the Town. 54 Section 9.12. Merger, Conversion or Consolidation of Trustee. Any corporation or association into which the Trustee may be merged or with which it may be consolidated or any corporation or association resulting from any merger, conversion or consolidation to which it shall be a party or any corporation or association to which the Trustee may sell or transfer all or substantially all of its corporate trust business shall be the successor to such Trustee hereunder, without any further act, deed or conveyance, provided that such corporation or association shall be a commercial bank or trust company or national banking association qualified to be a successor to such Trustee under the provisions of Section 9. 10, or a trust company that is a wholly-owned subsidiary of any of the foregoing. Section 9.13. Trustee To File Continuation Statements. If necessary, the Trustee shall file or cause to be filed, at the Town's expense, such continuation statements as may be delivered to the Trustee and which may be required by the Texas Uniform Commercial Code, as from time to time in effect (the "UCC"), in order to continue perfection of the security interest of the Trustee in such items of tangible or intangible personal property and any fixtures as may have been granted to the Trustee pursuant to this Indenture in the time, place and manner required by the UCC. Section 9.14. Accounts, Periodic Reports and Certificates. The Trustee shall keep or cause to be kept proper books of record and account (separate from all other records and accounts) in which complete and correct entries shall be made of its transactions relating to the Funds and Accounts established by this Indenture and which shall at all times be subject to inspection by the Town, and the Owner or Owners of not less than 10% in principal amount of the Bonds then Outstanding or their representatives duly authorized in writing. Section 9.15. Construction of Indenture. The Trustee may construe any of the provisions of this Indenture insofar as the same may appear to be ambiguous or inconsistent with any other provision hereof, and any construction of any such provisions hereof by the Trustee in good faith shall be binding upon the Owners of the Bonds. ARTICLE X MODIFICATION OR AMENDMENT OF THIS INDENTURE Section 10.1. Amendments Permitted. (a) This Indenture and the rights and obligations of the Town and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Indenture, except as provided below, pursuant to the affirmative vote at a meeting of Owners of the Bonds, or with the written consent without a meeting, of the Owners of the Bonds of at least fifty-one percent (51%) of the aggregate principal amount of the Bonds then Outstanding; and Town approval of such modification or amendment. No such modification or amendment shall (i) extend the 55 maturity of any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the Town to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation by the Town of any pledge or lien upon the Pledged Revenues superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by Applicable Laws or this Indenture), or reduce the percentage of Bonds required for the amendment hereof. Any such amendment may not modify any of the rights or obligations of the Trustee without its written consent. (b) This Indenture and the rights and obligations of the Town and of the Owners may also be modified or amended at any time by a Supplemental Indenture, without the consent of any Owners, only to the extent permitted by law, and only for anyone or more of the following purposes: (i) to add to the covenants and agreements of the Town in this Indenture contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the Town; (ii) to make modifications not adversely affecting any Outstanding Bonds in any material respect; (iii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Indenture, or in regard to questions arising under this Indenture, as the Town and the Trustee may deem necessary or desirable and not inconsistent with this Indenture, and that shall not adversely affect the rights of the Owners of the Bonds; and (iv) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from federal income taxation of interest on the Bonds. Section 10.2. Owners' Meetings. The Town may at any time call a meeting of the Owners of the Bonds. In such event the Town is authorized to fix the time and place of said meeting and to provide for the giving of notice thereof, and to fix and adopt rules and regulations for the conduct of said meeting. Section 10.3. Procedure for Amendment with Written Consent of Owners. (a) The Town and the Trustee may at any time adopt a Supplemental Indenture amending the provisions of the Bonds or of this Indenture, to the extent that such amendment is permitted by Section 10.1, to take effect when and as provided in this Section. A copy of such Supplemental Indenture, together with a request to Owners for their consent thereto, if such consent is required pursuant to Section 10. 1, shall be mailed by first class mail, by the Trustee to each Owner of Bonds from whom consent is required under this indenture, but failure to mail copies of such Supplemental Indenture and request shall not affect the validity of the Supplemental Indenture when assented to as in this Section provided. 56 (b) Such Supplemental Indenture shall not become effective unless there shall be filed with the Trustee the written consents of the Owners as required by this Indenture and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 11.6. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof), unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Trustee prior to the date when the notice hereinafter in this Section provided for has been mailed. (c) After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Indenture, the Town shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Indenture, stating in substance that the Supplemental Indenture has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Indenture or consents thereto). Proof of the mailing of such notice shall be filed with the Trustee. A record, consisting of the papers required by this Section 10.3 to be tiled with the Trustee, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Indenture shall become effective upon the filing with the Trustee of the proof of mailing of such notice, and the Supplemental Indenture shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the Town and the Owners of all Bonds at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty-day period. Section 10.4. Procedure for Amendment Not Requiring Owner Consent. (a) The Town and the Trustee may at any time adopt a Supplemental Indenture amending the provisions of the Bonds or of this Indenture, to the extent that such amendment is permitted by Section 10. 1, to take effect when and as provided in this Section. A copy of such Supplemental Indenture, together with a notice stating that the Supplemental Indenture does not require Owner consent, shall be mailed by first class mail by the Trustee to each Owner of Bonds, but failure to mail copies of such Supplemental Indenture shall not affect the validity of the Supplemental Indenture. The Trustee shall retain the proof of its mailing of such notice. A record, consisting of the papers required by this Section 10.4, shall be proof of the matters therein stated until the contrary is proved. (b) The Supplemental Indenture shall become effective upon the execution and delivery of such Supplemental Indenture by the Trustee and the Town, and the Supplemental Indenture shall be deemed conclusively binding upon the Town and the Owners of all Bonds as of the date of such execution and delivery. Section 10,5. Effect of Supplemental Indenture. From and after the time any Supplemental indenture becomes effective pursuant to this Article X, this Indenture shall be deemed to be modified and amended in accordance therewith, 57 the respective rights, duties, and obligations under this Indenture of the Town and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terns and conditions of this Indenture for any and all purposes. Section 10.6. Endorsement or Replacement of Bonds Issued After Amendments. The Town may determine that Bonds issued and delivered atter the effective date of any action taken as provided in this Article X shall bear a notation, by endorsement or otherwise, in form approved by the Town, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for that purpose at the designated office of the Trustee or at such other office as the Town may select and designate for that purpose, a suitable notation shall be made on such Bond. The Town may determine that new Bonds, so modified as in the opinion of the Town is necessary to conform to such Owners' action, shall be prepared, executed, and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the designated office of the Trustee without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds. Section 10.7. Amendatory Endorsement of Bonds. The provisions of this Article X shall not prevent any Owner from accepting any amendment as to the particular Bonds held by such Owner, provided that due notation thereof is made on such Bonds. Section 10.5. Waiver of Default. With the written consent of at least a majority in aggregate principal amount of the Bonds then Outstanding, the Owners may waive compliance by the Town with certain past defaults under this Indenture and their consequences. Any such consent shall be conclusive and binding upon the Owners and upon all future Owners. Section 10.9. Execution of Supplemental Indenture. In executing, or accepting the additional trusts created by, any Supplemental Indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall receive, and shall be fully protected in relying upon, an opinion of counsel addressed and delivered to the Trustee and the Town stating that the execution of such Supplemental Indenture is permitted by and in compliance with this Indenture. The Trustee may, but shall not be obligated to, enter into any such Supplemental Indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. 58 ARTICLE XI DEFAULT AND REMEDIES Section 1.1.1. Events of Default. Each of the following occurrences or events shall be and is hereby declared to be an "Event of Default," to wit: (i) The failure of the Town to deposit the Pledged Revenues to the Pledged Revenue Fund; (ii) The failure of the Town to enforce the collection of the Assessments including the prosecution of foreclosure proceedings, in accordance with Section 7.2; and (iii) Default in the performance or observance of any covenant, agreement or obligation of the Town under this Indenture and the continuation thereof for a period of ninety (90) days after written notice specifying such default and requiring same to be remedied shall have been given to the Town by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of the Owners of not less than fifty-one percent (51 %) in principal amount of the Bonds Similarly Secured then Outstanding; provided, however, if the default stated in the notice is capable of cure but cannot reasonably be cured within the applicable period, the Town shall be entitled to a fin-ther extension of time reasonably necessary to remedy such default so long; as corrective action is instituted by the Town within the applicable period and is diligently pursued until such failure is corrected, but in no event for a period of time of more than one hundred eighty (180) days after such notice. Section 112. Immediate Remedies for Default. (a) Subject to Article VIII, upon the happening and continuance of any of the Events of Default described in Section 11. 1, then and in every such case the Trustee may proceed, and upon the written request of the Owners of not less than fifty-one percent (51%) in principal amount of the Bonds Similarly Secured then Outstanding hereunder shall proceed, to protect and enforce the rights of the Owners under this 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 herein, or injunction; provided, however, that no action for money darnages against the Town may be sought or shall be permitted. (b) PURSUANT TO SECTION 11.7, THE PRINCIPAL OF THE BONDS SHALL NOT BE SUBJECT TO ACCELERATION UNDER ANY CIRCUMSTANCES. (c) If the assets of the Trust Estate are sufficient to pay all amounts due with respect to Outstanding Bonds Similarly Secured, in the selection of Trust Estate assets to be used in the paymcnt of Bonds Similarly Secured due under this Article, the Town shall determine, in its absolute discretion, and shall instruct the Trustee by Town 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 Town shall fail to deliver to the Trustee such 59 Town 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 Town by reason of such selection, liquidation or sale. (d) Whenever moneys are to be applied pursuant to this Article XI, irrespective of and whether other remedies authorized under this 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 this Section. 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 Town, 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 Town 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. Section 11.3. Restriction on Owner's Action.. (a) No Owner shall have any right to institute any action, suit or proceeding at law or in equity for the enforcement of this Indenture or for the execution of any trust thereof or any other remedy hereunder, unless (i) a default has occurred and is continuing; of which the Trustee has been notified in writing as provided in Section 11. 1, or of which by such Section it is deemed to have notice, (ii) such default has become an Event of Default and the Owners of fifty-one percent (51%) of the aggregate principal amount of the Bonds Similarly Secured then Outstanding have inade written request to the Trustee and offered it reasonable opportunity either to proceed to exercise the powers hereinbefore 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 Section 92, (iv) the Trustee has for 60 days after such notice failed or refused to exercise the powers hereinbefore 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 60 -day period by the Owners of fifty-one percent (51 %) of the aggregate principal amount of the Bonds Similarly Secured then Outstanding, and (vi) notice of such action, suit, or proceeding; is given to the Trustee; however, no one or more Owners of the Bonds Similarly Secured shall have any right in any manner whatsoever to affect, disturb, or prejudice this Indenture by its, his or their action or to enforce any right hereunder except in the manner provided herein, and that all proceedings at law or in equity shall be instituted and maintained in the manner provided herein and for the equal benefit of the Owners of all Bonds Similarly Secured then Outstanding. The notification, request and furnishing of indemnity set forth above shall, at the option of the Trustee, be conditions precedent to the execution of the powers and trusts of this Indenture and to any action or cause of action for the enforcement of this Indenture or for any other remedy hereunder. 60 (b) Subject to Article VIII, nothing in this 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 Town to pay each Bond issued hereunder to the respective Owners thereof at the time and place, from the source and in the manner expressed herein and in the Bonds. (c) In case the Trustee or any Owners of Bonds Similarly Secured shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or any Owners of Bonds Similarly Secured, then and in every such case the Town, the Trustee and the Owners of Bonds Similarly Secured shall be restored to their former positions and rights hereunder, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken. Section 11.4. Application of Revenues and Other Moneys After Default. (a) 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 this Article shall, after payment of the cost and expenses of the proceedings resulting in the collection of such amounts, the expenses (including its counsel), liabilities, and advances incurred or made by the Trustee and the fees of the Trustee in carrying out this Indenture, during the continuance of an Event of Default, notwithstanding Section 11.2, be applied by the Trustee, on behalf of the Town, to the payment of interest and principal or Redemption Price then due on Bonds Similarly Secured, as follows: FIRST: To the payment to the 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 Owners entitled thereto, without any discrimination or preference; and SECOND: To the payment to the Owners entitled thereto of the unpaid principal of Outstanding Bonds Similarly Secured, or Redemption Price of any Bonds Similarly Secured which shall have become due, whether at maturity or by call for redernption, in the direct order of their due dates and, if the amounts available shall not be sufficient to pay in full all the Bonds Similarly Secured due on any date, then to the payment thereof ratably, according to the amounts of principal due and to the Owners entitled thereto, without any discrimination or preference. Within thirty (30) days of receipt of such good and available funds, the Trustee may fix a record date and a payment date for any payment to be made to Owners of Bonds Similarly Secured pursuant to this Section 11.4. (b) In the event funds are not adequate to cure any of the Events of Default described in Section 11.1, the available funds shall be allocated to the Bonds Similarly Secured that are Outstanding in proportion to the quantity of Bonds Similarly Secured that are currently due and in default under the terms of this Indenture. 61 (c) The restoration of the Town to its prior position after any and all defaults have been cured, as provided in Section 11.3, shall not extend to or affect any subsequent default under this Indenture or impair any right consequent thereon. Section 11,5. Effect of Waiver. No delay or omission of the Trustee, or any Owner, to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Indenture to the Trustee or the Owners, respectively, may be exercised from time to time and as often as may be deemed expedient. Section. 11.6. Evidence of Ownership of Bonds. (a) Any request, consent, revocation of consent or other instrument which this Indenture may require or permit to be signed and executed by the Owners of Bonds may be in one or more instruments of similar tenor, and shall be signed or executed by such Owners in person or by their attorneys duly appointed in writing. Proof of the execution of any such instrument, or of any instrument appointing ally such attorney, or the holding; by any Person of the Bonds shall be sufficient for any purpose of this Indenture (except as otherwise herein expressly provided) if made in the following manner. (i) The fact and date of the execution of such instruments by any Owner of Bonds or the duly appointed attorney authorized to act on behalf of such Owner may be provided by a guarantee of the signature thereon by a batik or trust company or by the certificate of any notary public or other officer authorized to take acknowledgments of deeds, that the Person signing; such request or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. Where such execution is by an officer of a corporation or association or a member of a partnership, on behalf of such corporation, association or partnership, such signature guarantee, certificate, or affidavit shall also constitute sufficient proof of his authority. (ii) The ownership of Bonds and the amount, numbers and other identification and date of holding the same shall be proved by the Register. (b) Except as otherwise provided in this Indenture with respect to revocation of a consent, any request or consent by an Owner of any Bond shall bind all future Owners of the same Bond in respect of anything done or suffered to be done by the Town or the Trustee in accordance therewith. Section 11.7. No Acceleration. In the event of the occurrence of an Event of Default under Section IL], the right of acceleration of any Stated Maturity is not granted as a remedy hereunder and the right of acceleration under this Indenture is expressly denied. 62 Section t 1. 8, Mailing of Notice. Any provision in this Article for the mailing of a notice or other document to Owners shall be fully complied with if it is mailed, first class postage prepaid, only to each Owner at the address appearing upon the Register, Section 11.9. Exclusion of Bonds. Bonds owned or held by or for the account of the Town will not be deemed Outstanding for the purpose of consent or other action or any calculation of Outstanding Bonds provided for in this Indenture, and the Town shall not be entitled with respect to such Bonds to give any consent or take any other action provided for in this Indenture. ARTICLE XII GENERAL COVENANTS AND REPRESENTATIONS Section 12.1. Representations as to Pledged Revenues. (a) The Town represents and warrants that it is authorized by Applicable Laws to authorize and issue the Bonds, to execute and deliver this Indenture and to pledge the Pledged Revenues in the manner and to the extent provided in this Indenture, and that the Pledged Revenues are and will be and remain free and clear of any pledge, lien, charge, or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge and lien created in or authorized by this Indenture except as expressly provided herein. (b) The Town shall at all times, to the extent permitted by Applicable Laws, defend, preserve and protect the pledge of the Pledged Revenues and all the rights of the Owners and the Trustee, under this indenture against all claims and demands of all Persons whomsoever. (c) Subject to Section 7.2(d), the Town will take all steps reasonably necessary and appropriate, and will direct the Trustee to take all steps reasonably necessary and appropriate, to collect all delinquencies in the collection of the Assessments and any other amounts pledged to the payment of the Bonds to the fullest extent permitted by the PID Act and other Applicable Laws. Section 12.2. General. The Town shall do and perform or cause to be done and performed all acts and things required to be done or performed by or on behalf of the Town under the provisions of this Indenture. 63 ARTICLE XIII SPECIAL COVENANTS Section 13.1. Further Assurances; Due Performance. (a) At any and all times the Town will duly execute, acknowledge and deliver, or will cause to be done, executed and delivered, all and every such further acts, conveyances, transfers, and assurances in a manner as the: Trustee shall reasonably require for better conveying, transferring, pledging, and confirming unto the Trustee, all and singular, the revenues, Funds, Accounts and properties constituting the Pledged Revenues, and the Trust Estate hereby transferred and pledged, or intended so to be transferred and pledged. (b) The Town will duly and punctually keep, observe and perform each and every term, covenant and condition on its part to be kept, observed and perfonned, contained in this Indenture. Section 13.2. Other Obligations or Other Liens; Additional Bonds. (a) The Town reserves the right to issue obligations under other indentures, assessment ordinances, or similar agreements or other obligations which do not constitute or create a lien on the Trust Estate and are not payable from Pledged Revenues. (b) The Town will not create or voluntarily permit to be created any debt, lien or charge on the Trust Estate, and will not do or omit to do or suffer to be done or omit to be done any matter or things whatsoever whereby the lien of this Indenture or the priority hereof might or could be lost or impaired; and further covenants that it will pay or cause to be paid or will make adequate provisions for the satisfaction and discharge of all lawful claims and demands which if unpaid might by law be given precedence over or any equality with this Indenture as a lien or charge upon the Pledged Revenues or Pledged Funds; provided, however, that nothing in this Section shall require the Town to apply, discharge, or make provision for any such lien, charge, claim, or demand so long as the validity thereof shall be contested by it in good faith, unless thereby, in the opinion of counsel to the Trustee, the same would endanger the security for the Bonds. (c) The Town reserves the right to issue Additional Bonds for any purpose permitted by the PID Act and in accordance with the conditions set forth below: (i) A Town Representative shall certify that the Town is not in default in the performance and observance of any of the terns, provisions and conditions applicable to it contained in the Indenture. (ii) The Developer, through an authorized representative, shall certify that: a. It is not in default in the performance and observance of any of the terms, provisions and conditions applicable to it contained in the Financing Agreement; 64 b. At least 75% of the residential lots within Improvement Area #3 (East Residential) to be financed are under contract with merchant homebuilders unaffiliated with the Developer; Construction has commenced or been completed on at least 33% of the single-family homes located within Improvement Area #2 (West Residential); d. The appraised value of the Improvement Area #1, Improvement Area #2, and Improvement Area #3 Assessed Parcels, assuming completion of all Improvement Project A Improvements, is equal to at least three (3) times the principal amount of all outstanding Bonds Similarly Secured, taking into account the Additional Bonds to be issued; and e. The appraised value allocated to each Improvement Area #1 Assessed Parcel, Improvement Area #2 Assessed Parcel, and Improvement Area #3 Assessed Parcel is at least two and a half (2.5) times the portion of the principal amount of all Outstanding Bonds Similarly Secured, taking into account the Additional Bonds to be issued, that is allocated to each such Assessed Parcel. (iii) The principal of and interest on the Additional Bonds must be scheduled to be paid or mature on March 1 or September 1, or both, of the years in which principal or interest is scheduled to be paid or mature with a final maturity date no more than thirty (30) years from their date of issuance. (iv) There shall be deposited to the Reserve Fund an amount equal to the Reserve Fund Requirement taking into account the Outstanding Bonds Similarly Secured and the Additional Bonds then proposed to be issued. Section 13.3. Books of Record. (a) The Town shall cause to be kept full and proper books of record and accounts, in which full, true and proper entries will be made of all dealings, business and affairs of the Town, which relate to the Pledged Revenues, the Pledged Funds, and the Bonds. (b) The Trustee shall have no responsibility with respect to the financial and other information received by it pursuant to this Section 13.3 except to receive and retain same, subject to the Trustee's document retention policies, and to distribute the same in accordance with the provisions of this Indenture. 65 ARTICLE XIV PAYMENT AND CANCELLATION OF THE BONDS AND SATISFACTION OF THE INDENTURE Section 14.1, Trust Irrevocable. The trust created by the terms and provisions of this Indenture is irrevocable until the Bonds secured hereby are fully paid or provision is made for their payment as provided in this Article. Section 14.2. Satisfaction of Indenture. If the Town shall pay or cause to be paid, or there shall otherwise be paid to the Owners, principal of and interest on all of the Bonds, at the times and in the manner stipulated in this Indenture, and all amounts due and owing with respect to the Bonds have been paid or provided for, then the pledge of the Trust Estate and all covenants, agreements, and other obligations of the Town to the Owners of such Bonds, shall thereupon cease, terminate, and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Town copies of all such documents as it may have evidencing that principal of and interest on all of the Bonds has been paid so that the Town may determine if this Indenture is satisfied, if so, the Trustee shall pay over or deliver all moneys held by it in the Funds and Accounts held hereunder to the Person entitled to receive such amounts, or, if no Person is entitled to receive such amounts, then to the Town. Section 14.3. Bonds Deemed Paid. (a) Any Outstanding Bonds shall, prior to the Stated Maturity or redemption date thereof, be deemed to have been paid and no longer Outstanding within the meaning of this Trust Indenture (a "Defeased Debt"), and particularly this Article XIV, when payment of the principal of, premium, if any, on such Defeased Debt, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, rcdemption, or otherwise), either (1) shall have been made in accordance with the terms thereof, or (2) shall have been provided by irrevocably depositing with the Trustee, in trust, and irrevocably set aside exclusively for such payment, (A) money sufficient to make such payment or (B) Defeasance Securities, certified by an independent public accounting firm of national reputation to mature as to principal and interest in such amount and at such times as will insure the availability, without reinvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation, and expenses of the Trustee pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee. Neither Defeasance Securities nor moneys deposited with the Trustee pursuant to this Section 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 Town 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 ease may be. Any payment for Defeasance Securities purchased for 66 the purpose of reinvesting cash as aforesaid shall be made only against delivery of such Defeasance Securities. (b) Any determination not to redecrn Defeased Debt that is made in conjunction with the payment arrangements specified in Sections 14.3(a)(1) or 14.3(a)(2) shall not be irrevocable, provided that: (1) in the proceedings providing for such defeasance, the Town expressly reserves the right to call the Defeased .Debt for redemption; (2) the Town gives notice of the reservation of that right to the Owners of the Defeased Debt immediately following the defeasance; (3) the Town directs that notice of the reservation be included in any defeasance or redemption notices that it authorizes; and (4) at or prior to the time of the redemption, the Town satisfies the conditions of clause (a) of this Section 14.3 with respect to such Defeased Debt as though it was being defeased at the time of the exercise of the option to redeem the Defeased Debt, after taking the redemption into account in determining the sufficiency of the provisions made for the payment of the Defeased Debt. ARTICLE XV MISCELLANEOUS Section 15.1. Benefits of Indenture Limited to Parties. Nothing in this Indenture, expressed or implied, is intended to give to any Person other than the Town, the Trustee and the Owners, any right, remedy, or claim under or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture by and on behalf of the Town shall be for the sole and exclusive benefit of the Owners and the Trustee. Section 15.2. Successor is Deemed Included in All References to Predecessor. Whenever in this Indenture or any Supplemental Indenture either the Town or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Town or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 15.3. Execution of Documents and Proof of Ownership by Owners. (a) Any request, declaration, or other instrument which this Indenture may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys duty appointed in writing. (b) Except as otherwise expressly provided herein, the fact and date of the execution by any Owner or his attorney of such request, declaration, or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the Person signing such request, declaration, or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. 67 (c) Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number, and date of holding the same shall be proved by the Register. (d) Any request, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the Town or the Trustee in good faith and in accordance therewith. Section 15.4. No Waiver of Personal Liability. No member, officer, agent, or employee of the Town shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing herein contained shall relieve any such member, officer, agent, or employee from the performance of any official duty provided by law, Section 15.5. Notices to and Demands on Town and Trustee. (a) Except as otherwise expressly provided herein, all notices or other instruments required or permitted under this Indenture shall be in writing and shall be faxed, delivered by hand, or mailed by first class mail, postage prepaid, and addressed as follows: If to the Town If to the Trustee Or the Paying Agent/Registrar Town of Westlake, Texas 3 Village Circle, Suite 202 Westlake, Texas 76226 Attn: Town Manager Telephone: (817) 490-5720 U.S. Bank National Association 13737 Noel Road, Suite 800 Dallas, Texas 75240 Attu: Corporate Trust Services Fax: (972) 581-1660 (b) Any such notice, demand, or request may also be transmitted to the appropriate party by telegram or telephone and shall be deemed to be properly given or made at the time of such transmission if, and only if, such transmission of notice shall be confinned in writing and sent as specified above. (c) Any of such addresses may be changed at any tune upon written notice of such change given to the other party by the parry effecting the change. Notices and consents given by mail in accordance with this Section shall be deemed to have been given five Business Days alter the date of dispatch; notices and consents given by any other means shall be deemed to have been given when received. (d) The Trustee shall mail to each Owner of a Bond notice of (1) any substitution of the Trustee; or (2) the redemption or defeasance of all Bonds Outstanding. 68 Section 15.6. Partial Invalidity. If any Section, paragraph, sentence, clause, or phrase of this Indenture shall for any reason be held illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Indenture. The Town hereby declares that it would have adopted this Indenture and each and every other Section, paragraph, sentence, clause, or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that anyone or more Sections, paragraphs, sentences, clauses, or phrases of this Indenture may be held illegal, invalid, or unenforceable. Section 15.7. Applicable Laws. This Indenture shall be governed by and enforced in accordance with the laws of the State applicable to contracts made and performed in the State. Section 15.8. Payment on Business Day. In any case where the date of the maturity of interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption of any Bonds or the date any action is to be taken pursuant to this Indenture is other than a Business Day, the payment of interest or principal (and premium, if any) or the action need not be trade on such date but may be made on the next succeeding day that is a Business Day with the same force and effect as if trade on the date required and no interest shall accrue for the period from and after such date. Section 15.9. Counterparts. This Indenture may be executed in counterparts, each of which shall be deemed an original. [Remainder• of Page lEf Munk intentionally] 69 IN WITNESS WHEREOF, the Torun and the Trustee have caused this Indenture of Trust to be executed as of the date hereof. Attest: ��. 1" w (TOWN SEAL) TOWN OF WESTLAKE, TEXAS Mayor Town Signature Page to Indenture of Dust U.S. BANK NATIONAL ASSOCIA91JON, as Trustee ,, sss✓✓� �- Authorized Officer D-uslee Signature Page to Indenture of Trust EXHIBIT A DESCRIPTION OF THE PROPERTY WITHIN THE SOLANA PUBLIC IMPROVEMENT DISTRICT 85.90 Acres BEING a tract of land situated in the C.M. Throop Survey, Abstract No. 1510, the W. Medlin Survey, Abstract No. 1958, the William Pea Survey, Abstract No. 1246 and the Joseph Henry Survey, Abstract No. 742, Tarrant County, Texas and being a portion of Tract 2 as described in the Special Warranty Deed to MAGUIRE PARTNERS -- SOLANA LAND, L.P. as recorded in Volume 16858, Page 176 of the Deed Records of Tarrant County, Texas and being more particularly described as follows: BEGINNING at a 518 inch iron rod found with "Huitt-Zollars" cap at the southwest corner of Lot 2, Block 1, Westlake/Southlake Park Addition No. 1, an addition to the Town of Westlake, Texas as recorded in Volume 388-214, Page 78 of the flat Records of Tarrant County, Texas, being on the northeasterly right-of-way line of Kirkwood Boulevard, a variable width right-of-way as dedicated by said Westlake/Soutlilake Park Addition No. I and being the beginning of a non - tangent curve to the left having a central angle of 9 degrees 13 minutes I 1 seconds, a radius of 1428.00 feet and being subtended by a chord which. bears North 47 degrees 49 minutes 50 seconds West a distance of 229.54 fect; THENCE along the northeasterly right-of-way line of Kirkwood Boulevard, a variable with right-of-way, as described in Dedication Deed to the Town of Westlake as recorded under instrument No. D208427746, Deed Records of Tarrant County, Texas the following: Along said curve to the left an arc distance of 229.79 feet to a'/z inch rod found with Graham cap at the end of said curve; North 52 degrees 30 minutes 14 seconds west a distance of 32.60 feet to '/2 inch iron rod found with Graham cup beginning of a curve to the right having a central angle of 18 degrees 54 minutes 48 seconds, a radius of 612.00 feet and being subtended by a chord which bears North 43 degrees 02 minutes 03 seconds West a distance of 201.11 feet; Along said curve to the right an are distance of 202.02 feet to a '/z inch iron rod found with Graham cap at the beginning of a compound curve to the right having a central angle of 24 degrees 06 minutes 47 seconds, a radius of 812.00 feet and being subtended by a chord which bears North 21 degrees 32 minutes 03 seconds West a distance of 339.22 feet; Along said curve to the right an arc distance of 341.73 feet to a '/2 inch iron rod found with Graham cap at the end of a said curve; North 09 degrees 28 minutes 39 seconds West a distance of 132.24 feet to a %2 inch iron rod found with Graham cap at the beginning of a curve to the left having a central angle of 45 A-1 degrees 43 minutes 19 seconds, a radius of 708.00 feet and being subtended by a chord which bears North 32 degrees 20 minutes t9 seconds West a distance of 550.11 feet; Along said curve to the left an arc distance of 564.98 feet to a '/2 inch iron rod found with Graham cap at the end of said curve; North 55 degrees I I minutes 58 seconds West a distance of 190.50 feet to a % inch iron rod found with Graham cap; North 08 degrees 56 minutes 27 seconds West a distance off 21.41 feet to a 'h inch iron rod found with Graham cap on the easterly right-of-way line of Precinct Line Road, a variable width right-of-way, as described in Dedication Deed to Town of Westlake as recorded under Instrument No. D208427746, Deed Records of Tarrant County, Texas and being the beginning of a non -tangent curve to the left having a central angle of 16 degrees 09 minutes 21 seconds, a radius of 1,432.50 feet and being subtended by a chord which bears North 27 degrees 07 minutes 42 seconds East a distance of 402.59 feet; THENCE along the easterly right-of-way line of Precinct Line Road, the following; Along said curve to the left an are distance of 403.92 feet to a '/2 inch iron rod found with Graham cap at the end of said curve; North 18 degrees 47 minutes 24 seconds East a distance of 185.36 feet to a % inch iron rod found with Graham cap; North 17 degrees 03 minutes 03 seconds East a distance of 322.64 feet to a'/z inch iron rod found on the southerly right-of-way line of State Highway 114 (a variable width ROW); THENCE along the southerly right-of-way line of State Highway 114, the following; North 60 degrees 06 minutes 26 seconds East a distance of 44.54 feet to a Texas Department of Transportation brass disk in concrete found; South 71 degrees 03 minutes 32 seconds East a distance of 254.55 feet to a point for corner from which a Texas Department of Transportation brass disk in concrete found bears North 10 degrees 48 minutes 28 seconds West a distance of 0.43 feet; South 77 degrees 26 minutes 06 seconds East a distance of 746.74 feet to a Texas Department of Transportation brass disk in concrete found; South 71 degrees 03 minutes 31 seconds East a distance of 1443.85 feet to a Texas Department of Transportation brass disk in concrete found; South 62 degrees 34 minutes 19 seconds East a distance of 404.34 feet to a Texas Department of Transportation brass disk in concrete found at the beginning of a curve to the right having a central angle of 08 degrees 19 minutes 09 seconds, a radius of 2,709.79 feet and being subtended by a chord which bears South 58 degrees 24 minutes 45 seconds East a distance of 393.11 feet; A-2 Along said curve to the right an are distance of 393.45 feet to a Texas Department of Transportation brass disk in concrete found; South 54 degrees 15 minutes 11 seconds East a distance of 399.24 feet to a Texas Department of Transportation brass disk in concrete found; South 64 degrees 19 minutes 50 seconds East a distance of 56.55 feet to a 518 inch iron rod found with "Huitt-Zollars" cap at the beginning of a non -tangent curve to the right having a central angle of 02 degrees 13 minutes 56 seconds, a radius of 2,754.79 feet and being subtended by a chord which bears South 43 degrees 17 minutes 37 seconds East a distance of 107.32 feet; Along said curve to the right n arc distance of 107.33 feet to a '/2 inch rod found with "Huitt- Zollars" cap for the northeast corner of Lot 1, Block 1, of the aforementioned Westlake/Southlake Park Addition No. 1; THENCE departing the southerly right-of-way line of State Highway 114, North 90 degrees 00 minutes 00 seconds west along the north line of said Lot 1, Block 1, a distance of 2,132.54 feet to a 5/8 inch iron rod with "Carter -Burgess" cap found for the northwest corner of said Lot 2, Block 1, WestlakelSouthlake Park Addition No. l; THENCE South 52 degrees 00 minutes 00 seconds West along the northwesterly line said Lot 2, Block 1, a distance of 1000.00 feet to a 518 inch iron rod with "Carter & Burgess" cap found at an angle point in the west line of Lot 2, Block 1; THENCE along the west line of said Lot 2, Block 1, South 00 degrees 00 minutes 00 seconds East a distance of 168.55 feet to the POINT OF BEGINNING and containing 85.90 acres of land, more or less. A-3 NEW ISSUE NOT RATED PRELIMINARY OIC"F ICIAI4 STATEMENT DATED DECEMBER 22, 2014 In the opinion of Bond Counsel, interest on the Bonds will be excludable fr out gross income for federal income tax purposes under statutes, regulations, published rulings and Court decisions existing on the date thereof, subject to the matters described under "TAX ri/fATTERS" herein, including the alternative minimum tar on corporations. $26,175,000A TOWN OF WE, STLAKE, TEXAS, (a municipal corporation of the State of Texas located in Denton and Tarrant Counties) SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Dated: Date of Delivery Due; September 1, as shown on the inside cover The Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds*'), are being issued by the "town of Westlake, 'Texas (the "Town"). The Bonds will be issued in fully registered form, without coupons, in authorized denominations of $25,000 of principal amount and any integral multiple of $5,000 in excess thereof. The Bonds will hear interest at the rates set forth on the inside cover, calculated on, the basis of a 360 -day year of twelve 30 -day months, and will be payable on each March I and September 1, commencing September 1, 2015, 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 ars the book -entry only system is maintained, the principal of and interest ort the Bonds will be paid from the sources described herein by U.S. Bank National Association, as trustee (the "Trustee"), to Cede & Co. as the registered owner thereof, which will make distribution of the atuounts so paid to the participating members ofDTC for subsequent payment to the beneficial owners of the Bonds. See "APPENDIX H - BOOK -ENTRY ONLY SYSTEM." The Bonds are being issued by the "Town pursuant to the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas local Government Code, as amended (the "PIC] Act"), an ordinance adopted by tare Town Council of the "rows (the "Town Council") on January 15, 2015, and all Indenture of Trust, daled as of February 1, 2015 (the "Indenture"), entered into by and between the Town and the Trustee. Capitalized terms not otherwise defined herein shall have the meanings assigned to thein in the Indenture. Proceeds of the Bonds will be used to provide hamts for (i) the payment of a portion of the costs of construction, acquisition and purchase of certain roadway, water, wastewater, drainage, landscape and public park improvements (the "Improvement Project A Improvements") within Improvement Area N 1, improvement Area 42 and Improvement Area 43 (each m described hercin) that benefit the entire Solana Public Improvement District, a public improvement district of the Town (the "District"), (ii) the funding ofthe Reserve Fund in the amount of the Reserve Fund Requirement for the Boards, (iii) the payment of a portion fit -the costs incidental to the organization of the District, (iv) the f'anding of capitalized interest on the Bonds, and (v) the payment ofthe costs of issuance ofihe Bonds. See "THF IMPROVFMFNT PROJECT A IMPROVEMENTS" and "APPENDIX A -- FORM OF INDENTURE." The Bonds, when issued and delivered, will constitute valid and binding special obligations of the Town payable solely from and secured by the Pledged Revenues and other funds comprising the Trust Estate, consisting primarily o€special assessments levied for Improvement Project A Improvements against assessable property located in Improvement Area 41, Improvement Area #2 and Improvement Area #3 of the District ((lie "Assessments") in accordance with a Service and Assessment Plan, all to the extent and upon the conditions described herein. See "SECUIUTY FOR THE BONDS; THE INDENTURE." Tire Bonds are subject to redemption at the times, in the amounts, and at the redemption prices more tidly described herein under the sub -caption "DESCRIPTION OF T1TE BONDS - Redemption Provisions.- `Tbe Bonds involve a degree of risk and are riot 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 tine 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; with respect to the Bonds. THE BONDS ARE SPECIAL OBLIGATIONS OF THE TOWN PAYABLE, SOLELY FROM THE PLEDGED REVENUES AND OTHER FUNDS COMPRISING THE' TRUST T:STATE, AS AND "FO THE EXTENT PROVIDED IN THE INDENTURE. TETE BONDS DO NO`l' GIVE RISE TOA CHARGE AGAINST TETE GENERAL. CREDIT OR TAXING POWER 01" THE 'TOWN AND ARF, PAYABLE' SOLELY FROM THE, SOURCES IDENTIFIED IN THE INDFNTURF, THE-: OWNERS OF THE BONDS SHALL NEVER CLAVE THE RIGHT TO DEMAND PAYMENT "I'llFREOF OUT OF MONEY RAISED OR TO BF RAISED BY TAXATION, OR OUT OF ANY FUNDS OF THF. TOWN OTHER TFIAN THF TRUST F,S'TATE", AS AND TO THE EXTENT PROVIDED IN Ti It," INDT;NfURf?. NO OWNER OF TI 1E BONDS SHALL HAVE THE RIGHT TO DEMAND ANY EXERCISE OF'I'llE' TOWNS TAXING POWER TO PAY THF PRINCIPAL OF THE, BONDS OR THE IN'T'EREST OR REDEMPTION PREMIUM, IF ANY, THEREON. TIM TOWN SUALL HAVE NO LF(iAL OR MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY FUNDS OF THE TOWN OTHER TITAN THE TRUST ESTATE. "T"his cover page contains certain information for quick reference only. It is riot a summary of the Bonds- Investors roust read this entire Official Statement to obtain information essential to the making ofan informed investment decision. The Bonds are offered for delivery when, as, and if issued by the Town and accepled by the Underwriter, subject to, among other things, the approval ofthe Bonds by the Attorney General ofTexas and the receipt ofthe opinion of McCall, Parkhurst & I lorton 1,_1-,.P., Bond Counsel, las to the validity ofthe Hondo and the excludability of interest thereon from gross income for federal income tax purposes. See "APPENDIX D - Form of Opinion of Bond Counsel." Certain legal matters will be passed upon for the Underwriter by its counsel, Andrews Kurth LLP, ami for the Developer by its counsel, Miklos Law, PLLC It is expected that the Bonds will be delivered in book -entry form through the facilities of DTC on or about February 5, 2015. Jefferies Prelinrinar}', subject to charge. NEW ISSUE NOT BATED OFFICIAL STATEMENT DA'Z'ED JANUARY 15, 2015 In the opinial of Bond Counsel, interest oil the Bonds will he excludable rwil gross income for federral incase fax purposes lrnder statutes, regulations, puhlished ratings and courl decisions existing ora the date thereof; sulfccl to the malters described under "7A r M.477ERS"herein, including the Uhernallve rninimunn law" on cwywrations. $26,175,000 TOWN OF WESTLAKE, TEXAS, (a municipal corporation of the State of Texas located in Denton and Tarrant Counties) SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Dated: Date of Delivery Due: September 1, as shown on the inside cover The Town of Westlake, 'texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) {the "Bonds"), are being issued by theTown of Westlake, Texas (the "Town"), The Bonds will be issued in fully registered form, without coupons, in authorized denoninatious of 525,000 of principal amount and any integral multiple of $5,000 in excess thereof: The Bonds will bear interest at the rates set Corth on the inside cover, calculated on the basis of a 360 -day year of twelve 30 -day nionths, and will be payable on each March I and September 1, commencing September 1, 2015, until maturity or earlier redemption. 'file Bonds will be registered in the name of Cede & Co., as nominee of "I'be Depository Trust Company ("DTC"), Ncw 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 syste€u is maintained, the principal of and interest on the Bonds will be paid from the sources described herein by U.S. Bank National Association, as trustee (the "'trustee'), to Crede & Co. as the registered oww7tcr thereof, which will make distribution ofthc arruoumts so paid to the participating members of l' I'C for subsequent payment to the beneficial owners oft]te Bonds. See "APPENDIX 11 — BOOK -ENTRY ONLY SYSTEM." The Bonds are being issued by the Town pursuant to the Public Improvement District Assessmcmt Act, Suhchaptcr A of Chapter 372, Texas Local Government Code, as amended (the "I'll) Act"), an ordinance adopted by the Town Council of the Town the "Town Council') on January 15, 2015, and an Indenture of Trust, dated as of February 1, 2015 (the "Indenture"), entered, into by and between the Town and the Trustce. Capitalized terms not otherwise defined herein shall have the meanings assigned to theist in the Indenhrre, Proceeds of the Bonds will be used to provide funds fbr (i) the payment of a portion of the costs of construction, acquisition and purchase of certain roadway, water, wastewater, drainage, landscape and public park improvements (the "Improvement Project A Improvements") within Improvement Area 91, Improvement Arca 42 and Improvement Area 43 (each as described herein) that benefit the entire Solana Public Improvement District, a public improvement district of the Town (the "District"), (ii) the funding orthe Reserve Furul in lite amount of the Reserve Fund Requirement for the Bonds. (iii) the payment of a portion of the costs incidental to the organization of the District, (iv) the funding of capitalized interest on the Bonds, and (v) the payureut of the costs of issuance of lite Bonds. See "Tiff', IMPROVEMENT PROJECT A EMPROVFMFNTS" and "APPENDIX A — FORM OF NDENTU RE." The Boads, when issued and delivered, will constitute valid and binding special obligations of the Town payable solely frons and secured by the Pledged Revenues and other funds comprising the Trust Estate, consisting primarily of special assessments levied iirr Improvement Project A Improvements against assessable property located in Improvement Area #l, Improvement Area #2 and Improvement Area #3 of the District (tile "Assessments") in accordance with a Service and Assessment flan_; all to the extent and upon the conditions described herein, See "SECURITY FOR TI IE BONDS; THE INDFXFURF." The I3ouds are subject to redemption at the times, in the amounts, and at the redemption prices more fully described herein under the sub -caption "DESCRIPTION OF THE BONDS — Redemption Provisions." .Fhc Bonds involve a degree of risk and are not suitable for all investors. Sec "BOND1101I)EMS 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 matte for a rating with respect to the Bonds. `fIE13 BONDS ARF SPECIAL OBLIGATIONS OF `tIlI3 TOWN PAYABLE SOLFAX FROM T1I13 PLEDGED RFVFNUFS. AND OTHER FUNDS COMPRISING `I'1113 '1ltIJS't 1;S'I'A`I'E, AS AND '1 O 'I'IIE EX'I'LNI' PROVIDI,'D IN TETE INDENTURE, THE BONDS DO NOT GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR 'FAXING POWER OF THE TOWN AND ARE PAYABLE SOLELY FROM THE SOURCES IDENTIFIFD IN THF, INDENTURE. THE OWNERS Or THE BONDS SMALL NEVER HAVE TtIE RIGHT TO DEMAND PAYMENT TEIEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION, OR OUT OF ANY FUNDS OF THE "TOWN OTHER THAN THE TRUST ESTATE, AS AND "f0 '1'Idl: I,'X'I'[.N't PROVIDED IN THE INDENTURE. NO OWNER OF THE' BONDS SHALL 1IAVE THE RIGHT TO DEMAND ANY EXERCISE Of-' THE TOWN'S TAXING POWER TO PAY THE PRINCIPAL. OF TETE BONDS OR THE INTEREST OR REDEMPTION PREMIUM, IF ANY, TI IFRFON. IF TOWN SHALI. HAVENO LE?GAL OR MORAL OBLIGATION 't0 PAY THE; 13ONDS OUT OF ANY FUNDS Ol I'lIE TOWN OTIIER TI iAN THE ']'RUS`r ES'I'A'1'L. This cover page contains certain information for quick reference only. It is not a summary of the Bonds. Investors must read this entire Official Statement to obtain information essential to the making of an informed investment decision. The Bonds are offimd for delivery when, as, and ifissued by the Town 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 McCall, Parkhurst & I Lorton L.L.P., Bond Coc,nsel, as to the validity of the Bonds and the excludability of interest thereon from gross income for federal income tax purposes. See "APPE;N DI 1) — For€n of Opinion of Bond Counsel." Certain legal matters will be passed upon for the Underwriter by its counsel, Andrews Kurth LLP, and for the Developer by its counsel, Miklos Law, PLLC. It is expected €hat the Bonds will be delivered in book -entry form through the facilities of DTC ern or about February 5, 2015. Jefferies $26,175,000 TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) BOND PURCHASE AGREEMENT January 15, 2015 Honorable Mayor and Town Council Town of Westlake, Texas 3 Village Circle, Suite 202 Westlake, Texas 76262 Ladies and Gentlemen: The undersigned, Jefferies LLC (the "Underwriter"), offers to enter into this Agreement (this "Agreement") with the Town of Westlake, Texas (the "Town"), which will be binding upon the Town and the Underwriter upon the acceptance hereof by the Town. This oiler is made subject to its acceptance by the Town by execution of this Agreement and its delivery to the Underwriter on or before 10:00 p.m., Central Time, on the date hereof and, if not so accepted, will be subject to withdrawal by the Underwriter upon written notice delivered to the Town at any time prior to the acceptance hereof by the Town. All capitalized terms not otherwise defined herein shall have the meanings given to such terms in the indenture (defined herein) between the Town and U.S. Bank National Association, as trustee (the "Trustee"), relating to the Bonds (defined herein), and in the Official Statement (defined herein). 1. Purchase and Sale of Bonds. Upon the terms and conditions and upon the basis of representations, warranties and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the Town, and the Town hereby agrees to sell to the Underwriter, all (but not less than all) of $26,175,000 aggregate principal amount of the Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds"), at a purchase price of $25,651,500.00 (representing the aggregate principal amount of the Bonds, less an Underwriter's discount of $523,500.00). Inasmuch as this purchase and sale represents a negotiated transaction, the Town understands, and hereby confirms, that the Underwriter is not acting as a fiduciary of the Town, but rather is acting solely in its capacity as Underwriter for its own account. The Town acknowledges and agrees that (i) the purchase and sale of the Bonds pursuant to this Agreement is an arm's-length commercial transaction among the Town and the Underwriter, (ii) in connection therewith and with the discussions, undertakings, and procedures leading up to the consummation HOU:3432279.3 of this transaction, the Underwriter is and has been acting solely as a principal and is not acting as the agent or fiduciary of the Town, (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the Town with respect to the offering described herein or the discussions, undertakings, and procedures leading thereto (regardless of whether the Underwriter has provided other services or is currently providing other services to the Town on other matters) and the Underwriter has no obligation to the Town with respect to the offering described herein except the obligations expressly set forth in this Agreement, and (iv) the Town has consulted its own legal, financial, and other advisors to the extent it has deemed appropriate. The Town further acknowledges and agrees that following the issuance and delivery of the Bonds, the Underwriter has indicated that it may have periodic discussions with the Town regarding the expenditure of Bond proceeds and the construction of the projects financed with the Bonds and, in connection with such discussions, the Underwriter shall be acting solely as a principal and will not be acting as the agent or fiduciary of, and will not be assuming an advisory or fiduciary responsibility in favor of, the Town. The Bonds shall be dated the date of their issuance and delivery and shall have the maturities and redemption features, if any, and bear interest at the rates per annum shown on Appendix A hereto. Payment for and delivery of the Bonds, and the other actions contemplated hereby, shall take place on February 5, 2015 (or such other date as may be agreed to by the Town and the Underwriter) (the "Closing Date"). 2. Authorization Instruments and Law. The Bonds were authorized by an Ordinance enacted by the Town Council of the Town (the "Town Council") on January 15, 2015 (the "Bond Ordinance") and shall be issued pursuant to the provisions of Subchapter A of Chapter 372, Texas Local Government Code, as amended (the "Act"), and the Indenture of Trust, dated February 1, 2015, between the Town and the Trustee (the "Indenture"). The Bonds shall be substantially in the form described in, and shall be secured under the provisions of, the Indenture. The Bonds and interest thereon shall be secured by the proceeds of special assessments (the "Assessments") levied on the assessable parcels within hnprovement Area #1, Improvement Area 92 and Iinprovement Area #3 of the Solana Public Improvement District (the "District") established by Resolution No. 14-07 (the "Creation Resolution"), enacted by the Town Council on February 24, 2014, in accordance with the Act. A Service and Assessment Plan (the "Service and Assessment Plan") which sets forth the costs of the Improvement Project A Improvements (as defined in the Indenture) and the method of payment of the Assessments was adopted by the Town Council on January 15, 2015, pursuant to Ordinance No. 741 (the "Assessment Ordinance" and, together with the Creation Resolution, the Indenture and the Bond Ordinance, the "Authorizing Documents"). The Bonds shall be further secured by certain applicable funds and: accounts created under the Indenture. The Bonds shall be as described in Appendix A, the Indenture and the Official Statement (defined below). The proceeds of the Bonds shall be used for (i) paying a portion of the Costs of the Improvement Project A Improvements (as defined in the Indenture), (ii) paying a portion of the interest on the Bonds during and after the period of acquisition and construction of the Improvement Project A Improvements,_ (iii) funding a reserve fund for payment of principal and 2 HOU:3432279.3 interest on the Bonds, (iv) paying a portion of the costs incidental to the organization of the District, and (v) paying the costs of issuing the Bonds. 3. Public Offering. Subject to the provisions of the following paragraph, the Underwriter agrees to make a bona fide public offering of all of the Bonds at prices not to exceed the public offering prices set forth on the inside cover page of the Official Statement and may subsequently change such offering prices without any requirement of prior notice. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) and others at prices lower than the public offering prices (or yields higher than the public offering yields) stated on the inside cover page of the Official Statement. On or before the third (P) business day before Closing, the Underwriter shall execute and deliver to Bond Counsel the Issue Price Certificate, in substantially the form attached hereto as Appendix B. 4. Official Statement. (a) Delivery -of Official Statement. The Town previously has delivered, or caused to be delivered, to the Underwriter the Preliminary Official Statement for the Bonds dated December 22, 2014, (the "Preliminary Official Statement"), in a "designated electronic format," as defined in the Municipal Securities Rulemaking Board ("MSRB") Rule G-32 ("Rule G-32"). The Town will prepare, or cause to be prepared, a final Official Statement relating to the Bonds (the "Official Statement") which will be (i) dated the date of this Agreement, (ii) complete within the meaning of the United States Securities and Exchange Commission's Rule 1 Sc2-12, as amended (the "Rule"), (iii) in a "designated electronic format" and (iv) substantially in the form of the most recent version of the Preliminary Official Statement provided to the Underwriter before the execution hereof. The Official Statement, including the cover page thereto, all exhibits, schedules, appendices, maps, charts, pictures, diagrams, reports, and statements included or incorporated therein or attached thereto, and all amendments and supplements thereto that may be authorized for use with respect to the Bonds are collectively referred to herein as the "Official Statement." Until the Official Statement has been prepared and is available for distribution, the Town shall provide to the Underwriter sufficient quantities (which may be in electronic format) of the Preliminary Official Statement as the Underwriter deems necessary to satisfy the obligation of the Underwriter under the Rule with respect to distribution to each potential customer, upon request, of a copy of the Preliminary Official Statement. (b) Preliminga Official Statement Deemed Final. The Preliminary Official Statement has been prepared for use by the Underwriter in connection with the public offering, We and distribution of the Bonds. The Town hereby represents and warrants that the Preliminary Official Statement has been deemed final by the Town as of its date, except for the omission of such information which is dependent upon the final pricing of the Bonds for completion, all as permitted to be excluded by Section (b)(1) of the Rule. (c) Use of Official Statement in Offering and Sale. The Town hereby authorizes the Official Statement and the information therein contained to be used by the Underwriter in connection with the public offering and the sale of the Bonds. The Town consents to the use by the Underwriter prior to the date hereof of the Preliminary Official HOU:3432279.3 Statement in connection with the public offering of the Bonds. The Town shall provide, or cause to be provided, to the Underwriter as soon as practicable after the date of the Town's acceptance of this Agreement (but, in any event, not later than within seven (7) business days after the Town's acceptance of this Agreement) copies of the Official Statement which is complete as of the date of its delivery to the Underwriter. The Town shall provide the Official Statement, or cause the Official Statement to be provided, (i) in a "designated electronic format" consistent with the requirements of Rule G-32 and (ii) in a printed format in such quantity as the Underwriter shall request in order for the Underwriter to comply with Section (b)(4) of the Rule and the rules of the MSRB. (d) Updating �of Official Statement. If, after the date of this Agreement, up to and including the date the Underwriter is no longer required to provide an Oficial Statement to potential customers who request the same pursuant to the Rule (the earlier of (i) ninety (90) days from the "end of the underwriting period" (as defined in the Rule) and (ii) the time when the Official Statement is available to any person from the MSRB, but in no case less than twenty-five (25) days after the "end of the underwriting period" for the Bonds), the Town becomes aware of any fact or event which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary to amend or supplement the Official Statement to comply with law, the Town will notify the Underwriter (and for the purposes of this clause provide the Underwriter with such information as it may from time to time reasonably request), and if, in the reasonable judgment of the Underwriter, such fact or event requires preparation and publication of a supplement or amendment to the Official Statement, the Town will forthwith prepare and famish, at the Town's own expense (in a form and manner approved by the Underwriter), either an amendment or a supplement to the Official Statement so that the statements therein as so amended and supplemented will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or so that the Official Statement will comply with law; provided, however, that for all purposes of this Agreement and any certificate delivered by the Town in accordance herewith, the Town makes no representations with respect to (i) the descriptions in the Preliminary Official Statement or the Official Statement of The Depository Trust Company, New York, New York ("DTC"), or its book - entry -only system, (ii) the Preliminary Official Statement or the Official Statement under the captions "THE IMPROVEMENT PROJECT A IIviPROVEMENTS," "THE DEVELOPMENT," "THE DEVELOPER," "THE DEVELOPMENT CONSULTANT," "BONDHOLDERS' RISKS" (only as it pertains to the Developer and the Development), "LEGAL MATTERS — Litigation — The Developer," "CONTINUING DISCLOSURE – The Developer" and "INFORMATION RELATING TO THE TRUSTEE." If such notification shall be subsequent to the Closing, the Town, at the expense of the Developer, shall furnish such legal opinions, certificates, instruments and other documents as the Underwriter may reasonably deem necessary to evidence the truth and accuracy of such supplement or amendment to the Official Statement. The Town shall provide any such amendment or supplement, or cause any such amendment or supplement to be provided, (i) in a "designated- electronic format" consistent with the requirements of Rule -G-32 and: 4 HOU'34322793 (ii) in a printed format in such quantity as the Underwriter shall request in order for the Underwriter to comply with Section (b)(4) of the Rule and the rules of the MSRB. (e) Filing with MSRB. The Underwriter hereby agrees to timely file the Official Statement with MSRB through its Electronic Municipal Market Access ("EMMA") system on or before the date of Closing. Unless otherwise notified in writing by the Underwriter, the Town can assume that the "end of the underwriting period" for purposes of the Rule is the date of the Closing. 5. Town Representations, Warranties and Covenants. The Town represents, warrants and covenants to the Underwriter that: (a) Due Organization, Existence and Authority. The Town is a political subdivision of the State of Texas (the "State"), and has, and at the Closing Date will have, full legal right, power and authority (i) to enter into this Agreement, the Indenture, the Construction, Funding and Acquisition Agreement (the "Financing Agreement"), dated as of January 15, 2015, executed and delivered by the Town and Maguire Partners — Solana Land, L.P. (the "Developer"), the Continuing Disclosure Agreement of Issuer with respect to the Bonds, dated as of February 1, 2015 (the "Continuing Disclosure Agreement of Issuer"), executed and delivered by the Town, the Developer and U.S. Bank National Association, as Dissemination Agent, the Landowner Agreement, dated as of January 15, 2015 (the "Landowner Agreement"), executed and delivered by the Town and the Developer, and the Maguire Partners -Solana Land, L.P. Agreement Regarding Conveyance of Right of Redemption and Waiver of Agricultural Valuation - Solana PID, dated as of January 15, 2015 (the "Redemption Agreement"), executed and delivered by the Town, the Developer and the Trustee, (ii) to issue, sell and deliver the Bonds to the Underwriter as provided herein, and (iii) to carry out and consummate the transactions on its part contemplated by the Authorizing Documents, this Agreement, the Financing Agreement, the Landowner Agreement, the Official Statement, the Redemption Agreement, the Continuing Disclosure Agreement of Issuer and any other documents and certificates contemplated by any of the foregoing (collectively, the "Town Documents"). (b) Due Authorization. and Approval of Town. By all necessary official action of the Town, the Town has duly authorized and approved the adoption or execution and delivery by the Town of, and the performance by the Town of the obligations on its part contained in, the Town Documents and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded, except as may have been approved by the Underwriter. When validly executed and delivered by the other parties thereto, Town Documents will constitute the legally valid and binding obligations of the Town enforceable upon the Town in accordance with their respective terms, except insofar as enforcement may be limited by principles of sovereign immunity, bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors' rights generally. The Town has complied, and will at the Closing (defined herein) be in compliance, in all material respects with the obligations on its part to be performed on or prior to the Closing Date under the Town Documents. HOU:3432279.3 (c) Due Authorization for Issuance of the Bonds. The Town has duly authorized the issuance and sale of the Bonds pursuant to the Bond Ordinance, the Indenture and the Act. The Town has, and at the Closing Date will have, full legal right, power and authority (i) to enter into, execute, deliver and perform its obligations under this Agreement and the Town Documents, (ii) to issue, sell and deliver the Bonds to the Underwriter pursuant to the Indenture, the Bond Ordinance, the Act and as provided herein, and (iii) to carry out, give effect to and consummate the transactions on the part of the Town described by the Town Documents and the Bond Ordinance. (d) No Breach or Default. As of the time of acceptance hereof, the Town is not and, as of the Closing Date, the Town will not be, in breach of or in default in any material respect under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument related to the Bonds and to which the Town is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument which breach, default or event could have a material adverse effect on the Town's ability to perform its obligations under the Bonds or the Town Documents; and, as of such times, the authorization, execution and delivery of the Bonds and the Town Documents and compliance by the Town with obligations on its part to be performed in each of such agreements or instruments does not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the Town (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties are bound, nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the Town's assets or properties pledged to secure the Bonds or under the terms of any such law, regulation or instrument, except as may be permitted by the Town Documents. (e) No Litigation. At the time of acceptance hereof, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body (collectively and individually, an "Action") pending against the Town with respect to which the Town has been served with process, nor to the knowledge of the Town is any Action threatened against the Town, in which any such Action (i) in any way questions the existence of the Town or the rights of the members of the Town Council to hold their respective positions, (ii) in any way questions the formation or existence of the District, (iii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contests or affects the validity of the Town Documents or the consummation of the transactions on the part of the Town described therein, or contests the exclusion of the interest on the Bonds from federal income taxation, or (iv) which may result in any material adverse change in the financial condition of the Town; and, to the best knowledge of the 6 HOLI:3432279.3 Town, as of the time of acceptance hereof there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence. (f) Bonds Issued Pursuant to Indenture. The Town represents that the Bonds, when issued, executed and delivered in accordance with the Indenture and sold to the Underwriter as provided herein, will be validly issued and outstanding obligations of the Town subject to the terms of the indenture, entitled to the benefits of the Indenture and the security of the pledge of the proceeds of the levy of the Assessments received by the Town, all to the extent provided for in the Indenture. The Indenture creates a valid pledge of the monies in certain funds and accounts established pursuant to the Indenture to the extent provided for in the Indenture, including the investments thereof, subject in all cases to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein. (g) Assessments. The Assessments constituting the security for the Bonds have been levied by the Town in accordance with the Act on those parcels of land identified in the Assessment Roll (as defined in the Service and Assessment Plan). According to the Act, such Assessments constitute a valid and legally binding first and prior lien against the properties assessed, superior to all other liens and claims, except liens or claims for State, county, school district, or municipality ad valorem taxes. (h) Consents and Approvals. All authorizations, approvals, licenses, permits, consents, elections, and orders of or filings with any governmental authority, legislative body, board, agency or commission having jurisdiction in the matters which are required by the Closing Date for the due authorization of, which would constitute a condition precedent to or the absence of which would adversely affect the due performance by the Town of, its obligations in connection with the Town Documents have been duly obtained or made and are in full force and effect, except for the approval of the Bonds by the Attorney General of the State, registration of the Bonds by the Comptroller of Public Accounts of the State, and the approvals, consents and orders as may be required under Blue Sky or securities laws of any jurisdiction. (i) Public Debt. Prior to the Closing, the Town will not offer or issue any bonds, notes or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by a pledge of the Assessments which secure the Bonds without the prior approval of the Underwriter. 0) Preliminary Official Statement. The information contained in the Preliminary Official Statement with respect to the Town under the captions and subeaptions "THE TOWN," "THE DISTRICT," "LEGAL MATTERS — Litigation - The Town" and "CONTINUING DISCLOSURE" is true and correct in all material respects, and such information does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading_ (k) Official Statement. At the time of the Town's acceptance hereof and (unless the Official Statement is amended or supplemented pursuant to paragraph (d) of Section 4 7 HOU:34322793 of this Agreement) at all times subsequent thereto during the period up to and including twenty-five (25) days subsequent to the "end of the underwriting period," the information contained in the Official Statement with respect to the Town under the captions and subcaptions "THE TOWN," "THE DISTRICT" and "LEGAL MATTERS — Litigation - The Town" and "CONTINUING DISCLOSURE" does not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that if the Town notifies the Underwriter of any fact or event as required by Section 4(d) hereof, and the Underwriter determines that such fact or event does not require preparation and publication of a supplement or amendment to the Official Statement, then the Official Statement in its then -current form shall be conclusively deemed to be complete and correct in all material respects. (1) Supplements or Amendments to Official Statement. If the Official Statement is supplemented or amended pursuant to paragraph (d) of Section 4 of this Agreement, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto during the period up to and including the twenty-fifth (25th) day subsequent to the "end of the underwriting period," the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that if the Town notifies the Underwriter of any fact or event as required by Section 4(d) hereof, and the Underwriter determines that such fact or event does not require preparation and publication of a supplement or amendment to the Official Statement, then the Official Statement in its then -current forin shall be conclusively deemed to be complete and correct in all material respects. (m) Compliance with the Rule. During the last five (5) years, the Town has complied in all material respects with its previous continuing disclosure undertakings made by it in accordance with the Rule, except as may be described in the Official Statement. (n) Use of Bond Proceeds. The Town will apply, or cause to be applied, the proceeds from the sale of the Bonds as provided in and subject to all of the terms and provisions of the Indenture and will not take or omit to take any action which action or omission will adversely affect the exclusion from gross income for federal income tax purposes of the interest on the Bonds. (o) Blue Sky and Securities Laws and Regulations. The Town will furnish such information and execute such instruments and take such action in cooperation with the Underwriter as the Underwriter may reasonably request, at no expense to the Town, (i) to (y) qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions in the United States as the Underwriter may designate and (z) determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions and (ii) to continue such qualifications in effect so long as required for the initial distribution of the Bonds by the Underwriter (provided, however, that the Town will not be required to qualify as a foreign corporation or to file HOU:3432279.3 any general or special consents to service of process under the laws of any jurisdiction} and will advise the Underwriter immediately of receipt by the Town of any notification with respect to the suspension of the qualification of the Bonds for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose. (p) Certificates of the Town. Any certificate signed by any official of the Town authorized to do so in connection with the transactions described in this Agreement shall be deemed a representation and warranty by the Town to the Underwriter as to the statements made therein and can be relied upon by the Underwriter as to the statements made therein. (q) Intentional Actions Regarding Representations and Warranties. The Town covenants that between the date hereof and the Closing it will not intentionally take actions which will cause the representations and warranties made in this Section to be untrue as of the Closing. (r) Financial Advisor. The Town has engaged Lawrence Financial Consulting LLC, as financial advisor in connection with its debt offerings, including the Bonds. The Town covenants to notify the Underwriter and the Developer in a timely manner of any engagement by the Town of a new or additional financial advisor with respect to the Bonds. By delivering the Official Statement to the Underwriter, the Town shall be deemed to have reaffirmed, with respect to the Official Statement, the representations, warranties and covenants set forth above with respect to the Preliminary Official Statement. 6. Town to Cause Developer to Act. The Town will cause the Developer to deliver, at the signing hereof, a Developer Letter of Representation in the form of App dix C hereto, and at the Closing, a certificate signed by the Developer as set forth in Section 9(e). The "Developer Documents" consist of the Financing Agreement, the Development Agreement, the Reimbursement Agreement, the Continuing Disclosure Agreement of Developer with respect to the Bonds, dated as of February 1, 2015 (the "Continuing Disclosure Agreement of Developer") and any other documents and certificates of the Developer contemplated by any of the foregoing. 7. The Closing. At 10:00 a.m., Central time, on the Closing Date, or at such other time or on such earlier or later business day as shall have been mutually agreed upon by the Town and the Underwriter, (i) the Town will deliver or cause to be delivered to The Depository Trust Company, New York, New York, ("DTC") through its "FAST" System, the Bonds in the form of one fully registered Bond for each maturity, registered in the name of Cede & Co., as nominee for DTC, duly executed by the Town and authenticated by the Trustee as provided in the Indenture, and (ii) the Town will deliver the closing documents hereinafter mentioned to McCall, Parkhurst & Horton L.L.P. ("Bond Counsel"), or a place to be mutually agreed upon by the Town and the Underwriter. Settlement will be through the facilities of DTC. The Underwriter will accept delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer in federal funds payable to the order of the Town or its designee. These payments and deliveries, together with the delivery of the aforementioned documents, are herein called the "Closing." The Bonds will be made available to the Underwriter for inspection not less than twenty-four (24) hours prior to the Closing. 9 HOW432279.3 8. Closing Conditions. The Underwriter has entered into this Agreement in reliance upon the representations and covenants herein and the performance by the Town and the Developer of their respective obligations under this Agreement and the Developer Letter of Representations, respectively, both as of the date hereof and as of the date of the Closing. The Underwriter's obligations under this Agreement are and shall be subject to the following additional conditions: (a) Bring -Down __ Representations of the Town and the Developer. The representations and covenants of the Town and the Developer contained herein and the Developer Letter of Representation, respectively, shall be true and correct in all material respects as of the date hereof and at the time of the Closing, as if made on the Closing Date. (b) Executed A eements and Performance Thereunder. At the time of the Closing (i) the Town Documents and the Developer Documents shall be in full force and effect, and shall not have been amended, modified or supplemented except with the written consent of the Underwriter, (ii) the Authorizing Documents shall be in full force and effect; (iii) there shall be in full force and effect such other resolutions or actions of the Town as, in the opinion of Bond Counsel and Counsel to the Underwriter, shall be necessary on or prior to the Closing Date in connection with the transactions on the part of the Town contemplated by this Agreement and the Town Documents, (iv) there shall be in full force and effect such other resolutions or actions of the Developer as, in the opinion of Miklos Law, PLLC ("Developer's Counsel") shall be necessary on or prior to the Closing Date in connection with the transactions on the part of the Developer contemplated by this Agreement and the Developer Documents and (v) the Town and the Developer shall perform or have performed their respective obligations required or specified in the Town Documents and the Developer Documents, respectively, to be performed at or prior to Closing, (c) No Default. At the time of the Closing, no default shall have occurred or be existing and no circumstances or occurrences that, with the passage of time or giving of notice, shall constitute an event of default under this Agreement, the Indenture, the Developer Documents, the Town Documents or other documents relating to the financing and construction of the Improvement Project A Improvements and the Development, and the Developer shall not be in default in the payment of principal or interest on any of its indebtedness which default shall materially adversely impact the ability of such Developer to pay the Assessments when due. (d) Closing Documents. At or prior to the Closing, the Underwriter shall have received each of the documents required under Section 9 below. (e) Termination Events. The Underwriter shall have the right to cancel its obligation to purchase the Bonds and to terminate this Agreement without liability therefor by written notification to the Town if, between the date of this Agreement and the Closing, the market price or marketability of the Bonds, or the ability of the Underwriter to enforce contracts for the sale of the Bonds, shall be materially adversely affected, in the sole judgment of the Underwriter, reasonably exercised, by the occurrence of any of the following events: 14 HOU:3432279.3 (i) legislation shall have been introduced in or enacted by the Congress of the United States or adopted by either House thereof, or legislation pending in the Congress of the United States shall have been amended, or legislation shall have been recommended to the Congress of the United States or otherwise endorsed for passage (by press release, other form of notice, or otherwise) by the President of the United States, the Treasury Department of the United States, or the Internal Revenue Service or legislation shall have been proposed for consideration by either the U.S. Senate Committee on Finance or the U.S. House of Representatives Committee on Ways and Means or legislation shall have been favorably reported for passage to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or a decision by a court of the United States or the Tax Court of the United States shall be rendered or a ruling, regulation, or official statement (final, temporary, or proposed) by or on behalf of the Treasury Department of the United States, the Internal Revenue Service, or other federal agency shall be made, which would result in federal taxation of revenues or other income of the general character expected to be derived by the Town or upon interest on securities of the general character of the Bonds or which would have the effect of changing, directly or indirectly, the federal income tax consequences of receipt of interest on securities of the general character of the Bonds in the hands of the holders thereof; or (ii) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indenture need to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or (iii) a general suspension of trading in securities on the New York Stock Exchange, the establishment of minimum prices on such exchange, the establishment of material restrictions (not in force as of the date hereof) upon trading securities generally by any governmental authority or any national securities exchange, or a general banking moratorium declared by federal, State of New York, or State officials authorized to do so; or (iv) there shall have occurred any outbreak of hostilities (including, without limitation, an act of terrorism) or other national or international calamity or crisis, including, but not limited to, an escalation of hostilities that existed prior to the date hereof; or 11 HOU:3432279.3 (v) there shall have occurred since the date of this Agreement any materially adverse change in the affairs or financial condition of the Town, except for changes which the Official Statement disclose are expected to occur; or (vi) any state blue sky or securities commission or other governmental agency or body in any state in which more than 10% of the Bonds have been offered and sold shall have withheld registration, exemption or clearance of the offering of the Bonds as described herein, or issued a stop order or similar ruling relating thereto; or (vii) any amendment to the federal or State Constitution or action by any federal or State court, legislative body, regulatory body, or other authority materially adversely affecting the tax status of the Town, its property, income, securities (or interest thereon), or the validity or enforceability of the Assessments levied to pay principal of and interest on the Bonds; or (viii) the New York Stock Exchange or other national securities exchange or any governmental authority shall impose, as to the Bonds or as to obligations of the general character of the Bonds, any restrictions not now in force, or increase those now in force, materially affecting the market for the Bonds including the imposition of any limitations on interest rate) with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; or (ix) any fact or event shall exist or have existed, or information shall become known which, in the reasonable judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (x) a material disruption in securities settlement, payment or clearance services shall have occurred and shall be continuing as of the day preceding the Closing Date; or (xi) the purchase of and payment for the Bonds by the Underwriter, or the resale of the Bonds by the Underwriter, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission; provided, however, that such prohibition occurs after the date of this Agreement and is not caused by the action, or failure to act, of the Underwriter. With respect to the conditions described in subparagraphs (i), (ii), (viii) and (xi) above, the Underwriter is not aware of any current, pending or proposed law or government inquiry or investigation as of the date of execution of this Agreement which would permit the Underwriter to invoke its termination rights hereunder. 12 HOU:3432279.3 9. Closiny, Documents. At or prior to the Closing, the Underwriter shall receive the following documents: (a) Bond Opinion. The approving opinion of Bond Counsel, dated the Closing Date and substantially in the form included as Appendix C to the Official Statement, together with a reliance letter from Bond Counsel, dated the date of the Closing and addressed to the Underwriter, which may be included in the supplemental opinion required by Section 9(b), to the effect that the foregoing opinion may be relied upon by the Underwriter to the same extent as if such opinion were addressed to it. (b) Supplemental Opinion. A supplemental opinion of Bond Counsel dated the Closing Date and addressed to the Town, the Developer and the Underwriter, in force and substance acceptable to counsel for the Underwriter, to the following effect: (i) Except to the extent noted therein, Bond Counsel has not verified and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements and information contained in the Official Statement but that Bond Counsel has reviewed the statements and information appearing under the captions and subcaptions "PLAN OF DEVELOPMENT AND FINANCE — Financing of Public Improvements" (with respect to the first two paragraphs only), "DESCRIPTION OF THE BONDS," "SECURITY FOR THE BONDS; THE INDENTURE," "ASSESSMENT PROCEDURES" (except for the subcaptions "Assessment Methodology" and "Assessment Amounts"), "THE DISTRICT," "TAX MATTERS," "LEGAL MATTERS — Legal Proceedings" (with respect to first paragraph only), "LEGAL MATTERS — Legal Opinions," "CONTINUING DISCLOSURE" (first paragraph only), "LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS," "REGISTRATION AND QUALIFICATION OF BONDS FOR SALE" and "APPENDIX A — FORM OF INDENTURE" and Bond Counsel is of the opinion that the information relating to the Bonds and legal issues contained under such captions and subcaptions is an accurate and fair description of the laws and legal issues addressed therein and, with respect to the Bonds, such information conforms to the Bond Ordinance and Indenture; (ii) The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended (the "Securities Act'), and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (iii) The Town has full power and authority to adopt the Assessment Ordinance, the Creation Ordinance and the Bond Ordinance and perform its obligations thereunder and the Assessment Ordinance, the Creation Ordinance and the Bond Ordinance have been duly adopted, are in full force and effect and have not been modified, amended or rescinded; and (iv) The Indenture, the Financing Agreement, the Landowner Agreement, the Continuing Disclosure Agreement of Issuer, the Redemption Agreement and this Agreement have been duly authorized, executed and delivered 13 HOU:3432279.3 by the Town and, assuming the due authorization, execution and delivery of such instruments, documents and agreements by the other parties thereto, constitute the legal, valid and binding obligations of the Town, enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors rights, or by the application of equitable principles if equitable remedies are sought and to the application of Texas law relating to governmental immunity applicable to governmental entities. (c) Town Attorney Opinion. An opinion of the Town Attorney, dated the Closing Date and addressed to the Underwriter, the Developer and the Trustee, with respect to matters relating to the Town, substantially in the form of Appendix D hereto or in form otherwise agreed upon by the Underwriter. (d) Developer's Counsel Opinion. An opinion of Developer's Counsel, substantially in the form of Appendix E hereto, dated the Closing Date and addressed to the Town, Bond Counsel, the Underwriter and the Trustee, or in form otherwise agreed upon by the Town and the Underwriter. (e) Developer Certificate. A certificate or certificates of the Developer, dated the Closing Date, to the effect that: (i) the representations and warranties of the Developer contained in the Developer Letter of Representation and in the Developer Documents are true and correct in all material respects on and as of the Closing Date as if made on the date thereof; (ii) the Developer Documents have been properly executed by the Developer, have not been amended or rescinded, and the delivery and due performance thereof by the Developer has been authorized by the Developer; (iii) to the best of its knowledge after due inquiry, there is no action, suit, proceeding or investigation before any court, public board or body pending, with respect to which the Developer has been served with process, or, to the knowledge of the Developer threatened against the Developer wherein an unfavorable decision, ruling or finding would. (a) affect the creation, organization, existence or powers of the Developer or its officers to their offices; or (b) in any way question or affect this Agreement, the Developer Letter of Representation or the transactions contemplated by this Agreement, the Developer Letter of Representation, or the Developer Documents; (iv) the Developer has complied in all material respects with all of its agreements and covenants and satisfied all conditions required to be complied with or satisfied by the Developer under the Developer Letter of Representation at or prior to the Closing; (v) the information set forth in the Official Statement under the captions "THE IMPROVEMENT PROYECT A IMPROVEMENTS," "THE 14 HOU3432279.3 DEVELOPMENT" and "THE DEVELOPER.," and, to the best of its knowledge atter due inquiry, under the captions "BONDHOLDERS' RISKS" (only as it pertains to the Developer and the Development) and "LEGAL MATTERS — Litigation – The Developer" is true and correct and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, as of the date thereof; and (vi) although it has not verified and does not assume any responsibility for the accuracy, completeness or fairness of the information contained in the Preliminary Official Statement or the Official Statement other than that described in clause (v), it has participated in the preparation of the Preliminary Official Statement and the Official Statement and without independent verification, no facts came to its attention to lead it to believe that the Preliminary Official Statement, as of its date or as of the date of this Agreement, or the Official Statement, as of its date or as of the date of Closing (except for financial, forecast, technical and statistical statements and data therein and the information regarding The Depository Trust Company and its book -entry only system., in each case as to which it is not called upon to comment) contained or contains any untrue statement of a material fact, or omitted or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (f) Town Certificate. A certificate of an appropriate official of the Town, dated the Closing Date, to the effect that, to the best of such person's knowledge after due inquiry: (i) the representations and warranties of the Town contained herein and in the other Town Documents are true and correct in all material respects on and as of the Closing Date as if made on the date thereof; (ii) the Authorizing Documents and Town Documents are in full force and effect and have not been amended, modified or supplemented; (iii) except as disclosed in the Official Statement, no litigation or proceeding against the Town is pending or, to the knowledge of such person, threatened in any court or administrative body nor, to such person's knowledge, is there a basis for litigation which would (a) contest the right of the members or officials of the Town to hold and exercise their respective positions, (b) contest the due organization and valid existence of the Town or the establishment of the District, (c) contest the validity, due authorization and execution of the Bonds or the Town Documents or (d) attempt to limit, enjoin or otherwise restrict or prevent the Town from levying and collecting the Assessments pledged to pay the principal of and interest on the Bonds, or the pledge thereof; and (iv) the Town has, to the best of such person's knowledge, complied in all material respects with all agreements and covenants and satisfied all conditions 15 HOU:3432279.3 set forth in the Town Documents, on its part to be complied with or satisfied hereunder at or prior to the Closing. (g) Trustee's Certificate. A certificate of the Trustee, dated the date of Closing, in form and substance acceptable to counsel for the Underwriter to the following effect: (i) The Trustee is duly organized and validly existing as a national banking association organized under the laws of the United States of America, having the full power and authority, including trust powers, to accept and perforin its duties under the Indenture; and (ii) No consent, approval, authorization or other action by any governmental authority having jurisdiction over the Trustee that has not been obtained is or will be required for the authentication of the Bonds or the consummation by the Trustee of the other transactions contemplated to be performed by the Trustee in connection with the authentication of the Bonds and the acceptance and performance of the obligations created by the Indenture. (h) Underwriter Counsel's Opinion. An opinion, dated the Closing Date and addressed to the Underwriter, of Andrews Kurth LLP, counsel to the Underwriter, in a form satisfactory to the Underwriter to the effect that: (i) based. on (A) such counsel's review of the Bond Ordinance, the Indenture, and the Official Statement; (B) its discussions with bond counsel and with the Underwriter; (C) its review of the documents, certificates, opinions and other instruments delivered at the closing of the sale of the Bonds on the date hereof; and (D) such other matters as it deems relevant, such counsel is of the opinion that the Bonds are exempt securities under the Securities Act, and the Trust Indenture Act, and it is not necessary, in connection with the offering and sale of the Bonds, to register any securities under the Securities Act and the Indenture is not required to be qualified under the Trust Indenture Act; (ii) based upon (A) such counsel's review of Rule 15c2-12 of the Securities Exchange Act (the "Rule") and interpretive guidance published by the United States Securities and Exchange Commission relating thereto; (B) its review of the continuing disclosure undertaking of the City contained in the Continuing Disclosure Agreement of Issuer; and (C) the inclusion in the Official Statement of a description of the specifics of such undertaking, and assuming that the Bond Ordinance, the Indenture, and the Continuing Disclosure Agreement of Issuer have been duly adopted by the City and are in full force and effect, such undertaking provides a suitable basis for the Underwriter, to make a reasonable determination that the City has met the qualifications of paragraph (b)(5)(i) of the Rule; and (iii) although such counsel has not verified and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the information contained in the Official Statement, it has participated in the preparation of the Official Statement and without independent verification, no facts lb 11013:3432279.3 came to its attention that caused it to believe that the Official Statement (except for the Appendices as well as any other financial, engineering and statistical data contained therein or included therein by reference or any litigation disclosed therein, as to which it expresses no view) as of its date contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) Official Statement. The Official Statement and each supplement or amendment, if any, thereto. 0) Deliy_M of Town Documents and Developer Documents. The Town Documents and Developer Documents shall have been executed and delivered in form and content satisfactory to the Underwriter. (k) Or anizational Documents. The Developer shall have delivered to the Underwriter and the Town fully executed copies of each of the Developer's Organizational Documents. (1) Form 8038. Evidence that the federal tax infornnation form 8038-G has been prepared by Bond Counsel for filing. (in) Federal Tax Certificate. A certificate of the Town in form and substance satisfactory to Bond Counsel and counsel to the Underwriter (a) setting forth the facts, estimates and circumstances in existence on the date of the Closing, which establish that it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and any applicable regulations (whether final, temporary or proposed), issued pursuant to the Code, and (b) certifying that to the best of the knowledge and belief of the Town there are no other facts, estimates or circumstances that would materially change the conclusions, representations and expectations contained in such certificate. (n) Atto_rney General Opinion and Comptroller Registration. The approving opinion of the Attorney General of the State regarding the Bonds and the Comptroller of the State's Certificate of Registration for the Initial Bond. (o) Continuing_ Disclosure Agzreemen_ ts. The Continuing Disclosure Agreement of Issuer and Continuing Disclosure Agreement of Developer shall have been executed by the parties in substantially the form attached to the Preliminary Official Statement as Appendix E. (p) Letter of R resentation of the A raiser. Letter of Representation of the Appraiser, substantially in the form of Appendix F hereto, dated the Closing mate and addressed to the Town, Bond Counsel, the Underwriter and the Trustee, or in form otherwise agreed upon by the Underwriter and the Town. 17 HQU:3432279.3 (q) Letter of Representation of Municap, Inc. Letter of Representation of Municap, Inc., substantially in the form of Appendix G hereto, dated the Closing Date and addressed to the Town, Bond Counsel, the Underwriter and the Trustee, or in form otherwise agreed upon by the Underwriter and the Town. (r) Letter of Representation of Co -Developer and -Development Consultant. Letter of Representation of Building Villages, LLC, substantially in the form of Appendix H hereto and Letter of Representation of Lenart Development Company, L.L.C. substantially in the form of Appendix I hereto, dated the Closing Date and addressed to the Town, Bond Counsel, the Underwriter and the Trustee, or in form otherwise agreed upon by the Underwriter and the Town. (s) Evidence of Filing of Creation Resolution and Assessment Ordinance. Evidence that the Creation Resolution and Assessment Ordinance have been filed of record in the real property records of Tarrant County, Texas. (t) Evidence of Filing of Landowner Ag ggrient and Redemption Agreement. Evidence that the Landowner Agreement and Redemption Agreement have been filed of record in the real property records of Tarrant County, Texas. (u) Lender Consent Certificate. Lender Consent Certificate of American Bank of Texas, a Texas banking corporation, and any other lienholder on land in the District, consenting to and acknowledging the creation of the District, the adoption of the Assessment Ordinance, the levy of the Assessments, and the subordination of their respective liens to the lien created by the Assessments. (v) Evidence of Ownership of Property. Evidence that on the date the Assessment Ordinance was adopted (i) all Assessed Parcels were owned by the Developer or a homebuilder and that the Developer and the homebuilders are not entities that may claim a homestead exemption under Texas law, or (ii) identification of all Improvement Area #1 Assessed Parcels, Improvement Area #2 Assessed Parcels and Improvement Area #3 Assessed Parcels that on the date that the Assessment Ordinance was adopted were subject to pre-existing homestead rights. (w) BLOR. A copy of the Town's Blanket Letter of Representation with DTC. (x) Additional Documents. Such additional legal opinions, certificates, instruments and other documents as the Underwriter or its counsel may reasonably deem necessary. If either the Town or the Developer shall be unable to satisfy the conditions contained in this Agreement, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Agreement, this Agreement shall terminate and neither the Underwriter nor the Town shall be under further obligation hereunder, except as further set forth in Sections 10 and 13 hereof. 18 HOU:3432279.3 10. Costs and Expenses. (a) The Underwriter shall be under no obligation to pay, and the Town shall cause to be paid from proceeds of the Bonds the following expenses incident to the issuance of the Bonds and performance of the Town's obligations hereunder: (i) the costs of the preparation and printing of the Bonds; (ii) the cost of preparation, printing and mailing of the Preliminary Official Statement, the final Official Statement and any supplements and amendments thereto; (iii) the fees and disbursements of the Town's financial advisor, the Trustee's counsel, Bond Counsel, Developer's counsel, counsel to the Underwriter and the Trustee relating to the issuance of the Bonds, (iv) the Attorney General's review fees; (v) the fees and disbursements of accountants, advisers and any other experts or consultants retained by the Town or the Developer, including but not limited to the fees and expenses of the Appraiser; and (vi) the expenses incurred by or on behalf of Town employees and representatives that are incidental to the issuance of the Bonds and the performance by the Town of its obligations under this Agreement. (b) The Underwriter shall pay the following expenses: (i) all advertising expenses in connection with the offering of the Bonds; and (ii) all other expenses, including CUSIP fees (including out-of-pocket expenses and related regulatory expenses), incurred by it in connection with its public offering and distribution of the Bonds, except as noted in Subsection 10(a) above. (c) The Issuer acknowledges that the Underwriter will pay from the underwriters' expense allocation of the underwriting discount the applicable per bond assessment charged by the Municipal Advisory Counsel of Texas, a non-profit corporation whose purpose is to collect, maintain and distribute information relating to issuing entities of municipal securities. 11. Notice. Any notice or other communication to be given to the Town under this Agreement may be given by delivering the same in writing to: Town of Westlake, Texas, 3 Village Circle, Suite 202, Westlake, Texas 76262, Attention: Town Manager. Any notice or other communication to be given to the Underwriter under this Agreement may be given by delivering the same in writing to: Jefferies LLC, 300 Crescent Court, Suite 500, Dallas, Texas 75201, Attention: Mark Curran, Managing Director. 12. Entire Agreement. This Agreement is made solely for the benefit of the Town and the Underwriter (including their respective successors and assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. All of the Town's and the Developer's representations, warranties and agreements contained in this Agreement and in the Developer Letter of Representation, respectively, shall remain operative and in full force and effect regardless of (i) any investigations made by or on behalf of the Underwriter, provided the Town and the Developer shall have no liability with respect to any matter of which the Underwriter has actual knowledge prior to the purchase of the Bonds; or (ii) delivery of any payment for the Bonds pursuant to this Agreement. The agreements contained in this Section and in Section 13 shall survive any termination of this Agreement. 19 HOU:3432279.3 13. Survival of Representations and Warranties. All representations and warranties of the parties made in, pursuant to or in connection with this Agreement shall survive the execution and delivery of this Agreement, notwithstanding any investigation by the parties. All statements contained in any certificate, instrument or other writing delivered by a party to this Agreement or in connection with the transactions contemplated by this Agreement constitute representations and warranties by such party under this Agreement to the extent such statement is set forth as a representation and warranty in the instrument in question. 14. Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 15. Severability. In ease any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof. 16. State Law Governs. The validity, interpretation and performance of this Agreement shall be governed by the laws of the State of Texas. 17. No Assigment. The rights and obligations created by this Agreement shall not be subject to assignment by the Underwriter or the Town without the prior written consent of the other parties hereto. 18. No Personal Liability. None of the members of the Town Council, nor any officer, agent, or employee of the Town, shall be charged personally by the Underwriter with any liability, or be held liable to the Underwriter under any term or provision of this Agreement, or any other document relating to the Bonds or the District, or because of execution or attempted execution, or because of any breach or attempted or alleged breach of this Agreement. [The remainder of this page is intentionally left blank.] 20 HOU 34322793 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first set forth above. JEFFERIES ILC, as Underwriter Curran anaging Director S-1 I JOU:3432279.3 Accepted as of the date first stated above: TOWN OF WESTLAKE, TEXAS By:�""�e��1 Mayor S-2 I IW3A322791 'DMi1►.. $26,175,000 TOWN OF WESTLAKE, TEXAS, (a municipal corporation of the State of Texas located in Denton and Tarrant Counties) SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) $3,825,000 5.50% Term Bonds, Due September 1, 2025, Priced to Yield 5.50% (a)(b)(f) $7,650,000 6.125% Term Bands, Due September 1, 2035, Priced to Yield 6. 125% $6,150,000 6.25% Term Bonds, Due September 1, 2040, Priced to Yield 6.25% fa3(1)(1) $8,550,000 6.375% Term Bonds, Due September 1, 2045, Priced to Yield 6.375% (a?(elft} (a) The Bands are subject to redemption, in whole or in part, prior to stated maturity, at the option of the Town, on any date on or after September 1, 2025, at the prices at the price of par plus accrued interest to the redemption date. (b) (c) (d) The Tette Bonds maturing September 1, 2025, are also subject to mandatory sinking fin redemption on the dates and in the respective principal amounts as set forth in the following schedule. $3,825,000 Term Bonds due September 1, 2025 Redemption Date September 1, 2017 September 1, 2018 September 1, 2019 September 1, 2020 September 1, 2021 September 1, 2022 September 1, 2023 September 1, 2024 September 1, 2025 Prinel�unt $ 325,000 350,000 375,000 400,000 425,000 450,000 475,000 500,000 525,000 The Tette Bonds maturing September 1, 2035, are also subject to mandatory sinking fund redemption on the dates and in the respective principal amounts as set forth in the following schedule. $7,650_,1100 Term Bonds due Setrtember_IS 2035 Redemption Date September 1, 2026 September 1, 2027 September 1, 2028 September 1, 2029 September 1, 2030 September 1, 2031 September 1, 2032 September 1, 2033 Septetnbcr 1, 2034 September 1, 2035 Prineinal Amount _ S 575,000 600,000 650,000 675,000 725,000 775,000 825,000 875,000 950,000 1,000,000 The Term Bonds maturing September 1, 2040, are also subject to mandatory sinking fund redemption on the dates and in the respective principal amounts as set forth in the following schedule. 56,150,000 Term Bonds due September 1, 2040 Rede September 1, 2036 September 1, 2037 September 1, 2038 September 1, 2039 September 1, 2040 A-1 HOTJ:3432279.3 Principal Amount $1,075,000 1,150,000 1,225,000 1,300,000 1,400,000 (e) M The Term Bonds maturing September 1, 2045, are also subject to mandatory sinking fund redemption on the dates and in the respective principal amounts as set forth in the following schedule. S8,550,0000 Term Bonds dues N ptember 1, 2045 Re em tion Date September 1, 2041 September 1, 2042 September 1, 2043 September 1, 2044 September 1, 2045 Principal Amount $1,475,000 1,600,000 1,700,000 1,825,000 1,950,000 The Bonds are also subject to extraordinary optional redemption as described in the Official Statement under "DESCRIP'T'ION OF THE BONDS -- Redemption Provisions" A-2 HOU:3432279.3 APPENDIX B FORM OF ISSUE PRICE CERTIFICATE The undersigned, as the duly authorized representative of Jefferies LLC (the "Underwriter"), with respect to the underwriting of Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds") issued by the Town of Westlake, Texas (the "Issuer"), hereby certifies and represents on behalf of the Underwriter, but not in his/her own right, based on the Underwriter's records and information available to it (including information provided to the Underwriter members of its selling group) that it believes, after reasonable inquiry, to be accurate and complete as of the date hereof, as follows: (a) All of the Bonds were the subject of a bona fide initial offering to members of the public at a price which, on the date of such offering, was reasonably expected by the Underwriter to be equal to the fair market value of such maturity. For purposes of this Issue Price Certificate, the term "public" does not include any bondhouses, brokers, dealers, and similar persons or organizations acting in the capacity of underwriters or wholesalers (including the Underwriter or members of the selling group or persons that are related to, or controlled by, or are acting on behalf of or as agents for the undersigned or members of the selling group). (b) Other than the obligations maturing in (the "Retained Maturity or Maturities"), the first price at which a substantial amount (i.e., at least 10 percent) of the principal amount of each maturity of the Bonds was sold to the public is set forth in the Official Statement. In the case of the Retained Maturities, the Underwriter reasonably expected on the offering date to sell a substantial amount (i.e., at least 10 percent) of each Retained Maturity at the initial offering price set forth in the Official Statement. The Official Statement is included in the transcript for the Bonds and is incorporated herein by reference. The Underwriter understands that the representations made in this Issue Price Certificate will be relied upon, by the Issuer with respect to certain of the representations set forth in this Federal Tax Certificate and by McCall, Parkhurst & Horton L.L.P. (i) in connection with rendering its opinion to the Issuer that interest on the Bonds is excludable from gross income thereof for income tax purposes, and (ii) for purposes of completing the IRS Form 8038-G. The undersigned is certifying only as to facts in existence on the date hereof. Nothing herein represents the undersigned's interpretation of any laws or the application of any laws to these facts. EXECUTED and DELIVERED this JEFFERIES LLC LIM Title: B-1 HOU:3432279.3 APPENDIX C FORM OF DEVELOPER LETTER OF REPRESENTATION $26,1.75,000 TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) DEVELOPER LETTER OF REPRESENTATION January 15, 2015 Jefferies LLC 300 Crescent Court, Suite 500 Dallas, Texas 75201 Honorable Mayor and Town Council Town of Westlake, Texas 3 Village Circle, Suite 202 Westlake, Texas 76262 Ladies and Gentlemen: This letter is being delivered to Jefferies LLC (the "Underwriter") and the Town of Westlake, Texas (the "Town"), in consideration for your entering into the Bond Purchase Agreement dated the date hereof (the `Bond Purchase Agreement") for the sale and purchase of the $26,175,000 "Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)" (the "Bonds"). Pursuant to the Bond Purchase Agreement, the Underwriter has agreed to purchase from the Town, and the Town has agreed to sell to the Underwriter the Bonds. In order to induce the Town to enter into the Bond Purchase Agreement and as consideration for the execution, delivery, and sale of the Bonds by the Town and the purchase of them by the Underwriter, the undersigned, Maguire Partners — Solana Land, L.P. (the "Developer"), makes the representations, warranties, and covenants contained in this Developer Letter of Representation. Unless the context clearly indicates otherwise, each capitalized term used in this Developer Letter of Representation will have the meaning set forth in the Bond Purchase Agreement. 1. Purchase and Sale of Bonds. Inasmuch as the purchase and sale of the Bonds represents a negotiated transaction, the Developer understands, and hereby confirms, that the Underwriter is not acting as a fiduciary of the Developer, but rather is acting solely in its capaTown as Underwriter of the Bonds for its own account. C-1 HOU:3432279.3 2. Updating of the Official Statement. If, after the date of this Developer Letter of Representation, up to and including the date the Underwriter is no longer required to provide an Official Statement to potential customers who request the same pursuant to the Rule (the earlier of (i) ninety (90) days from the "end of the underwriting period" (as defined in the Rule) and (ii) the time when the Official Statement is available to any person from the MSRB, but in no case less than twenty-five (25) days after the "end of the underwriting period" for the Bonds), the Developer becomes aware of any fact or event which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary to amend or supplement the Official Statement to comply with law, the Developer will notify the Underwriter (and for the purposes of this clause provide the Underwriter with such information as it may from time to time request); however, that for the purposes of this Developer Letter of Representation and any certificate delivered by the Developer in accordance the Bond Purchase Agreement, the Developer makes no representations with respect to (i) the descriptions in the Preliminary Official Statement or the Official Statement of The Depository Trust Company, New York, New York, or its book -entry -only system and (ii) the information in the Preliminary Official Statement and the Official Statement under the captions "THE TOWN," "THE DISTRICT," and "LEGAL MATTERS — Litigation – The Town." 3. Developer Representations, Warranties and Covenants. The Developer represents, warrants, and covenants to the Underwriter and the Town that: (a) Due Organization. Existence and Authority. The Developer is duly formed and validly existing as a limited partnership under the laws of the State of Texas, with frill rights, power and authority to execute, deliver, and perform its obligations under this Developer Letter of Representation, the Financing Agreement, the Development Agreement, the Continuing Disclosure Agreement of Developer, the Landowner Agreement, the Redemption Agreement, and any other documents and certificates of the Developer contemplated by any of the foregoing (collectively, the "Developer Documents"). (b) (Jrganizational_Documents. The copies of the organizational documents of the Developer delivered on the Closing Date (the "Developer Organizational Documents") are fully executed, true, correct, and complete copies of such documents and such documents have not been amended or supplemented and are in full force and effect as of the date hereof. (c) Due Authorization and Approval. By all necessary action, the Developer has duly authorized and approved its execution and delivery of the Developer Documents and the performance by the Developer of its obligations contained in the Developer Documents and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified, or rescinded. (d) No Breach or Default. The execution and delivery of the Developer Documents by the Developer and compliance by the Developer with the provisions thereof under the circumstances contemplated thereby do not and will not in any material respect conflict with or constitute on the part of the Developer a breach or default under (i) any order, writ, judgment, injunction, decree, determination, or award of any governmental C-2 HOU:3432279.3 authority against or with respect to the Developer or (ii) any agreement or instrument to which the Developer is a party or by which it is bound, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would, in any material respect, constitute a default or an event of default by the Developer under the Developer Documents. (e) No Litigation. Otherthan as described in the Preliminary Official Statement and the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Developer, threatened by or against the Developer: (i) in any way questioning the due formation and valid existence of the Developer; (ii) in any way challenging the titles of its officers executing the Developer Documents; (iii) in any way contesting or affecting the validity or enforceability or the execution and delivery by it of the Developer Documents or the consummation of the transactions contemplated thereby; (iv) in any way questioning or contesting the validity of any governmental approval of the District or any aspect thereof; (v) in any way questioning or contesting the construction and development of the Development; or (vi) which would have a material adverse effect upon the financial condition of the Developer or its ability to own or develop property within the District. (f) Information. The information prepared and submitted by the Developer to the Town or the Underwriter in connection with the preparation of the Preliminary Official Statement and the Official Statement was, and is, as of this date, true and correct in all material respects. (g) Preliminary Official Statement and Official Statement. The Developer represents and warrants that the information set forth in the Preliminary Official Statement and Official Statement under the captions "PLAN OF DEVELOPMENT AND FINANCE – Development Plan," "THE IMPROVEMENT PROJECT A IMPROVEMENTS," "THE DEVELOPMENT," and "THE DEVELOPER," and, to the best of its knowledge after due inquiry, under the captions and subcaptions `BONDHOLDERS' RISKS" (only as it pertains to the Developer, the Improvement Project A Improvements, and the Development), "LEGAL MATTERS — Litigation – The Developer," and "CONTINUING DISCLOSURE" (only as it pertains to the Developer) is true and correct and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were :made, not misleading. The Developer agrees to provide a certificate dated the Closing Date affirming, as of such date, the representations contained in this subsection (g) with respect to the Preliminary Official Statement and the Official Statement. (h) Consent to Bond Issuance. The Developer hereby consents to the issuance of the Bonds. (i) Consent to Terms of Indenture. The Developer hereby consents to all of the terms and conditions contained in the Indenture. 0) Agreement. The Developer covenants that, while the Bonds are outstanding, it will not bring any action, suit, proceeding, inquiry, or investigation at law or in equity, before any court, regulatory agency, public board, or body which in any way C-3 HOU:3432279.3 Date: seeks to challenge or overturn the District, the validity of the Developer Documents, the levy or collection of the Assessments, or the validity of the Bonds or the proceedings relating to their issuance. (k) Permits, Licenses, Etc. The Developer has obtained and there are currently in force and effect, or the Developer is not aware of any fact that will prevent it from receiving at or prior to the Closing Date or the date required therefor, all consents, permits, licenses, certificates, and other approvals (governmental or otherwise) required of it that: (i) are necessary to conduct its business as it is currently being conducted; (ii) (with the exception of the Authorizing Documents) would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance of its obligations under this Developer Letter of Representation, the Developer Documents, and any other material agreement or instrument to which it is a party and which is to be used or contemplated for use in the consummation of the transactions contemplated hereby or by the Official Statement relating to the financing and construction of the Improvement Project A Improvements; or (iii) are necessary for the acquisition, construction, and operation of the Improvement Project A Improvements. (1) Events of Default. No "Event of Default" or "event of default" by the Developer under any of the Developer Documents, any documents to which Developer is a party described in the Official Statement, or under any material documents relating to the financing and construction of the Improvement Project A Improvements to which the Developer is a party, or event that, with the passage of time or the giving of notice or both, would constitute such "Event of Default' or "event of default," by the Developer has occurred and is continuing. (m) Financing. Other than the Assessments and the Lender Lien, which Lender will acknowledge and consent to the subordination of the Lender Lien, no debt has been or will be issued nor will any additional liens be placed on the property within Improvement Area #1, Improvement Area #2 or Improvement Area #3 of the District in order to complete the construction of the Improvement Project A Improvements. (n) Taxes and Assessments. All ad valorem taxes and assessments are current on the property which the Developer owns within the District. 4. ClosingConditions. The Developer will provide the following as of the Closing (a) Bring -Down. The representations and covenants of the Developer contained under this Developer Letter of Representation shall be true and correct in all material respects as of the date hereof and at the time of the Closing, as if made on the Closing Date. C-4 HOU3432279.3 (b) Executed Agreements and Performance Thereunder. There shall be in full force and effect such other resolutions or actions of the Developer as, in the opinion of Miklos Law, PLLC ("Developer's Counsel") shall be necessary on or prior to the Closing Date in connection with the transactions on the part of the Developer contemplated by the Developer Documents and the Developer shall perform or have performed their respective obligations required or specified in the Developer Documents, to be performed at or prior to Closing. 5. Indemnification. (a) The Developer will indemnify and hold harmless the Town and the Underwriter and each of their officers, directors, employees and agents against any losses, claims, damages or liabilities to which any of them may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained or incorporated by reference in the Official Statement under the captions "THE IMPROVEMENT PROJECT A IMPROVEMENTS," "THE DEVELOPMENT" and "THE DEVELOPER," and, to the best of its knowledge after due inquiry, under the captions `BONDHOLDERS' RISKS" (only as it pertains to the Developer, the Improvement Project A Improvements, and the Development), "LEGAL MATTERS — Litigation – The Developer," and "CONTINUING DISCLOSURE" (only as it pertains to the Developer) or any amendment or supplement to the Official Statement amending or supplementing the information contained under the aforementioned captions (as qualified above), or arise out of or are based upon the omission or alleged untrue statement or omission to state therein a material fact necessary to make the statements under the aforementioned captions (as qualified above) not misleading under the circumstances under which they were made and will reimburse any indemnified party for any reasonable legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred. (b) The Underwriter will indemnify and hold harmless the Developer against any losses, claims, damages or liabilities to which the Developer may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Official Statement, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading under the circumstances under which they were made, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Official Statement or any such amendment or supplement in reliance upon and in conformity with information under the heading "UNDERWRITING" in the Official Statement, and will reimburse the Developer and the Town for any legal or other expenses reasonably incurred by the Developer and the Town in connection with investigating or defending any such actions or claims as such expenses are incurred. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, C-5 HOU:3432279.3 notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve the indemnifying party from any liability which it may have to the indemnified party otherwise than under such subsection, unless such indemnifying party was prejudiced by such delay or lack of notice. In case any such action shall be brought against an indemnified party, it shall promptly notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. The indemnifying party shall not be liable for any settlement of any such action effected without its consent, but if settled with the consent of the indemnifying party or if there is a final judgment for the plaintiff in any such action, the indemnifying party will indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. The indemnity agreement in this Section 10 shall survive delivery of the Bonds and shall survive any investigation made by or on behalf of the Town, the Developer or the Underwriter. 6. Notice. Any notice or other communication to be given to the Underwriter under this Developer Letter of Representation may be given by delivering the same in writing to: Jefferies LLC, 300 Crescent Court, Suite 500, Dallas, Texas 75201, Attention: Mark Curran, Managing Director. Any notice or other communication to be given to the Town under this Agreement may be given by delivering the same in writing to: Town of Westlake, Texas, 3 Village Circle, Suite 202, Westlake, Texas 76262, Attention: Town Manager. 7. Survival of Representations. Warranties and Covenants. All representations, warranties, and agreements in this Developer Letter of Representation will survive regardless of (a) any investigation or any statement in respect thereof made by or on behalf of the Underwriter, (b) delivery of any payment by the Underwriter for the Bonds hereunder, and (c) any termination of the Bond Purchase Agreement. 8. Binding on Successors and Assigns. This Developer Letter of Representation will be binding upon the Developer and its successors and assigns and inure solely to the benefit of the Underwriter and the Town, and no other person or firm or entity will acquire or have any right under or by virtue of this Developer Letter of Representation. C-6 HQU:3432279.3 MAGUIRE PARTNERS — SOLANA LAND, L.P., a Texas Limited Partnership By: MMM Ventures, LLC, a Texas limited liability company, its general partner By: 2M Ventures, LLC, a Delaware limited liability company, its manager Lo Name: Mehrdad Moayedi Title: Manager C-7 HOU:3432279.3 APPENDIX D [Letterhead of the Town of Attorney] [Closing Date] [Include Developer, Trustee, Underwriter, Developer's Counsel and Bond Counsel as addressees] $26,175,000 TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Ladies and Gentlemen: I am the Town Attorney for the Town of Westlake, Texas (the "Town"), and am rendering this opinion in connection with the issuance and sale of $26,175,000 Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds"), by the Town, a political subdivision of the State of Texas. The Bonds are authorized pursuant to Ordinance No. 743 and enacted by the Town Council of the Town (the "Town Council") on January 15, 2015 (the `Bond Ordinance") and shall be issued pursuant to the provisions of Subchapter A of the Public Improvement District Act, Chapter 372, Texas Local Government Cade, as amended (the "Act") and the Indenture of Trust dated as of February 1, 2015 (the "Indenture") by and between the Town and U.S. Bank, National Association, as trustee (the "Trustee"). Capitalized terms not defined herein shall have the same meanings as in the Indenture, unless otherwise stated herein. In connection with rendering this opinion, I have reviewed the: (a) The Bond Ordinance. (b) The Resolution No. 14-07 (the "Creation Resolution") enacted by the Torun Council on February 24, 2014. (c) The Ordinance No. 741 accepted and approved by Town Council on January 15, 2015, and the Service and Assessment plan attached as an exhibit thereto (the "Assessment Ordinance"). (d) The Indenture. (e) The Construction, Funding and Acquisition Agreement dated as of January 15, 2015, executed and delivered by the Town and the Developer (the "Financing Agreement"). D-1 HOU:3432279.3 (f) The Landowner Agreement, dated as of January 15, 2015, executed and delivered by the Town and the Developer (the "Landowner Agreement"). (g) The Continuing Disclosure Agreement of Issuer, dated as of February 1, 2015, executed and delivered by the Town and the Dissemination Agent (the "Disclosure Agreement"). (h) The Agreement Regarding Conveyance of Right of Redemption and Waiver of Agricultural Valuation, dated as of January 15, 2015, executed and delivered by the Town, the Developer and the Trustee (the "Redemption Agreement'). The Bond Ordinance, the Creation Resolution, the Assessment Ordinance, the Financing Agreement and the Landowner Agreement shall herein after be referred to as the "Authorizing Documents" and the remaining documents shall herein after be collectively referred to as the "Town Documents." In all such examinations, I have assumed that all signatures on documents and instruments executed by the Town are genuine and that all documents submitted to me as copies conform to the originals. In addition, for purposes of this opinion, I have assumed the due authorization, execution and delivery of the Town Documents by all parties other than the Town. Based upon and subject to the foregoing and the additional qualifications and assumptions set forth herein, I am of the opinion that: I . The Town is a Texas political subdivision and has all necessary power and authority to enter into and perform its obligations under the Town Documents. The Town has taken or obtained all actions, approvals, consents and authorizations required of it by applicable laws in connection with the execution of the Town Documents and the performance of its obligations thereunder. 2. There is no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, public board or body, pending or, to the best of my knowledge, threatened against the Town (a) affecting the organization and existence of the Town or the titles of its officers to their respective offices, (b) in any way questioning the formation or existence of the District, (c) affecting, contesting or seeking to prohibit, restrain or enjoin the delivery of any of the Bonds, or the payment, collection or application of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, including the special assessments in the Solana Public Improvement District pursuant to the provisions of the Assessment Ordinance and the Service and Assessment Plan referenced therein, (d) contesting or affecting the validity or enforceability or the Town's performance of the Town Documents, (e) contesting the exclusion of the interest on the Bonds from federal income taxation, or (f) which may result in any material adverse change relating to the financial condition of the Town; and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (a) through (f) of this sentence. 3. The Bond Ordinance, the Creation. Resolution and the Assessment Ordinance were duly enacted by the Town and remain in full force and effect on the date hereof. 4. The Financing Agreement, the Landowner Agreement, the Redemption Agreement, the Indenture and the Continuing Disclosure Agreement of Issuer have been duly D-2 xov:3432279_3 authorized, executed and delivered by the Town and remain legal, valid and binding obligations of the Town enforceable against the Town in accordance with their terms. However, the enforceability of the obligations of the Town under such Town Documents may be limited or otherwise affected by (a) bankruptcy, insolvency, reorganization, moratorium and other laws affecting the rights of creditors generally, (b) principles of equity, whether considered at law or in equity, and (c) the application of Texas law relating to governmental immunity applicable to governmental entities. 5. The performance by the Town of the obligations under the Town Documents will not violate any provision of any Federal or Texas constitutional or statutory provision. 6. No further consent, approval, authorization or order of any court or governmental agency or body or official is required to be obtained by the Town as a condition precedent to the performance by the Town of its obligations under the Town Documents. 7. The adoption of the Bond Ordinance, the Creation Resolution and the Assessment Ordinance and the execution and delivery of the Financing Agreement, the Landowner Agreement, the Redemption Agreement, the Indenture and the Continuing Disclosure Agreement of Issuer and the compliance with the provisions of the Authorizing Documents and the Town Documents under the circumstances contemplated thereby (a) do not and will not to my knowledge in any material respect conflict with or constitute on the part of the Town a breach of or default under any agreement to which the Town is a party or by which it is bound, and (b) do not and will not in any material respect conflict with or constitute on the part of the Town a violation, breach of or default under any existing law, regulation, court order or consent decree to which the Town is subject. This opinion may not be relied upon by any other person except those specifically addressed in this letter. Very truly yours, D-3 HOU:3432279.3 APPENDIX E [Letterhead of Counsel to the Developer] [Closing Date] [Include Town, Underwriter, Bond Counsel and Trustee as addressees] $26,175,000 TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Ladies and Gentlemen: We have acted as special counsel for Maguire Partners — Solana Land, L.P. (the "Developer'), in connection with the issuance and sale by the Town of Westlake, Texas (the "Town"), of $26,175,000 Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds"), pursuant to Indenture of Trust dated as of February 1, 2015 (the "Indenture"), by and between the Town and U.S Bank National Association, as trustee (the "Trustee")_ Proceeds from the sale of the Bonds will be used, in part, to fund certain public infrastructure improvements in the development known as "Westlake Entrada" (the "Project") located in the Town. The Bonds are being sold to Jefferies LLC (the "Underwriter"), pursuant to that certain Bond Purchase Agreement dated January 15, 2015 (the "Bond Purchase Agreement"), by and among the Town and the Underwriter. This opinion is being delivered pursuant to Section 9(d) of the Bond Purchase Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Bond Purchase Agreement. Assumptions and Bases for Opinions and Assurances In our capacity as special counsel to the Developer, and for purposes of rendering the opinions set forth herein, we have examined originals or copies, certified or otherwise identified to our satisfaction, of: (a) The following documents being executed, entered into and/or issued, as the case may be, in connection with the issuance of the Bonds (collectively, the "Documents"): E-1 HOLP:3432279.3 (1) The Indenture; (2) The Bond Purchase Agreement; (3) The Financing Agreement; (4) The Landowner Agreement; (5) The Redemption Agreement; and (6) The Continuing Disclosure Agreement of Developer. (b) Certificates of the Developer dated as of the closing date certifying as to (i) the Developer's organization documents as such are in effect as of the date hereof (the "Developer Basic Documents"); (ii) the resolution of the Developer adopted as of , 20�, authorizing its execution of the applicable Documents to which it is a party and related matters; and (iii) certain other matters (collectively, the "Developer Certificates"); (c) Evidence that the Developer is authorized to do business in the State of Texas and is in good standing; (d) The Preliminary Official Statement, dated December 22, 2014, relating to the issuance of the Bonds (the "Preliminary Official Statement"); (e) The final Official Statement relating to the issuance of the Bonds, dated January 15, 2015 (the "Official Statement"); and (f) Such other documents, records, agreements and certificates of the Developer and such other parties as we have deemed necessary or appropriate to enable us to render the opinions expressed below. In basing the opinions and other matters set forth herein on "our knowledge," the words "our knowledge" signify that, in the course of our representation of the Developer the principal attorneys in this firm involved in the current actual transaction do not have actual knowledge or actual notice that any such opinions or other matters are not accurate or that any of the documents, certificates, reports and information on which we have relied are not accurate and complete. Except as otherwise stated herein, we have undertaken no independent investigation or certification of such matters. The words `bur knowledge" and similar language used herein are intended to be limited to the knowledge of the attorneys within our firm who have worked on the matters contemplated by our representation as special counsel. In rendering the opinions set forth herein, we have assumed, without independent investigation, that (i) all persons other than the Developer have duly and validly executed and delivered each instrument, document, and agreement constituting a Document or executed in connection therewith to which such party is a signatory, and each such party's obligations set forth therein are its legal, valid, and binding obligations, enforceable in accordance with the terms thereof; (ii) each person executing any such instrument, document, or agreement other than the Developer is duly authorized and has the legal power to do so; (iii) each natural person executing E-2 HOU:3432279.3 any such instrument, document, or agreement is legally competent to do so; (iv) there are no oral or written modifications of, or amendments to, the Documents, and there has been no waiver of any of the provisions thereof, by actions or conduct of the parties or otherwise; (v) all representations of fact set forth in the Documents are complete and accurate, insofar as such facts pertain to the subject matter of the opinions rendered hereby; and (vi) all documents submitted to us as originals are complete and authentic, all documents submitted to us as certified, conformed or photostatic copies conform to the original documents, all signatures on all documents submitted to us for examination are genuine, and all public records and certificates of public officials are accurate and complete. In addition, we have assumed that the Documents accurately reflect the complete understanding of the parties with respect to the transactions contemplated thereby and the rights and obligations of the parties thereunder. We have also assumed that the terms and conditions of the transaction as reflected in the Documents have not been amended, modified or supplemented, directly or indirectly, by any other agreement or understanding of the parties or waiver of any of the material provisions of the Documents. We assume that none of the parties to the Documents (other than Developer) is a party to any court or regulatory proceeding relating to or otherwise affecting the Documents or is subject to any order, writ, injunction or decree of any court or federal, state or local governmental agency or commission that would prohibit the execution and delivery of the Documents, or the consummation of the transactions therein contemplated in the manner therein provided, or impair the validity or enforceability thereof. We assume that each of the parties to the Documents (other than Developer) has full authority to close this transaction in accordance with the terms and provisions of the Documents. We assume that neither the Underwriter nor the Town nor their respective counsel has any current actual knowledge of any facts not known to us or any law or judicial decision which would make the opinions set forth herein incorrect, and that no party upon whom we have relied for purposes of this opinion letter has perpetrated a fraud. We have only been engaged by our clients in connection with the Documents (and the transactions contemplated in the Documents) and do not represent these clients generally. Opinions and Assurances Based solely upon the foregoing, and subject to the assumptions and limitations set forth herein, we are of the opinion that: 1. The general partner of the Developer is in good standing and the Developer is qualified to do business in and in good standing under the laws of the State of Texas. 2. The Developer has the full legal right, power and authority to execute, deliver and perform its obligations under each of the Documents to which it is a party and has taken all necessary actions to authorize the execution, distribution and delivery by it of such Documents and the performance by it of such obligations. E-3 HOU:3432274.3 3. The execution, delivery and performance by the Developer of the Documents to which it is a party, and compliance and performance by the Developer with the terms and provisions thereof and obligations thereunder, will not: (i) to our knowledge, violate or conflict with any provision of any existing law, statute, rule or regulation applicable to the Developer by reason of the general conduct of its business and operation of its assets: (ii) based solely upon the Developer Certificates and our knowledge, conflict with or result in the breach of any court decree or order of any governmental body binding upon or affecting the Developer, the conflict with which or breach of which would have a material, adverse effect on the ability of the Developer to perform its obligations under the Documents to which it is a party; or (iii) contravene or conflict with the Developer Basic Documents. 4. To our knowledge, no consent, approval, authorization or other action by, or filing with, any governmental authority is required for the execution and delivery by the Developer of the Documents to which the Developer is a party or the performance of its obligations thereunder, other than as are required with respect to the financing transaction evidenced thereby, or if required, and not otherwise obtained, with respect to which the requisite consent, approval or authorization has been obtained, the requisite filing has been accomplished or the requisite action has been taken at or prior to the date required therefor. 5. The Developer has duly executed and delivered each of the Documents to which it is a party, and each of such Documents constitutes the legal, valid and binding obligation of the Developer, enforceable against the Developer in accordance with its terms. 6. To our knowledge after reasonable inquiry, there are no actions, suits or proceedings pending against the Developer in any court of law or equity, or before or by any governmental instrumentality with respect to (i) its organization or existence or qualification to do business in the State of Texas; (ii) its authority to execute or deliver the Documents to which it is a party; (iii) the validity or enforceability against it of such Documents or the transactions contemplated thereby; (iv) the titles of its officers executing the Documents; (v) the execution and delivery of the Documents on behalf of the Developer; or (vi) the operations or financial condition of the Developer that would materially adversely affect those operations or the financial condition of the Developer. 7. To our knowledge, no taxes or other charges, including, without limitation, intangible or documentary stamp taxes, mortgage or recording taxes, transfer taxes or similar charges, are payable to the State of Texas by the Developer on account of its execution or delivery of any of the Documents or the creation of the indebtedness evidenced or secured by any of the Documents or the recording or filing of any of the Documents, except for normal filing or recording fees. & In addition, we advise you that no facts have come to our attention that would lead us to believe that the information set forth in the Official Statement under the captions "THE IMPROVEMENT PROJECT A IMPROVEMENTS," "THE DEVELOPMENT," "THE E-4 HOU:3432279.3 DEVELOPER" and "BONDHOLDERS' RISK FACTORS" (only as it pertains to the Developer and the Project) does not fairly and accurately present the information purported to be shown therein, and (except for Appendices A, D and F, as well as any other financial, engineering and statistical data contained therein or elsewhere in the Official Statement or included therein by reference, as to which we express no view) as of the date hereof, nothing has come to the attention of those individuals working on this matter on behalf of this firm which would lead us to believe that such information contains an untrue statement of a material fact or that such information omits to state a material fact required to be stated therein in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. 9. To our knowledge, the execution and delivery of the Developer Basic Documents and the Documents do not, and the transactions contemplated thereby may be consummated and the terms and conditions thereof may be observed and performed in a manner that does not, conflict with or constitute a breach of or default under any loan agreement, indenture, bond note, resolution, agreement or other instrument to which the Developer is a party or is otherwise subject which violation, breach or default would materially adversely affect the Developer or the transactions contemplated by the Documents; nor will any such execution, delivery, adoption, fulfillment, or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Developer, except as expressly contemplated by the Documents (a) under the terms of any such law, administrative regulation, judgment or decree or (b) under any such loan agreement, indenture, bond note, resolution, agreement, or other instrument. ualiflcations In addition to any assumptions, qualifications and other matters set forth elsewhere herein, the opinions set forth above are subject to the following assumptions and qualifications: (a) We have not examined any court dockets, agency files or other public records regarding the entry of any judgments, writs, decrees or orders or the pendency of any actions, proceedings, investigations or litigation. (b) We have relied upon the Developer Certificates, as well as the representations of the Developer contained in the Documents, with respect to certain facts material to our opinion. Except as otherwise specifically indicated herein, we have made no independent investigation regarding any of the foregoing documents or the representations contained therein. (c) Our opinion delivered pursuant to Section 5 above is subject to the effect of any applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other laws affecting creditors' rights generally and to the effect of general principles of equity, including (without limitation) remedies of specific performance and injunctive relief and concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether considered in a proceeding in equity or at law). (d) Except for the Documents, we have not reviewed, and express no opinion as to, any other contracts or agreements to which the Developer is a party or by which the Developer is or may be bound. E-5 HOU:3432279.3 (e) The opinions expressed herein are based upon and limited to the applicable laws of the State of Texas and the laws of the United States of America, excluding the principles of conflicts of laws thereof, as in effect as of the date hereof, and our knowledge of the facts relevant to such opinions on such date. In this regard, we note that we are members of the Bar of the State of Texas, we do not express any opinion herein as to matters governed by the laws of any other jurisdiction, except the United States of America, we do no purport to be experts in any other laws and we can accept no responsibility for the applicability or effect of any such laws. In addition, we assume no obligation to supplement the opinions expressed herein if any applicable laws change after the date hereof, or if we become aware of any facts or circumstances that affect the opinions expressed herein. (f) This letter is strictly limited to the matters expressly set forth herein and no statements or opinions should be inferred beyond such matters. (g) Notwithstanding anything contained herein to the contrary, we express no opinion whatsoever concerning the status of title to any real or personal property. (h) We express no opinion as to the laws of any jurisdiction other than the laws of the State of Texas and the laws of the United States of America. The opinions expressed above concern only the effect of the laws (excluding the principles of conflict of laws, except as specifically provided herein) of the State of Texas and the United States of America as currently in effect. We assume no obligation to supplement this opinion if any applicable laws change after the date of this opinion, or if we become aware of any facts that might change the opinions expressed above after the date of this opinion. (i) The opinions expressed herein regarding the enforceability of the Documents is subject to the qualification that certain of the remedial, waiver or other provisions thereof may not be enforceable; but such unenforceability will not, in our judgment, render the Documents invalid as a whole or substantially interfere with the practical realization of the principal legal benefits provided in the Documents, except to the extent of any economic consequences of any procedural delays which may result therefrom. (l) The opinion expressed herein as to the enforceability of the Documents is specifically subject to the qualification that enforceability of the Documents is limited by the following: (i) the rights of the United States under the Federal Tax Lien Act of 1966, as amended; (ii) principles of equity, public policy and unconscionability which may Iimit the availability of certain remedies; (iii) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, liquidation, probate, conservatorship and other laws applicable to creditors' rights or the collection of debtors' obligations generally; and (iv) requirements of due process under the United States Constitution, the Constitution of the State of Texas and other laws or court decisions limiting the rights of creditors to repossess, foreclose or otherwise realize upon the property of a debtor without appropriate notice or hearing or both. (k) We express no opinion as to whether a court would grant specific performance or any other equitable remedy with respect to the enforcement of the Documents. E-6 SOU:3432279.3 (1) We express no opinion as to the validity, binding effect, or enforceability of (i) provisions which purport to waive rights or notices, including rights to trial by jury, counterclaims or defenses, jurisdiction or venue; (ii) provisions relating to consent judgments, waivers of defenses or the benefits of statutes of limitations, marshaling of assets, the transferability of any assets which by their nature are nontransferable, sales in inverse order of alienation, or severance; (iii) provisions purporting to waive the benefits of present or of future laws relating to exemptions, appraisement, valuation, stay of execution, redemption, extension of time for payment, setoff and similar debtor protection laws; or (iv) provisions requiring a party to pay fees and expenses regardless of the circumstances giving rise to such fees or expenses or the reasonableness thereof. (m) The opinions expressed herein are subject to the effect of generally applicable rules of law that provide that forum selection clauses in contracts are not necessarily binding on the court(s) in the forum selected. (n) We express no opinion as to the enforceability of any provisions in the Documents purporting to entitle a party to indemnification in respect of any matters arising in whole or in part by reason of any negligent, illegal or wrongful act or omission of such party. This opinion is furnished to you solely in connection with the transactions, for the purposes and on the terms described above and may not be relied upon by you for any other purpose or by any other person in any manner or for any purpose. Very truly yours, E-7 14OU:34322793 APPENDIX F [Letterhead of Appraiser] [Date] [Include Town, Underwriter, Bond Counsel and Trustee as addressees] Re: Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds") Ladies and Gentlemen: The undersigned, , of Jackson Claborn, Inc., appraiser of the property contained in the Solana Public Improvement District (the "District'), does hereby represent the following: 1. On behalf of Jackson Claborn, Inc., I have supplied certain information contained in the Preliminary Official Statement for the Bonds, dated December 22, 2014, and the Official Statement for the Bonds, dated January 15, 2015 (together, the "Official Statement"), relating to the issuance of the Bonds by the Town of Westlake, Texas, as described above. The information I have provided is the real estate appraisal of the property in the District, located in Appendix F to the Official Statement. 2. To the best of my professional knowledge and belief, as of the date of my report, the portion of the Official Statement described above does not contain an untrue statement of a material fact as to the information and data set forth therein, and does not omit to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. 3. I agree to the use of the name of my firm in the Official Statement for the Bonds. 4. I agree that, to the best of my ability, I will inform you immediately should I learn of any event(s) or information of which you are not aware subsequent to the date of this letter and prior to the actual time of delivery of the Bonds (anticipated to occur on or about February 5, 2015) which would render any such information in the Official Statement untrue, incomplete, or incorrect, in any material fact or render any statement in the appraisal materially misleading. 5. The undersigned hereby represents that he has been duly authorized to execute this letter of representation. Sincerely yours, JACKSON CLABORN, INC. F-1 HOU:3432279.3 F-2 HOU:3432279.3 By: Its: EXHIBIT G [Letterhead of Municap, Inc.] [Date] [Include Town, Underwriter, Bond Counsel and Trustee as addressees] Re: Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds") Ladies and Gentlemen: The undersigned, , of Municap, Inc., consultant in connection with the creation by the Town. of Westlake, Texas (the "Town"), of the Solana Public Improvement District (the "District'), does hereby represent the following: 1. On behalf of Municap, Inc., I have supplied certain information contained in the Preliminary Official Statement, dated December 22, 2014, and the Official Statement, dated January 15, 2015, bath in connection with the Bonds (the "Official Statement"), relating to the issuance of the Bonds by the Town, as described above. The information I have provided is the Service and Assessment Plan (the "SAP") for the District located in Appendix B to the Official Statement. 2. To the best of my professional knowledge and belief, as of the date of the SAP, the portion of the Official Statement described above does not contain an untrue statement of a material fact as to the information and data set forth therein, and does not omit to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. 3. I agree to the inclusion of the SAP and the use of the name of my firm in the Official Statement for the Bonds. 4. I agree that, to the best of my ability, I will inform you immediately should I learn of any event(s) or information of which you are not aware subsequent to the date of this letter and prior to the actual time of delivery of the Bonds (anticipated to occur on or about February 5, 2015) which would render any such information in the Official Statement untrue, incomplete, or incorrect, in any material fact or render any statement in the SAP materially misleading. 5. The undersigned hereby represents that he has been duly authorized to execute this letter of representation. Sincerely yours, MUNICAP, INC. By: Its: G-1 HOU:3432279.3 EXHIBIT H [Letterhead of Building Villages, LLC] [Date] [Include Town, Underwriter, Bond Counsel and Trustee as addressees] Re: Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds") Ladies and Gentlemen: The undersigned, 'of Building Villages, LLC, Co -Developer in connection with the creation by the Town of Westlake, Texas (the "Town"), of the Solana Public Improvement District (the "District"), does hereby represent the following: 1. On behalf of Building Villages, LLC, I have supplied certain information contained in the Preliminary Official Statement, dated December 22, 2014, and the Official Statement, dated January 15, 2015, both in connection with the Bonds (the "Official Statement"), relating to the issuance of the Bonds by the Town., as described above. The information I have provided is located under the caption "THE DEVELOPER — Co -Developer: Building Villages, LLC" in the Official Statement. 2. To the best of my professional knowledge and belief after due inquiry, as of its date, the portion of the Official Statement described above is true and correct and does not contain an untrue statement of a material fact as to the information and data set forth therein, and does not ornit to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. 3. I agree to the inclusion of the information under the caption "THE DEVELOPER — Co -Developer: Building Villages, LLC" and the use of the name of my firm in the Official Statement for the Bonds. 4. I agree that, to the best of my ability, I will inform you immediately should I learn of any event(s) or information of which you are not aware subsequent to the date of this letter and prior to the actual time of delivery of the Bonds (anticipated to occur on or about February 5, 2015) which would render any such information in the Official Statement untrue, incomplete, or incorrect, in any material fact or render any such information materially misleading. 5. The undersigned hereby represents that he has been duly authorized to execute this letter of representation. Sincerely yours, BUILDING VILLAGES, LLC By: Its: H-1 HOU3432279.3 EXHIBIT I [LETTERHEAD OF LENART DEVELOPMENT COMPANY, L.L.C.} [DATE] [Include City, Underwriter, Bond Counsel and Trustee as addressees] Re: Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the `Bonds") Ladies and Gentlemen: The undersigned, of Lenart Development Company, L.L.C., a development consultant in connection with the creation by the Town of Westlake, Texas (the "City"), of the Solana Public Improvement District (the "District"), does hereby represent the following: 1. On behalf of Lenart Development Company, L.L.C., I have supplied certain information contained in the Preliminary Official Statement, dated December 22, 2014, and the Official Statement, dated January 15, 2015, both in connection with the Bonds (the "Official Statement"), relating to the issuance of the Bonds by the City, as described above. The information I have provided is located under the caption "THE DEVELOPMENT CONSULTANT" in the Official Statement. 2. To the best of my professional knowledge and belief after due inquiry, as of its date, the portion of the Official Statement described above is true and correct and does not contain an untrue statement of a material fact as to the information and data set forth therein, and does not omit to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. 3. I agree to the inclusion of the information under the caption "THE DEVELOPMENT CONSULTANT" in the Official Statement for the Bonds. 4. I agree to the use of the name of my firm in the Official Statement for the Bonds. 5. I agree that, to the best of my ability, I will inform you immediately should I learn of any event(s) or information of which you are not aware subsequent to the date of this letter and prior to the actual time of delivery of the Bonds (anticipated to occur on or about February 5, 2015) which would render any such information in the Official Statement untrue, incomplete, or incorrect, in any material fact or render any such information materially misleading. 6. The undersigned hereby represents that he has been duly authorized to execute this letter of representation. I- l HOU:3432279.3 Sincerely yours, LENA.RT DEVELOPMENT COMPANY, L.L_C. a Texas limited liability company By: Its: I-2 HO'U:3432279.3 TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) CONTINUING DISCLOSURE AGREEMENT OF THE ISSUER This Continuing Disclosure Agreement dated as of February 1, 2015 (this "Disclosure Agreement") is executed and delivered by and between the Town of Westlake, Texas (the "Issuer") and U.S. Bank National .Association (the "Dissemination Agent") with respect to the Issuer's "Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)" (the "Bonds"). The Issuer and the Dissemination Agent covenant and agree as follows: SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Issuer and the Dissemination Agent for the benefit of the Owners (as hereinafter defined) and beneficial owners of the Bonds. Unless and until a different filing location is designated by the MSRB or the SEC, all filings made by the Dissemination Agent pursuant to this Agreement shall be filed with the MSRB through EMMA (defined below). SECTION 2. Definitions. In addition to the definitions set forth above and in the Indenture of Trust dated as of February 1, 2015, relating to the Bonds (the "Indenture"), which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Administrator" shall mean the employee or designee of the Town, identified in any indenture of trust or relating to the Bonds, the District's Service and Assessment Plan, or any other agreement or document approved by the Issuer related to the duties and responsibilities of the administration of the District. "Annual Financial Information" shall mean annual financial information as such term is used in paragraph (b)(5)(i) of the Rule and specified in Sections 4(b) through (g) of this Disclosure Agreement. "Annual Issuer Report" shall mean any Annual Bond Disclosure Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Developer" shall mean Maguire Partners — Solana Land, L.P., a Texas limited partnership, and its successors and assigns. "Disclosure Agreement of Developer" shall mean the Continuing Disclosure Agreement of the Developer dated as of February 1, 2015 executed and delivered by the Developer and the Dissemination Agent. "Disclosure Representative" shall mean the Town Manager of the Issuer or his or her designee, or such other officer or employee as the Issuer, may designate in writing to the Dissemination Agent from time to time. 110L] 3443844.2 "Dissemination Agent" shall mean the Trustee, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Trustee a written acceptance of such designation. "District" shall mean the Solana Public Improvement District. "EMMA" shall mean the Electronic Municipal Market Access System available on the internet at http://emma.msrb.org. "Fiscal Year" shall mean the calendar year from October I through September 30. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. "MSRB" shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the SEC to receive reports pursuant to the Rule. "Owner" shall mean the registered owner of any Bonds. "Participating Underwriter" shall mean Jefferies LLC and its successors and assigns. "Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "SEC" shall mean the United States Securities and Exchange Commission. "Tax-exempt" shall mean that interest on the Bonds is excluded from gross income for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating any other tax liability, including any alternative minimum tax liability. "Trustee" shall mean U.S. Bank National Association, or any successor trustee pursuant to the Indenture. SECTION 3. Provision of Annual Bond Disclosure Re orts. (a) The Issuer shall cause and hereby directs the Dissemination Agent to, not later than six months after the end of the Issuer's Fiscal Year, commencing with the Fiscal Year ending September 30, 2014, provide or cause to be provided to the MSRB, in the electronic or other form required by the MSRB, an Annual Issuer Report provided to the Dissemination Agent which is consistent with the requirements of Section 4 of this Disclosure Agreement. In each case, the Annual Issuer Report may be submitted as a single document or as separate documents comprising a package and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the Issuer, if prepared and when available, may be submitted separately from the balance of the Annual Issuer Report, and later than the date required in this paragraph for the filing of the Annual Issuer Report if audited financial statements are not available by that date; provided further, however, that the Annual Financial Information must be submitted not later than six months 2 E3oti:3443844.2 after the end of the Issuer's Fiscal Year. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(d). All documents provided to the MSRB shall be accompanied by identifying information as prescribed by the MSRB. (b) TheIssuer shall or shall cause the Dissemination Agent to: (i) determine the filing address or other filing location of the MSRB each year prior to filing the Annual Issuer Report on the date required in subsection (a); (ii) file the Annual Issuer Report (excluding the audited financial statements of the Issuer, if any, which shall be tiled by the Issuer or the Dissemination Agent upon receipt from the Issuer) containing or incorporating by reference the information set forth in Section 4 hereof; and (iii) if the Issuer has provided the Dissemination Agent with the completed Annual Issuer Report and the Dissemination Agent has filed such Annual .Issuer Report with the MSRB, then the Dissemination Agent shall file a report with the Issuer certifying that the Annual Issuer Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided and that it was filed with the MSRB SECTION 4. Content of Annual Issuer Reports, The Annual Issuer Report for the Bonds shall contain or incorporate by reference, and the Issuer agrees to provide or cause to be provided to the Dissemination Agent, the following: (a) If prepared and when available, the audited financial statements of the Issuer for the most recently ended Fiscal Year, prepared in accordance with generally accepted accounting principles applicable from time to time to the Issuer. If audited financial statements of the Issuer are not available by the date required by Section 3(a), the Issuer shall provide the Annual Financial Information not later than such date. (b) Tables setting forth the following information, as of the end of such Fiscal Year: (i) For the Bonds, the maturity date or dates, the interest rate or rates, the original aggregate principal amount and principal amount remaining Outstanding. (ii) The amounts in the funds and accounts securing the Bonds. (c) Updates to the information in the Service and Assessment Plan ("SAP") as most recently amended or supplemented, including (i) any changes to the methodology for levying the Assessments in Improvement Area # 1, Improvement Area 42, and Improvement Area #3, and (ii), if available at the time the SAP was so amended or supplemented, (A) the most recent certified assessed valuation for each parcel within the District, (B) the status of development (undeveloped, under construction or developed) of each parcel within the District, and (C) the payment status (current or delinquent) of the Annual Installments for each Assessed Property. (d) The total amount of Annual Installments, delinquent Annual Installments, Foreclosure Proceeds and prepaid Assessments collected during the immediate preceding billing period (generally, October I of the preceding calendar year through January 31 of the current calendar year). HOU 3443$44.2 (e) The total amount of Annual Installments assessed and collected during such Fiscal Year, together with the amount of delinquent Assessments collected and Assessments prepaid during such Fiscal Year. (f) The principal and interest paid on the Bonds during the most recent Fiscal Year and the minimum scheduled principal and interest required to be paid on the Bonds in the next Fiscal Year. (g) A description of any amendment to this Disclosure Agreement and a copy of any restatements to the Issuer's audited financial statements. See Exhibit B hereto for a form for submitting the information set forth in the preceding paragraph. The Town has designated .MuniCap, Inc. as the initial Administrator. The Administrator, and if no Administrator is designated, Town staff, shall prepare the Annual Financial Information. Any or all of the items listed above may be included by specific reference to other documents, including disclosure documents of debt issues of the Issuer, which have been submitted to and are publicly accessible from the MSRB. If the document included by reference is a final offering document, it must be available from the MSRB. The Issuer shall clearly identify each such other document so included by reference. SECTION 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, each of the following is a Listed Event with respect to the Bonds: Principal and interest payment delinquencies. 2. Non-payment related defaults, if material. 3. Unscheduled draws on debt service reserves reflecting financial difficulties. 4. Unscheduled draws on credit enhancements reflecting financial difficulties. 5. Substitution of credit or liquidity providers, or their failure to perform. 6. Adverse tax opinions, the issuance by the IRS of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds. 7. Modifications to rights of Owners, if material. 8. Bond calls, if material. 9. Defeasances, 10. Release, substitution, or sale of property securing repayment of the Bonds, if material. 0 110U3443844 2 11. Rating changes. 12. Bankruptcy, insolvency, receivership or similar event of the Issuer. 13. The consummation of a merger, consolidation, or acquisition of the Issuer, or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. 14. Appointment of a successor or additional trustee under the Indenture or the change of name of a trustee, if material. For these purposes, any event described in the immediately preceding paragraph (12) is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Issuer in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer. Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, the Issuer shall promptly notify the Dissemination Agent in writing and the Issuer shall direct the Dissemination Agent to file a notice of such occurrence with the MSRB. The Dissemination Agent shall file such notice no later than the Business Day immediately following the day on which it receives written notice of such occurrence from the Issuer. Any such notice is required to be filed within ten (10) Business Days of the occurrence of such Listed Event. Additionally, the Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer to provide annual audited financial statements or unaudited financial information as required under this Disclosure Agreement. See Exhibit A hereto for a form for submitting "Notice To MSRB of Failure To File." Any notice under the preceding paragraphs shall be accompanied with the text of the disclosure that the Issuer desires to make, the written authorization of the Issuer for the .Dissemination Agent to disseminate such information as provided herein, and the date the Issuer desires for the Dissemination Agent to disseminate the information (which date shall not be more than ten (10) Business Days after the occurrence of the Listed Event or failure to file). In all cases, the Issuer shall have the sole responsibility for the content, design and other elements comprising substantive contents of all disclosures. In addition, the Issuer shall have the sole responsibility to ensure that any notice required to be filed under this Section 5 is filed within (10) Business Days of the occurrence of the Listed Event. (b) The Dissemination Agent shall, within three (3) Business Days of obtaining actual knowledge of the occurrence of any Listed Event with respect to the Bonds, notify the Disclosure Representative of such Listed Event. The Dissemination Agent shall not be required to file a notice of 5 110U:3443844.2 the occurrence of such Listed Event with the MSRB unless and until it receives written instructions from the Disclosure Representative to do so. It is agreed and understood that the duty to make or cause to be made the disclosures herein is that of the Issuer and not that of the Trustee or the Dissemination Agent. It is agreed and understood that the Dissemination Agent has agreed to give the foregoing notice to the Issuer as an accommodation to assist it in monitoring the occurrence of such event, but is under no obligation to investigate whether any such event has occurred. As used above, "actual knowledge" means the actual fact or statement of knowing, without a duty to make any investigation with respect thereto. in no event shall the Dissemination Agent be liable in damages or in tort to the Participating Underwriter, the issuer or any Owner or beneficial owner of any interests in the Bonds as a result of its failure to give the foregoing notice or to give such notice in a timely fashion. (c) If in response to a notice from the Dissemination Agent under subsection (b), the Issuer determines that the Listed Event under number 2, 7, 8, 10, 1.3, or 14 of subparagraph (a) above is not material under applicable federal securities laws, the Issuer shall promptly notify the Dissemination Agent and the Trustee (if the Dissemination Agent is not the Trustee) in writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection (d). (d) If the Dissemination Agent has been instructed by the Issuer to report the occurrence of a Listed Event, the Dissemination Agent shall immediately file a notice of such occurrence with the MSRB. SECTION 6. Termination of Reporting Obligations. The obligations of the Issuer and the Dissemination Agent under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds, when the Issuer is no longer an obligated person with respect to the Bonds, or upon delivery by the Disclosure Representative to the Dissemination Agent of an opinion of nationally recognized bond counsel to the effect that continuing disclosure is no longer required, So long as any of the Bonds remain Outstanding, the Dissemination Agent may assume that the Issuer is an obligated person with respect to the Bonds until it receives written notice from the Disclosure Representative stating that the Issuer is no longer an obligated person with respect to the Bonds, and the Dissemination Agent may conclusively rely upon such written notice with no duty to make investigation or inquiry into any statements contained or matters referred to in such written notice. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event with respect to such series of Bonds under Section 5(d). SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent or successor Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge such Dissemination Agent, with or without appointing a successor Dissemination Agent. If at any time there is not any other designated Dissemination Agent, the Issuer shall be the Dissemination Agent. The initial Dissemination Agent appointed hereunder shall be the Trustee. SECTION 8. Amendment; Waiver. Notwithstanding any other provisions of this Disclosure Agreement, the Issuer and the Dissemination Agent may amend this Disclosure Agreement (and the Dissemination Agent shall not unreasonably withhold its consent to any amendment so requested by the Issuer), and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied: 6 HOU 34438442 (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the delivery of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver either (i) is approved by the Owners of the Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or beneficial owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Issuer shall describe such amendment in the next related Annual Issuer Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(d), and (ii) the Annual Issuer Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. No amendment which adversely affects the Dissemination Agent may be made without its prior written consent (which consent will not be unreasonably withheld or delayed). SECTION 9. Additional .information. Nothing in this Disclosure Agreement shall be deemed to prevent the .issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Issuer Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Issuer Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Bond Disclosure Report or notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Agreement, the Dissemination Agent may (and, at the request of any Participating Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding .Bonds, shall, upon being indemnified to its satisfaction as provided in the Indenture), or any Owner or beneficial owner of the Bonds may, take such actions as may be necessary and appropriate to cause the Issuer, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture with respect to the Bonds, and the sole remedy under this Disclosure Agreement in the event of any failure of the Issuer to comply with this Disclosure Agreement shall be an action to mandamus or specific performance. A default under this 7 HOU3443844.2 Disclosure Agreement by the Issuer shall not be deemed a default under the Disclosure Agreement of Developer by the Developer, and a default under the Disclosure Agreement of the Developer by the Developer shall not be deemed a default under this Disclosure Agreement by the Issuer. SECTION 11. Duties Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall not have any duty with respect to the content of any disclosures made pursuant to the terms hereof. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and no implied covenants shall be read into this Disclosure Agreement with respect to the Dissemination Agent. To the extent permitted by law, the Issuer agrees to hold harmless the Dissemination Agent, its officers, directors, ernployees and agents, but only with funds to be provided by the Developer or from Assessments collected from the property owners in Improvement Area #1, Improvement Area 92 and Improvement Area #3 of the District, against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct; provided, however, that nothing herein shall be construed to require the Issuer to indemnify the Dissemination Agent for losses, expenses or liabilities arising from information provided to the Dissemination Agent by the Developer or the failure of the Developer to provide information to the Dissemination Agent as and when required under the Disclosure Agreement of Developer. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment in full of the Bonds. Nothing in this Disclosure Agreement shall be construed to mean or to imply that the Dissemination Agent is an "obligated person" under the Rule. The Dissemination Agent is not acting in a fiduciary capacity in connection with the performance of its respective obligations hereunder. The fact that the Dissemination Agent may have a banking relationship with the Issuer or any person with whom the Issuer contracts in connection with the transaction described in the Indenture, apart from the relationship created by the Indenture or this Disclosure Agreement, shall not be construed to mean that the Dissemination Agent has actual .knowledge of any event described in Section 5 above, except as may be provided by written notice to the Dissemination Agent pursuant to this Disclosure Agreement. The Dissemination Agent may, frorn time to time, consult with legal counsel of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or their respective duties hereunder, and the Dissemination Agent shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. UNDER NO CIRCUMSTANCES SHALL TME DISSEMINATION AGENT OR THE ISSUER BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, 1N CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER OR THE DISSEMINATION AGENT, RESPECTIVELY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS DISCLOSURE AGREEMENT, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. THE DISSEMINATION AGENT IS UNDER NO OBLIGATION NOR IS IT REQUIRED TO BRING SUCH AN ACTION. SECTION 12. Assessment Timeline. The basic expected timeline for the collection of Assessments and the anticipated procedures for pursuing the collection of delinquent Assessments is set forth in Exhibit C which is intended to illustrate the general procedures expected to be followed in enforcing the payment of delinquent Assessments. I i01J -3443844.2 SECTION 13. No Personal Liability. No covenant, stipulation, obligation or agreement of the Issuer or Dissemination Agent contained in this Disclosure Agreement shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future council members, officer, agent or employee of the Issuer or Dissemination Agent in other than that person's official capacity. SECTION 14. Severability. In case any section or provision of this Disclosure Agreement, or any covenant, stipulation, obligation, agreement, act or action, or part thereof made, assumed, entered into, or taken thereunder or any application thereof, is for any reasons held to be illegal or invalid, such illegality or invalidity shall not affect the remainder thereof or any other section or provision thereof or any other covenant, stipulation, obligation, agreement, act or action, or part thereof made, assumed, entered into, or taken thereunder (except to the extent that such remainder or section or provision or other covenant, stipulation, obligation, agreement, act or action, or part thereof is wholly dependent for its operation on the provision determined to be invalid), which shall be construed and enforced as if such illegal or invalid portion were not contained therein, nor shall such illegality or invalidity of any application thereof affect any legal and valid application thereof, and each such section, provision, covenant, stipulation, obligation, agreement, act or action, or part thereof shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. SECTION 15. Sovereign Immunity. The Dissemination Agent agree that nothing in this Disclosure Agreement shall constitute or be construed as a waiver of the Issuer's sovereign or governmental immunities regarding liability or suit. SECTION 16. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriter and the Owners and the beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. Nothing in this Disclosure Agreement is intended or shall act to disclaim, waive or otherwise limit the duties of the Issuer under federal and state securities laws. SECTION 17. Dissemination Agent.. Compensation. The Issuer shall pay or reimburse the Dissemination Agent, but only with funds to be provided by the Developer or from Assessments collected from the property owners in Improvement Area #1, Improvement Area #2 and Improvement Area #3 of the District, for its fees and expenses for the Dissemination Agent's services rendered in accordance with this Disclosure Agreement. SECTION 18. Governing Law. This Disclosure Agreement shall be governed by the laws of the State of Texas. SECTION 19. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Cr-enwinder of page Left Blank intentionally] 9 HOU 3443844.2 TOWN OF WESTLAKE, TEXAS By: zd-zlj� Mayo SIGNATURE PAGE OF CONTINUING DisuosUR.E AGREEMENT U.S. BANK NATIONAL ASSOCIA'T'ION (as Dissemination Agent) By:� '✓ Authorized Officer SIGNATURE PAGL; OF CONTINUING DISCI,OSURr AGREEMENT EXHIBIT A NOTICE TO MSRB OF FAILURE TO FILE ANNUAL ISSUER REPORT Name of Issuer: Town of Westlake, Texas Name of Bond Issue: Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) Date of Delivery: , 20_ NOTICE IS HEREBY GIVEN that the Town of Westlake, Texas, has not provided an Annual issuer Report with respect to the above-named bonds as required by the Continuing Disclosure Agreement dated 201.4, between the Issuer and U.S. Bank National Association, as dissemination agent. The Issuer anticipates that the Annual Issuer Report will be filed by Dated: U.S. Bank National Association, on behalf of the Town of Westlake, Texas (as Dissemination Agent) By: Title: cc: Town of Westlake, Texas A-1 I10U:3443844.2 EXHIBIT B TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) ANNUAL BOND DISCLOSURE REPORT* Delivery Date: , 20 TRUSTEE Name: U.S. Bank National Association Address: Town: Telephone: Contact Person: BONDS OUTSTANDING Original CUSIP Maturity Interest Principal Number Date Rate Amount Outstanding Principal Amount Outstanding Interest Amount INVESTMENTS Fund/ Investment Account Name Description Par Value Book Value Market Value *Excluding Audited Financial Statements of the Issuer B-1 110U3443844 ASSETS AND LIABILITIES OF PLEDGED TRUST ESTATE Bonds (Principal Balance) Funds and Accounts [list] TOTAL ASSETS LIABILITIES EQUITY Outstanding Bond Principal Outstanding Program Expenses (if any) TOTAL LIABILITIES Assets Less Liabilities Parity Ratio Form of Accounting ❑ Cash E Accrual 0 Modified Accrual ITEMS REQUIRED BY SECTION 4(c) T (g) [Insert a line item for each applicable listing] B-2 HOU 3443844.2 EXHIBIT C BASIC TIMELINE FOR ASSESSMENT COLLECTIONS AND PURSUIT OF DELINQUENCIES Date Delinquency Activi Clock (Days) January 31 Assessments arc due. February I I Assessments Delinquent if not received February 15 15 Issuer forwards payment to Trustee for all collections received as of February 15, along with detailed breakdown. Subsequent payments and relevant details will follow monthly thereafter. Issuer and/or Administrator should be aware of actual and specific delinquencies Issuer and/or Administrator should be aware if Reserve Fund needs to be utilized for debt service payment on March 1. If there is to be a shortfall, the Trustee and Dissemination Agent should be immediately notified. Issuer and/or Administrator should also be aware if, based on collections, there will be a shortfall for September payment. Issuer and/or Administrator should determine if previously collected surplus funds, if any, plus actual collections will be fully adequate for debt service in March and September. At this point, if total delinquencies are under 5% and if there is adequate funding for March and September payments, no further action is anticipated for collection of Assessments except that the Issuer or Administrator, working with the Town Attorney or ail appropriate designee, will begin process to cure deficiency. For properties delinquent by more than one year or if the delinquency exceeds $10,000 the matter will be referred for commencement of foreclosure. If there are over 5% delinquencies or if there is inadequate funding in the Pledged Revenue Fund for transfer to the Principal and Interest Account of such amounts as shall be required for the full March and September payments, C -I HOLD 3443844.2 the collection -foreclosure procedure will proceed: against all delinquent properties. March 1 29/30 Trustee pays bond interest payments to bondholders. Reserve Fund payment to Bond fund may be required if Assessments are below approximately 50% collection rate. Issuer, or the Trustee on behalf of the Issuer, to notify Dissemination Agent of the occurrence of draw on the Reserve Fund and, following receipt of such notice, Dissemination Agent to notify MSRB of such draw or Fund for debt service. Use of Reserve Fund for debt service payment should trigger commencement of foreclosure on delinquent properties. March 5 33134 Issuer and/or Administrator to notify Dissemination Agent for disclosure to MSRB of all delinquencies. If any property owner with ownership of property responsible for more than $1.0,000 of the Assessments is delinquent or if a total of delinquencies is over 5%, or if it is expected that Reserve Fund moneys will need to be utilized for either the March or September bond payments, the Disclosure Representative shall work with Town Attorney's office, or the appropriate designee, to satisfy payment of all delinquent Assessments. April 15 74175 Preliminary Foreclosure activity commences, and Issuer to notify Dissemination Agent of the commencement of preliminary foreclosure activity. If Dissemination Agent has not received Foreclosure Schedule and Plan of Collections, Dissemination Agent to request same from the Issuer. May 1 89/90 If the Issuer has not provided the Dissemination Agent with Foreclosure Schedule and Plan of Collections, and if instructed by the bondholders under Section 11.2 of the Indenture, Dissemination Agent requests that the Issuer C_2 HOU 3443844.2 C-3 HOU 3443844.2 commence foreclosure or provide plan for collection. May 15 1.03/104 The designated lawyers or law firm will be preparing the formal foreclosure documents and will provide periodic updates to the Dissemination Agent for dissemination to those bondholders who have requested to be notified of collections progress. The goal for the foreclosure actions is a filing by no later than June 1 (day 120/121). June 1 120/121 Foreclosure action to be filed with the court. June 15 134/135 Issuer notifies Trustee and Dissemination Agent of Foreclosure filing status. Dissemination Agent notifies bondholders. July 1 150/151 If bondholders and Dissemination Agent have not been notified of a foreclosure action, Dissemination Agent will notify the Issuer that it is appropriate to file action. C-3 HOU 3443844.2 TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) CONTINUING DISCLOSURE AGREEMENT OF THE DEVELOPER This Continuing Diselo5l[re Agreement dated as of February 1, 2015 (this "Disclosure Agreement") is executed and delivered by and between Maguire Partners — Solana Land, L.P., a Texas limited partnership (the "Developer") and U.S. Bank National Association (the "Dissemination Agent") with respect to the "Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)" (the "Bonds"). The Developer and the Dissemination Agent covenant and agree as follows: SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Developer and the Dissemination Agent for the benefit of the Owners (as hereinafter defined) and beneficial owners of the Bonds. Unless and until a different filing location is designated by the M.SRB or the SEC, all filings made by the .Dissemination Agent Pursuant to this Disclosure Agreement shall be filed with the M.SRB through EMMA. SECTION 2. Definitions. In addition to the definitions set forth above and in the Indenture of Trust dated as of February 1, 2015, relating to the Bonds (the "Indenture"), which apply to any capitalized teen used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terns shall have the following meanings: "Administrator" shall mean the employce or designee of the Town, identified in any indenture of trust or relating to the Bonds, the District's Service and Assessment Plan, or any other agreement or docuncnt approved by the Issuer related to the duties and responsibilities of the administration of the District. "Developer" shall mean Maguire Partners -- Solana Land, L.P., a Texas limited partnership, its successors and assigns, including any Subsequent Third Party Owner. "Disclosure Agreement of Issuer" shall mean the Continuing Disclosure Agrcencnt of the Issuer dated as of February 1, 2015 executed and delivered by the Issuer and the Dissernination Agent. "Disclosure Representative" shall mean the manager of the Developer or his or her designee, or such other officer or employee as Developer may designate in writing to the Dissemination Agent from time to time. "Dissemination Agent" shall mean the Trustee, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Trustee a written acceptance of such designation. "District" shall mean the Solana Public Improvement District. "EMMA" shall mean the Electronic Municipal Market Access System available on the internet at http://enna.msi-b.org. "Fiscal Year" shall mean the calendar year from October I through September 30 "Issuer" shall mean the Town of Westlake, Texas. "Improvement Project A Improvements" shall mean the authorized improvements which will benefit Improvement Area fl, Improvement Area 42 and Improvement Area 43 (defined as "Improvement Project A" in the Service and Assessment Plan) and as more particularly described Section III.B. of the Service and Assessment Plan and any future updates and/or amendments thereto. "Listed Events" shall mean any of the events listed in Section 4(a) of this Disclosure Agreement. "MSRB" shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the SEC to receive reports pursuant to the Rule. "Owner" shall mean the registered owner of any Bonds. "Participating Underwriter" shall mean Jefferies LLC and its successors and assigns. "Quarterly Improvement Implementation Report" shall mean any Quarterly Improvement Implementation Report provided by the Developer pursuant to, and as described in, Section 3 of this Disclosure Agreement. "Rule" shall mean Rule I5c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "SEC" shall mean the United States Securities and Exchange Commission. "Subsequent Third Party Owner" shall have the meaning assigned to such term in Section 3(d) of this Disclosure Agreement. "Trustee" shalt mean U.S. Bank National Association, or any successor trustee pursuant to the Indenture. SECTION 3, Quarterly Improvement Implementation Reports. (a) The Developer shall provide, or cause to be provided, at its cost and expense, to the Dissemination Agent, on or before each March 30, .lune 30, Septcmber 30 and December 30 (beginning September 30, 2014), a Quarterly Improvement Implementation Report containing the information described in this Section 3, and the Dissemination Agent shall provide such information to the MSRB within fifteen (15) calendar days of its receipt thereof. The Developer shall provide, or cause to be provided, such Quarterly Improvement Implementation Report during the period from the delivery of the Bonds until such time as the Developer is no longer responsible for the payment of Annual Installments of' Assessments equal to at least 20% of the total Annual Installments of Assessments for any year. Such Quarterly Improvement Implementation Report shall include: 2 (i) Statement with respect to the Developer or any affiliate of the Developer as to the status of development loans and any permanent financing with respect to any development undertaken by the Developer in the District not financed with Bond proceeds, including loan balance, existence of deeds of trust or other similar encumbrances against the property within the District, existence of any default and remaining term; (ii) Statement as to available funds to complete development under construction as contemplated (both Bond financed and non-Bond financed development undertaken by the Developer or any affiliate of the Developer); (iii) Status of parcel and/or lot sales frorn the Developer to any other party by type and average pricing, as well as anticipated future absorption sales; (iv) A statement as to material changes, if any, in the form, organization or controlling ownership of the Developer; (v) The status of any governmental approvals (other than customary home building permits required after a delivery of a finished lot) required for completion of Improvement Project A improvements; (vi) Any information regarding the improvement project A Improvements or other information as may be reasonably requested by the Issuer relating to the ability of the Developer or any affiliate of the Developer to fulfill its obligations udder the Indenture or the SAP; (vii) Written notification of any significant zoning or land use entitlement changes or any other matter that would have a material adverse impact on land values within the District, development of potential of lands within the District or the likelihood of the timely payment of the Assessments levied on land or parcels owned by the Developer; and (viii) Any changes to the land use designation for the property in the District that might negatively impact its development for those purposes identified in the final SAP, as the same may be amended and supplemented from time to tirne. (b) Additionally, the Developer shall provide or cause to be provided flings as follows: (i) The number, dollar amount, and property type (e.g., developed lots, undeveloped pads, parcels, raw land) under contract with wholesale purchasers and. the namc of each such purchaser; (ii) A listing of any Subsequent Third Party Owners (defined below) representing at least twenty percent (20%) of the Assessments, the amount of the levy of Assessments against such Subsequent Third Party Owner, and the percentage of such Assessments relative to the entire levy of Assessments; (iii) for each residential home builder, on a per quarter and running total basis, (A) the number of residential units for which construction has begun, (B) the number of residential units for which construction has been completed, and (C) the number of residential units which have been sold to end users and the average sales price therefor; (iv) For each residential home builder, the estimated date of completion for all residential units expected to be constructed in the District. (v) Coordinate with the Administrator to prepare, the amount of Assessments delinquent greater than six months, one year and two years, and, if delinquencies amount to more than five percent (5%) of' aggregate amount of Assessments due in any year, a list of property owners whose Assessments are delinquent. (vi) Coordinate with the Administrator to prepare, the amount of delinquent Assessments by Fiscal Year: (1) which are subject to institution of foreclosure proceedings (but as to which such proceedings have not been instituted); (2) which are currently subject to foreclosure proceeding which have not been concluded; (3) which have been reduced to judgment but not collected; (4) which have been reduced to judgment and collected; and (5) the result of any foreclosure sales of assessed property if the assessed property represents more than three percent (3%) of the total amount of Assessments. (c) With respect to the Project Fund for the Improvement Project A Improvements, the .Developer shall provide or cause to be provided filings as follows: (i) With respect to the design -engineering and the Project Fund for the Improvement Project A Improvements, the Developer will establish an accounting and budgeting system that will show: (ii) Total expected costs for design and engineering to be completed after delivery of the Bonds; (iii) Total expected construction budget; (iv) Construction budget allocated to progress "Milestones;" (v) Forecast construction "Milestones" of progress; (vi) Forecast completion date; and (vii) Forecast Issuer acceptance date. The Developer shall prepare, within ninety (90) days of the issuance of the Bonds, a schedule reflecting the points listed above for each of the Improvement Project A Improvements within the District to be funded by the Bond proceeds. Monthly design and construction expenditure progress reports, reflecting the points listed above, will be summarized by the Developer on a quarterly basis to reflect the progress and conformance with the overall project budget. These quarterly summaries will be filed with the Dissemination Agent. Budget overruns in excess of $250,000 per quarter or delays of greater than sixty (60) days will be highlighted and explained and the Developer shall include a plan to remedy the situation. (d) if the Developer sells, assigns or otherwise transfers ownership of real property in the District to a third party, which results in such third party owning property representing at least twenty percent (20%) of the total Annual Installments of the Assessments first coming due after such transfer of ownership (a "Subsequent Third Party Owner"), the Developer shall require such Subsequent Third Party Owner to comply with the Developer's disclosure obligations hereunder with respect to such acquired real property for so long as such Subsequent Third Party Owner is the owner of property representing at least twenty percent (20%) of the total of Annual Installments of the Assessments next coming due. The Developer shall deliver to the Dissemination Agent, a written acknowledgement from each Subsequent Third Party Owner, acknowledging its obligations tinder this Disclosure Agreement. SECTION 4. Event Re ortin<T Obli 3ations of Develo er. (a) Whenever the Developer or an affiliate of the Developer obtains actual knowledge of the occurrence of one or more of the following events, the Developer shall notify, or cause such affiliate to notify, the Dissemination Agent of such occurrences and the Dissemination Agent shall immediately report and file a notice of such event with the MSRB. Any such notice is required to be filed within ten (10) business days of the occurrence. (i) Failure to pay any real property taxes or Assessments levied within the District on a parcel owned by the Developer, or an affiliate of the Developer; (ii) Material damage to or destruction of any development or improvements, including the authorized improvements within the District; (iii) Material default by the Developer or any affiliate of the Developer on any loan with respect to the development or permanent financing of the District development undertaken by the Developer or any affiliate of the Developer; (iv) Material default by the Developer or any affiliate of the Developer on any loan secured by property within the District owned by the Developer or any affiliate of the Developer; (v) The bankruptcy filing of the Developer or of any affiliate of the Developer or any determination that the Developer or any affiliate of the Developer is unable to pay its debts as they become due; (vi) The consummation of a merger, consolidation, or acquisition of the Developer, or the sale of all or substantially all of the assets of the Developer, other than in the ordinary course of business, the envy into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (vii) The filing of any lawsuit with claim for damage, in excess of $1,000,000 against the Developer or any affiliate of the Developer which may adversely affect the completion of development or litigation which would materially adversely affect the financial condition of the Developer or any affiliate of the Developer; and 5 (viii) Any change in the legal structure, chief executive officer or controlling ownership of the Developer or any affiliate of the Developer. For purposes of Sections 3 and 4, the terra "affiliate" shall mean an entity that owns property within the District and is controlled by, controls, or is Linder common control of the Developer. Any notice under the preceding paragraph shall be accompanied with the text of the disclosure that the Developer desires to make, the written authorization of the Developer for the Dissemination Agent to disseminate such information as provided herein, and the date the Developer desires for the Dissemination Agent to disserninate the information (which date shall not be more than ten (10) Business Days after the occurrence of the Listed Event). In all cases, the Developer shall have the sole responsibility for the content, design and other elements comprising substantive contents of all disclosures. In addition, the Developer shall have the sole responsibility to ensure that any notice required to be filed Linder this Section 4 is filed within ten (10) Business Days of the occurrence of the Listed Event. (b) if the Dissemination Agent has been instructed by the Developer to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the MSRB within one (1) Business Day of its receipt of such written instructions from the Developer. SECTION 5. 'Termination of Reporting Obligations. (a) The obligations of the Developer, including any Subsequent Third Party Owner, and the Dissemination Agent Linder this Disclosure Agreement shall terminate (i) upon the legal defeasance, prior redemption or payment in full of all of the Bonds or (ii) when the Developer, including any Subsequent Third Party Owner, is no longer responsible for the payment of Annual Installments of Assessments equal to at least 20% of the total Annual Installment of Assessments for any year. (b) At such time that the Developer, including any Subsequent Third Party Owner, is no longer responsible for payment of Annual Installments of Assessments equal to at least 20% of the total Annual Installments of Assessment for any year, the District Administrator shall provide written notice to the Developer that no party is responsible for the payment of Annual Installments of Assessments equal to at least 20% of the total Annual Installment of Assessments for any year (the "Termination Notice"). "he Developer shall immediately provide, or cause to be provided, the Termination Notice to the Dissemination Agent, and the Dissemination Agent shall provide such Termination Notice to the MSRB within ten (10) Business Days of its receipt thereof. SECTION b. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent or successor Dissemination Agent to assist it in carrying out the Developer's obligations under this Disclosure Agreement, and may discharge such Dissemination Agent, with or without appointing a successor Dissemination Agent. If at any time there is not any other designated Dissemination Agent, the Issuer shall be the Dissemination Agent. The initial Dissemination Agent appointed hereunder shall be the Trustee. SECTION 7. Amendment', Waiver. Notwithstanding any other provisions of this Disclosure Agreement, the Developer and the Dissemination Agent may amend this Disclosure Agreement (and the Dissemination Agent shall not unreasonably withhold its consent to any 6 amendment so requested by the Developer), and any provision of this Disclosure Agreement may be waived, provided that the following; conditions are satisfied: (a) If the amendment or waiver relates to the provisions of` Sections 3(a) or 4, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Developer, or the type of business conducted; and (b) The amendment or waiver either (i) is approved by the Owners of the Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or beneficial owners of the Bonds. No amendment which adversely affects the Dissemination Agent may be made without its prior written consent (which consent will not be unreasonably withheld or delayed). SECTION 8. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Developer from disseminating any other information, using; the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in addition to that which is required by this Disclosure Agreement. If the Developer chooses to include any information in any Quarterly Report or notice of occurrence of a Fisted Event in addition to that which is specifically required by this Disclosure Agreement, the Developer shall have no obligation under this Disclosure Agreement to update- such information or include it in any future notice of occurrence of Listed Event, SECTION 9. Default. In the event of a failure of the Developer to comply with any provision of this Disclosure Agreement, the Dissemination Agent may (and, at the request of any Participating Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Bonds, shall, upon being indemnified to its satisfaction as provided in the indenture), or any Owner or beneficial owner of the Bonds may, take such actions as may be necessary and appropriate to cause the Developer to comply with its obligations under this Disclosure Agreement. A default Linder this Disclosure Agreement shall not be decmcd an Event of Default under the Indenture with respect to the Bonds, and the sole remedy under this Disclosure Agreement in the event of any failure of the Developer to comply with this Disclosure Agreement shall be an action to mandamus or specific performance. A default under this Disclosure Agreement by the Developer shall not be deemed a default under the Disclosure Agreement of Issuer by the Issuer, and a default under the Disclosure Agreement of the Issuer by the Issuer shall not be deemed a default under this Disclosure Agreement by the Developer. SECTION 10. Duties, lnlmunities and Liabilities of Dissemination Agent, The Dissemination Agent shall not have any duty with respect to the content of any disclosures made pursuant to the terms hereof. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and no implied covenants shall be read into this Disclosure Agreement with respect to the Dissemination Agent. To the extent permitted by law, the Developer agrees to hold harmless the Dissemination Agent, its officers, directors, employees and agents, against any loss, expense and liabilities which it may incur arising; out of or in the exercise or performance of its powers and duties hereunder, including; the costs and expenses (including attorneys' fees) of defending against any claimm of liability, but excluding liabilities due to the Dissemination Agent's 7 negligence or willful misconduct. The obligations of the Developer under this Section shall survive resignation or removal of the Dissemination Agent and payment in full of the Bonds. Nothing in this Disclosure Agreement shall be construed to mean or to imply that the Dissemination Agent is an "obligated person" under the Rule. The Dissemination Agent is not acting in a fiduciary capaTown in connection with the performance of its respective obligations hereunder. The fact that the Dissemination Agent may have a banking relationship with the Developer or any person with whom the Developer- contracts in connection with the transaction described in the Indenture, apart frorn the relationship created by this Disclosure Agreement, shall not be construed to mean that the Dissemination Agent has actual knowledge of any event described in Section 4 above, except as may be provided by written notice to the Dissemination Agent pursuant to this Disclosure Agreement. The Dissemination Agent shall not in any event incur any liability with respect to (i) any action taken or omitted to be taken in good faith upon advice of legal counsel given with respect to any question relating to duties and responsibilities of the Dissemination Agent hereunder, or (ii) any action taken or omitted to be taken in reliance upon any document delivered to the Dissemination Agent and believed to be genuine and to have been signed or presented by the proper party or parties. The Dissemination Agent may, from time to time, consult with legal counsel of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or their respective duties hereunder, and the Dissemination Agent shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. UNDER NO CIRCUMSTANCES SHALL ']'HE DISSEMINATION AGENT OR THE DEVELOPER BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART" FROM ANY BREACH BY THE DI VELOPER OR THE DISSEMINATION AGENT", RESPECTIVELY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS DISCLOSURE AGREEMENT, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR 'PORT, FOR OR ON ACCOUNT OF ANY SUCII BREACH SHALL BE LIMITED T'O AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. THE DISSEMINATION AGENT IS UNDER NO OBLIGATION NOR IS IT RFQUIRED TO BRING SUCH AN ACTION. SECTION 11. No Personal liability. No covenant, stipulation, obligation or agreement of the Developer or Dissemination Agent contained in this Disclosure Agreement shall be deemed to be a covenant, stipulation, obligation or agreement of any present or fixture officer, agent or employee of the Developer or Dissemination Agent in other than that person's official capaTown. SECTION 12. Severability. In case any section or provision of this Disclosure Agreement, or any covenant, stipulation, obligation, agreement, act or action, or part thereof made, assumed, entered into, or taken thereunder or any application thereof, is for any reasons held to be illegal or invalid, such illegality or invalidity shall not affect the remainder thereof or any other section or provision thereof or any other covenant, stipulation, obligation, agreement, act or action, or part thereof made, assurned, entered into, or taken thereunder (except to the extent that such remainder or section or provision or other covenant, stipulation, obligation, agreement, act or action, or part thereof is wholly dependent for its operation on the provision determined to be invalid), which shall be construed and enforced as if such illegal or invalid portion were not contained therein, nor shall such illegality or invalidity of any application thereof affect any legal and valid application thereof, and each such section, provision, covenant, stipulation, obligation, agreement, act or action, or part thereof shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Developer, the Dissemination Agent, the Participating Underwriter, and the Owners and the beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. Nothing in this DISCIOSUre Agreement is intended or shall act to disclaim, waive or otherwise limit the duties of the ISSuer under federal and state securities laws. SECTION 14, Dissemination Agent Compensation. The Developer shall pay or reimburse the Dissemination Agent for its fees and expenses for the Dissemination Agent's services rendered in accordance with this Disclosure Agreement. SECTION 15. Governing Law. This Disclosure Agreement shall be governed by the laws of the State of Texas. SECTION 16. Counterparts. This ❑iSClosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. [remaimier ofljage left blank intentionally] 9 U.S. BANK NATIONAL ASSO t N (as Dissemination Agen By: Authorized Officer SIGNATURE PAGE OF CONTINUING DISCLOSURE AGR[;FMENT MAGUIRE PARTNERS — SOLANA LAND, L.P., a Texas limited partnership By: MMM Ventures, I..,I.C, a Texas limited liability company its General Partner By: 2M Ventures. LLC, a Delaware limited liability company its Manager and Member By: Name: Mehrdad Moyedi Title: Manager and Member SIGNATURE PAGE OF CONTINUING? DtsC�i-.OSt;Rt f�E,iRta:V1i�.N't' F{OU:34438 l3. i GENERAL CERTIFICATE We, the undersigned, Mayor and Town Secretary of the Town of Westlake, Texas (the "Town"), hereby certify the following; information: General 1.1 This certificate relates to the "Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)" (the "Bonds"), issued pursuant to that certain Indenturre of Trust (the "Indenture"), dated as of February 1, 2015, between the Town and U.S. Bank National Association, as trustee (the "Trustee"), and that certain bond ordinance adopted by the Town Council of the Town (the "Council") on January 15, 2015 (the "Ordinance"). Capitalized terms used herein and not otherwise defined shall have the meaning assigned to such terms in the Indenture. L2 The Town is a duly incorporated Type A general law municipality, having less than 5,000 inhabitants, operating under the Constitution and laws of the State of Texas. 1.3 As of the date hereof, the members of the Council and certain other officers of the Town are as follows: Laura Wheat, Mayor Carol Langdon, Mayor Pro Tem Michael Barrett, Council Member Alesa Belvedere, Council. Member Wayne Stoltenberg, Council Member Rick Rennhack, Council Member Thomas E. Brymer, Town Manager Debbie Piper, Finance Director Kelly Edwards, Town Secretary 1.4 Only the Bonds and no other obligations of the Town are secured by or payable from the Trust Estate for the Bonds. 1.5 The Town is not in default in the payment of principal or interest on any of its outstanding obligations. 1.6 A debt service requirement schedule for the Bonds is attached hereto as Exhibit A and incorporated herein by reference as a part hereof for all purposes. 1.7 A statement of anticipated Assessment Revenues and coverage of the debt set -vice on the Bonds is attached hereto as Exhibit. B and incorporated herein by reference as a part hereof for all put -poses. 1.8 In satisfaction of Section 1201.022(x)(3), 'Texas Government Code, the terms and sale are the most advantageous reasonably available on the date and time of the pricing of the Bonds given the then existing market conditions and the stated terms of sale on such date and time. 1.9 A true and correct copy of the Appraisal Report relating to the Solana Public Improvement District (the "District") is attached as Appendix E to the final Official Statements for the Bonds. 1.10 With respect to estimated amounts set forth in the Service and Assessment Plan, while line item fluctuations are permissible, such costs cannot exceed the initial levy, absent a new levy of assessments. 1.11 With regard to the deferred assessment relating to the Improvement Project B Improvements, the Town fully complied with the requirements set forth in Section 372.0055 of the Local Government Code prior to the public hearing regarding the creation of the District. lRemainder ofhage Left blank intentionally] 2 EXECUTED AND DELIVERED ON JANUARY 15, 2015. Manual Signatures (Town Seal) Official Titles .Mayor, Town of Westlake, Texas Town Secretary, Town of Westlake, Texas Signature page to General Certificate EXHIBIT A SCHEDULE OF DEBT SERVICE REQUIREMENTS ON THE BONDS (See attached) A-1 Town of Westlake, Texas (a municipal corporation of the State of Texas located in Denton, and Tarrant Counties) Special Assessment Revenue Bonds, Series 2015 (Solona Public Improvement District) Total Prepayment Delinquency Capitalized Debt Service Net Date Debt Service Reserve Reserve Interest Reserve Fund Debt Service 09/01/2015 920,347.92 29,955.83 44,933.75 920,347.92 74,889.58 03/01/2016 804,187.50 804,187.50 09/01/2016 804,187.50 52,350.00 78,525.00 804,187.50 130,875.00 03/01/2017 804,187.50 688,027.08 116,160.42 09/01/2017 1,129,187.50 52,350.00 78,525.00 1,260,062.50 03/01/2018 795,250.00 795,250.00 09/01/2018 1,145,250.00 51,700.00 77,550.00 1,274,500.00 03/01/2019 785,625.00 785,625.00 09/01/2019 1,160,625.00 51,000.00 76,500.00 1,288,125.00 03/01/2020 775,312.50 775,312.50 09/01/2020 1,175,312.50 50,250.00 75,375.00 1,300,937.50 03/01/2021 764,312.50 764,312.50 09/01/2021 1,189,312.50 49,450.00 74,175.00 1,312,937.50 03/01/2022 752,625.00 752,625.00 09/01/2022 1,202,625.00 27,444.17 94,055.83 1,324,125.00 03/01/2023 740,250.00 740,250.00 09/01/2023 1, 215, 250.00 119,25D.00 1,334,500.00 03/01/2024 727,187.50 727,187.50 09/02/2024 1,227,187.50 116,875.00 1,344,062.50 03/01/2025 713,437.50 713,437.50 09/01/2025 1,238,437.50 114,375.00 1,352,812.50 03/01/2026 699,000.00 699,000.00 09/01/2026 1,274,000.00 111,750.00 1,385,750.00 03/01/2027 681,390.63 681,390.63 09/01/2027 1,281,390.63 108,875.00 1,390,265.63 03/01/2028 663,015.63 663,015.63 09/01/2028 1,313,015.63 105,875.00 1,418,890.63 03/01/2029 643,109.38 643,109.38 09/01/2029 1,318,109.38 102,625.00 1,420,734.38 03/01/2030 622,437.50 622,437.50 09/01/2030 1,347,437.50 99,250.00 1,446,687.50 03/01/2031 600,234.38 600,234.38 09/01/2031 1, 375, 234.38 95,6.25.00 1,470,859.38 03/01/2032 576,500.00 576,500.00 09/01/2032 1,401, 500.00 91,750.00 1,493, 250.00 03/01/2033 551,234.38 551,234.38 09/01/2033 1,426,234.38 87,625.00 1,513,859.38 03/01/2034 524,437.50 524,437.50 09/01/2034 1,474,437.50 83,250.00 1,557,687.50 03/01/2035 495,343.75 495,343.75 09/01/2035 1,495,343.75 78,500.00 1,573,843.75 03/01/2036 464,718.75 464,718.75 09/01/2036 1,539,718.75 73,500.00 1,613,218.75 03/01/2037 431,125.00 431,125.00 09/01/2037 1,581,125.00 68,125.00 1,649, 250.00 03/01/2038 395,187.50 395,187.50 09/01/2038 1,620,187.50 62,375-00 1,682,562.50 03/01/2039 356,906.25 356,906.25 09/01/2039 1,656,906.25 56,250.00 1,713,156.25 03/01/2040 316,281.25 316,281.25 Town of Westlake, Texas (a municipal corporation of the State of Texas located in Denton and Tarrant Counties) Special Assessment Revenue Bonds, Series 2015 (Solona Public Improvement District) 60,172,035.50 364,500.00 2,359,389.58 3,216,750.00 2,074,312.50 57,604,862.58 Total Prepayment Delinquency Capitalized Debt Service Net Date Debt Service Reserve Reserve Interest Reserve Fund Debt Service 09/01/2040 1,716,281.25 49,750.00 1,766,031.25 03/01/2041 272, 531.25 272, 531.25 09/01/2041 1,747,531.25 42,750.00 1,790,281.25 03/01/2042 225,515.63 225,515.63 09/01/2042 1,825,515.63 35,375.00 1,860,890.63 03/01/2043 174,515.63 174,515.63 09/01/2043 1,874,515.63 27,375.00 1,905,890.63 03/01/2044 120,328.13 120,328.13 09/01/2044 1.,945,328.13 18,875.00 1,964,203.13 03/01/2045 62,156.25 62,156.25 09/01/2045 2,012,156.25 3,750.00 2,074,312.50 X2,406.25 60,172,035.50 364,500.00 2,359,389.58 3,216,750.00 2,074,312.50 57,604,862.58 EXHIBIT B DEBT SERVICE COVERAGE (See attached) B-1 Projected Assessment Revenues and Coverage of Bonds Solana Public Improvement District Projected Debt Service Coverage - Series 2015 Bonds and Reimbursement Agreement ."allment [11)ue Date (a) Series 2015 Bond Principal (a) Series 2015 Bond Interest (b) Reimbursement Agreement Principal (c) Reimbursement Agreement Interest (d) Principal + Interest (e ) Prepayment Reserve (f) Delinquency Reserve (f) Adminsitrative Expenses (g) dotal Annual Debt Servire+ Administrative Expenses Total Annual Installments Coverage 1/31/2016 50 5920,348 30 $218,620 53,138,966 550,294 575,440 $40,000 $],304,702 51,304,702 1.Ofl 1/31/2017 $0 51,608,375 $0 5218,620 $1,826,995 559,150 588,725 $40,800 $2,015,670 52,015,670 1,00 1/31/2018 5325,000 $1,608,375 $1,000 5218,620 $2,152,995 $59,150 $88,725 $41,616 52,342,486 52,342,486 1.00 /31/2019 5350,000 51,590,500 $5,000 S218,556 $2,164,056 558,498 587,747 $42,448 $2.352,749 52,352,749 1.00 1/31/2020 5375,000 $1,571,250 59,000 $218,234 $2,173,484 557,788 $86,682 $43,297 $2.361,251 52;361,251 1.00 1;311202) $400,000 31,550,625 $13,000 $217,656 $2,181,281 $57,020 $85.530 $44,163 52,367,994 $2,367,994 1.00 1/31/2422 $435,000 $1,528,625 518,000 $216,820 $2,188,445 $56,194 $84,291 545,046 52,373,976 $2,373,976 1.00 1/21P2023 $450,000 $1,505,250 $23,000 $215,652 $2J93,912 $34,152 $104,118 $45,947 52,378,130 52,378,130 1.00 1/31/2024 $475,000 $1,484,500 529,000 $2t4,183 52,198,683 55,662 $129,243 546,866 52,381,455 $2,381,455 1.00 1/31/2025 5500,000 $1,454,375 $35,000 $212,319 $2,201,694 S6,604 5126,781 $47,804 $2,382,882 $2,382,882 3.00 1!31/2026 $525,000 51,426,875 $42,000 $2[0,068 $2,203,943 50 S124,176 $48,760 $2,376,879 $2,376,879 1.00 1/31/2027 $575,000 $1,398,000 $49,000 $207,368 $2,229,368 So 5121,425 $49,735 $2,400,527 $2,400,527 1.00 113 112 02 8 $600,000 51,362,781 $57,0110 $204,217 $2,223,998 So $118,403 550;730 $2,393,131 $2,393,131 1.00 1/31/2029 $650,000 $1,326,031 $65,000 $200,552 52,241,583 SO $115,232 $51,744 $2,408,559 $2,408,559 1.00 1/31/2030 $675,004 51,286,219 $75,000 $196,372 $2,232,591 50 $111,787 $52,779 $2,397,157 52,397,157 1.00 1/31/2031 $725,000 $1,244,875 $85,000 5191,550 $2,246,425 $0 5108,187 553,835 $2408,446 52,408,446 1.00 €!3112032 $775,000 $1,200,469 $96,000 $186.084 $2,257,553 50 5104,307 $54,911 $2,416,771 $2,416,771 1.00 1/31/2033 $825,000 $1,153,004 $108,000 $179.911 $2,265,911 SO 5100,144 $56,014 $2,422,065 $2,422,065 1.00 1/3t12034 $875,000 $1,102,469 $121,000 $172,967 $2,271,436 50 $95,695 557,130 $2,424,261 ,52,424,261 1,00 1/31/2035 $950,000 $1.048,875 S135A00 5165,187 52,299,062 SO $90,957 $58,272 $2,448,291 $2,448,291 1.40 1131/2036 51.000,000 S990,688 $150,000 $156,506 $2,297,194 $0 $85,802 $59,438 52,442.434 $2442,434 1.00 1131/2037 $1,075,000 5929,438 $167,000 5146,861 $2,318,299 50 $80,352 $60,627 $2,459,277 $2,459,277 1.00 1/31/2038 51.150,000 $862,250 $184,000 $136,123 52,332,373 SO $74,476 $61,839 52,468,688 $2,468.688 1.00 1/31!2039 $1,225,000 5790,375 5204,000 5124,292 $2,341,657 $o 568,174 $63,076 $2,474,917 $2,474.917 1.00 131/2040 $5,300,000 $713,813 5225,000 $111,175 $2,349,987 $0 $61,437 $64,337 $2,475,762 51475,762 1.00 1/311204/ $1,400,000 $632,563 $247,000 $96,707 $2,376,274 $0 $54,262 $65,624 52,496,156 $2,496,156 1.00 1i21112042 $1.475,000 5545,063 $272,000 $80,825 52,372,888 $0 S46.521 566,937 52,486,345 52,486,345 LOU 1/31!2043 $1,600,000 3451,031 $299,000 $63,336 $2,413,367 $0 $38,330 $68,275 $2,519,972 $2,519,972 1,00 1!3112044 $1,700,000 $349,031 $327,000 $44,110 $2,420.141 $0 $29,433 $69,641 52,519,215 $2,519,215 IAO 1/3112045 $1,825,000 5240,656 5359,000 $23,084 $2,447,740 $0 519,952 $71,034 52,538,726 $2,538,726 1,00 1/3112046 $1,950,000 $124,313 $0 $o $2,074,313 So .$9,750 $32,415 52,116,477 $2,116,4771 1,00 Totals $26,175,000 $33,997,036 $3,400,000 55,066,583 $68,638,618 $445,512 $2,616,084 51,655,138 573,355,352 $73,355,352 (a) 1he 1/31 AX dales represent .4unual lnstailment dire dates for the P151 Elands. which are intended to cover the March I and Septemher I debt ser.ice pay/ -Ls_ (b) The tint too year interest is being paid from Capitalizcd lraar t. (c ) The amaents reprr ent principal to be collected under the R6mbursetnent Agreement for remaining eosts that were not financed with the Series 2015 Bonds. (d) The int - v shown is eakulated now an interest rate of 6.43%, nhich is caluclated to be less than the maximum interest ate allowtd by the PID Act for rcimhurserncrrt agreements for years i through 5 and heyond_ (e) Ibis amount docs not include reserve fund earnings, City Conaibuv n5 or any ether funds, which could be ayaslable to reduce /tel debt service. (.t) The Prepayment Reserve and ❑eiropency Resent amounts we collected as 0.5° o of the outstanding principal amounts for each year. (g) Prehrrinra7 csriinatcs. "the Adruinsstrative Exp -rases will he revls d in the Annual Senicc Plan updates based on the actual cost, SIGNATURE IDENTIFICATION AND NO -LITIGATION CERTIFICATE THE STATE OF 'TEXAS § COUNTY OF TARRANT § WE, the undersigned, officials of the Town of Westlake, Texas (the ... l'own"), do hereby certify with respect to the "Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)" (the "Bonds"), as follows: 1. The Bonds have been duly and officially executed by the undersigned with our manual or facsimile signature in the same manner appearing hereon, and the undersigned hereby adopt and ratify our respective signatures in the manner appearing on each of the Bonds whether in manual or facsimile form, as the case may be, as our true, genuine and official signatures. 2. On the date of adoption of the Ordinance authorizing the issuance of the Bonds and on the date hereof, we are the duly qualified and acting officials of the Town as indicated below. 3. We have caused the official seal of the Town to be impressed, imprinted or lithographed on the Bonds; and said seal on the Bonds has been duly adopted as, and is hereby declared to be, the official seal of the Town. d. No litigation of any nature is now pending before any federal or state court, or administrative body, or to our knowledge threatened, seeking; to restrain or enjoin the issuance, sale or delivery of the Bonds or the authority or actions of the governing body of the Town authorizing the issuance or sale of the Bonds, or relating to the sale of the Bonds, or the levy, assessment and collection of the special assessment revenues securing the payment thereof, or that would otherwise adversely affect in a material manner the financial condition of the Town to pay the principal of and interest on the Bonds; and that neither the corporate existence or boundaries of the Town nor the right to hold office of any member of the governing body of the Town or any other elected or appointed official of the Town nor the boundaries of the Solana Public Improvement District heretofore created by the Town is being contested or otherwise questioned. 5. No authority or proceeding for the issuance, sale or delivery of the Bonds, passed and adopted by the governing body of the 'Town, has been amended, repealed, revoked, rescinded or otherwise modified since the date of passage thereof, and all such proceedings and authority relating; to the issuance and sale of the Bonds remain in full force and effect as of the date of this certificate. "The Town hereby authorizes the Office of the Attorney General to date this certificate the date of delivery of its approving opinion, and the Town agrees to notify the Office of the Attorney General of any changes with respect to this certificate or any Bond documents to which the Town is a party to entered into between the date of such opinion and the date of closing. EXECUTED AND DELIVERED ON Manual Signatures THE STATE OF TEXAS COUNTY OF TARRANT FEEB0 2015 Official Titles Mayor, Town of Westlake, Texas Town Secretary, Town of Westlake, Texas ACKNOWLEDGMENT BEFORE ME, the undersigned authority, on this day personally appeared the foregoing individuals, known to me to be the persons and officers whose true and genuine signatures were subscribed to the foregoing instrument in my presence. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this January 15, 2015. [NOTARY SEAL] 4*p=` DEGAN w; Notuy Public STATE OF TEMS Mr Comm.acP• pecembcr 19, 2019 AR4444�. Notary Public, State of Texas Signature page to Signature Identification and No -Litigation Certificate CLOSING CERTIFICATE THE STATE OF TEXAS § COUNTY OF TARRANT § TOWN OF WESTLAKE § I, the undersigned, Mayor of the Town of Westlake, Texas (the "Town"), do hereby certify as follows: This Certificate is executed and delivered for and on behalf of the Town with reference to the issuance of the "Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)" (the 'Bonds"), as required by and in satisfaction of the requirements set forth in the Bond Purchase Agreement dated January 15, 2015 (the "Agreement"). Capitalized terins used and not defined in this Certificate shall have the meanings assigned to them in the Agreement. (i) the representations and warranties of the Town contained in the Agreement and in the other Town Documents are true and correct in all material respects on and as of the date hereof as if made on the date hereof, (ii) the Authorizing Documents and Town Documents are in full force and effect and have not been amended, modified or supplemented; (iii) except as disclosed in the Official Statement, no litigation or proceeding against the Town is pending or, to my knowledge, threatened in any court or administrative body nor, to my knowledge, is there a basis for litigation which would (a) contest the right of the members or officials of the Town to hold and exercise their respective positions, (b) contest the due organization and valid existence of the Town or the establishment of the District, (c) contest the validity, due authorization and execution of the Bonds or the Town Documents or (d) attempt to limit, enjoin or otherwise restrict or prevent the Town from levying and collecting the Assessments pledged to pay the principal of and interest on the Bonds, or the pledge thereof; and (iv) the Town has, to the best of my knowledge, complied in all material respects with all agreements and covenants and satisfied all conditions set forth in the Town Documents, on its part to be complied with or satisfied under the Agreement at or prior to the date hereof. EXECUTED as of FEB 0 5 2015 Mayor, Town of Westlake Signature page to Closing Certificate FEDERAL TAX CERTIFICATE In General. 1.1. The undersigned is the Town Manager of the Town of Westlake, Texas (the "Issuer") 1.2. This Certificate is executed for the purpose of establishing the reasonable expectations of the Issuer as to future events regarding the Issuer's Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds"). The Bonds are being issued pursuant to an Indenture of Trust by and between the Issuer and U.S. Bank National Association dated as of February 1, 2015 and an Ordinance of the Issuer adopted on January 15, 2015 (collectively, the "Ordinance"). The Ordinance is incorporated herein by reference. 13. To the best of the undersigned's knowledge, information and belief, the expectations contained in this Federal Tax Certificate are reasonable. 1.4. The undersigned is an officer of the Issuer delegated with the responsibility of issuing and delivering the Bonds. 1.5. The undersigned is not aware of any facts or circumstances that would cause him to question the accuracy of the representations made by Jefferies LLC (the "Underwriter") in the Issue Price Certificate attached hereto as Exhibit "D" and by Lawrence Financial Consulting LLC (the "Financial Advisor") in Subsection 6.3 of this Certificate and with respect to the Schedules attached hereto as Exhibit "E". The Purpose of the Bonds and Useful Lives of Projects. 2.1. The Bonds are being issued pursuant to the Ordinance (a) to provide for the payment of costs of issuing the Bonds, (b) to provide payment of a portion of the costs of construction, acquisition and purchase of certain roadway, water, wastewater drainage, landscape and public park improvements within Improvement Area # 1, Improvement Area #2 and hnprovement Area #3 (each as described in the Ordinance) that benefit the entire Solana Public Improvement District (the "Projects") and (c) to deposit funds in the reserve fund (the "Reserve Fund") established by the Ordinance. 2.2. The Issuer expects that the aggregate useful lives of the Projects exceed 30 years from the later of the date the Projects are placed in service or the date on which the Bonds are issued. 2.3. All earnings, such as interest and dividends, received from the investment of the proceeds of the Bonds during the period of acquisition and construction of the Projects and not used to pay interest on the Bonds, will be used to pay the costs of the Projects, unless required to be rebated and paid to the United States in accordance with section 148(f) of the Internal Revenue Code of 1986 (the "Code"). The proceeds of the Bonds, together with any investment earnings thereon, are expected not to exceed the amount necessary for the governmental purpose of the Bonds. The Issuer expects that no disposition proceeds will arise in connection with the Projects or the Bonds. Expenditure of Bond Proceeds and Use of Projects. 3.1. The Issuer will incur, within six months after the date of issue of the Bonds, a binding obligation to commence the Projects, either by entering into contracts for the construction of the Projects or by entering into contracts for architectural or engineering services for such Projects, or contracts for the development, purchase of construction materials, or purchase of equipment, for the Projects, with the amount to be paid under such contracts to be in excess of five percent of the proceeds which are estimated to be used for the cost of the Projects. 3.2. After entering into binding obligations, work on such Projects will proceed promptly with due diligence to completion. 3.3. All original proceeds derived from the sale of the Bonds to be applied to the Projects and all investment earnings thereon (other than any amounts required to be rebated to the United States pursuant to section 1480 of the Code) will be expended for the Projects no later than a date which is three years after the date of issue of the Bonds. 3.4. The Ordinance provides that allocations of proceeds to expenditures for the Projects are expected not to be later than 18 months after the later of the date of the expenditure or the date that the Projects are placed in service, but, in any event, not longer than 60 days after the earlier of five years of the date hereof or the date the Bonds are retired. 3.5. Only Project costs paid or incurred by the Issuer on or after 60 days prior to the date the Issuer approved the funding of the Project (the "60 -day period") through its declaration of official intent ("Qualified Costs") will be paid or reimbursed with Bond proceeds. For this purpose Qualified Costs also include preliminary expenditures, incurred prior to the 60 -day period before the approval of the Issuer through its declaration of official intent, up to an amount not in excess of 20 percent of the aggregate amount of the Bonds. No Qualified Cost represents the cost of property or land acquired from. a related party. 3.6. The Issuer will not invest the proceeds prior to such expenditure in any guaranteed investment contract or other non -purpose investment with a substantially guaranteed yield for a period equal to or greater than four years. 3.7. Other than members of the general public, the Issuer expects that throughout the lesser of the term of the Bonds, or the useful lives of the Projects, the only user of the Projects will be the Issuer or the Issuer's employees and agents. The Issuer will be the manager of the Projects. In no event will the proceeds of the Bonds or facilities financed therewith be used for private business use in an amount greater than $15 million. The Issuer has engaged a consult with respect to the management of certain aspects related to the issuance of the Bonds and the administration of the Issuer (the "Consultant"). The Issuer has not entered, nor will it enter, into any contract, agreement or arrangements with any non-governmental persons with respect to the management, operation or provision of services with respect to the Project (or any portion thereof) unless such agreements or arrangements have complied, or will comply, with the guidelines set forth in Rev. Proc. 97-13, 1997-1 C.B. 632, as amended and supplemented (the "Guidelines"), or an opinion of nationally recognized bond counsel is received. A summary of the Guidelines is attached as Exhibit "G". 3.8. Except as stated below, the Issuer expects not to sell or otherwise dispose of property constituting the Projects prior to the earlier of the end of such property's useful life or the final maturity of the Bonds. The Ordinance provides that the Issuer will not sell or otherwise dispose of the Projects unless the Issuer receives an opinion of nationally -recognized bond counsel that such sale or other disposition will not adversely affect the tax-exempt status of the Bonds. 3.9. For purposes of Subsection 3.8 hereof, the Issuer has not included the portion of the Projects comprised of personal property that is disposed in the ordinary course at a price that is expected to be less than 25 percent of the original purchase price. The Issuer, upon any disposition of such property, will transfer the receipts from the disposition of such property to the general operating fund and expend such receipts within six months for other governmental programs. 110. The Bonds are being secured by that certain special assessment (the "Assessment") which is approved pursuant to that certain Ordinance No. 741 and assessed on all lots or parcels located within Improvement Area #1, Improvement Area #2 and Improvement Area #3 of the Solana Public Improvement District. The Assessment does not constitute a loan to the Developer within the meaning of section 1.141- 5 (d) of the Treasury Regulations, because (a) the tax or assessment is an enforced contribution that is imposed and collected for the purpose of raising revenue to be used for a specific purpose (that is, to defray the capital cost of an improvement) which are essential governmental improvements; (b) the tax or assessment is imposed pursuant to Texas state law on all property owners, whether such property is used for business or nonbusiness purposes, on an equal basis that can be applied equally to natural persons not acting in a trade or business and persons acting in a trade or business; (c) the terms for payment of the tax or assessment are the same for all taxed or assessed persons; (e) the Issuer does not allow certain property owners to pay the tax or assessment over a period of years while others must pay the entire tax or assessment immediately; (f) the Issuer does not require only certain property owners to prepay the tax or assessment when the property is sold; and (g) to private guarantee of the Bonds or the Assessment have been made by the Developer, or any related party thereto. That certain Agreement Regarding Conveyance of Right of Redemption and Waiver of Agricultural Valuation — Solana PID, dated as of January 15, 2015, does not, a direct or indirect, guarantee debt service of the Bonds, or of taxes, or assessments by the Developer. 3.11. The Issuer will allocate the Project costs to "capital expenditures". For this purpose, "capital expenditure" means any cost that is properly chargeable to capital account (or would be so chargeable with a proper election) under general federal income tax principles. For example, costs incurred to acquire, construct or improve land, building and equipment generally are capital expenditure. Less than 5 percent of the sale proceeds hereof will be allocated by the Issuer to working capital costs that are directly related to capital expenditures finance by the Bonds (e.g., initial operating expenses for a new capital project). 4. Bond Fund and Redemption Fund. 4.1. Separate and special Bond Fund and Redemption Fund (collectively, the "Interest and Sinking Fund") have been created and established solely to pay the principal of and interest on the Bonds. The Bona Fide Debt Service Portion constitutes a fund that is used primarily to achieve a proper matching of revenues and debt service within each bond year. Such portion will be completely depleted at least once each year except for an amount not in excess of the greater of (a) one -twelfth of the debt service on the Bonds for the previous year, or (b) the previous year's earnings on such portion of the Interest and Sinking Fund. Amounts deposited in the Interest and Sinking Fund constituting the Bona Fide Debt Service Portion will be spent within a thirteen -month period beginning on the date of deposit, and any amount received from the investment of money held in the Interest and Sinking Fund will be spent within a one-year period beginning on the date of receipt. 4.2. Any money deposited in the Interest and Sinking Fund and any amounts received from the investment thereof that accumulate and remain on hand therein after thirteen months from the date of deposit of any such money or one year after the receipt of any such amounts from the investment thereof shall constitute a separate portion of the Interest and Sinking Fund. The yield on any investments allocable to the portion of the Interest and Sinking Fund exceeding the sum of (a) the Bona Fide Debt Service Portion and (b) an amount equal to the lesser of five percent of the sale and investment proceeds of the Bonds or $100,000 will be restricted to a yield that does not exceed the yield on the Bonds. Pledged Revenue Fund. The Ordinance creates a Pledged Revenue Fund into which certain revenues of the Issuer are deposited. Amounts on deposit in the Pledged Revenue Fund are transferred and used in the manner required by the Ordinance. Other than moneys in the Pledged Revenue Fund that are transferred to the Interest and Sinking Fund, the moneys in the Pledged Revenue Fund are reasonably expected not to be used to pay the principal of and interest on the Bonds. There will be no assurance that such moneys will be available to in. debt service if the Issuer encounters financial difficulty. Amounts in the Pledged Revenue Fund may be invested without yield restriction. 6. Reserve Fund. 6.1. Funds on deposit in the Reserve Fund created by the Ordinance are held in trust for the benefit of the holders of the Bonds. If on any interest payment or maturity date, the Interest and sinking fund does not contain an amount sufficient to make debt service payments on the Bonds, the Issuer is required to transfer money from the Reserve Fund to the Interest and Sinking Fund in an amount sufficient to make such applicable payments. 6.2. The present value of the investments deposited to the Reserve Fund and allocable to the Bonds that will be invested at a yield higher than the yield on the Bonds will not, as of any date, exceed an aggregate amount which equals the lesser of (a) tO percent of the stated principal amount (or, in the case of a discount, the issue price) of the Bonds, (b) 1.25 of the average annual debt service on the Bonds, or (c) maximum annual debt service on the Bonds. 6.3. Based on the recommendation of the Financial Advisor to the Issuer, the amount deposited to the Reserve bund, if any, does not exceed that amount which is reasonably prudent to be maintained to secure the timely payment of debt service in the event of periodic fluctuations in revenues of the Issuer. Amounts deposited in the Reserve Fund from proceeds received from the sale of the Bonds do not exceed 10 percent of the issue price of the Bonds. Administrative Fund. The Ordinance creates an Administrative Fund into which certain revenues of the Issuer are deposited. Amounts on deposit in the Administrative Fund are transferred and used in the manner required by the Ordinance. The moneys in the Administrative Fund are reasonably expected not to be used to pay the principal of and interest on the Bonds. There will be no assurance that such moneys will be available to meet debt service if the Issuer encounters financial difficulty. Amounts in the Administrative Fund will be invested without yield restriction. Developer Property Tax Reserve Fund. In addition, the Ordinance establishes that certain Developer Property Tax Reserve Fund into which cash contribution from the Developer is being deposited in an amount set forth in the Ordinance. Such Developer Property Tax Reserve Fund is not expected as of the date hereof to be used to pay debt service on the Bonds. Such amounts may be invested at a yield which does not exceed the yield on the Bonds. 4 9. Reimbursement Fund The Ordinance creates a Reimbursement Fund into which certain revenues of the Issuer are deposited. Amounts on deposit in the Reimbursement Fund are transferred and used in the manner required by the Ordinance. The moneys in the Reimbursement Fund are reasonably expected not to be used to pay the principal of and interest on the Bonds. There will be no assurance that such moneys will be available to meet debt service if the Issuer encounters financial difficulty. Amounts in the Reimbursement Fund may be invested without yield restriction. 10. Yield. 10.1. The issue price of the Bonds included in the Form 8038-6, is based on the Issue Price Certificate attached hereto. 10.2. The Issuer has not entered into any qualified guarantee or qualified hedge with respect to the Bonds. The yield on the Bonds will not be affected by subsequent unexpected events, except to the extent provided in section 1.148-4(h)(3) of the Treasury Regulations when and if the Issuer enters into a qualified hedge or into any transaction transferring, waiving or modifying any right that is part of the terrus of any Bond. The Issuer will consult with nationally recognized bond counsel prior to entering into any of the foregoing transactions. 11. Invested Sinking Fund Proceeds, Replacement Proceeds. 11.1, The Issuer has, in addition to the moneys received from the sale of the Bonds, certain other moneys that are invested in various funds which are pledged for various purposes. These other funds are not available to accomplish the purposes described in Section 2 of this Certificate. 11.2. Other than the Interest and sinking fund and the Reserve Fund, there are, and will be, no other funds or accounts established, or to be established, by or on behalf of the Issuer (a) which are reasonably expected to be used, or to generate earnings to be used, to pay debt service on the Bonds, or (b) which are reserved or pledged as collateral for payment of debt service on the Bonds and for which there is reasonable assurance that amounts therein will be available to pay such debt service if the Issuer encounters financial difficulties. Accordingly, there are no other amounts constituting "gross proceeds" of the Bonds, within the meaning of section 148 of the Code. 12. Other Obligations. There are no other obligations of the Issuer that (a) are sold at substantially the same time as the Bonds, i.e., within 15 days of the date of sale of the Bonds, (b) are sold pursuant to a common plan of financing with the Bonds, and (c) will be payable from the same source of funds as the Bonds. 13, Federal Tax Audit Responsibilities. The Issuer acknowledges that in the event of an examination by the Internal Revenue Service (the "Service") to determine compliance of the Bonds with the provisions of the Code as they relate to tax-exempt obligations, the Issuer will respond, and will direct its agents and assigns to respond, in a commercially reasonable manner to any inquiries from the Service in connection with such an examination. The Issuer understands and agrees that the examination may be subject to public disclosure under applicable Texas law. The Issuer acknowledges that this Certificate, including any attachments, does not constitute an opinion of Bond Counsel as to the proper federal tax or accounting treatment of any specific transaction. 14. Record Retention and Private Business Use. The Issuer has covenanted in the Ordinance that it will comply with the requirements of the Code relating to the exclusion of the interest on the Bonds under section 103 of the Code. The Service has detennined that certain materials, records and information should be retained by the issuers of tax-exempt obligations for the purpose of enabling the Service to confirm the exclusion of the interest on such obligations under section 103 of the Code. ACCORllINGLY, THE ISSUER SHALL TAKE STEPS TO ENSURE THAT ALL MATERIALS, RECORDS AND INFORMATION NECESSARY TO CONFIRM THE EXCLUSION OF THE INTEREST ON THE BONDS UNDER SECTION 103 OF THE CODE ARE RETAINED FOR THE PERIOD BEGINNING ON THE ISSUE DATE OF THE BONDS AND ENDING THREE YEARS AFTER THE DATE THE BONDS ARE RETIRED. The Issuer acknowledges receipt of the letters attached hereto as Exhibit "B" which discusses limitations related to private business use and Exhibit "C" which, in part, discusses specific guidance by the Service with respect to the retention of records relating to tax-exempt bond transactions. is. Rebate to United States. The Issuer has covenanted in the Ordinance that it will comply with the requirements of the Code, including section 148(f) of the Code, relating to the required rebate to the United States. Specifically, the Issuer will take steps to ensure that all earnings on gross proceeds of the Bonds in excess of the yield on the Bonds required to be rebated to the United States will be timely paid to the United States. The Issuer acknowledges receipt of the memorandum attached hereto as Exhibit "A" which discusses regulations promulgated pursuant to section 148(f) of the Code. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 6 DATED as of `TOWN OF WESTLAKE, TEXAS By: 26k�m Town Manager Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) The undersigned represents that, to the best of the undersigned's knowledge, information and belief, the representations contained in Subsection 6.3 and the Schedules attached hereto as Exhibit "E" of this Federal Tax Certificate are, as of February 5, 2015, accurate and complete. We understand that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in this Federal Tax Certificate and by McCall, Parkhurst & Horton L.L.P. (i) in connection with rendering its opinion to the Issuer that interest on the Bonds is excludable from gross income thereof for income tax purposes, and (ii) for purposes of completing the IRS Form 8038-G. The undersigned is certifying only as to facts in existence on the date hereof. Nothing herein represents the undersigned's interpretation of any laws or the application of any laws to these facts. LAWRENCE FINANCIAL CONSULTING LLC B -- Y' Name: T Title: 'town of Westlake, Texas, Special Assessment Revenue 13onds, Series 20 t -S (Solana Public Improvement District) Exhibit "A" LAW OFFICES MCCALL, PARKHURST & HORTON L.L.P. 600 CONGRESS AVENUE 717 NORTH HARWOOD 100 N. ST. MARY'S STREET SUITE 1800 SUITE 900 SUITE 1525 AUSTIN, TEXAS 78701.3248 DALLAS, TEXAS 75201-6587 SAN ANTONIO, TEXAS 78205.3503 TELEPHONE: (512) 478.3805 TELEPHONE (214) 754-9200 TELEPHONE -(210)2252800 FACSIMILE: (512) 472-0871 FACSIMILE: (214) 754-9250 FAGSIMfLE:1210) 2252984 January 1, 2006 ARBITRAGE REBATE REGULATIONS@ The arbitrage rebate requirements set forth in section 148(f) of the Internal Revenue Code of 1986 (the "Code") generally provide that in order for interest on any issue of bonds' to be excluded from gross income (i.e., tax-exempt) the issuer must rebate to the United States the sum of, (1) the excess of the amount earned on ail "nonpurpose investments" acquired with "gross proceeds" of the issue over the amount which would have been earned if such investments had been invested at a yield equal to the yield on the issue, and (2) the earnings on such excess earnings. On June 18, 1993, the U.S. Treasury Department promulgated regulations relating to the computation of arbitrage rebate and the rebate exceptions. These regulations, which replace the previously -published regulations promulgated on May 15, 1989, and on May 18, 1992, are effective for bonds issued after June 30, 1993. This memorandum was prepared by McCall, Parkhurst & Horton L.L.P. and provides a general discussion of these arbitrage rebate regulations. This memorandum does not otherwise discuss the general arbitrage regulations, other than as they may incidentally relate to rebate. This memorandum also does not attempt to provide an exhaustive discussion of the arbitrage rebate regulations and should not be considered advice with respect to the arbitrage rebate requirements as applied to any individual or governmental unit or any specific transaction. Any tax advice contained in this memorandum is of a general nature and is not intended to be used, and should not be used, by any person to avoid penalties under the Code. McCall, Parkhurst & Horton L.L.P. remains available to provide legal advice to issuers with respect to the provisions of these tax regulations but recommends that issuers seek competent financial and accounting assistance in calculating the amount ofsuch issuer's rebate liability under section 148(f) of the Code and in making elections to apply the rebate exceptions. Effective Dates 1 In this memorandum the word "bond" is defined to include any bond, note, certificate, financing lease or other obligation of an issuer. Copyright 2006 by Harold T. Flanagan, McCall, Parkhurst & Horton L.L.P. All rights reserved. The regulations promulgated on June 18, 1993, generally apply to bonds delivered after June 30, 1993, although they do permit an issuer to elect to apply the rules to bonds issued prior to that date. The temporary regulations adopted by the U.S. Treasury Department in 1989 and 1992 incorporated the same effective dates which generally apply for purposes of section 148(f) of the Code. As such, the previous versions of the rebate regulations generally applied to bonds issued between August 1986 and June 30, 1993 (or, with an election, to bonds issued prior to August 15, 1993). The statutory provisions of section 148(f) of the Code, other than the exception for construction issues, apply to all bonds issued after August 15, 1986, (for private activity bonds) and August 31, 1986, (for governmental public purpose bonds). The statutory exception to rebate applicable for construction issues generally applies if such issue is delivered after December 19, 1989. The regulations provide numerous transitional rules for bonds sold prior to July 1, 1993. Moreover, since, under prior law, rules were previously published with respect to industrial development bonds and mortgage revenue bonds, the transitional rules contained in these regulations permit an issuer to elect to apply certain of these rules for computing rebate on pre - 1986 bonds. The regulations provide for numerous elections which would permit an issuer to apply the rules (other than 18 -month spending exception) to bonds which were issued prior to July 1, 1993 and remain outstanding on June 30, 1993. Due to the complexity of the regulations, it is impossible to discuss in this memorandum all circumstances for which specific elections are provided. If an issuer prefers to use these final version of rebate regulations in lieu of the computational method stated under prior law (e.g., due to prior redemption) or the regulations, please contact McCall, Parkhurst & Horton L.L.P. for advice as to the availability of such options. Future Value Computation, Method The regulations employ an actuarial method for computing the rebate amount based on the future value of the investment receipts (i.e., earnings) and payments. The rebate method employs a two-step computation to determine the amount of the rebate payment. First, the issuer determines the bond yield. Second, the issuer determines the arbitrage rebate amount. The regulations require that the computations be made at the end of each five-year period and upon final maturity of the issue (the "computation dates"). THE FINAL MATURITY DATE WILL ACCELERATE IN CIRCUMSTANCES IN WHICH THE BONDS ARE OPTIONALLY REDEEMED PRIOR TO MATURITY. AS SUCH, IF BONDS ARE REFUNDED OR OTHERWISE REDEEMED, THE REBATE MAY BE DUE EARLIER THAN INITIALLY PROJECTED. In order to accommodate accurate record-keeping and to assure that sufficient amounts will be available for the payment of arbitrage rebate liability, however, we recommend that the computations be performed at least annually. Please refer to other materials provided by McCall, Parkhurst & Horton L.L.P. relating to federal tax rules regarding record retention. Under the future value method, the amount of rebate is determined by compounding the aggregate earnings on all the investments from the date of receipt by the issuer to the computation date. Similarly, a payment for an investment is future valued from the date that the payment is made to the computation date. The receipts and payments are future valued at a discount rate equal to the yield on the bonds. The rebatable arbitrage, as of any computation date, is equal to the excess of the (1) future value of all receipts from investments (i.e., earnings), over (2) the future value of all payments. McCall, Parkhurst & Horton L.L.P. - Page 2 The following example is provided in the regulations to illustrate how arbitrage rebate is computed under the future value method for a fixed -yield bond: "On January 1, 1994, City A issues a fixed yield issue and invests all the sale proceeds of the issue ($49 million). There are no other gross proceeds. The issue has a yield of 7.0000 percent per year compounded semiannually (computed on a 30 day month/360 day year basis). City A receives amounts from the investment and immediately expends them for the governmental purpose of the issue as follows: Date Amount 2/1/1994 $ 3,000,000 4/1/1994 5,000,000 6/1/1994 14,000,000 9/1/1994 20,000,000 7/1/1995 10,000,000 City A selects a bond year ending on January 1, and thus the first required computation date is January 1, 1999. The rebate amount as of this date is computed by determining the future value of the receipts and the payments for the investment. The compounding interval is each 6 -month (or shorter) period and the 30 day month/360 day year basis is used because these conventions were used to compute yield on the issue. The future value of these amounts, plus the computation credit, as of January 1, 1999, is: Date Recei_pts_(Payments) 0111!1994 ($49,000,000) 02/1/1994 3,000,000 04/1/1994 5,000,000 0611/1994 14,000,000 09/111994 20,000,000 01/1/1995 (1,000) 07/11/11995 10,000,000 01/111996 (1,000) Rebate amount (01/01/1999) General Method for Computing Yield on Bonds FY (7.0000 percent) ($69,119,339) 4,207,602 6,932,715 19,190,277 26,947,162 (1,317) 12,722,793 (1,229) $878,664° In general, the term "yield," with respect to a bond, means the discount rate that when used in computing the present value of all unconditionally due payments of principal and interest and all of the payments for a qualified guarantee produces an amount equal to the issue price of the bond. The term "issue price" has the same meaning as provided in sections 1273 and 1274 of the Code. That is, if bonds are publicly offered (i.e., sold by the issuer to a bond house, broker or similar person acting in the capacity of underwriter or wholesaler), the issue price of each bond is determined on the basis of the initial offering price to the public (not McCall, Parkhurst & Horton L.L.P. - Page 3 to the aforementioned intermediaries) at which price a substantial amount of such bond was sold to the public (not to the aforementioned intermediaries). The "issue price" is separately determined for each bond (i.e., maturity) comprising an issue. The regulations also provide varying periods for computing yield on the bonds depending on the method by which the interest payment is determined. Thus, for example, yield on an issue of bonds sold with variable interest rates (i.e., interest rates which are reset periodically based on changes in market) is computed separately for each annual period ending on the first anniversary of the delivery date that the issue is outstanding. In effect, yield on a variable yield issue is determined on each computation date by "looking back" at the interest payments for such period. The regulations, however, permit an issuer of a variable-yield issue to elect to compute the yield for annual periods ending on any date in order to permit a matching of such yield to the expenditure of the proceeds. Any such election must be made in writing, is irrevocable, and must be made no later than the earlier of (1) the fifth anniversary date, or (2) the final maturity date. Yield on a fixed interest rate issue (i.e., an issue of bonds the interest rate on which is determined as of the date of the issue) is computed over the entire term of the issue. Issuers of fixed-yield issues generally use the yield computed as of the date of issue for all rebate computations. Such yield on fixed-yield issues generally is recomputed only if (1) the issue is sold at a substantial premium, may be retired within five years of the date of delivery, and such date is earlier than its scheduled maturity date, or (2) the issue is a stepped-coupon bond. In such cases, the regulations require the issuer to recompute the yield on such issues by taking into account the early retirement value of the bonds. Similarly, recomputation may occur in circumstances in which the issuer or bondholder modify or waive certain terms of, or rights with respect to, the issue or in sophisticated hedging transactions. IN SUCH „CIRCUMSTANCES, ISSUERS ARE ADVISED TO CONSULT WCALL PARKHURST & HORTON L.L.P. TO ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES OF THESE TRANSACTIONS. For purposes of determining the principal or redemption payments on a bond, different rules are used for fixed-rate and variable-rate bonds. The payment is computed separately on each maturity of bonds rather than on the issue as a whole. In certain circumstances, the yield on the bond is determined by assuming that principal on the bond is paid as scheduled and that the bond is retired on the final maturity date for the stated retirement price. For bonds subject to early redemption or stepped-coupon bonds, described above, or for bonds subject to mandatory early redemption, the yield is computed assuming the bonds are paid on the early redemption date for an amount equal to their value. Premiums paid to guarantee the payment of debt service on bonds are taken into account in computing the yield on the bond. Payments for guarantees are taken into account by treating such premiums as the payment of interest on the bonds. This treatment, in effect, raises the yield on the bond, thereby permitting the issuer to recover such fee with excess earnings. The guarantee must be an unconditional obligation of the guarantor enforceable by the bondholder for the payment of principal or interest on the bond or the tender price of a tender bond. The guarantee may be in the form of an insurance policy, surety bond, irrevocable letter or line of credit, or standby purchase agreement. Importantly, the guarantor must be legally entitled to full reimbursement for any payment made on the guarantee either immediately or McCall, Parkhurst & Horton L.L.P. - Page 4 upon commercially reasonable repayment terms. The guarantor may not be a co -obligor of the bonds or a user of more than 10 percent of the proceeds of the bonds. Payments for the guarantee may not exceed a reasonable charge for the transfer of credit risk. This reasonable charge requirement is not satisfied unless it is reasonably expected that the guarantee will result in a net present value savings on the bond (i.e., the premium does not exceed the present value of the interest savings resulting by virtue of the guarantee). If the guarantee is entered into after June 14, 1989, then any fees charged for the nonguarantee services must be separately stated or the guarantee fee is not recoverable. The regulations also treat certain "hedging" transactions in a mannersimilar to qualified guarantees. "Hedges" are contracts, e.g., interest rate swaps, futures contracts or options, which are intended to reduce the risk of interest rate fluctuations. Hedges and other financial derivatives are sophisticated and ever -evolving financial products with which a memorandum, such as this, cannot readily deal. IN SUCH CIRCUMSTANCES, ISSUERS AREADVISED TO CONSULT MCCALL PARKHURST & HORTON L.L_P. TO ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES OF THESE TRANSACTIONS. Earnings on Nonpurpose Investments The arbitrage rebate provisions apply only to the receipts from the investment of "gross proceeds" in "nonpurpose investments." For this purpose, nonpurpose investments are stock, bonds or other obligations acquired with the gross proceeds of the bonds for the period prior to the expenditure of the gross proceeds for the ultimate purpose. For example, investments deposited to construction funds, reserve funds (including surplus taxes or revenues deposited to sinking funds) or other similar funds are nonpurpose investments. Such investments include only those which are acquired with "gross proceeds." For this purpose, the term "gross proceeds" includes original proceeds received from the sale of the bonds, investment earnings from the investment of such original proceeds, amounts pledged to the payment of debt service on the bonds or amounts actually used to pay debt service on the bonds. The regulations do not provide a sufficient amount of guidance to include an exhaustive list of "gross proceeds" for this purpose; however, it can be assumed that "gross proceeds" represent all amounts received from the sale of bonds, amounts earned as a result of such sale or amounts (including taxes and revenues) which are used to pay, or secure the payment of, debt service for the bonds. The total amount of "gross proceeds" allocated to a bond generally can not exceed the outstanding principal amount of the bonds. The regulations provide that an investment is allocated to an issue for the period (1) that begins on the date gross proceeds are used to acquire the investment, and (2) that ends on the date such investment ceases to be allocated to the issue. In general, proceeds are allocated to a bond issue until expended for the ultimate purpose for which the bond was issued or for which such proceeds are received (e.g., construction of a bond -financed facility or payment of debt service on the bonds). Deposit of gross proceeds to the general fund of the issuer (or other fund in which they are commingled with revenues or taxes) does not eliminate or ameliorate the Issuer's obligation to compute rebate in most cases. As such, proceeds commingled with the general revenues of the issuer are not "freed -up" from the rebate obligation. An exception to this commingling limitation for bonds, other than private activity bonds, permits "investment earnings" (but not sale proceeds or other types of gross proceeds) to be considered spent when deposited to a commingled fund if those amounts are reasonably McCall, Parkhurst & Horton L.L.P. - Page 5 expected to be spent within six months. Other than for these amounts, issuers may consider segregating investments in orderto more easily compute the amount of such arbitrage earnings by not having to allocate investments. Special rules are provided for purposes of advance refundings. These rules are too complex to discuss in this memorandum. Essentially, the rules relating to refundings, however, do not require that amounts deposited to the escrow fund to defease the prior obligations of the issuer be subject to arbitrage rebate to the extent that the investments deposited to the escrow fund do not have a yield in excess of the yield on the bonds. Any loss resulting from the investment of proceeds in an escrow fund below the yield on the bonds, however, may be recovered by combining those investments with investments deposited to other funds, e.g., reserve or construction funds. The arbitrage regulations also provide an exception to the arbitrage limitations for the investment of bond proceeds in tax-exempt obligations. As such, investment of proceeds in tax exempt bonds eliminates the Issuer's rebate obligation. A caveat; this exception does not apply to gross proceeds derived allocable to a bond, which is not subject to the alternative minimum tax under section 57(a)(5) of the Code, if invested in tax-exempt bonds subject to the alternative minimum tax, i.e., " private activity bonds." Such "AMT -subject" investment is treated as a taxable investment and must comply with the arbitrage rules, including rebate. Earnings from these tax-exempt investments are subject to arbitrage restrictions, including rebate. Similarly, the investment of gross proceeds in certain tax-exempt mutual funds are treated as a direct investment in the tax-exempt obligations deposited in such fund. While issuers may invest in such funds for purposes of avoiding arbitrage rebate, they should be aware that if "private activity bonds" are included in the fund then a portion of the earnings will be subject to arbitrage rebate. Issuers should be prudent in assuring that the funds do not contain private activity bonds. The arbitrage regulations provide a number of instances in which earnings will be imputed to nonpurpose investments. Receipts generally will be imputed to investments that do not bear interest at an arm's-length (i.e., market) interest rate. As such, the regulations adopt a "market price" rule. In effect, this rule prohibits an issuer from investing bond proceeds in investments at a price which is higher than the market price of comparable obligations, in order to reduce the yield. Special rules are included for determining the market price for investment contracts, certificates of deposit and certain U.S. Treasury obligations. For example, to establish the fair market value of investment contracts a bidding process between three qualified bidders must be used. The fair market value of certificates of deposit which bear a fixed interest rate and are subject to an early withdrawal penalty is its purchase price if that price is not less than the yield on comparable U.S. Treasury obligations and is the highest yield available from the institution. In any event, a basic "common sense" rule -of -thumb that can be used to determine whether a fair market value has been paid is to ask whether the general funds of the issuer would be invested at the same yield or at a higher yield. An exception to this market price rule is available for United States Treasury Obligations - State or Local Government Series in which case the purchase price is always the market price. Reimbursement and Working Capital McCall, Parkhurst & Horton L.L.P. - Page 6 The regulations provide rules for purposes of determining whether gross proceeds are used for working capital and, if so, at what times those proceeds are considered spent. In general, working capital financings are subject to many of the same rules that have existed since the mid-1970s. For example, the regulations generally continue the 13 -month temporary period. By adopting a "proceeds -spent -last" rule, the regulations also generally require that an issuer actually incur a deficit (i.e., expenditures must exceed receipts) for the computation period (which generally corresponds to the issuer's fiscal year). Also, the regulations continue to permit an operating reserve, but unlike prior regulations the amount of such reserve may not exceed five percent of the issuer's actual working capital expenditures for the prior fiscal year. Another change made by the regulations is that the issuer may not finance the operating reserve with proceeds of a tax-exempt obligation. Importantly, the regulations contain rules for determining whether proceeds used to reimburse an issuer for costs paid prior to the date of issue of the obligation, in fact, are considered spent at the time of reimbursement. These rules apply to an issuer who uses general revenues for the payment of all or a portion of the costs of a project then uses the proceeds of the bonds to reimburse those general revenues. Failure to comply with these rules would result in the proceeds continuing to be subject to federal income tax restrictions, including rebate. To qualify for reimbursement, a cost must be described in an expression (e.g., resolution, legislative authorization) evidencing the issuer's intent to reimburse which is made no later than 60 days after the payment of the cost. Reimbursement must occur no later than 18 months after the later of (1) the date the cost is paid or (2) the date the project is placed in service. Except for projects requiring an extended construction period or small issuers, in no event can a cost be reimbursed more than three years after the cost is paid. Reimbursement generally is not permitted forworking capital; only capital costs, grants and loans may be reimbursed. Moreover, certain anti -abuse rules apply to prevent issuers from avoiding the limitations on refundings. IN CASES INVOLVING WORKING CAPITAL OR REIMBURSEMENT, ISSUERS ARE ADVISED TO CONTACT McCALL, PARKHURST & HORTON L.L.P. TO ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTION. Rebate Pa meets Rebate payments generally are due 60 days after each installment computation date. The interim computation dates occur each fifth anniversary of the issue date. The final computation date is on the latest of (1) the date 60 days after the date the issue of bonds is no longer outstanding, (2) the date eight months after the date of issue for certain short-term obligations (i.e., obligations retired within three years), or (3) the date the issuer no longer reasonably expects any spending exception, discussed below, to apply to the issue. On such payment dates, other than the final payment date, an issuer is required to pay 90 percent of the rebatable arbitrage to the United States. On the final payment date, an issuer is required to pay 100 percent of the remaining rebate liability. Failure to timely pay rebate does not necessarily result in the loss of tax -exemption. Late payments, however, are subject to the payment of interest, and unless waived, a penalty of 50 percent (or, in the case of private activity bonds, other than qualified 501(c)(3) bonds, 100 McCall, Parkhurst & Horton L.L.P. - Page 7 percent) of the rebate amount which is due. IN SUCH CIRCUMSTANCES, ISSUERS ARE ADVISED TO CONSULT McCALL, PARKHURST & HORTON L.L.P. TO ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES OF THESE TRANSACTIONS. Rebate payments are refundable. The issuer, however, must establish to the satisfaction of the Commissionerof the Internal Revenue Service thatthe issuerpaid an amount in excess of the rebate and that the recovery of the overpayment on that date would not result in additional rebatable arbitrage. An overpayment of less than $5,000 may not be recovered Before the final computation date. Alternative Penalty Amount In certain cases, an issuer of a bond the proceeds of which are to be used for construction may elect to pay a penalty, in lieu of rebate. The penalty may be elected in circumstances in which the issuer expects to satisfy the two-year spending exception which is more fully described under the heading "Exceptions to Rebate." The penalty is payable, if at all, within 60 days after the end of each six-month period. This is more often than rebate. The election of the alternative penalty amount would subject an issuer, which fails the two-year spend -out requirements, to the payment of a penalty equal to one and one-half of the excess of the amount of proceeds which was required to be spent during that period over the amount which was actually spent during the period. The penalty has characteristics which distinguish it from arbitrage rebate. First, the penalty would be payable without regard to whether any arbitrage profit is actually earned. Second, the penalty continues to accrue until either (1) the appropriate amount is expended or (2) the issuer elects to terminate the penalty. To be able to terminate the penalty, the issuer must meet specific requirements and, in some instances, must pay an additional penalty equal to three percent of the unexpended proceeds. Exceptions to Rebate The Code and regulations provide certain exceptions to the requirement that the excess investment earnings be rebated to the United States. a. Small Issuers. The first exception provides that if an issuer (together with all subordinate issuers) during a calendar year does not issue tax-exempt bonds2 in an aggregate face amount exceeding $5 million, then the obligations are not subject to rebate. Only issuers with general taxing powers may fake advantage of this exception. Subordinate issuers are those issuers which derive their authority to issue bonds from the same issuer, e.g., a city and a health facilities development corporation, or which are controlled by the same issuer, e.g., a state and the board of a public university. In the case of bonds issued for public school capital expenditures, the $5 million cap may be increased to as much as $15 million. For purposes of measuring whether bonds in the calendar year exceed these dollar limits, current refunding 1 For this purpose, "private activity bonds" neither are afforded the benefit of this exception nor are taken into account for purposes of determining the amount of bonds issued. McCall, Parkhurst & Horton L.L.P. - Page 8 bonds can be disregarded if they meet certain structural requirements. Please contact McCall, Parkhurst & Horton L.L.P. for further information. b. Spending Exceptions. Six -Month Exception. The second exception to the rebate requirement is available to all tax-exempt bonds, all of the gross proceeds of which are expended during six months. The six month rule is available to bonds issued after the effective date of the Tax Reform Act of 1986. See the discussion of effective dates on page two. For this purpose, proceeds used for the redemption of bonds (other than proceeds of a refunding bond deposited to an escrow fund to discharge refunded bonds) can not be taken into account as expended. As such, bonds with excess gross proceeds generally can not satisfy the second exception unless the amount does not exceed the lesser of five percent or $100,000 and such de minimis amount must be expended within one year. Certain gross proceeds are not subject to the spend -out requirement, including amounts deposited to a bona fide debt service fund, to a reserve fund and amounts which become gross proceeds received from purpose investments. These amounts themselves, however, may be subject to rebate even though the originally expended proceeds were not. The Code provides a special rule for tax and revenue anticipation notes (i.e., obligations issued to pay operating expenses in anticipation of the receipt of taxes and other revenues). Such notes are referred to as TRANs. To determine the timely expenditure of the proceeds of a TRAN, the computation of the "cumulative cash flow deficit" is important. If the "cumulative cash flow deficit" (i.e., the point at which the operating expenditures of the issuer on a cumulative basis exceed the revenues of the issuer during the fiscal year) occurs within the first six months of the date of issue and must be equal to at least 90 percent of the proceeds of the TRAN, then the notes are deemed to satisfy the exception. This special rule requires, however, that the deficit actually occur, not that the issuer merely have an expectation that the deficit will occur. In lieu of the statutory exception for TRANS, the regulations also provide a second exception. Under this exception, 100 percent of the proceeds must be spent within six months, but before note proceeds can be considered spent, all other available amounts of the issuer must be spent first ("proceeds -spent -last" rule). In determining whether all available amounts are spent, a reasonable working capital reserve equal to five percent of the prior year's expenditures may be set aside and treated as unavailable. 18 -Month Exception. The regulations also establish a non -statutory exception to arbitrage rebate if all of the gross proceeds (including investment earnings) are expended within 18 months after the date of issue. Under this exception, 15 percent of the gross proceeds must be expended within a six-month spending period, 60 percent within a 12 -month spending period and 100 percent within an 18 -month spending period. The rule permits an issuer to rely on its reasonable expectations for computing investment earnings which are included as gross proceeds during the first and second spending period. A reasonable retainage not to exceed five percent of the sale proceeds of the issue is not required to be spent within the 18 -month period but must be expended within 30 months. Rules similar to the six-month exception relate to the definition of gross proceeds. Two Year Exception. Bonds issued after December 19, 1989 (Le., the effective date of the Omnibus Reconciliation Act of 1989), at least 75 percent of the net proceeds of which are to be used for construction, may be exempted from rebate if the gross proceeds are spent McCall, Parkhurst & Horton L.L.P. - Page 9 within two years. Bonds more than 25 percent of the proceeds of which are used for acquisition or working capital may not take advantage of this exception. The exception applies only to governmental bonds, qualified 501(c)(3) bonds and private activity bonds for governmentally - owned airports and docks and wharves. The two-year exception requires that at least 10 percent of the available construction proceeds must be expended within six months after the date of issue, 45 percentwithin 12 months, 75 percentwithin 18 months and 100 percent within 24 months. The term "available construction proceeds" generally means sale proceeds of the bonds together with investment earnings less amounts deposited to a qualified reserve fund or used to pay costs of issuance. Under this rule, a reasonable retainage not to exceed five percent need not be spent within 24 months but must be spent within 36 months. The two-year rule also provides for numerous elections which must be made not later than the date of issuance of the bonds. Once made, the elections are irrevocable. Certain elections permit an issuer to bifurcate bond issues, thereby treating only a portion of the issue as a qualified construction bond; and, permit an issuerto disregard earnings from reserve funds for purposes of determining "available construction proceeds." Another election permits an issuer to pay the alternative penalty amount discussed above in lieu of rebate if the issuer ultimately fails to satisfy the two-year rule. Issuers should discuss these elections with their financial advisors prior to issuance of the bonds. Of course, McCall, Parkhurst & Horton L.L.P. remains available to assist you by providing legal interpretations thereof. Debt Service Funds. Additionally, an exception to the rebate requirement, whether or not any of the previously discussed exceptions are available, applies for earnings on "bona fide debt service funds." A "bona fide debt service fund" is one in which the amounts are expended within 13 months of the accumulation of such amounts by the issuer. In general, most interest and sinking funds (other than any excess taxes or revenues accumulated therein) satisfy these requirements. For private activity bonds, short term bonds (i.e., have a term of less than five years) or variable rate bonds, the exclusion is available only if the gross earnings in such fund does not exceed $100,000, for the bond year. For other bonds issued after November 11, 1988, no limitation is applied to the gross earnings on such funds for purposes of this exception. Therefore, subject to the foregoing discussion, the issuer is not required to take such amounts into account for purposes of the computation. FOR BONDS ISSUED AFTER THE EFFECTIVE DATE OF THE TAX REFORM ACT OF 1986 WHICH WERE OUTSTANDING AS OF NOVEMBER 11, 1988, OTHER THAN PRIVATE ACTIVITY BONDS, SHORT TERM BONDS OR VARIABLE RATE BONDS, A ONE-TIME ELECTION MAY BE MADE TO EXCLUDE EARNINGS ON "BONA FIDE DEBT SERVICE FUNDS" WITHOUT REGARD TO THE $100,000, LIMITATION. THE ELECTION MUST BE MADE IN WRITING (AND MAINTAINED AS PART OF THE ISSUER'S BOOKS AND RECORDS) NO LATER THAN THE LATER OF MARCH 21, 1990, OR THE FIRST DATE A REBATE PAYMENT IS REQUIRED. Conclusion McCall, Parkhurst & Horton L.L.P. hopes that this memorandum will prove to be useful as a general guide to the arbitrage rebate requirements, Again, this memorandum is not intended as an exhaustive discussion nor as specific advice with respect to any specific transaction. We advise our clients to seek competent McCall, Parkhurst & Horton L.L.P. - Page 10 financial and accounting assistance. Of course, we remain available to provide legal advice regarding all federal income tax matters, including arbitrage rebate. If you have any questions, please feel free to contact either Harold T. Flanagan or Stefano Taverna at (214) 754-9200. McCall, Parkhurst & Horton L.L.P. - Page 11 EXHIBIT "B" LAW OFFICES WCALL, PARKHURST & HORTON L.L.P. 600 CONGRESS AVENUE 717 NORTH HARWOOD 700 N, ST. MARY'S STREET SUITE 1800 SUITE 900 SUITE 1.525 AUSTIN, TEXAS 78701-3246 DALLAS, TEXAS 75205-6587 SAN ANTONIO, TEXAS 78 205-3 503 TELEPHONE: (SI 2) 978-3895 TELEPHONE: (214) 754-9209 TELEPHONE: (210) 225-2800 FACSIMILE: (512)472.0871 FACSIMILE:(214)754-9250 FACSIMILE: (210)225�29B4 May 21, 2013 Certain Federal Income Tax Considerations for Private Business Use of Bond -Financed Facilities This memorandum provides a general discussion of those types of contractual arrangements which give rise to private business use, and to what extent that use rises to a prohibited level. Generally, in order for bonds issued by governmental units to be tax- exempt, no more than a de minimis amount of the proceeds of the bonds or the facilities financed with such proceeds may be used by non-governmental users. That is, there may be no more than an incidental use by persons, other than state or local governments. Too much private business use can cause the bonds to become taxable. Private business use for this purpose can be direct or can result from indirect benefits being conveyed to a private person by contractual arrangement. The following discussion describes, in general terms, those types of arrangements which need to be scrutinized. We hope that this general guideline will be useful to you in interacting with private parties regarding the use of bond proceeds or bond -financed facilities. While the statements contained herein are not intended as advice with regard to any specific transaction, McCall, Parkhurst & Horton L.L.P. remains available should you have questions about these rules. If you have any specific questions or comments, please feel free to contact Stefano Taverna or Harold T. Flanagan at (214) 754-92001 Private Business Use Arrangements that involve use in a trade or business by a nongovernmental person of bond proceeds or facilities financed with bond proceeds may cause a "private business use" problem. Bond -financed facilities may be used by a variety of people with differing consequences under these rules. For example, students, teachers, employees and the general public may use bond -financed facilities on a non-exclusive basis without constituting private business use. More problematic, however, is use of bond -financed facilities by groups such as managers, lessees (e.g., book store owners), persons providing services (e.g,, food or cleaning), seminar groups, sports and entertainment groups, and even alumni associations. The benefits also may be considered to pass to a private person where the right to the output produced by the facility is transferred. For this purpose, the federal government is considered a non-governmental person. Use by an organization organized under section 501(c)(3) of the Internal Revenue Code in a trade or business unrelated to the exempt purpose of such organization also is considered use by a private person. The term "use" includes both actual and beneficial use. As such, private business use may arise in a variety of ways. For example, ownership of a bond -financed facility by a non-governmental person is private business use. The leasing of a bond -financed facility by a non-governmental person can also cause a private business use problem. Along the same line, management of such facilities by a non-governmental person can cause a problem with private business use, absent compliance with the management contract rules discussed below. Essentially, such use can occur in connection with any arrangement in which the non- governmental user has a preference to benefit from the proceeds or the facilities. Therefore, any arrangement which results in a non-governmental person being the ultimate beneficiary of the bond financing must be considered. 1. Sales and Leases. The sale of a bond -financed facility to a non- governmental person would cause a private business use problem if that facility involved the use of more than 10 percent of the bond proceeds. Since state law often prohibits a governmental issuer from lending credit, this circumstance generally does not occur. Leases, however, also could be a problem because such arrangements grant a possessory interest in the facility which results in the lessee receiving a right to use the facility which is superior to members of the general public. 2. Management Contracts. Having a private manager will give rise to private business use unless certain terms of the management agreement demonstrate that beneficial use has not been passed to the manager. These factors relate to the compensation arrangements, contract term, cancellation provisions, and the relationship of the parties. The primary focus of these rules is on compensation, in general, compensation must be reasonable and not be based, in whole or in part, on a share of net profits. Compensation arrangements may take one of four forms_ (1) periodic fixed fee; (2) capitation fee; (3) per- unit fee; or (4) percentage of fees charged. In general, a periodic fixed fee arrangement, however, is required in which at least 50 percent of annual compensation be based on a predetermined fee. During the initial two year start-up period, compensation may be based on a percentage of fees charged (i.e., gross revenues, adjusted gross revenues or expenses). The term of a management contract, generally, may not exceed five years, including all renewal options, and must be cancelable by the governmental unit at the end of the third year. If per-unit fee compensation is used, the term is limited to three years, with a cancellation option for the governmental unit at the end of two years. Where compensation is based on a percentage of gross revenues, the contract may not extend beyond a term of two years, cancelable by the governmental unit at the end of the first year. In each instance, cancellation may be upon reasonable notice, but must be "without penalty or cause," meaning no covenant not to compete, buy-out provision or liquidated damages provision is allowed. Finally, the manager may not have any role or relationship with the governmental unit that would limit the ability of the governmental unit to exercise its rights under the contract. Any voting power of either party which is vested in the other party, including its officers, directors, shareholders and employees, may not exceed 20 percent. Further, the chief executive officer of either party may not serve an the governing board of the other party. Similarly, the two parties must not be members of the same controlled group or be related persons, as defined in certain provisions of federal tax law. 3. Cooperative Research Agreements. A cooperative research agreementwith a private sponsorwhereby the private party uses bond -financed facilities may cause a private business use problem. Nevertheless, such use of a bond -financed facility by a non- governmental person is to be disregarded for purposes of private business use if the arrangement is in one of the following forms. f=irst, the arrangement may be disregarded if the sponsoring party is required to pay a competitive price for any license or other use of resulting technology, and such price must be determined at the time the technology is available. Second, an arrangement may also qualify if a four-part requirement is met: (1) multiple, unrelated industry sponsors must agree to fund university -performed basic research; (2) the university must determine the research to be performed and the manner in which it is to be performed; (3) the university must have exclusive title to any patent or other product incidentally resulting from the basic research; and (4) sponsors must be limited to no more than a nonexclusive, royalty -free license to use the product of any such research. McCall, Parkhurst & Horton L.L.P. - Page 2 4. Output Contracts. In some circumstances, private business use arises by virtue of contractual arrangements in which a governmental unit agrees to sell the output from a bond -financed facility to a non-governmental person. If the non-governmental person is obligated to take the output or to pay for output even if not taken, then private business use will arise. This is because the benefits and burdens of the bond -financed facility are considered as inuring to the non-governmental purchaser. In addition to the general rule, output -type facilities, including electric and gas generation, transmission and related facilities (but not water facilities) are further limited in the amount of private business use which may be permitted. If more than 5 percent of the proceeds are used for output facilities and if more than 10 percent of the output is sold pursuant to an output arrangement, then the aggregate private business use which may result (for all bond issues) is $15,000,000. How Much Private Business Use is Too Much? In general, there is too much private business use if an amount in excess of 10 percent of the proceeds of the bond issue are to be used, directly or indirectly, in a trade or business carried on by persons other than governmental units, and other than as members of the general public. All trade or business use by persons on a basis different than that of the general public is aggregated for the 10 percent limit. Private business use is measured on a facility or bond issue basis. On a facility basis, such use is generally measured by relative square footage, fair market rental value or the percentage of cost allocable to the private use. On a bond issue basis, the proceeds of the bond issue are allocated to private and governmental (or public) use of the facility to determine the amount of private business use over the term of the bond issue. Temporary use is not necessarily "bad" (i.e, private use) even though it results in more than 10 percent of the facility being so used. For example, if 100 percent of a facility is used for a period equal to five percent of the term of the bond such use may not adversely impact the bonds. The question is whether the benefits and burdens of ownership have transferred to the private user, as in the case of a sale, lease or management contract. If these benefits and burdens have not transferred, such use may be disregarded for purposes of private business use. In no event should private business use exceed $15,000,000. In addition, if the private use is considered "unrelated or disproportionate" to the governmental purpose for issuance of the bonds, the private business use test is met if the level of the prohibited private use rises to 5 percent. The "unrelated" question turns on the operational relationship between the private use and use for the governmental purpose. In most cases, a related use facility must be located within or adjacent to the related governmental facility, e.g., a privately -operated school cafeteria would be related to the school in which it is located. Whereas, the use of a bond -financed facility as an administrative office building for a catering company that operates cafeterias for a school system would not be a related use of bond proceeds. Nonetheless, even if a use is related, it is disproportionate to the extent that bond proceeds used for the private use will exceed proceeds used for the related governmental use. III. When are the tests applied to analyze the qualification of a bond? A bond is tested both (1) on the date of issue, and (2) over the term. The tests are applied to analyze the character of the bond on the date of issue, based on how the issuer expects to use the proceeds and the bond -financed property. This is known as the "reasonable expectations" standard. The tests also continuously are applied during the term of the bonds to determine whether there has been a deviation from those expectations. This is known as the "change of use" standard. When tested, bonds are viewed on an "issue -by -issue" basis. Generally, bonds secured by the same sources of funds are part of the same "issue" if they are sold within 15 days of one another. IV. What is the reasonable expectations standard? McCall, Parkhurst & Horton L.L.P. - Page 3 The reasonable expectations standard will be the basis on which McCall, Parkhurst & Horton L.L.P., as bond counsel, will render the federal income tax opinion on the bonds. The statement of expectations will be incorporated into the Federal Tax Certificate, previously referred to as the Federal Tax Certificate. The certificate also will contain information about the amounts to be expended on different types of property, e.g., land, buildings, equipment, in order to compute a weighted useful life of the bond -financed property. Based on the information on useful life, the maximum weighted average maturity of the bonds tested to ensure that is restricted to no more than 120 percent of the useful life of the property being financed or refinanced. V. Chanae of Use Standard. The disqualified private business use need not exist on the date of issue. Subsequent use by non-governmental persons also can cause a loss of tax -exemption. Post - issuance "change of use" of bond -financed facilities could result in the loss of the tax-exempt status of the bonds, unless certain elements exist which demonstrate the change was unforeseen. For this purpose, a change in use includes a failure to limit private business use subsequent to the date of issuance of the bonds. A reasonable expectation element requires that, as of the date of issue of the bonds, the governmental unit reasonably have expected to use the proceeds of the issue for qualified facilities for the entire term of the issue. To fall within the safe harbor rules which avoid loss of tax-exempt status the governmental unit must assure that no circumstances be present which indicate an attempt to avoid directly or indirectly the requirements of federal income tax law. Finally, the safe harbor requires that the governmental unit take remedial action that would satisfy one of the following provisions: redemption of bonds; alternative use of disposition proceeds of a facility that is financed by governmental bonds; or, alternative use of a facility that is financed by governmental bonds. For purposes of the latter two remedial action provisions, the governmental unit has 90 days from the date of the change of use to satisfy the requirements. In addition, there is an exception for small transactions for dispositions at a loss. Vl. Written Procedures. The Internal Revenue Service ("IRS") has initiated an active audit program intended to investigate the compliance of governmental issuers with the private activity bond rules described herein and the arbitrage rules described in the other memorandum provided to you by our firm. In connection with the expansion of this program, auditors and their supervisors have expressed the viewpoint that each governmental issuer should establish written procedures to assure continuing compliance. Moreover, the IRS is asking issuers to state in a bond issue's informational return (such an 8038-G) whether such procedures have been adopted. The federal tax certificate, together with the attached memoranda and bond covenants can be supplemented by standard written practices adopted by the executive officer or legislative bodies of the issuer. Accordingly, our firm is prepared to advise you with respect to additional practices which we believe would be beneficial in monitoring compliance and taking remedial action in cases of change in use. There is no standard uniform practice for all issuers to adopt because each issuer operates in unique fashion. However, if you wish us to assist you in developing practices which might assist you in complying with the viewpoints expressed by the IRS and its personnel, please contact your bond lawyer at McCall, Parkhurst & Horton LLP. Disclosure Under IRS Circular 230: McCall Parkhurst & Horton LLP informs you that any tax advice contained in this memorandum, including any attachments, was not intended or written to be used, and cannot be used, for the purpose of avoiding federal tax related penalties or promoting, marketing or recommending to another party any transaction or matter addressed herein. McCall, Parkhurst & Horton L.L.P. - Page 4 Exhibit "C" LAW OFFICES WCALL, PARKHURST & HORTON L.L.P. 600 CONGRESS AVENUE 717 NORTH HARWOOD SUITE 1800 SUITE 900 AUSTIN, TEXAS 7870$-3249 DALLAS, TEXAS 75201-6587 TELEPHONE: (512) 478-3805 TEtLPHONE: (214) 754-9ZOO FACSIMILC- (512) 4YZ-0871 FACSIMILE: (214) 754-9250 January 15, 2015 Debbie Piper Finance Director Town of Westlake, Texas 3 Village Circle, Suite 202 Westlake, Texas 76262 700 W ST. MARY'S STREET SVITE 1525 SAN ANTONIO. TEXAS. 78205-3503 TELEPHONE: (210) 225-2800 FACSWILE: (210) 225-2984 Re: Town of Westlake, Texas Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) Dear Ms. Piper: As you know, the Town of Westlake, Texas (the "Issuer") will issue the captioned bonds in order to provide for the acquisition and construction of the project. As a result of that issuance, the federal income tax laws impose certain restrictions on the investment and expenditure of amounts to be used for the project or to be deposited to the bond interest and sinking fund, and the reserve fund for the captioned bonds. The purpose of this letter is to set forth, in somewhat less technical language, those provisions of the tax law which require the timely use of bond proceeds and that investment of these amounts be at a yield which is not higher than the yield on the captioned bonds. For this purpose, please refer to line 21(e) of the Norm 8038-G included in the transcript of proceedings for the yield on the captioned bonds. Please note that the Form 8038-G has been prepared based on the information provided by or on your behalf by your financial advisor. Accordingly, while we believe that the information is correct you may wish to have the yield confirmed before your rebate consultant or the paying agent attempt to rely on it. Generally, the federal tax laws provide that, unless excepted, amounts to be used for the project orto be deposited to the interest and sinking fund and the reserve fund must be invested in obligations the combined yield on which does not exceed the yield on the bonds. Importantly, for purposes of administrative convenience, the bonds, however, have been structured in such a way as to avoid, for the most part, this restriction on investment yield. They also contain certain covenants relating to expenditures of proceeds designed to alert you to unintentional failures to comply with the laws affecting expenditures of proceeds and dispositions of property. First, the sale and investment proceeds to be used for the new money project may be invested for up to three years without regard to yield. (Such amounts, however, may be subject to rebate.) Thereafter, they must be invested at or below the bond yield. Importantly, expenditure of these proceeds must be accounted in your books and records. Allocations of these expenditures must occur within 18 months of the later of the date paid or the date the project is completed. The foregoing notwithstanding, the allocation should not occur later than 60 days after the earlier of (1) of five years after the delivery date of the bonds or (2) the date the bonds are retired unless you obtain an opinion of bond counsel. Second, the interest and sinking fund is made up of amounts which are received annually for the payment of current debt service on all the Issuer's outstanding bonds. Any taxes or revenues deposited to the interest and sinking fund which are to be used for the payment of current debt service on the captioned bonds, or any other outstanding bonds, are not subject to yield restriction, By definition, current debt service refers only to debt service to be paid within one year of the date of receipt of these amounts. For the most part, this would be debt service in the current fiscal year. 'These amounts deposited to the account for current debt service may be invested without regard to any constraint imposed by the federal income tax laws. Third, a portion of the interest and sinking fund is permitted to be invested without regard to yield restriction as a "minor portion." The "minor portion" exception is available for de minimis amounts of taxes or revenues deposited to the interest and sinking fund. The maximum amount that may be invested as part of this account may not exceed the lesser of five percent of the principal amount of the bonds or $100,000. In addition, the reserve fund contains an amount, which although not expended for debt service within the current year, is necessary to ensure that amounts will be sufficient to pay debt service in the event that taxes or revenues are insufficient during that period. This amount represents a reserve against periodic fluctuations in the receipt of taxes and revenues. The Internal Revenue Code permits amounts which are held in reserve for the payment of debt service, in such instances, to be invested without regard to yield restriction if such amounts do not exceed the lesser of (1) 10 percent of the outstanding principal amount of all outstanding bonds, (2) maximum annual debt service on all outstanding bonds, or (3) 125 percent of average annual debt service on all outstanding bonds. Accordingly, you should review the current balance in the interest and sinking fund and the reserve fund in order to determine if such balances exceed the aggregate amounts discussed above. Additionally, in the future it is important that you be aware of these restrictions as additional amounts are deposited to the funds. The amounts in these funds which are subject to yield restriction would only be the amounts which are in excess of, in the case of the interest and sinking find, the sum of (1) the current debt service account and (2) the "minor portion" account and, in the case of the reserve fund, the amount which is the lesser of the three amounts described above. Moreover, to the extent that additional bonds are issued by the Issuer, whether for new money projects or for refunding, these amounts will change in their proportion. The Ordinance contains covenants that require the Issuer to comply with the requirements of the federal tax laws relating to the tax-exempt obligations. The Internal Revenue Service (the "Service") has determined that certain materials, records and information should be retained by the issuers of tax-exempt obligations for the purpose of enabling the Service to confirm the exclusion of the interest on such obligations under the Internal Revenue Code. Accordingly, the Issuer should retain such materials, records and information for the period beginning on the issue date of the captioned bonds and ending three years after the date the captioned bonds are retired. Please nate this federal tax law standard may vary from state law standards. The material, records and information required to be retained will generally be contained in the transcript of proceedings for the captioned bonds, however, the Issuer should collect and retain additional materials, records and information to ensure the continued compliance with federal tax law requirements. For example, beyond the transcript of proceedings for the bonds, the Issuer should keep schedules evidencing the expenditure of bond proceeds, documents relating to the use of bond -financed property by governmental and any private parties (e.g., leases and management contracts, if any) and schedules pertaining to the investinent of bond proceeds. In the event that you have questions relating to record retention, please contact us. The Service also wants some assurance that any failure to comply with the federal tax laws was not due to an issuer's intentional disregard or gross neglect of the responsibilities imposed on it by the federal tax laws. Therefore, to ensure post -issuance compliance, an issuer should consider adopting formalized written guidelines to help the issuer perform diligence reviews at regular intervals. The goal is for issuers to be able to timely identify and resolve violations of the laws necessary to maintain their obligations' tax -favored status. While the federal tax certificate, together with its attachments, may generally provide a basic written guideline when incorporated in an organizations' operations, the extent to which an organization has appropriate written compliance procedures in place is to be determined on a case-by-case basis Moreover, the Service has indicated that written procedures should identify the personnel that adopted the procedures, the personnel that is responsible for monitoring compliance, the frequency of compliance check activities, the nature of the compliance check activities undertaken, and the date such procedures were originally adopted and subsequently updated, if applicable. The Service has stated that the adoption of such procedures will be a favorable factor that the Service will consider when determining the amount of any penalty to be imposed on an issuer in the event of an unanticipated and non -curable failure to comply with the tax laws. Finally, you should notice that the Ordinance contains a covenant that limits the ability of the Issuer to sell or otherwise dispose of bond -financed property for compensation. Beginning for obligations issued after May 15, 1997 (including certain refunding bonds), or in cases in which an issuer elects to apply new private activity bond regulations, such sale or disposition causes the creation of a class of proceeds referred to as "disposition proceeds." Disposition proceeds, like sale proceeds and investment earnings, are tax -restricted funds. Failure to appropriately account, invest or expend such disposition proceeds would adversely affect the tax-exempt status of the bonds. In the event that you anticipate selling; property, even in the ordinary course, please contact us. Obviously, this letter only presents a fundamental discussion of the yield restriction rules as applied to amounts deposited to the funds. Moreover, this letter does not address the rebate consequences with respect to the interest and sinking fund and the reserve fund. You should review the memorandum attached to the Federal Tax Certificate as Exhibit "A" for this purpose. If you have certain concerns with respect to the matters discussed in this letter or wish to ask additional questions with regards to certain limitations imposed, please feel free to contact our firm. Thank you for your consideration and we look forward to our continued relationship. Very truly yours, McCALL, PARKHURST & HORTON L.L.P. cc: Chris Settle Exhibit "D" ISSUE PRICE, CERTIFICATE Tile undersigned, as the duty authorized representative of Jefferies LIX (the "Underwriter"), with respect 10 the underwriting of Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds") issued by the'1'own of Westlake, Texas (the "Issuer"), hereby certifies and represents on behalfol'the Underwriter, but not in his/her own right, based on the Underwriter's records and information available to it that it believes, after reasonable inquiry, to be accurate and complete as of the date hereof: as follows: (a) 'file Underwriter has offered all of the Bonds to members of the public in a bona fide initial offering at a price which, on the date of such offering, was reasonably expected by the Underwriter to be equal to the fair market value of such maturity. for purposes of this Issue Price Certificate, the term "public" does not include any bondhouses, brokers, dealers, and similar persons or organizations acting in the capacity Of underwriters or wholesalers (including the Underwriter or members of the selling group or persons that are related to, or controlled by, or are acting on behalf of or as agents for the undersigned or members of the selling group). (b) Other than the obligations maturing hi (the "Retained Maturity or Maturities"). the first price at which a substantial amount (i.e., at least 10 percent) of the principal amount of each maturity of the Bonds was sold to the public is set forth in the Official Statement. In the case of the Retained Maturities, the Underwriter reasonably expected on the offering date to sell a substantial amount (i.e., at least 10 percent) of each Retained Mirturity at the initial offering, price set forth in the Official Statement. `file Official Statement is included in the transcript for the Bonds and is incorporated herein by reference. The Underwriter understands that the representations made in this Issue Price Certificate will be relied upon, by the Issuer with respect to certain of the representations set forth in this Federal Tax Certificate and by McCall, Parkhurst & I lorton L.L.P. (i) in connection with rendering its opinion to the Issuer that interest on the Bonds is excludable from gross income thereof for income tax purposes, and (ii) for purposes of completing the IRS Form 8038-G. The undersigned is certifying only as to facts in existence on the date hereof. Nothing herein represents the undersigned's interpretation of any laws or the application of any laws to these facts. EXECUTED and DELIVERED as of this February 5, 2015. JEFFERIES LLC 4 By: <-� By: Name: Name: 'title: _-- (/+' t I D • Title: Exhibit "D" ISSUE PRICE CERTIFICATE The undersigned, as the duty authorized representative of Jefferies LLC (the "Underwriter"), with respect to the underwriting of Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds") issued by the Town of Westlake, Texas (the "Issuer"), hereby certifies and represents on behalf of the Underwriter, but not in his/her own right, based on the Underwriter's records and information available to it that it believes, after reasonable inquiry, to be accurate and complete as of the date hereof, as follows: (a) The Underwriter has offered all of the Bonds to members of the public in a bona fide initial offering at a price which, on the date of such offering, was reasonably expected by the Underwriter to be equal to the fair market value of such maturity. For purposes of this Issue Price Certificate, the term "public" does not include any bondhouses, brokers, dealers, and similar persons or organizations acting in the capacity of underwriters or wholesalers (including the Underwriter or members of the selling group or persons that are related to, or controlled by, or are acting on behalf of or as agents for the undersigned or members of the selling group). (b) Other than the obligations maturing in (the "Retained Maturity or Maturities"), the first price at which a substantial amount (i.e., at least 10 ereent) of the principal amount of each maturity of the Bonds was sold to the public is set forth in the Official Statement. In the case of the Retained Maturities, the Underwriter reasonably expected on the offering date to sell a substantial amount (i.e., at least 10 percent) of each Retained. Maturity at the initial offering price set forth in the Official Statement. The Official Statement is included in the transcript for the Bonds and is incorporated herein by reference. The Underwriter understands that the representations made in this Issue Price Certificate will be relied upon, by the Issuer with respect to certain of the representations set forth in this Federal Tax Certit icate and by McCall, Parkhurst & Morton L.L.P. (i) in connection with rendering its opinion to the Issuer that interest on the Fonds is excludable from gross income thereof for income tax purposes, and (ii) for purposes of completing the IRS Form 8038-G. The undersigned is certifying only as to tracts in existence on the date hereof. Nothing herein represents the undersigned's interpretation of any laws or the application of any laws to these facts. EXECUTED and DELIVERED as of this February 5, 2015. JEFFERIES LLC By:�%� By: Navi�; �l �f r� d ., S �► r % o r e Name: i Title Title, Exhibit "E" SCHEDULES OF FINANCIAL ADVISOR [To be attached hereto] TOWN OF WESTLAKE, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Table of Contents P€tang Stnnrna€v Duiaation Of Form 8038 Yidd Statistics 2015 1 Major Improvements 1 1114?2015 1 10:51 AM TOWN OF WESTLAKE. TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Sources & Uses Dated 02/05/2015 1 Delivered 02105/2015 Sources Of Funds Par Amount of Bonds $263175,000.00 Total Sources $26,175,000.00 Uses Of Funds 1'ro�cci Fund 17 934,$36.50 Deposit to CapltAized Interest ((.11) Ynnd 3,216 ,7%00 Deposit to Debt Service Reserve Fund (DSRF) 2,074.312.50 ... Developer Advisor 88 (100.00 Total Underwriter's Discount (2.000%)523,500.00 _. _. Other Creation/Fn&eering 355 801.00 Section 6.03 "Town Maintenance Fee �.. .. ..... ...... .. _._..._ ....._.... ._. _..._ ......_ 200,000 00 . _..... �._.. ... ....... .........-_. _ Bond Counsell __.._ . ......... _..,... ...... ff2,000.0U .......... Disclosure/Underwriter Counsel 145,000:00 Town Start l7p (.nsts Appr�rsal 135 000.00 . Developer Counsel 98 000.00 Financial Advisor98,000.00 I t,ctc�o no Developer Advisor 88 (100.00 PID Administration 50,000.00 2015 1 Major Improvements 1 1!1412015 j 10:51 AM 50,000.00 SAP Consultant42,500.00 _ contingency I t,ctc�o no 1,00o.00 Attorney General (000.00 Trustee5,000.00 .... .... ....... . _ _.... ... Trustee Counsel 5,000.00 2015 1 Major Improvements 1 1!1412015 j 10:51 AM TOWN OF WESTLAKE, TEXAS SPECIAL. ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Debi Service Schedule Part 1 of 3 Date Principal Coupon Interest Total P+1 Fiscal Total 02/05!2015 - - - - 09/01/2015 - 920,347.92 920,347.92 - 09/30/2015 - - 920,347.92 03;01/2016 - 804,187.50 804,187.50 - 09/01/2016 - 804,187.50 804,187.50 09/30/2016 - - 1,608.375.00 0310112017 - 804,187.50 804,187.50 09/01/2017 325,000.00 5.500% 804,187.50 1,129,187.50 09/30/2017 - - - 1,933,375.00 03/01/2018 - - 795,250.00 795,250,00.._ 09/01/2018 350,000.00 5.500% 795,250.00 1.145,250.00 09/30/2018 - - - - 1,940,500,00 03/01/2019 - 785.625.00 785,625.00 - 09/01/2019 375,000.00 5.500% 785,625.00 1,160,625,00 09/30/2019 1,946,250.00 03!0112020 - 775.312.50 775312.50 09/01/2020 400.000.00 5.500% 775;312.50 1,175,312.50 09/30/2020 - - - - 1950,625.00 03/01/2021 - - 764,312.50 764,312.50 09/01/2021 425,000.00 5.500% 764.312.50 1,189.312.50 09/30/2021 - 1.953,625.00 03/01/2022 - 752,625.00 752,625.00 - 09101/2022 450,000.00 5.500% 752,625.00 1,202,625.00 09/30/2022 - - - - 1,955;250.00 03/0112023- 740,250.00 740,250.110 _. _ 09/01/2023 475.00000 5.5001/4 7407250.00 1.215-250.00 - 09/30/2023 - - - - 1,955,500.00 03/01/2024 - 727;187.50 727.187.50 09/01/2024 500,000.00 5.500% 727,187.50 1,227,187.50 09/30/2024 1,954, 37500 03/01/2025 - 713,437 50 713,437.50 09/01/2025 525,000.00 5.500% 713.437.50 1.23 9,437.50 - 09/30/2025 - 1,951,875.00 03/01/2026 - 699.000.00 699,000,00 - 09/01/2026 575,000.00 6.125% 699.000.00 1,274,000.00 09/30/2026 - - - 1.973,000.00 03/01/2027 - - 681,390.63 681,390.63 09/01/2027 600,000.00 6.125% 681,390.63 1,281,390.63 09/30/2027 - - - 1,962,781.26 03/01/2028 - - 663,015.63 663,015.63 09/01/2028 650,000.00 6.125% 663.015.63 1,313,015.63 09130/2028 - - - - 1,976,03I.26 03/01/2029 - - 643,109.38 643,109.38 - 09/01/2029 67.5,000.00 6.125%p 643.109.38 1,318.109.38 2015 1 Major Improvements I 1114/2015 1 10:51 AM TOWN OF WESTLAKE. TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Debt Service Schedule Part 2 of 3 Date Principal Coupon Interest Total P+I Fiscal Total 09/30/2029 _....... _ . .._..... ... ...... ,..... _._ .. _ __. ._ 1,961.218.76 .._ __... ..:... ..:. -: 0310112.. 030 - - 622.437.50 622,437.50 09/01/2030 725,000.00 6.125% 022,437,50 1,347,437.50 09/3012030 - 1,969,875.00 11310112031 600,234.38 600,234.39 09/01/2031 775,000.00 6.125% 600.234.38 1,375.234 38 - 09/30/2031 - - 1,975,468.76 03/0112032 - 576.500.00 576.500 00 09/01/2032 825,D00.00 6125°/ 576.50000 1,101,500,00 09/30/2032 1,978,000.00 03/01/2033 551.234.38 551,234,38 119/01/2033 875.000.00 6.125% 551,234.38 1,426,234.38 09/30/2033 - - - - 1.977,468-76 03/01/2034 - 524,437.50 524,43750 09/01/2034 950,000.00 6.125% 524,437.50 1,474,437,50 09/30/2034 _ .... _.. .. - - ........ 1,998,875-011 03101/2035 495.343.75 495,343.7 09/01/2035 1,000,000 00 6.125% 495.343-75 1,495,343.75 09/30/2035 - - - - 1.990.687.50 03/01/2036 - 464.718.75 464.718 75 09/01/2036 1.075,000-00 6.250;0 464.718.75 1.539,718 75 09/30/2036 - 2,00-1.437.50 03/01/2037 - - 131,125-00 431,125.00 09/01/2037 1,15€1,000,00 6.250% 431,125.00 1,581,125.00 09/30/2037 - - - - 2.012.250.00 03/01/2038 - 395,187.50 395.187 50 09/01!2038 1,225,00000 6.2500/'. 395,187.50 1,620,18750 - 09/30/2038 - - - 2,015,375.00 03/0112039 - - 356,906.25 356,906.25 - 09101/2039 1,300,000:00 6.250% ;56.906.25 1,656.90625 09/30/2039 - - - - ?.1113,812.50 03/01/2040 - - 316.281.25 31628125 - 0910I12040 1,400,000 00 6.250% 316,281.25 1,716,281.25 09/30/2040 - - - 2,032,562.50 03/01/2041 - 272.531.25 272.531.25 - 09/01/2041 1,475,000.00 6.375% 272.531.25 1,747,531.25 - 09l30/2041 2,020,062-50 03/01/2042 - 225.515.63 225,515.63 - 09101/2042 1,600;000.00 6.375% 225,515.63 1,825,515.63 09/30/2042 - - 2,051.031.26 03/01/2043 - 174.515.63 174.515 63 09/01/2043 1,7110,000 00 6.375% 174.515 63 1.874,515.63 - 09/30/2043 - - - - 2.049,03L26 03/0 1 /2 044 t20.328 13 120.328 13 2015 1 Major improvements 1 1!44;2015 1 10'51 AM TOWN OF WESTLAKE, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Debt Service Schedule part 3 of 3 Date Principal Coupon Interest Total P+1 Fiscal Total 09/01/2044 1,825,000.00 6.375% 120.328.13 1,945.328.13 09/30/2044 _ _.. , . . - .. _..._ 2.065.65626 ...... ...........___ 03/01/2045 - 62156 25 62,156.25 09101/2045 1,950,000.00 6.375% 62,156.25 2,012,156.25 09/30/2045 - - - - 2,074.312.50 "Total 526,175,000.00 - 533,997,035.50 $60,172,035,50 Yield Statistics Bond Year Dollars $544,777.92 Average Life 20.813 Years Av eragc, Coupon_', 6 240531 1 % Net Interest Cost (NICD 6.3366253% True Interest Cast (%1C) ., 6.3943750% Rand Yield for Arbitrage Purposes 6.2106151% All lnciusice Cast (AIC) ___ ___ _ 7 8775312% IRS Form 8038 Net Interest Cast 6.240531 'I " % Wei !lied Average Maturit y 20 813 Years 2015 1 Major Improvements 1 1114/2015 1 10:5l AM TOWN OF WESTLAKE, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Net Debt Service Schedule Part oft Bate Princioal Coupon Interest Total P+i 09/30/2015 920,347.92 920,347,92 09/30/2016 - - 1,608,375.00 1,608,375,00 09/30/2017 325,000.00 5.500% 1,608,375.00 1,933,375:00 09/30/2018 350,000.00 5.500% 1,590,500.00 1,940,500.00 09/30/2019 375 000.00 5.500% 11571,250 00 _ 1,946,250.()0 09/30/2020 400,000.00 5.500% 1,550,625.00 1,950,625.00 09/30/2021 425,000.00 5-500% 1,528,625.00 1,953,625.00 09/30/2022 450,000.00 5.500% 1,505,250.00 1,955;250.00 09/30/2023 475,000.00 5.500% 1,480, 500.00 1,955,500.00 09/30/2024 500,000.00 5.500% 1,454,375.00 1,954.375.00 09/30/2025 525,000.00 5.500% 1,426,875.00 1,95 1.875.00 09/30/2026 575.000.00 6.125% 11398,000.00 1,973,000.00 0913{712027 600,000.00 6.125% 1,362.781.26 1,962,781.26 09/3012028 650,000.00 6-125% 1,326,03126 1,976,031.26 09/30/2029 675,000.00 6 125% 1,286,218.76 1,961,218.76 09/30/2030 725,000.00 6,125% 1,244,875.00 1,969.875.00 09/3012031 775,000.00 6.125% 1,200,468.76 1,975,468.76 09/30/2032 825,000.00 6.125% 1,153,000,00 1,978,000.00 09130/2033 875,000.00 6.125% 1,1023468-76 1,977,468.76 0913012034 950,000.00 6.125% 1,048,875,00 1,998,875.00 09/30/2035 1,000,000.00 6 125% 990,687.50 1,990.687.50 09/30/2036 1,075,000.00 6.250% 929,437.50 2,004,437.50 09/30/2037 1,150,000.00 6.250°/ 862,250.00 2,012,250.00 09/30/2038 1.225.000.00 6.250% 790,375.00 2,015,375.00 0913(}12039 _. .. �,300.000.00 , 6 250 % _ .,. ... .. 713,81 50 2,013,912.50 09/30/2040 .. 1,400,000.00 6.250% 632,562.50 2,032,562.50 09/30/2041 1,475,000.00 6.375% 545,062,50 2,020,062.50 09/30/2042 1,600,000.00 6375% 451,031.26 2,051,031.26 09/30/2043 1,70.0000.00 6.375% 349,031.26 2,049,031.26 09/30/2044 1,825,000.00 6.375% 240,656.26 2,065.656.26 09/30/2045 1, )50,000.00 6.375% 124,312.50 2,074,312.50 Total S26,175,000,U0 - S33,997,03S.50 560,172,035.50 2915 I Major €mprovements 1 1114!2015 1 10:51 AM TOWN OF WESTLAKE, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Net Debt Service Schedule Part 2 of 2 Combined Date Reserves DSR CiF Net New DIS 09/30/2015 74,889.59 (920,347.92) 74,889 59 09/30/2016 130,875,00 (1,61087375.00) 130,875.00 09/30/2017 130,875.00 - (688,027.08) 1,376,222.92 09/30/2018 129,250.00 2,069.750.00 09/30/2019 127,500 00 - 2,073,750.00 09/3012020 125,625.00 - 2.076,250.00 09!3012021 123,625.00 - - 2,077,250.00 09/30/2022 121,500.00 - 2,076,750.00 09/3012023 119,250.00 - 2,074,750.00 09/3012024 1161,875.00 2.071.250.00 09/30/2025 114,375.00 2,060,250.00 09/30/2026 1.11,750.00 - - 2,084,750.00 09/30/2027 108,875.00 2.071,656.26 09130/2028 105,875.00 - - 2,081,906.26 09/30/2029 102,625.00 - 2.063,843.76 09130/2030 99,250.00 - 2,069,125.00 09130/2031 95,625.00 - 2;071,093:76 09/30/2032 91,750 00 - 2,069,750.00 09/30/2033 87,6125.00 - - 2,065,093.76 096012034 83,250.00 - 2.082,125.00 09130/2035 78.500.00 - 2,069,187.50 09/30/2036 73,500.00 2 077,937.50 09/30/2037 68,125.00 - 2,080375.00 09/30/2038 62,375.00 - 2,077,750.00 09/30/2039 56,250.00 2,070.062.50 09130/2040 49,750.00 2,082,312.50 09/30/2041 42,750.00 - 2.062.812.50 09/30/2042 35,375.00 - 2,086,406.26 09/30/2043 27,375.00 2,070,406.26 09/30/2044 18,875.00 2,084,531.26 09/30/2045 9,750.00 (27074,312.50) 9,750.00 Total 52,723,889,59 (2,074,312.50) (3,216,750,00) 557,604,862.59 2015 1 Major Improvements 1 111412015 1 10:51 AM TOWN OF WESTLAKE, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Pricing Summary Maturity Type of Bond Coupon Yield Maturity Value Price Dollar Price 09/01/2025 Term I Coupon 5.500% 5.500% 3,825,000.00 100,000°% 3,825,000.00 09/01/2035 Term 2 Coupon 6.125% 6.125% 7,650,000.00 100,000% 7,650,004.00 09101/2040 Term 3 Coupon 6.250% 6.250% 6,150,000.00 100,000% 6,150,000.00 09/01/2045 Terra 4 Coupon 6.375% 6.375% 8,550,000.00 100.000°% 8,550,000.00 Total - - 526,175,000.00 - 5;26,175,000.00 Bid Information Par �11301tn1 of Bonds 526 17s 000-00 Gross Production .... ....... ... ... .... ........ .._.__, __.. $26,175,000 00 total l ndernntersDiscount (2000°/aj __....... ,.. _.....,.. .,........ .._ ......... .. ........ ... $(�23 �OO.flO� .... ...... ..... ..... . _ . Sid (98 000%) 25 65 t 5010 0 Total Purchase Price $25,651,500 00 Borid Year Dollars $544,777.92 Acerae l.rfc 20,8 13Years Average Coupon 6 240531 I%a Nit interest C act (NIC) 6.3366253°% ..._.... True Interest Cost (TIC) f).3943750% 2015 1 Major Improvements 1 1/1412015 1 10:51 AM TOWN OF WESTLAKE. TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) Derivation Of Form 8038 Yield Statistics IRS Form 8038 W'eigh.ted Average Nlatunty Bond Yearsltcsue Price Total Interest from Debt Service 'iota{ Interest NIC= Interest / (Issue Price,* Average ivtaturity)_ Hond Yield for Arbitrage Nirooses 2015 I Major improyements I {11412015 1 10:51 AM 20 8 t 3 Years 33,997,0:35-50 33,997,0'35.50 6.2405311% 6.2106151% Issuance Issuance Maturity Value Price Price Exponent Bond Years 02/05/2015 - - - - 04/01/2017 325,000.00 100.000% 325,000.00 2.5722222x 835;972'2 09/01/2018 350,000.00 100.000,;. 350,000.00 3.5722222x 1,250,277.78 09/01/2019 375,000.00 100000°, 375,00000 4.5722222x 1,714,583.33 09/01/2020 4001000.00 100.000% 4(1(1,000.00 5.5722222x 21228,888.89 09/01/2021 425,000 00 100-000% 425,000.00 6 5722222x 2,793,194.44 09/01/2022 450,000.00 100.0000/6 450,000.00 7-5722222x 3.407-500.00 09/01/2023 475,000.00 100 000% 475,000 00 8.5722222x 4,071.805-56 09/01/2924 500,000.00 100.000% 500,00000 9.5722222x 4,796,111 H. 09/01/2025 _.. ... _ 525,000.00 .. �. 100900% .... - -.... ..__. 525,000.00 _... . ....... 111.5722222x _. _ _.._... , 5,550.416.67 09/01/2026 575,000.00 100.000% 575,000 00 11.5722222x 6,654,027.78 09/01/2027 600,000.00 100.000% 600.000,00 12.5722222x 7,543,333.33 09!01/2028 650,000-00 100.000% 650,000.00 13.5722222x 8,821,944.44 09101/2029 675,000.00 100.000% 675.000.00 14.5722222x 9,836,250.00 09!0112030 725,000.00 1()41000°/ 725,000.00 15.5722222x 11,289,861.11 09/01/2031 775,000.00 100.000% 775,00000 16.5722222x 12,843,47222 09/0112032 825,000,00 100000% 825.000.00 17,5722222x 14,497,093.33 09/01/2033 875,000 00 100900% 875,00000 1ti,5722222x 16,250,694 44 09/01/2034 9500000 100.1100% 950,000.00 19.57222228 18,593,611,11 0910t/2035 1,000,0(10 00 100.000°/ 1,000,000.00 20-5722222x 20,572,222.22 09!01!2036 1.075,000.00 100.0001✓° 1,075,00090 215722222x 23,1t)0,138,89 09/002037 1,150,000.00 100900/ 1,150,00000 22.5722222x 25,958,055.56 09/01/2038 1,225,000.00 100,000% 13225,000.00 23.5722222x 28,875,972 22 09/0t/2039 1,300,000.00 100.000% 1,300,000.00 245722222x 31,943.888.89 09/01/2040 1,400,000.00 100.000% 1,400,000.00 25.5722222x 35,801,111-11 09/01/2041 1,475,000.00 100.000°/fl 1,475,000.00 26.5722222x 39,194,027.78 09/01/2042 1,600,000.00 100.000°/ 1,600,000.00 27.5722222x 44,115,555,56 09/0312043 1.700,000.00 1001000% 1,700.000.00 28.5722222x 48,5 72,777r 78 09/01/2044 1,825,000.00 100000% 1,825.000.00 29.5722222x 53,96930556 09/01/2045 1,950,000.00 100000% 1,950,000.00 30.57222228 59,615.833 3i Total 526,175,000,00 526,175,000.00 - $544,777,916.67 IRS Form 8038 W'eigh.ted Average Nlatunty Bond Yearsltcsue Price Total Interest from Debt Service 'iota{ Interest NIC= Interest / (Issue Price,* Average ivtaturity)_ Hond Yield for Arbitrage Nirooses 2015 I Major improyements I {11412015 1 10:51 AM 20 8 t 3 Years 33,997,0:35-50 33,997,0'35.50 6.2405311% 6.2106151% Exhibit "F" CERTIFICATE OF ELECTION PURSUANT TO SECTION 148(0(4)(C) OF THE INTERNAL REVENUE CODE OF 1986 1, the undersigned, being the duly authorized representative of the Town of Westlake, Texas (the "Issuer") hereby state that the Issuer elects the provisions of section 148(f)(4)(C) of the Internal Revenue Code of 1486 (the "Code"), relating to the exception to arbitrage rebate for temporary investments, as more specifically designated below, with respect to the Issuers Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) (the "Bonds") which are being issued on the date of delivery of the Bonds. The CUSIP Number for the Bonds is stated on the Form 8038-0 filed in connection with the Bonds. The Issuer intends to take action to comply with the two-year temporary investments exception to rebate afforded construction bonds under section 148(f)(4)(C) of the Code or arty of the other exceptions available to the Issuer in accordance with section I.148-7 of the Treasury Regulations. Capitalized terms have the same meaning as defined in the Federal Tax Certificate. ® 1, PENALTY ELECTION. In the event that the Issuer should fail to expend the "available construction proceeds" of the Bonds in accordance with the provisions of section 148(f)(4)(C) of the Code, the Issuer elects, in lieu of rebate, the penalty provisions of section 148(0(4)(C)(vii)(I) of the Code. ® 2. RESERVE FUND ELECTION, The Issuer elects to exclude from "available construction proceeds," within the meaning of section 148(f)(4)(C)(vi) of the Code, of the Bonds, earnings on the Reserve Fund in accordance with section 148(f)(4)(C)(vi)(IV) of the Code. 3. MULTIPURPOSE ELECTION. The Issuer elects to treat that portion of the Bonds the proceeds of which are to be used for the payment of expenditures for construction, reconstruction or rehabilitation of the Projects, as defined in the instrument authorizing the issuance of the Bonds, in an amount which is currently expected to be equal to $ as a separate issue in accordance with the provisions of section 148(f)(4)(C)(v)(II) of the Code. (Note: This electron is not trecessary unless less than 75 percent of 11re proceeds of the Bonds will be used for construction, reconstruction or renovation.) ® 4. ACTUAL FACTS. For purposes of determining compliance with section 148(f)(c) of the Code (other than qualification of the Bonds as a qualified construction issue), the Issuer elects to use actual facts rather than reasonable expectations. S. NO ELECTION. The Issuer understands that the elections which are adopted as evidenced by the check in the box adjacent to the applicable provision are irrevocable. Further, the Issuer understands that qualification of the Bonds for eligibility for the exclusion from the rebate requirement set forth in section 148(f) of the Code is based on subsequent events and is unaffected by the Issuers expectations of such events as of the date of delivery of the Bonds. Accordiniziy, while allure to execute this cerci rcate and to desi hale the intended election does not reclude yuallficalion, it would preclude the issuer frorn the relief afforded by such election. DATED: February 5, 2015 //L Town �LManager Town of Westlake, "Texas 3 Village Circle, Suite 202 Westlake, Texas 76262 Employer l.D. Number: 75-2449357 Exhibit "G" SAFE-HA"OR MANAGEMENT CONTRACT GUIDELINES SUMMARY OF REV. PROC. 97-13 General Rule A contract that meets the safe -harbor guidelines of Rev. Proc. 97-13 as summarized below between a state or local governmental unit or a section 501(c)(3) organization (a "Qualified User") and a non-exempt provider (a "Provider") for the management of, or services rendered at, or incentive payment in respect of, a tax-exempt bond -financed facility that does not otherwise give the Provider an ownership or leasehold interest in bond -financed property for federal income tax purposes does not give raise to private business use within the meaning of the Internal Revenue Code of 1986 (the "Code"). In addition, if the guidelines are met, the burden to prove that the contract creates impermissible private activity would shift to the Internal Revenue Service ("IRS") in a tax court proceeding. All contracts must be reviewed on a case-by-case basis. General Requirements 1. Reasonable Compensation and No Net Pro f ts. The compensation must be reasonable and no portion of the compensation paid to the Provider may in any event be based on net profits derived from the bond -financed facility. However, a compensation that is based on a percentage either of gross revenues or of expenses (but not both.) is permitted. Reimbursement for actual and direct expenses paid by the Provider to unrelated persons is not by itself treated as compensation. 2. No Penalty if Required to be Cancelable. Whenever a contract is required to be cancelable as described below, it must be possible to cancel it without penalty imposed on the Qualified User. A "penalty" ineans: (a) any limitation on the Qualified User's right to compete with the Provider; (b) any requirement that the Qualified User purchase equipment, goods or services from the Provider; or (c) any requirement that the Qualified User pay liquidated damages for cancellation of the contract. A requirement that the Qualified User reimburse ordinary and necessary expenses of the Provider or a restriction against hiring key personnel of the Provider is not a penalty. A penalty may exist where provisions of another contract between the Provider and Qualified User (e.g., a loan or guarantee) impair the practical ability of the Qualified User to terminate the service contract for example by automatically terminating when the service contract terminates. 3. No Role or Relationship between Qualified User and Provider. There must not be any role or relationship between the Qualified User and the Provider that would substantially limit the Qualified User's ability to exercise its rights under the contract, including cancellation rights. This requirement is considered satisfied if (a) not more than 20% of the voting power of the governing board of the Qualified User is vested in the Provider and its directors, officers, shareholders and employees, (b) overlapping board members do not include the chief executive officers of the service provider or its governing body or the Qualified User or its governing body, and (c) the Qualified User and the Provider are not "related persons" within the meaning of Treasury Regulation § 1.1 S0- I (b). Permitted Contract Terms and Compensation Arrangements Contract Maximum Term Limit )Permissible Compensation Arrangements (including renewal options) 1. Lesser of 15 years (20 years for 1. At least 95% of compensation for each annual period public utility property) or 80% must be based on a periodic fixed fee. A one-time of the reasonably expected productivity award is permitted. useful life of the bond -financed property. No cancellation right required. 2. Lesser of 10 years (20 years for 2. At least 80% of compensation for each annual period public utility property) or 80% must be based on a periodic fixed fee. A one-time of the reasonably expected productivity award is permitted. useful life of the bond -financed property. No cancellation right required. 3. 5 years, cancelable by the 3. (i) At least 50% of compensation for each annual period Qualified User at the end of 3 is based on a periodic fixed fee or years without penalty. (ii) 100% of compensation is based on a capitation fee or any combination of periodic fixed fees and capitation fees. 4. 3 years, cancelable by the 4. (i) 100% of compensation is based on a per-unit fee Qualified User at the end of 2 stated in the contract or otherwise specifically limited by years without penalty. the governmental service recipient or an independent third party (e.g., Medicare reimbursement formulas); or (ii) 100% of compensation is based on any combination of periodic fixed fees and per-unit fees. 5. 2 years, cancelable by the 5. 100% of compensation is based on a percentage of the Qualified User at the end of 1 fees charged at the bond -financed facility except that, year without penalty. during the start-up period of the facility, it may be based on either gross revenues, gross revenues adjusted for bad debt or similar allowances or the expenses of the facility. Note: This compensation arrangement is available only (i) with respect to facilities providing services to third parties (e.g., radiology, facilities) or (ii) during an initial start-up period during which operations have been insufficient to permit a reasonable estimate of annual gross revenues. Definitions of Permissible Compensation Arrangements. 1. A Capitation Fee is a fixed periodic amount payable for each person for whom services are provided (e.g., an HMO member) as long as the quantity and type of services actually provided vary substantially from person to person. A capitation fee may include a variable component of up to 20% of the total capitation fee designed to protect the Provider against risks such as catastrophic loss. 2. A Periodic Fixed Fee is a stated dollar amount for services rendered for a specified period of time. The stated dollar amount may automatically increase according to a specified objective external standard that is not linked to the output or efficiency of a facility, e.g., the Consumer Price Index and similar external indices that track increases in prices in an area or increases in revenues or costs in an industry are objective external standards. 3. A Per -Unit Fee is a stated amount for each unit of services provided (e.g., medical procedure performed, car parked, passenger mile traveled, ton of waste incinerated, unit of landfill capacity consumed). 4. A Productivity Award is a stated dollar amount of additional compensation based on increases or decreases in gross revenues or reductions in total expense target (but not both) in any annual period during the term of a contract. Revision and Renewal of Management Contract. If the compensation arrangements of a management contract are materially revised, the requirements for compensation arrangements are retested as of the date of the material revision and the management contract is treated as one that was newly entered into as of the date of the material revision. A renewal option is a provision under which the Provider has a legally enforceable right to renew the contract. Thus, for example, a provision under which a contract is automatically renewed for one-year periods absent cancellation by either party is not a renewal option (even if it is expected to be renewed). Certain Exceptions. Certain arrangements generally are not treated as management contracts that are subject to the above rules. These include: (a) Contracts for services that are solely incidental to the primary governmental function or functions of a bond -financed facility (e.g., contracts for janitorial, office equipment repair, hospital billing or similar services); (b) The mere granting of admitting privileges by a hospital to a doctor, even if those privileges are conditioned on the provision of de minimis services, if those privileges are available to all qualified physicians in the area, consistent with the size and nature of its facilities; (c) A contract to provide for the operation of a facility or system of facilities that consists predominantly of public utility property (as defined in section 168(1)(10) of the 1986 Code), if the only compensation is the reimbursement of actual and direct expenses of the service provider and reasonable administrative overhead expenses of the service provider; and (d) A contract to provide for services, if the only compensation is the reimbursement of the service provider for actual and direct expenses paid by the service provider to unrelated parties. TRUSTEE CERTIFICATE The undersigned, as Trustee (referred to in such capacity as the "Trustee") under an Indenture of "Trust, dated as of .February 1, 2015 (tile "Indenture"), between it and the 'Town of Westlake, Texas (the "Town"), relating to the $26,175,000 "Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solaria Public Improvement District)" (the "Bonds"), hereby certifies with respect to the Bonds issued pursuant to the Indenture as follows: (i) The Trustee is duly organized and validly existing as a national banking association organized under the laws of the United States of America, having the full power and authority, including trust powers, to accept and perform its duties under the Indenture, and (ii) No consent, approval, authorization or other action by any govcrimiental authority having jurisdiction over the Trustee that has not been obtained is or will be required for the authentication of the Bonds or the consummation by the Trustee of the other transactions contemplated to be performed by the Trustee in connection with the authentication of the Bonds and the acceptance and performance of the obligations created by the Indenture. EXECUTED THIS U.S. BANK NATIONAL A� SS IAT.[) _ By: Title: Israel Lugo 1/j .ePresident SIGNATURE IDENTIFICATION AND AUTHORITY CERTIFICATE OF TRUSTEE 1, the undersigned officer of U.S. Bank National Association (the "Bank"), which. is Trustee appointed by the 'Down of Westlake, `I"exas (the "Issuer") in connection with the issuance, sale, execution and delivery of the City of Celina, Texas, special Assessment. Revenue Bonds, Series 2015 (Solana Public Improvement Project) (the "Bonds"), and the execution and delivery of an Indenture of Trust relating to the Bonds (the "Indenture") between the Issuer and the Batik, hereby certify as follow=s: 1. The flank is a banking association duly organized under the banking laws of the United States of America and has Gull power and authority to enter into and perform its obligations under the Indenture. 2. The Indenture has been duly executed and attested on behalf of the flank by the following person who is duly elected or appointed officer of the Bank holding the office set forth opposite his/her respective name and specimen of his/her genuine signature - Nance Office ,�rfIeI ., p, vace Preside[A Si natu IN WI`I'NISS WHEREOF, the undersigned Bank has caused this certificate to be executed this January 9, 2015. U.S. BANK NA'T'IONAL ASSOCIATION By: Title: (L-iiad HOtt sec, VIGe._President Exhibits -- Evidence of Delegation of Authority bank. Fire SLtr servile G'.a wcm AUTHORIZED SIGNATURES I hereby certify that the following is a true and exact extract from Article VI of the Bylaws presently in effect for U.S. Bank National Association, a national banking association organized and existing under the laws of the United States: Article VI CONVEYANCES, CONTRACTS, ETC. All transfers and conveyances of real estate, mortgages, and transfers, endorsements or assignments of stock, bonds, notes, debentures or other negotiable instruments, securities or personal property shall be signed by any elected or appointed officer. All checks, drafts, certificates of deposit and all funds of the Association held in its own or in a fiduciary capacity may be paid out by an order, draft or check bearing the manual or facsimile signature of any elected or appointed officer of the Association. All mortgage satisfactions, releases, all types of loan agreements, all routine transactional documents of the Association, and all other instruments not specifically provided for, whether to be executed in a fiduciary capacity or otherwise, may he signed on behalf of the Association by any elected or appointed officer thereof. The Secretary or any Assistant Secretary of the Association or other proper officer may execute and certify that required action or authority has been given or has taken place by resolution of the Board under this Bylaw without the necessity of further action by the Board. I further certify that the following officers of U.S. Bank National Association have been duly elected and qualified and now hold tbei respective o ices, and that the signatures of such officers are aut c: Brad A. Hounsel f Israel A. Lugo Vice President Vice President 1 Mauri 7, Cowen Shazi.a Flores Vice President `— Assistant Vice President Steven A. F inklea Vice President IN WITNF,SS WHER1 Damien M. Daley Assistant Vice President ny hand this day ofG� U.S. BA K NATIONAL ASSOCIATION i By: Dyan M. Huhta Senior Vicc; President DEVELOPER'S CLOSING CERTIFICATE PURSUANT TO SECTION 9(e) OF THE BOND PURCHASE AGREEMENT The undersigned, an authorized officer of Maguire Partners -Solana Land, LP, a Texas limited partnership (the "Dev_ _eloper"), makes the certifications set forth herein in connection with the issuance and delivery of the Town of Westlake, "Texas, Special Assessment Revenue Bonds, Series 2015.(Solana Public Improvement District) (the "Bonds"), as required by the Bond Purchase Agreement pertaining to the Bonds (the "Bond Purchase Agreement"). Capitalized terms used herein and not otherwise defined shall have the meaning assigned thereto in the Bond Purchase Agreement. It is hereby certified that: (i) The representations and warranties of the .Developer contained in the Bond Purchase Agreement and in the Developer Documents are true and correct in all material respects on and as of the date hereof; (ii) The Developer Documents have been properly executed by the Developer, have not been amended or rescinded, and the delivery and due performance thereof by the Developer has been authorized by the Developer; (iii) To the best of its knowledge after due inquiry, there is no action, suit, proceeding or investigation before any court, public board or body pending, with respect to which the Developer has been served with process, or, to the knowledge of the Developer threatened against the Developer wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the Developer or its officers to their offices; or (b) in any way question or affect this Agreement or the transactions contemplated by this Agreement or the Developer Documents; (iv) The Developer has complied in all material respects with all of its agreements and covenants and satisfied all conditions required to be complied with or satisfied by the Developer hereunder at or prior to the Closing; (v) The information set forth in the Official Statement under the captions. "PLAN OF FINANCE — DEVELOPMENT PLAN," "'I`IIE IMPROVEMENT PROJECT A IMPROVEMENTS," "TLIE DEVELOPMENT"" and "TIIE DEVELOPER," and, to the best of its knowledge afer due inquiry, under the captions "1BONDTTO,DERS' RISKS" (only as it pertains to the Developer, the Improvement Project A Improvement Projects, and the Development) and "LEGAL MATJ'ERS — Litigation —The Developer" is true and correct and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, as of the date thereof; and (vi) Although it has not verified and does not assume any responsibility for the accuracy, completeness or fairness of the information contained in the Preliminary Official Statement or the Official Statement other than that described in clause (v), it has participated in the preparation of the Preliminary Official Statement and the Official Statement and without independent verification, no facts came to its attention to lead it to believe that the Preliminary Official Statement, as of its date or as of the date of the Bond Purchase Agreement, or the Official Statement, as of its date or as of the date of Closing (except for financial, forecast, technical and statistical statements and data therein and the information regarding The Depository Trust Company and its book -entry only system, in each case as to which it is not called upon to comment) contained or contains any untrue statement of a material fact, or omitted or ornits to state any material fact required to he stated therein or necessary to make the statements therein. in the light of the circumstances under which they were made, not misleading. jhxecuflon P(ige Follows�j Dated: February 5, 2015 DEVELOPER MAGUIRE PARTNERS-SOLANA LAND, L.P. By: MMM Ventures, LLC, its general partner Hy: 2M Ventures, 1.1,C, its manager By' _ lVI'ehrdad �Moayvedi. Manager [Signature Page for Developers (.'losing Certificate $26,175,000 TOWN OF WESTLAKE, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIFS 2015 (SOLANA PUBLIC IMPROVEMENT DISTRICT) DEVELOPER LETTER OF REPRESENTATION January 15, 2015 Jefferies LLC 300 Crescent Court, Suite 500 Dallas, Texas 75201 Honorable Mayor and Town Council Town of Westlake, Texas 3 Village Circle, Suite 202 Westlake, Texas 76262 Ladies and Gentlemen: This letter is being delivered to Jefferies LLC (the "Underwriter") and the Town of Westlake, Texas (the "Town"), in consideration for your entering into the Bond Purchase Agreement dated the date hereof (the "Bond Purchase Agreement") for the sale and purchase of the $26,175,000 "Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District)" (the `Bonds"). Pursuant to the Bond Purchase Agreement, the Underwriter has agreed to purchase from the Town, and the 'Town has agreed to sell to the Underwriter the Bonds. In order to induce the Town to enter into the Bond Purchase Agreement and as consideration for the execution, delivery, and sale of the Bonds by the Town and the purchase of them 6y the Underwriter, the undersigned, Maguire Partners — Solana Land, L.P. (the "Developer"), makes the representations, warranties, and covenants contained in this Developer Letter of Representation. Unless the context clearly indicates otherwise, each capitalized term used in this Developer Letter of Representation will have the meaning set forth in the Bond Purchase Agreement. 1. Purchase and Sale of Bonds. Inasmuch as the purchase and sale of the Bonds represents a negotiated transaction, the Developer understands, and hereby confirms, that the Underwriter is not acting as a fiduciary of the Developer, but rather is acting solely in its capaTown as Underwriter of the Bonds for its own account. 2. Updating of the Official Statement. If, after the date of this Developer Letter of Representation, up to and including the date the Underwriter- is no longer required to provide an Official Statement to potential customers who request the same pursuant to the Rule (the earlier C-1 of (i) ninety (90) days from the "end of the underwriting; period" (as defined in the Rule) and (ii) the time when the Official Statement is available to any person from the MSRB, but in no case less than twenty-five (25) days after the "end of the underwriting period" for the Bonds), the Developer becomes aware of any fact or event which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;, or if it is necessary to amend or supplement the Official Statement to comply with law, the Developer will notify the Underwriter (and for the purposes of this clause provide the Underwriter with such information as it may from time to time request); however, that for the purposes of this Developer Letter of Representation and any certificate delivered by the Developer in accordance the Bond Purchase Agreement, the Developer makes no representations with respect to (i) the descriptions in the Preliminary Official Statement or the Official Statement of The Depository Trust Company, New York, New York, or its book -entry - only system and (ii) the information in the Preliminary Official Statement and the Official Statement under the captions "THE TOWN," "THE DISTRICT," and "LEGAL MATTERS — Litigation – The Town." 3. Developer Representations, Warranties and Covenants. The Developer represents, warrants, and covenants to the Underwriter and the Town that-. a. Due Organization, Existence and Authority. The Developer is duly formed and validly existing as a limited partnership under the laws of the State of Texas, with full rights, power and authority to execute, deliver, and perform its obligations under this Developer Letter of Representation, the Financing Agreement, the Development Agreement, the Continuing Disclosure Agreement of Developer, the Landowner Agreement, the Redemption Agreement, and any other documents and certificates of the Developer contemplated by any of the foregoing (collectively, the ":Developer Documents"). b. Organizational Documents. The copies of the organizational documents of the Developer delivered on the Closing; Date (the "Developer Organizational Documents") are fully executed, true, correct, and complete copies of such documents and such documents have not been amended or supplemented and are in full force and effect as of the date hereof. C. Due Authorization and Approval. By all necessary action, the Developer has duly authorized and approved its execution and delivery of the Developer Documents and the performance by the Developer of its obligations contained in the Developer Documents and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified, or rescinded. d. No Breach or Default. The execution and delivery of the Developer Documents by the Developer and compliance by the Developer with the provisions thereof under the circumstances contemplated thereby do not and will not in any material respect conflict with or constitute on the part of the Developer a breach or default under (i) any order, writ, judgment, injunction, decree, determination, or award of any C-2 governmental authority against or with respect to the Developer or (ii) any agreement or instrument to which the Developer is a party or by which it is bound, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would, in any material respect, constitute a default or an event of default by the Developer under the Developer Documents. e. No Litigation. Other than as described in the Preliminary Official Statement and the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Developer, threatened by or against the Developer: (i) in any way questioning the due formation and valid existence of the Developer; (ii) in any way challenging the titles of its officers executing the Developer Documents; (iii) in any way contesting or affecting the validity or enforceability or the execution and delivery by it of the Developer DOCnments or the consummation of the transactions contemplated thereby; (iv) in any way questioning or contesting the validity of any governmental approval of the District or any aspect thereof; (v) in any way questioning; or contesting the construction and development of the Development; or (vi) which would have a material adverse effect upon the financial condition of the Developer or its ability to own or develop property within the District. f. Information. The information prepared and submitted by the Developer to the Town or the Underwriter in connection with the preparation of the Preliminary Official Statement and the Official Statement was, and is, as of this date, true and correct in all material respects. g. Prelii-n.inary Official Statement and Official Statement. The Developer represents and warrants that the information scat forth in the Preliminary Official Statement and Official Statement under the captions "PLAN OF DEVELOPMENT AND FINANCE Development Plan," "THE IMPROVEMENT PROJECT A IMPROVEMENTS," "TIIE DEVELOPMENT," and "THE DEVELOPER," and, to the best of its knowledge after due inquiry, under the captions and subcaptions "BONDHOLDERS' RISKS" (only as it pertains to the Developer, the Improvement Project A Improvements, and the Development), "LEGAL MATTERS — Litigation The Developer," and "CONTINUING DISCLOSURE" (only as it pertains to the Developer) is true and correct and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Developer agrees to provide a certificate dated the Closing Date affirming, as of such date, the representations contained in this subsection (g) with respect to tlhe Preliminary Official Statement and the Official Statement. h. Consent to Bond Issuance. The Developer hereby consents to the issuance of the Bonds. i. Consent to Terra -is of Indenture. The Developer hereby consents to all of the terms and conditions contained in the Indenture. C-3 Date: j. Agreement. The Developer covenants that, while the Bonds are outstanding, it will not bring any action, suit, proceeding, inquiry, or investigation at law or in equity, before any court, regulatory agency, public board, or body which in any way seeks to challenge or overturn the District, the validity of the Developer Documents, the levy or collection of the Assessments, or the validity of the Bonds or the proceedings relating to their issuance. k. Permits, Licenses, Etc. The Developer has obtained and there are currently in force and effect, or the Developer is not aware of any fact that will prevent it from receiving at or prior to the Closing Date or the date required therefor, all consents, permits, licenses, certificates, and other approvals (governmental or otherwise) required of it that, i. are necessary to conduct its business as it is currently being; conducted; ii. (with the exception of the Authorizing; Documents) would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance of its obligations under this Developer Letter of Representation, the Developer Documents, and any other material agreement or instrument to which it is a party and which is to be used or contemplated for use in the consummation of the transactions contemplated hereby or by the Official Statement relating to the financing and construction of the Improvement Project A Improvements; or iii. are necessary for the acquisition, construction, and operation of the Improvement Project A Improvements. 1. Events of Default. No "Event of Default" or "event of default" by the Developer under any of the Developer Documents, any documents to which Developer is a party described in the Official Statement, or under any material documents relating to the financing and construction of the Improvement Project A Improvements to which the Developer is a party, or event that, with the passage of time or the giving of notice or both, would constitute such "Event of Default" or "event of default," by the Developer has occurred and is continuing. M. financing. Other than the Assessments and the Lender Lien, which Lender will acknowledge and consent to the subordination of the Lender Lien, no debt has been or will be issued nor will any additional liens be placed on the property within Improvement Area 41, Improvement Area #2 or Improvement Area #3 of the District in order to complete the construction of the Improvement Project A Improvements. n. Taxes and Assessments. All ad valorem taxes and assessments are current on the property which the Developer owns within the District. 4, Closing Conditions. The Developer will provide the following as of the Closing; C-4 a. Bring -Down. The representations and covenants of the Developer contained under this Developer Letter of Representation shall be true and correct in all material respects as of the date hereof and at the time of the Closing, as if made on the Closing Date. b. Executed A yrcements and Performance Thereunder. "There shall be in full force and effect such other resolutions or actions of the Developer as, in the opinion of Miklos Law, PLLC ("Developer's Counsel") shall be necessary on or prior to the Closing Date in connection with the transactions on the part of the Developer contemplated by the Developer Documents and the Developer shall perform or have performed their respective obligations required or specified in the Developer Documents, to be performed at or prior to Closing. 5. Indemnification. a. The Developer will indemnify and hold harmless the Town and the Underwriter and each of their officers, directors, employees and agents against any losses, claims, damages or liabilities to which any of them may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereot) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained or incorporated by reference in the Official Statement under the captions -THE IMPROVEMENT PROJECT A IMPROVEMENTS," "THE DEVELOPMENT" and "THE DEVELOPER," and, to the best of its knowledge after due inquiry, under the captions "BONDHOLDERS' RISKS" (only as it pertains to the Developer, the Improvement Project A Improvements, and the Development), "LEGAL MATTERS — Litigation – The Developer," and "CONTINUING DISCLOSURE" (only as it pertains to the Developer) or any amendment or supplement to the Official Statement amending or supplementing the information contained under the aforementioned captions (as qualified above), or arise out of or are based upon the omission or alleged untrue statement or omission to state therein a material fact necessary to make the statements under the aforementioned captions (as qualified above) not misleading under the circumstances under which they were made and will reimburse any indemnified party for any reasonable legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred. b. The Underwriter will indemnify and hold harmless the Developer against any losses, claims, damages or liabilities to which the Developer may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Official Statement, or any amendment or supplement thereto, or arise; out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading; under the circumstances under which they were made, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Official Statement or any such amendment or supplement in reliance upon and in conformity with information under the heading C-5 "UNDERWRITING" in the Official Statement, and will reimburse the Developer and the Town for any legal or other expenses reasonably incurred by the Developer and the Town in connection with investigating or defending any such actions or claims as such expenses are incurred. C. Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof;, but the omission so to notify the indemnifying party shall not relieve the indemnifying party from any liability which it may have to the indemnified party otherwise than under such subsection, unless such indemnifying party was prejudiced by such delay or lack of notice. In case any such action shall be brought against an indemnified party, it shall promptly notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. The indemnifying party shall not be liable for any settlement of any such action effected without its consent, but if settled with the consent of the indemnifying party or if there is a final judgment for the plaintiff in any such action, the indemnifying party will indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. The indemnity agreement in this Section 10 shall survive delivery of the Bonds and shall survive any investigation made by or on behalf of the Town, the Developer or the Underwriter. 6. Notice. Any notice or other communication to be given to the Underwriter under this Developer Letter of Representation may be given by delivering the same in writing to: Jefferies LLC, 300 Crescent Court, Suite 500, Dallas, "Texas 75201, Attention: Mark Curran, Managing Director. Any notice or other communication to be given to the Town under this Agreement may be given by delivering the same in writing to: "Town of Westlake, Texas, 3 Village Circle, Suite 202, Westlake, Texas 76262, Attention: Town Manager. 7. Survival of Representations, Warranties and Covenants. All representations, warranties, and agreements in this Developer Letter of Representation will survive regardless of (a) any investigation or any statement in respect thereof made by or on behalf of the Underwriter, (b) delivery of any payment by the Underwriter for the Bonds hereunder, and (c) any termination of the Bond Purchase Agreement. 8. Binding on Successors and Assigns. This Developer Letter of Representation will be binding upon the Developer and its successors and assigns and inure solely to the benefit of the Underwriter and the Town, and no other person or firm or entity will acquire or have any right under or by virtue of this Developer Letter of Representation. C-6 MAGUIRE PARTNERS — SOLANA LAND, L.P., a Texas Limited Partnership By: MMM Ventures, UX, a "Texas limited liability company, its general partner By: 2M Ventures, UC, a Delaware limited liability company, its manager C-7 Frror! Unknown document property name. Name: Mehrdad Moayedi Title: Manager GENERAL CERTIFICATE OF DEVELOPER. Town of Westlake, Texas, Special Assessment Revenue Bonds, Series 2015 (Solana Public Improvement District) The undersigned manager of 2M Ventures, LLC, a Delaware limited liability company, the manager of MMM Ventures LLC, a Texas limited liability company (the "General Partner"), the general partner of Maguire Partners -Solana Land, L.P., a Texas limited partnership (the "Develop") being duly authorized to execute this certificate on behalf of the General Partner and the Developer, does hereby certify on behalf of the General Partner and the Developer, with respect to the above-described series of bonds (the "Bonds-'), as follows: 1. The Developer is a limited partnership duly formed and existing under the laws of the State of Texas and has power and authority to own its properties and carry on its business as now being conducted and the General Partner is a limited liability company duly formed and existing under the laws of the State of Texas and is authorized to execute the documents and take the actions described in this Certificate on behalf of the Developer and each such entity is authorized to do business in Texas and has full legal right, power and authority to execute, and deliver, as appropriate (i) the Construction, Funding, and Acquisition Agreement, dated as of January 15, 2015 (the "CFA Agreement") between the Town of Westlake, Texas (the "Issuer") and the Developer, (ii) the Landowner Agreement, dated as of January 15, 2015 (the "Landowner Agreement'"), between the Issuer and the Developer, and (iv) the Continuing Disclosure Agreement relating to the Bonds, dated as of January 15, 2015 (the "Disclosure Agreement") between the Issuer, the Developer and U.S. Bank National Association, as Dissemination Agent (hereinafter collectively, the "Bond Documents"). 2. The following is currently authorized to execute documents, including, but not limited to, the Bond Documents, on behalf of the Developer and the General Partner, as applicable: Name Title Specimen Signature Mehrdad Moayedi Manager and said person is duly appointed, qualified and acting in the capacity shown above and the signature of such person appearing above is a true and correct specimen of his genuine signature. 3. The Bond Documents to which the Developer is a party, have been properly executed by the General Partner on behalfof the Developer and such documents have not been amended or rescinded and due performance thereof .bas been authorized by the Developer and the General Partner on behalf of the Developer. 4. The terms and performance of the Bond Documents and all documents relating to the Bonds, to which Developer is a party, are not in conflict with the partnership agreement of the Developer or the articles of organization or regulations of the General Partner. or any other agreement of any of the foregoing or any other instrument or restriction to which any of them is a party or is subject. 5. All necessary permits and approvals of governmental bodies or agencies required of the Developer with respect to the issuance and sale of the Bonds have been received and with respect to the construction and operation of the Authorized Improvements (as such term is defined in the Service and Assessment flan) the Developer has received or expects to receive and has applied or will apply with due diligence for all such necessary permits and approvals. 6. No event has occurred since the date the Developer submitted its petition to create the Solana Public improvement District (the "District") that would result in a material adverse change in the financial condition of the Developer or in the Developer's ability to perform its obligations under the Bond Documents. 7. To the knowledge of the Developer and the General Partner, there is no default under any agreement to which the Developer is a party which would have a material adverse effect on the Developer. 8. To the knowledge of Developer, there is no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, public board or body, pending or to the knowledge of the Developer and the General Partner threatened against the Developer affecting the existence of the Developer or seeking to prohibit, restrain, enjoin or in any way contesting or affecting the validity or enforceability of the documents relating to the Bonds, to which the Developer is a party or contesting the powers of the .Developer to perform its obligations thereunder. 9. 'Fhe Bond Documents constitute legal, valid, and binding obligations of the Developer enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by any applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the rights of creditors generally or by general principals of equity and except as enforceability of indemnification provisions herein may be limited, in whole or in part. 10. The Developer reaffirms each of the representations and warranties relating to or made by the Developer contained in the Bond Documents and in certificates or other instruments delivered pursuant hereto or in connection herewith. 11, Attached hereto as Exhibit A are true and correct copies of the Texas Certificate of Formation and the company agreement of the Developer and as Exhibit B is a true and correct copy of the certificates of existence/good standing from the State of 'Texas relating to the Developer. 12. Attached hereto as Exhibit C are true and correct copies of the Texas Certificate of' Formation and the company agreement of the General Partner as Exhibit 1) is a true and correct copy of' a certificate of existence/good standing from the State of "Texas relating to the General Partner. 13. Attached hereto as Exhibit E are true and correct copies of the Certificate of Formation and the company agreement of the 2M Ventures, LLC, a Delaware limited liability company and as Exhibit F is a true and correct copy of a certificate of existence/good standing from the State of Texas relating to 2M Ventures, LLC. 2 14. Attached hereto as Exhibit G is a true and correct copy of the duly adopted approval of the Developer and the General Partner, which approves the bond financing and the Bond Documents, and which authorizes all necessary action required by the Developer in connection therewith. 15. The Developer has complied with all of the covenants and satisfied all of the conditions in the Bond Documents to be performed or satisfied by it on or prior to the date hereof, and the representations and warranties of the Developer contained in the Bond Purchase Agreement and in each of the Bond Documents to which it is a party are true, correct and complete as of the date hereof; and it has full legal right, power and authority to enter into and carry out the transactions contemplated by the Bond Documents. 16. The Developer hereby authorizes the Office of' the Attorney General to date this certificate the date of delivery of its approving opinion, and agrees to notify the Office of the Attorney General of any changes with respect to this certificate or any Bond Documents to which it is a party that are matte between the date of such opinion and the date of closing. 17. This certificate may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same document. Counterparts to this certificate may be transmitted electronically with the same effect as if they had been manually signed and delivered. (thc remainder o f this page is intentionally lq� blank) 3 IN WITNESS WHFREOF, the undersigned has delivered this certificate this FEB 05 201 MAGUIRE PARTNERS-SOLANA LAND, L.Y. By., MMM Ventures, LLC, its general partner Fay: 2M Ventures, LLC, its manager By: �;- "/ — Mehrdad Moayedi, Manager STATE OF TEXAS COUN'T'Y OF_4�q�_ `The foregoing instrument was acknowledged before me by Mehrdad Moayedi, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity stated and as the act and deed of the above referenced entities as an authorized signatory of said entity. Givcn under nay hand and seal of office on this ,U; EAJ_ k, 2015. Notary Public, State ofTexas (NO I CRY SI A,I,/STA ,_ ' L WAYLk!D �y mission xpiPe>� July 14, 2016 ' f mow- EXHIBIT A CERTIFICATE OF FORMATION AND PARTNERSHIP AGREEMENT OF "T'IJE DEVELOPER JUN -12-2003 16:68 Corporations Section PAM 13697 $ � Austiitr, Texas 78711-3697 Y Office of the Secretary of State CERTMCATE Of HLIN'G OF Maguire Partners-Solaua Land, L.P. Filing Number: 800213274 P.02i63 Uwyrl Shea Sccretxry of Stale The undersigned, as Secretary of State of Texas, hereby certifies that a certificate of limited pmts ship for she above named limited partnership Ms been receivod in this oflico and filed as provided by lave on the date shown below. Accordingly, the andenigned, as Secretary of State hemby inues this Certifacstc evidoncing the filing in tws office. Dated: 06/11/2403 Effective: 06111/2003 1 eGwyn Shea Come visit lis on the intcrnet �l �tt�;//wyrW,9p9.9Ts1e.bc VS1 PHONE(512) 963.5555 PAX($12) 463.5709 TPY7-1-1 Prcpw'or. Tka" Auodu 3tSt 1-6-003 14 - .ag P. 06/06 F I! ED In the Office of til. CERTIF7lCATE OF )LXNUTED PARTNERSH&ecretary 01 state of 7 O xa" OF jUN 112003 MAGUIRE PARTNERS-SOLANA LAND, L.P. corporations Section This Certificate of Limited Partnership (this "Certificate") of Maguire Partners -Solana Land, L.P., a Texas limited partnership (the "Partnership"), dated as of June 3- , 2003, has been duly executed and is being filed in accordance with the provisions of the Texas Revised Limited Partnership Act (the "Act"). I. Name. The name of the limited partnership formed, hereby is Maguire Partners - Solana Land, L -P. 2. Registered Office and Registered Agent. The address of the registered office of the Partnership in the State of Texas is Maguire Partners, 9 Village Circle, Suite 500, Westlake, Texas 76262, and the name of the registered agent for service of process on the Parmership at such address required to be maintained in accordance with Section 1.06 of the Act is Torn Allen. 3, Principal Ofice. The mailing address of the Partnership, and the address of the principal office in the United States where Partnership records are to be kept or made available under Section 1.07 of the Act, is and shall be Maguire Partners, 9 Village Circle, Suite 500, Westlake, Texas 76262. 4. General Partner. The name of the general partner of the Partnership and its mailing address and meet address are as follows: General Partner Maguire Partners -Solana Land GP LLC Mailing and Street Address 555 West Fifth Street, Suite 5000 Los Angeles, California 90013-1010 Attn. Robert F. Maguire M 5. Dare of Formation. In accordance with Section 2.01(b) of the Act, the Partnership shall be formed at the time of the filing of this Certificate with the Secretary of State of the State of Texas. IN WMIESS WHEREOF, the undersigned general partner of the Partnership has duly executed this Certificate as of the day and year first aforesaid, 050+65000017 pat .r IS%)Sq„ Maguire Partners -Solana Land GP LLC, a Delaware limited liability company By: Maguire Partners -Solana Business Trust, a Delaware business trust, its sole Member By. "--- Tom Allen, aging Trustee TOTAL_ P.06 ,1UL/25/2013/Thq !0:53 AIM FAX Na, P. 004 Form 424 This space resotved for office use. (Revised 05/11) ❑ Professional Limited Liability Company Submit in duplicate to: FILED Secretary of State In tete QffiCe Of the P.O. Box 13697 SBCretary of Sfatp of Taya> Austin, TX 78711-3697 Certificate of Amendment JUL 25 2013 512 463-5555 FAX: 512/463-5709 CQrporado 18 Section Filing Fee: See instructions Entity hfot•tuation The name of the filing entity is: Maguire Partners-Sol=t Land, L.P., a Texas limited partnership State the uanie of the entity as cuaeutly in the records of tho secretory of state. If the ,wiendment changes 0ry name of'the entity, state the old name and not the new name. The filing entity is a: (Select the appropriate tntity type below,) ❑ For-profit Corporation ❑ Professional Corporation ❑ Nonprofit Corporation ❑ Professional Limited Liability Company ❑ Cooperative Association ❑ Professionai Association ❑ Limited Liability Company ® Litnited ParttiersWp The file atunber issues[ to the filing entity by the seclretaty of state is: 800213274 The date of fortnation of the entity is: Jeune 11, 2003 ,Amendknents 1. Amended Name (if the purpose of the certificate of amendment is io change the name of the cntity, use the folloNviug stmeutent) The amendment changes the certificate of formation to change the article or provision that names the filing eutity. The article or provision is amended to read as follows: The name of the filing entity is: (state the new frame sof the entity below) The name of the entity must contain an organizationel desip�oatiou of accepted abbreviation of such term, as applicabsc. 2. Amended Registered Agent/Registered Office The axnendniont changes the certificate of fonnation to change the article or provision stating the name of the registered agent and the registered office address of the filing endty. The article or provision is aimteaded to read as follows: +t .!ail til I t Form 424 6 JUL/25/2013/THU 11:00 AM FAX No, P, 005 Registered Agent (Complete either A or B, but not both. Also complete C.) ❑ A. The registered agent is an organuzation (cannot bc entity named above) by the trance of: OR ® B. The registered agent is art individual resident of the state whose name is: Mehrdad _Moay_edi Flat Name U.J. Lasl Name Six The person executing this itistnrrnetrt affinns that the person designated as the new registered agent has consented to serve as registered agent, C. The business address of the registered agent and the registered office address is: 1225 Notch I -35F Suite 200 Carrollton TX 75406 Street Address (No P.O. Box) City Slat¢ Zip Code 3. Other Added, Altered, or Deleted Provisjous Other changes or additions to the certificate of formation may be made i i the space provided below, If the space provided is insufficicnt, incorporate die additional text by providvtg an attacluinent to this form. Please read the instructions to this form for further information on fnrxtrat. Text ,Area (Thr attached addendum, if any, is irtcorporxed herein by refercrtce.) Acle each of the following provisions to the certificate of fonuation. 'Die identification or reference of the added provision acrd the full text are as follows: Section 4: Maguire ParWers-Solana Land, L.P.`s new General Partner is: MMM Ventures, LLC, a Texas limited liability company 1221 North 1-35E, Suite 200 Carrolitoi4Texas 75006 ® Alter each of the followizrg provisions of the certificate of fora- ation. The identification or referetice of the altered provision and the Ul text of the provision as amended are as follows: Section 3 is amended as follows: Principal office and mailing address for the Partnership is as follows: 1221 North 1-35E, Stute 200 Carroliton, Dallas COttrlty, Texas 75006 Delete each of the provisions identified. below from the certificate of formation. Section 4: Remove Magwre Patuers-Solana Land GP, LLC and its address as General Partner, as it has resigned as General Partner of the Partnershdp. Form 424 1U1J25/2013/TEiU :1:00 ASI 7AX No. P. 006 Statement of Approval The amendments to the certificate of formation lukve been approved in the tztanner required by the Teas Business Organizations Code and by the. governing documents of the entity. Effectiveness of Filing (Select efthcr A, B, or C.) A. ® This document becomes effective when the document is .filed by the secretary of state. 13. ❑ Tftis doctunent becomes effective at a later date, wbich is riot more than ninety (90) days frotu the date of signing. The delayed effective date is: C. ❑ This document takes effect upon the occatrrence of a future event or fact, other than the passage of time. The 901h day after the date of signing is: The following event or fact will cause the doctuttent to take effect bi the wanner described below: Execution The undersigned signs this document subject to the penalties imposed by law for the submission. of a Materially false or fraudulent instrunietat and certifies under penidty of perjury that the undersigned is authorized under the provisions of 1mv govea xa ug tbe entity to execute the filing instrumeat. Date: 07-25-2013 By: tl A`1 l 5i naturc of authorized ersou 8 P By: MMM Vrrttures, LLC, a Texas United liability company BY: 2M Ventures, LLC, a Delaware limited liability company Its Sole Manager By: Melu'dad Moayedi Its Manager Printed or typed nemc of tiuthorized persona (See instructions) Form 424 JUL/25/2013/TEU 10;59 AM FAX Pio, P. 003 .Form 401-A, (Revised 12109) Acceptance of Appointment and Consent to Serve as Registered .Agent §5,201(b) Business Organizations Code The following forth may be used when the person designated as registered agent iii a registered agent filing is an individual. Acte taalce of A poitittnent and Consent to Serve ns Re ist.erAizexit I acknowledge, accept wid consent to any designs ition or appointment as registered agent in Texas for Maguire Partners-Solzma Land, L,P. a Texas limited artnershi Name ofr,,P,'etented entity I ani a resident of the state and tuiderstand that it will be my responsibility to receive ativ process, notice, or detimid that is served on ine as the registered agent of the represented entity; to forward such to the represented entity; and to ininiediately notify the represented entity and submit a statement of aesiguation to the Secretary of State if T resign. X"_ Mchrdad Moayedi Q7-25-2013 SigntnerrofregisteredcWerrt k Printed nineafregisleredap¢nt Date(intra/dd/3y}ryJ The following foie, may be used when the person desigeaated as registered agent in, a xegistered agent filing is iii organization. Acceptance -of Appointment and Conserkt to Serve as Registered Agent I am authorized to act on behalf of Name of organization designated as registered agent Tlie organization is, registered or otherwise authorized to do business iii Texas. The organisation acl iiowledges, accents and consents to its appointment or designation as registoi-ed agent in Texas for: Nance of repre,7ented entity The organization takes responsibility to receive any process, notice, or demand that is served ora the organization as the registered agent of the represented entity; to forward such to the represented entity; and to immediately notify the represented entity and submit a st itetnent of resignation to the Secretary of State if the arganizatioza resigns. x. S(rrattire of person authari.ed to act on behatf of organization Printed name of Pones 401-A EXHIBIT A-1 050405 000043 DALLAS 1445823.1 AGREEMENT OF LIMITED PARTNERSHIP MAGUIRE PARTNERS-SOLANA LAND, L.P., A TEXAS LRUMD PARTNERSHIP This Agreement of Limited Partnership (this "Agreement") is made and is effective as of June 3, 2003 by and among MAGUMB PARTNERS-SOLANA LAND GP LLC, a Delaware .limited liability company (the "Geaeral Partner"), MAGUIRE PARTNERS -DALLAS, LTD., a California limited partnership ("MP -Dallas"), and MAGUIRE PARTNERS -DALLAS II, LTD., a California limited partnership ("MP -Dallas II," and together with the General Partner and MP - Dallas, the "Partners"), with reference to the following facts: RECITALS A. The Limited Partners and Maguire Partners -Solana GP Limited Liability Company ("1Vi, P -S GP"} are parties to that certain Second Amended and Restated Agreement of Limited Partnership dated as of December 5, 2000 (the "MP -S Agreement") for Maguire Partners -Solana Limited Partnership, a Texas limited partnership (the "MPS Partnership"). S. The Limited Partners and MP -S GP desire to divide the MP -S. Partnership into two separate partnerships pursuant to Section 1.708-1(d)(3)(i)(A) of the Regulations; the new partnersbip established hereby as Maguire Partners -Solana Land, L.P., a Texas limited partnership (the "Partnersbin"), organized for the purpose of holding the property described on Exhibit A attached hereto (the "Development Provera►') which shall be conveyed to the Partnership by the MP -S Partnership as provided herein, and the MP -S Partnership which shall continue as the owner of all property previously held by it other than the Development Property. C. The General Partner will be admitted as the general partner of the Partnership, and both the General Partner and MP -S GP and will be disregarded as entities separate from their sole member for federal income tax purposes. AGREEMENT NOW, THEREFORE, the Partners by this Agreement set forth the limited partnership agreement for the Partnership under the laws of the State of Texas upon the terms and subject to the conditions of this Agreement. 050405 000025 DALLAS 1598076.2 ARTICLE I When used in this Agreement, the following terms shall have the meanings set forth below (all terms used in this Agreement that are not defined in this Article I shall have the meanings set forth elsewhere in this Agreement): 1.1 "Act" shall mean the Texas Revised Uniform Limited Partnership Act, as the same may be amended from time to time. - 1.2 "Agreement" shall mean this Agreement of Limited Partnership, as originally executed and as amended from time to time. 1.3 "Capital Contribution" shall -mean the total of cash and other assets contributed to the Partnership by Partners. 1.4 "Certificate" shall mean the Certificate of Limited Partnership of the Partnership as filed with the Secretary of State of Texas, as amended or restated from time to time. 1.5 "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, the provisions of succeeding law, and to the extent applicable, the Regulations. 1.6 "DeveioRment Properly" shall mean the real property described on Exhibit A attached hereto. 1.7 "Distributable Cash" shall mean the amount of cash which the Partners deem available for distribution, taking into account all Partnership debts, liabilities, and obligations then due (including without limitation, the Loan) and amounts necessary to place into reserves for customary and usual claims with respect to the Partnership's business. 1.8 "Fiscal Year" shall mean the Partnership's fiscal year, which shall be the calendar year. 1.9 "General Partner" shall mean Maguire Partners -Solana Land GP LLC, a Delaware limited liability company, in its capacity as general partner of the Partnership, or any other person or entity that succeeds such General Partner in that capacity. 1.10 "Lender" shall mean Old Standard Life Insurance Company, an .Idaho corporation and Western United Life Assurance Company, a Washington corporation. 1.11 -"Limited Partners °' shall mean UT -Dallas and MP -Dallas IL in their capacities as limited partners of the Partnership, and any other person or entity admitted as a 050405 000025 DALLAS 1598075.2 limited partner of the Partnership pursuant to this Agreement, collectively; the term "Limited Partner" shall mean any one (1) of the Limited Partners. 1.12 "Loan" shall mean those two certain loans in the aggregate original principal amount of $21,500,000.00 made to the Partnership by the Lender, one of which loans is payable to Old Standard Life insurance Company in the original principal amount of $8,700,000 and the second of which loans is payable to Western United Life Assurance Company in the original principal amount of $12,800,900.00. 1.13 "Loan Documents" shall mean all documents executed or delivered in connection with the Loan. 1.14 "Management Aereement'shall mean that certain Property Management and Leasing Agreement dated as if even date herewith executed by and between the Partnership and Maguire Properties -Solana Services, L.P., a Texas limited partnership. 1.15 "Net Profits" and "Net Losses" shall mean the taxable income or loss, as the case may be, for a period (or from a transaction) as determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be separately stated pursuant to Code Section 703(a)(1) shall be included in taxable income or loss). 1.16 "Partners ' shall mean the General Partner and the Limited Partners, and any other person or entity admitted to the Partnership as a Partner pursuant to this Agreement, collectively; the term "Partner" shall mean any one (1) of the Partners. 1.17 "Partnership" shall mean Maguire Partners -Solana Land, L.P., a Texas limited partnership. 1.18 "Partnershiu Interest" shall mean with respect to any Partner, all of such Partner's right, title and interest in, to and against the Partnership with respect to the Net Profits, Net Losses, and Distributable Cash of the Partnership, and all other rights of a Partner to participate in the business, affairs and management of the Partnership, including without limitation, the right to vote on or grant consent or approval with respect to matters coming before the Partnership. 1.19 "PercentaLe Interest" shall mean 1.00% with respect to the General Partner, 98.99% with respect to W -Dallas and 0.01% with respect to NO -Dallas II, 1.20 "Re u lations" shall, unless the content clearly indicates otherwise, mean the regulations currently in force as final or temporary that have been issued by the U.S. Department of Treasury pursuant to its authority under the Code. 050405 000025 DALLAS 1598076.2 3 1.21 "ROFO A reement" means that certain Right of First Offer Agreement dated of even date herewith executed by the Partnership and Maguire Properties, L.P., a Maryland limited partnership ("ROFO Holder', pursuant to which the Partnership grants to the ROFO Holder and its successors and assigns a right of first offer with respect to the Development Property. 1.22 "Tu Matters Partner" shall be the General Partner or its successor as designated pursuant to Section 8.7. ARTICLE II ORGANIZATIONAL MATTERS 2.1 Formation. Pursuant to the Act, the Partnership shall be formed as a limited partnership under the laws of the State of Texas by filing the Certificate with the Texas Secretary of State and otherwise complying with the requirements of the Act for the formation of a limited partnership. Without the need for the consent of any person or entity, (i) each of Maguire Partners -Solana Land GP LLC, MP -Dallas and MP -Dallas H are hereby admitted to the Paftership as partners of the Partnership, and (ii) Maguire Partners -Solana Land GP LLC is hereby designated as the sole general partner of the Partnership. The rights and liabilities of the Partners shall be determined pursuant to the Act and this Agreement. To the extent that the rights or obligations of any Partner are different by reason of any provision of this Agreement than they would be in the absence of such provision, this Agreement shall control, to the extent permitted by the Act. 2.2 Name. The name of the Partnership shall be "Maguire Partners -Solana Land, L.P.". The business of the Partnership may be conducted under that name or, upon compliance with applicable laws, any other name that the Partners deem appropriate or advisable. The General Partner shall qualify the Partnership to do business in the State of Texas and shall file any qualification instruments and fictitious name certificates and similar filings, and any amendments thereto, 'as necessary to qualify the Partnership to conduct business in the State of Texas or which the General Partner otherwise considers appropriate or advisable. 2.3 Term. The term of the Partnership shall commence on the date of filing of the Certificate with the Texas Secretary of State as aforesaid and shall continue to December 31, 2050, unless the Partnership is sooner dissolved as hereinafter provided. 2.4 R 'stared Office; Re stared Aent; Pr nci l Office. The Partnership shall continuously maintain a registered office and registered agent in the State of Texas as required by the Act. The registered office and registered agent of the Partnership in Texas is Tom Allen, Maguire Partners, 9 Village Circle, Suite 500, Westlake, Texas 76262. In addition, the Partnership shall maintain its principal office at 9 Village Circle, Suite 500, Westlake, Texas 76262, or at such other place as the General Partner may determine. The registered office, registered agent and principal office of the Partnership may be changed at any time and from time to time by the General Partner. 050405000025 DAUAS 1598076.2 2.5 Addresses of the Partners. The address of the General Partner is 555 West Fifth Street, Suite 5000, Los Angeles, California 90013-1010, Attention: Robert F. Maguire III. The address of the Limited Partners is 555 West Fifth Street, Suite 5000, Los Angeles, California 90013-1010, Attention: Robert F. Maguire M. 2.6 Purpose of Partnership The purposes of the Partnership are (i) acquiring, owning and holding the Development Property, (ii) obtaining the Loan from Lender secured, inter a� by the Development Property pursuant to the terms of the Loan Documents, and (iii) transacting any and all lawful business that is incident, necessary and appropriate to accomplish the foregoing. ARTICLE ffi CAPITAL CONTRIBUTIONS 3.1 Initial Capital Contributions. The initial Capital Contribution to the Partnership shall be the Development Property which shall be conveyed to the Partnership directly by the MP -S Partnership. Such Capital Contribution shall be treated for federal income tax purposes as a contribution of the Development Property by the MP -S Partnership to the Partnership in exchange for all of the Partuership'Interests in the Partnership, followed by the distribution of the Partnership interests to the Partners in the percentages and with the status of General Partner or Limited Partner as provided in Exhibit B. The capital accounts of the Partners shall be credited with their Percentage Interest share of the value of the Development Property at the time of contribution to the Partnership. 3.2 Additional Capital Contributions. The Partners shall contribute additional capital to the Partnership in such amounts and at such times as the Partners shalt determine in their sole and absolute discretion. The Partners shall contribute such additional capital pro rata in proportion to their respective Percentage Interests. 3.3 No Interest. No Partner shall be entitled to receive interest on any Capital Contributions. ARTICLE IV PARTNEKS 4.1 Limited Liability. Except as required under the Act, no Limited Partner shall be personally liable under any judgment of a court, or in any other manner, for any debt, obligation, or liability of the Partnership, whether that debt, liability, or obligation arises in contract, tort, or otherwise. 4.2 Admission of Additional Partners. No additional partners shall be admitted to the Partnership unless approved by all of the Partners. 050405 000025 DALLAS 1598076/ 4.3 Witbdrawals. No Partner may withdraw from the Partnership. 4.4 Transactions With The Partnership Subject to any limitations set forth in this Agreement, any Partner may lend money to and transact other business with the Partnership. Subject to other applicable law, such Partner has the same rights and obligations with respect thereto as a person or entity who is not a Partner. 4.5 Remuneration To Partners. Except as otherwise authorized in, or pursuant to, this Agreement, no Partner is entitled to remuneration for acting in the Partnership business. 4.6 Limited Partners Are Not Aeents, The management of the Partnership is vested in the General Partner. No Limited Partner, acting solely in the capacity of a Limited Partner, is an agent of the Partnership, nor can any Limited Partner in such capacity bind, or execute any instrument on behalf of, the Partnership. 4.7 Voting Rights. Except as expressly modified in this Agreement, Partners shall have the voting, approval and consent rights provided in the Act. 4.8 Meetiu sg of the Partners. No annual or regular meetings of Partners are required. ARTICLE V MANAGEMENT AND CONTROL OF THE PARTNERSHIP 5.1 Management of the Partnership by General Partner. The business, property and affairs of the Partnership shall be managed and all powers of the Partnership shall be exercised by or under the direction of the General Partner. Without limiting the provisions of Section 5.5 below, the General Partner shall have the power and authority (i) to manage, control, administer, operate, sell and mortgage the Property, (ii) to operate the Partnership and the business thereof, (iii) to manage, control, administer the business and affairs of the Partnership, and (iv) to do or cause to be done any and all acts deemed by the Gencral Partner to be necessary or appropriate to and of the foregoing, and the scope of such power and authority shall encompass all matters in any way connected with such business or incident thereto, including but not limited to, the power and authority: (a) To borrow the Loan upon such terms and conditions as any officer of the General Partner determines, including, but not limited to executing and delivering one or more loam commitments, promissory notes, deeds of trust, security agreements, profit participations, loan agreements, hazardous substance agreements, financing statements, indemnification agreements, assignments of rents and leases, certificates, affidavits and powers of attorney; 050405 000025 DALLAS 1518076.2 (b) To perform all of the Partnership's obligations under the Loan Documents, including causing the Partnership to do no acts in contravention of the Loan Documents; (c) To borrow monies for the purchase, development and maintenance of Partnership assets and other aspects of the Partnership=s business and from time to time to draw, make, execute and issue promissory notes and other negotiable or non-negotiable instruments and evidences of indebtedness; to secure the payment of the sums so borrowed and to mortgage, pledge or assign in trust all or any part of the property of the Partnership, and to assign any monies owing or to be owing to the Partnership; (d) To enter into any agreements of joint venture or partnership or for sharing of risks, expenses or profits, with any person, firm, corporation, government or agency thereof engaged in any business or transaction in which the Partnership is authorized to engage; (e) To maintain, develop, manage and defend Partnership property; to contract with third parties for such purposes; and to do any and all other things necessary or appropriate to carry out the terms and provisions of this Agreement which would or might be done by a normal and prudent businessman in the development and management of its own property; (f) To enter into and execute agreements customarily employed in the industry and any and all other instruments or documents considered by the General Partner to be necessary or appropriate to carry on and conduct the business of the Partnership, for such consideration and on such terms as the General Partner may determine to be in the best interests of the Partnership; (g) To sell, assign, convey or otherwise dispose of, for such consideration and upon such terns and conditions as the General Partner may determine to be in the best interests of the Partnership, all or any part of the Partnership property, any interest therein, or any interest payable therefrom, and in connection therewith to execute and deliver such deeds, assignments and conveyances containing such warranties as the General Partner may determine to be appropriate; (h) To purchase, lease, rent or otherwise acquire or obtain the use of facilities and all other kinds and types of real or personal property that may in anyway be deemed necessary, convenient, or advisable in connection with carrying an the business of the Partnership, and in connection therewith, to enter into one or more bill of sale agreements; (i) To pay any amounts necessary or appropriate to the maintenance, management or operation of any Partnership property; 050405 000n25 onwAs 1598076.1 7 0) To mare and to enter into such agreements and contracts with such parties and to give such receipts, releases and discharges with respect to any and all of the foregoing and any matters incident thereto as the General Partner may deem advisable or appropriate; (k) To procure and maintain in force such insurance as the General Partner shall deem prudent to serve as protection against liability for loss and damage which may be occasioned by the activities to be engaged in by the Partnership or the General Partner on behalf of the Partnership; (1) To sue and be sued, complain and defend in the name of and on behalf of the Partnership; (m) To quitclaim, surrender, release or abandon any Partnership property, with or without consideration therefor; (n) To execute and deliver all checks, drafts, endorsements and other orders for the payment of Partnership funds; (o) To employ on behalf of the Partnership agents, employees and officers (having such duties and titles and hating such authority by delegation from the General Partner as the General Partner shall designate), accountants, attorneys, brokers, consultants and all other professionals, clerical help and such other assistance and services as the General Partner may deem proper and to pay therefor such remuneration as the General Partner may determine to be reasonable and appropriate; (p) To appear and to represent the Partnership before any governmental authority or regulatory agency and to make all necessary or appropriate filings before such authority or agency; (q) To take such other action, execute and deliver such other documents and perform such other acts as may be deemed by the General Partner to be appropriate to carry out the business and affairs of the Partnership in accordance with this Agreement; (r) To Dissolve or liquidate the Partnership; and (s) Without in any way limiting paragraph (f) above, to sell or lease, or otherwise dispose of all or substantially all of the assets of the Partnership, upon such terms and conditions as the general partner shall determine, in its sole discretion; conduct the affairs of the Partnership in the best interest of the Partnership and its Partners, including the safekeeping and use of all Partnership funds for the benefit of the Partnership and its Partners. 5.1 Powers With Respect to Manaeemeut of the Partnership. Subject to the limitations set forth in this Agreement, the General Partner shall have all necessary powers to 050405 000025 DALLAS 1598076.2 manage and carry out the management of the Partnership, including without limitation, the power to sign contracts and perform and exercise obligations and rights on behalf of the Partnership, including without limitation, the power to exercise on behalf and in the name of the Partnership all of the powers and rights of a general partner described in the Act. 5.2 Limited Partners Have No Managerial Authority. The Limited Partners shall have no power to participate in the management of the Partnership, except as expressly authorized by this Agreement or except as expressly required by the Act. Unless expressly and duly authorized in writing to do so by the General Partner, no Limited Partner shall have any power or authority to bind or act on behalf of the Partnership in any way, to pledge its credit, or to render it liable for any purpose. 5.3 Performance of Duties,• Liability of General Partner. The General Partner shall not be liable to the Partnership or to any Partner for any loss or damage sustained by the Partnership or any Partner, unless the loss or damage shall have been the result of an act performed, or omitted to be performed, in bad faith with gross negligence or willful misconduct by the General Partner. 5.4 Competing Activities. Notwithstanding the existence of this Agreement, the Partners may engage in whatever other activities they or any of them may respectively choose, whether or not the same be competitive with the Partnership, and none of the non -engaging Partners shall have any right in the income or profits derived from such other activities. . 5.5 Limited Liability. Except as required under the Act, no Limited Partner of the Partnership shall be personally liable under any judgment of a court, or in any other manner, for any debt, obligation, or liability of the Partnership, whether that liability or obligation arises in contract, tort, or otherwise, by reason of being a Partner of the Partnership. ARTICLE VI ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS 6.1 Allocations of Net Profit and Net Losses. Net Profit and Net Losses shall be allocated to the Partners in proportion to their Percentage Interests. 6.2 Code Section 704(c) Mocations. Notwithstanding any other provision in this Article.VI, in accordance with Code Section 704(c) and the Regulations promulgated thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Partnership shall, solely for tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership for Federal income tax purposes and its fair market value on the date of contribution_ Allocations pursuant to this Section 6.2 are solely for purposes of Federal, state and local taxes. As such, they shall 050405 000025 DALLAS 1598076.2 not affect or in any way be taken into account in computing a Partner's share of profits, losses, or other items of distributions pursuant to any provision of this Agreement. 6.3 Distributions of the Partnership. Distributable Cash shall be distributed to the Partners in proportion to their Percentage Interests. All such distributions shall be made only to the persons or entities who, according to the books and records of the Partnership, are the holders of record of the Partnership Interests in respect of which such distributions are made on the actual date of distribution. Notwithstanding any provision to the contrary contained in this Agreement, the Partnership shall not make a distribution that would violate the Act or other applicable law. Neither the Partnership nor any Partner shall incur any liability for making distributions in accordance with Section 2.6 and this Section 6.3. 6.4 Form of Distributiou. A Partner has no right to demand or receive any distribution from the Partnership in any form other than money. No Partner may be compelled to accept from the Partnership a distribution of any asset in kind in lieu of a proportionate distribution of money being made to other Partners. Except upon a dissolution and the winding - up of the Partnership, no Partner may be compelled to accept a distribution of any asset in kind. 6.5 Return of Distributions. Except for distributions made in violation of the Act or this Agreement, no Partner shall be obligated to return any distribution to the Partnership or pay the amount of any distribution for the account of the Partnership or to any creditor of the Partnership. The amount of any distribution returned to the Partnership by a Partner or paid by a Partner for the account of the Partnership or to a creditor of the Partnership shall be added to the account or accounts from which it was subtracted when it was distributed to the Partner. ARTICLE VII TRANSFER OF INTERESTS So long as the Loan remains outstanding, no Partner shall be entitled to directly or indirectly transfer, assign;, convey, sell, or in any way alienate all or any part of its Partnership Interest. To the fullest extent permitted by law, transfers in violation of this Article VII shall be null and void ab initio. Notwithstanding the foregoing or any other provision to the contrary contained in this Agreement, the partners shall have the right to pledge, assign, mortgage or grant a security interest in their respective Partnership Interests for the purpose of securing the debt of the applicable Partner or any affiliate of the applicable Partner or the direct or indirect owner of the beneficial interests of the applicable Partner. ARTICLE VIII ACCOUNTING2RECORDS, REPORTING BY PARTNERS 0SW5 000025 DALLAS 1598076,3 10 8.1 Books and Records. The books and records of the Partnership shall be kept, and the financial position and the results of its operations recorded, in accordance with the accounting methods followed for Federal income tax purposes, or such other commonly accepted accounting methods as may be selected by the General Partners from time to time. The books and records of the Partnership shall reflect all the Partnership transactions and shall be appropriate and adequate for the Partnership's business. The Partnership shall maintain at its principal office all of the following: (a) Partners. A current list of the full name and last known business or residence address of each Partner set forth in alphabetical order, together with the capital account, Capital Contributions, and Percentage Interest of each Partner; (b) Certificate. A copy of the Certificate and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which the Certificate or any amendments thereto have been executed; (c) - Agreement, A copy of this Agreement and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which this Agreement or any amendments thereto have been executed; (d) Books and Records. The Partnership's books and records as they relate to the internal affairs of the Partnership for at least the current and past two Fiscal Years. 8.2 Inspection Each Partner has the right to inspect and copy during normal business hours any of the Partnership records described in Sections 8.1(a) through (e). 8.3 Annual Statements. The General Partner shall cause to be prepared at least annually, at Partnership expense, information necessary for the preparation of the Partners' Federal and state income tax returns. The General Partner shall use commercially reasonable efforts to send or cause to be sent to each Partner within ninety (90) days after the end of each taxable year such information as is necessary to complete Federal and state income tax or information returns, and a copy of the Partnership's federal, state, and local income tax or information returns for that. year. 8.4 Filings. The General Partner, at Partnership expense, shall cause the income tax returns for the Partnership to be prepared and timely filed with the appropriate authorities. The General Partner, at Partnership expense, shall also cause to be prepared and timely filed, with appropriate Federal and state regulatory and administrative bodies, amendments to, or restatements of the Certificate and all reports required to be filed by the Partnership with those entities under the Act or other then current applicable laws, rules, and regulations. If the General Partner is required by the Act to execute or file any document and fails, after demand, to do so within a reasonable period of time or refuses to do so, any Partner may prepare, execute and file that document with the Texas Secretary of State. 050405 000025 DALLAS 15980762 11 8.5 Bank Acconts. The General Partner shall maintain the funds of the Partnership in one or more separate bank accounts. 8.6 Accounting Decisions and Reliance on Others. All decisions as to accounting matters, except as otherwise specifically set forth herein, shall be made by the General Partner. The General Partner may rely upon the advice of its accountants as to whether such decisions are in accordance with accounting methods followed for Federal income tax purposes. 8.7 Tax otters• Tax Matters Partner. (a) The Partnership and the MP -S Partnership shall each be deemed to be a continuation of the MP -S Partnership as it existed prior to the division of the MP -S Partnership as herein provided and consistent with Section. 1.708-1(d)(3)(i)(A) of the Regulations. The MP- S Partnership shall be deemed to continue with the same taxpayer identification number as it had prior to such division and its taxable year for the year in which such division occurs shall continue without -interruption until the end of the calendar year 2003. The Partnership also shall be treated as a continuation of the MP -S Partnership insofar as the Partnership's tax elections and holding period of the Development Property are concerned but the Partnership shall obtain a new taxpayer identification number and its initial taxable year shall commence on the date hereof and continue until the end of the calendar year 2003. (b) The Tax Matters Partner shall from time to time cause the Partnership to make such tax elections as it deems to be in the best interests of the Partnership and the Partners. The Tax Matters Partner, as deed in Code Section 6231 shall represent the Partnership (at the Partnership's expense) in connection with all examinations of the Partnership's affairs by tax authorities, including resulting judicial and administrative proceedings, and shall expend the Partnership funds for professional services and costs associated therewith. The Tax Matters Panner shall oversee the Partnership tax affairs in the overall best interests of the Partnership. If for any reason the Tax Matters Partner can no longer serve in that capacity or ceases to be a Partner, the Partners, or the remaining Partners, as the case may be, may designate another to be Tax Matters Partner. ARTICLE IX DISSOLUTION AND WINDING -UP 9.1 Dissolution. The Partnership shall be dissolved, its assets shall be disposed of, and its affairs wound up on the first to occur of the following: (a) Upon the expiration of the term as specified in Section 2.3 of this Agreement; 050405 000025 DALLAS 1598076.2 12 (b) Upon the entry of a decree of judicial dissolution under the Act; or (c) Upon the bankruptcy, dissolution, withdrawal or resignation of the General Partner,.unless within ninety (90) days after the date of such event, all of the remaining Farmers agree in writing to continue the business of the Partnership without dissolution and the Partnership will be treated as a partnership for Federal income tax purposes under the laws then existing, and the remaining Partners also agree in writing to the appointment, effective as of the date of such event, of a new General Partner which shall (A) agree in writing to act as General Partner and to the terms of this Agreement, and (B) be a special purpose entity having a limited liability company agreement substantially identical to that of the initial General Partner and deliver a non -consolidation opinion to the Lender, provided in the event that the agreement in writing to continue the business of the Partnership is not obtained; the Partnership will not for so long as amounts remain outstanding under the Loan (x) dissolve so long as one of its Partners is not bankrupt or dissolved, or (y) liquidate its assets without the consent of the holder of the Loan, and the holder of the Loan will be authorized to continue to exercise all of its rights under the Loan Documents and to retain the collateral until the Loan has been paid in full or otherwise completely discharged. 9.2 Winding -Un. Upon the dissolution of the Partnership, the Partnership shall continue solely for the purpose of winding -up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors. The General Partner or, if there is no General Partner, the other Partners shall be responsible for overseeing the winding -up and liquidation of the Partnership, shall take full account -of the liabilities of the Partnership and its assets, shall either cause its assets to be sold or distributed, and if sold (as promptly as is consistent with obtaining the fair market value thereof} shall cause the proceeds therefrom,, to the extent sufficient therefor, to be applied and distributed as provided in Section 9.3. 9.3 Order of PayMent of Liabitiiges Upon Dissolution. Upon dissolution, the assets of the Partnership shall be liquidated, and the proceeds from such liquidation shall be allocated and distributed in the following order of priority: (a) First, to the satisfaction of creditors of the Partnership, to the extent otherwise permitted by law, in satisfaction of the liabilities of the Partnership (whether by payment or the making of reasonable provision for payment thereof); (b) Second, to the satisfaction of all debts, liabilities and other obligations owed to any Partner (whether by payment or the making of reasonable provision for payment thereof); and (c) The balance to each of the Partners in accordance with their respective positive capital account balances. 050405 WW25 DALLAS 1596016.2 13 9.4 No Deficit Restoration. If, upon liquidation, any Partner has a deficit balance in its capital account, after taking into account all capital account adjustments for the Partnership taxable year during which liquidation occurs, such Partner shall have no obligation to contribute cash to the capital of the Partnership to restore such deficit balance. 9.5 Limitations on Payments Made in Dissolution. Except as otherwise specifically provided in this Agreement, each Partner shall only be entitled to look solely to the assets of Partnership for the return of its, and shall have no recourse for its Capital Contribution and/or share of Net Profits (upon dissolution or otherwise) against any other Partner. 9.6 Certificate of Cancellation. Upon the completion of the distribution -of Partnership assets as provided in Section 9.3, the Partnership shall be terminated and the General Partner or, if there is no General Partner, the other Partners who wound -up the affairs of the Partnership in accordance with this Agreement; shall cause to be filed in the office of, and on a form prescribed by, the Texas Secretary of State and such other appropriate governing agencies, a cancellation of the Certificate and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the State of Texas and shall take such other actions as may be necessary to terminate the Partnership. 9.7 No Action for Dissolution. Except as expressly permitted in this Agreement, to the fullest extent permitted by law, a Partner shall not take any voluntary action that directly causes a dissolution of the Partnership. The Partners acknowledge that irreparable damage would be done to the goodwill and reputation of the Partnership' if any Partner should bring an action in court to dissolve the Partnership under circumstances where dissolution is not required by Section 9.1. This Agreement has been drawn carefully to provide fair treatment of all parties and equitable payment in liquidation of the Partnership Interests. Accordingly, except where the Partners have failed to Iiquidate the Partnership as required by this Article DC, to the fullest extent permitted by law, each Partner hereby waives and renounces its right to initiate legal action to seek the appointment of a receiver or trustee to liquidate the Partnership or to seek a decree of judicial dissolution of the Partnership. ARTICLE X NDEMNIFICATION The Partnership shall defend, indemnify and save harmless each Partner, and its direct or indirect agents, employees, representatives, officers, directors, shareholders or partners from and against all claims, losses, damages, cost, expense, demands, liabilities, obligations, liens, encumbrances, rights of action or attorneys' fees ("Claims") sustained by reason of any act performed, or omitted to be performed, in good faith and without gross negligence or willful misconduct, within the scope of its authority expressly conferred by this Agreement, to the fullest extent permitted by applicable law in effect on the' date hereof and to such greater extent as applicable law may hereafter 1rorn time to time permit. Such inderanity &ball not be construed 050405 000015 DALLAS 1598076.2 14 to limit or diminish the coverage of any Partner under any insurance obtained by the Partnership, Payment shall not be a condition precedent to any indemnification provided in this Agreement. ARTICLE )a NUSCELLANEOUS 11.1 Complete Agreement! This Agreement and the Certificate constitute the complete and exclusive statement of agreement among the Partners with respect to the subject matter herein and therein and replace and supersede all prior written and oral agreements or statements by and among the Partners. No representation, statement, condition or warranty not contained in this Agreement or the Certificate will be binding on the Partners or have any force or affect whatsoever. 11.2 Binding Effect. Subject to the provisions of this Agreement relating to transferability, this Agreement will be binding upon and inure to the benefit of the Partners and their respective successors and assigns. 11.3 Parties in Interest. Except as expressly provided in the Act, nothing in this Agreement shall confer any rights or remedies tinder or by reason of this Agreement on any person or entity other than the Partners and their respective successors and assigns nor shall anything in this Agreement relieve or discharge the obligation or liability of any third person to any party to this Agreement, nor shall any provision give any third person any right of subrogation or action over or against any party to this Agreement. 11.4 Pronouns: StatutgKy References. All pronouns and all variations thereof shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the context in which they are used may require. Any reference to the Code, the Regulations, the Act, or other statutes or laws will include all amendments, modifications, or replacements of the specific sections and provisions concerned. 11.5 Readings. All headings herein are inserted only for convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of this Agreement. 11.6 Interpretation. In the event any claim is made by any Partner relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular Partner or its counsel. 11.7 References to this Aereement. Numbered or lettered articles, sections and subsections herein contained refer to articles, sections and subsections of this Agreement unless otherwise expressly stated. 050405 OM5 DALLAS 1596976-2 15 11.8 Severability. If any provision of this Agreement or the application of such provision to any person or circumstance shall be held invalid, the remainder of this Agreement or the application of such provision to persons or circumstances other than those to which it is held invalid shall not be affected thereby. 11.4 Additional Documents and Acts, Each Partner agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions, and conditions of this Agreement and the transactions contemplated hereby. 11.10 Notices. Any notice which a party is required or may desire to give the other party shall be in writing and may be personally delivered or given by United States registered or certified mail, return receipt requested, addressed as provided under Section 2.5 above (subject to the right of a party io designate a different address for itself by notice similarly given). Any notice so given by United States mail shall be deemed to have been given on the third day after the same is deposited in the United States mail as a registered or certified matter, return receipt requested, addressed as above provided, with postage thereon fully prepaid. Any notice not given by registered or certified mail as aforesaid shall be deemed to be given upon actual receipt of the same by the party to whom the same is to be givers, provided that the refusal by such party to receive any such notice shall be deemed such party's receipt of the same. 11.11 Amendments. All amendments to this Agreement will be in writing and signed by all of the Partners. It. 12 Multiple Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 11.13 Remedies Cumulative. The remedies under this Agreement are cumulative and shall not exclude any other remedies to which any person may be lawfully entitled. 11.14 Choice of Law. This Agreement shall be governed by, and shall be construed in accordance with, the laws of the State of Texas (without regard to conflict of laws principles). 050405 OM25 DALLAS 1548075.2 16 IN W UNESS WHEREOF, all of the Partners have executed this Agreement, effective as of the date written above. General Partner: MAGUME PARTNERS-SOLANA LAND CP LLC, a Delaware limited liability company By: MAGUME PARTNERS -DALLAS, LTD., a California limited partnership By: Maguire Partners Solana, LLC, a California limited liability company, its general partner By: Maguire Partners SCS, Inc., a California corporation, its manager By: Name: Title: Tom Allen, Senior Vice President Limited Partners: MAGUIRE PARTNERS -DALLAS, LTD., a California limited partnership By: Maguire Partners Solana, LLC, a California limited liability company, its general partner By: Maguire Partners SCS, Inc., a California corporation, its manager By: _ Name: Title: Tom Allen, Senior Vice President 050405 440423 DALLAS 1599076.2 17 MAGUIRE PARTNERS -DALLAS H, LTD., a California limited partnership By: Maguire Partners Solana, LLC, a California limited liability company, its general partner By: Maguire Partners SCS, Inc., a California co oration, its manager By: Name: Title: Tom Allen, Senior Viae President 050405 000025 BAr LA31598076.2 18 LEGAL DESCRIPTION OF THE DEVELOPMENT PROPERTY 054405000025 DALLAS 1548()76.2 19 EXHIBIT A The following two (2) tracts of land In Tarrant and Denton County, Texas being more particularly described as follows: TRACT 1: Being a 22.618 acre tract of land located in the C.M. THROOP SURVEY, ABSTRACT NO. 1510, Tarrant County, Texas and being all of Lot 2, Block 1, WESTI.AKFJSOUFMII P PARK ADDITION NO. 1, an addition to the Town of Westlake, Tarrant County, Texas according to the map thereof recorded in Volume 388-214, Page 78, 79, Plat Records of Tarrant County, Texas, and being mora particularly described as follows: BEINNING at a 112 inch iron rod found with "Huitt-%liars" cap for a comer on the northerly right-of-way line of Kirkwood Boulevard (variable width right -Df -way) and also being the southwesterly comer of said Lot 2, Block 1, WES'TLAKBISOUTHLAKE PARK ADDITION NO. 1; THENCE North, along the westerly line of said Lot 2, Block 1, a distance of 168.55 feet to a 518 inch iron rod with cap stamped "Carter Burgess" found for a comer, THENCE North 52 degrees 00 minutes 00 seconds East, along the northwesterly line of said Lot 2, Block 1, a distance of 1000.00 fact to a 5!8 inch iron. rad with cap stamped "Carter Burgess" found; THENCE East, along the north tine of said Lot 2, Block 1, a distance of 459.42 feet to a PK nail found in rock for the northwest comer of Lot 1, Block 1 of said WestlakeJSouthlake Park Addition No. 1; THENCE, along the easterly line of said Lot 2, Block 1 and along the westerly line of Lot 1, Block 1 of said Westl"Southlake Park Addition No. 1 the following courses: South 30 degrees 13 minutes 57 seconds West, a distance of 566.22 feet to a PK nail found in asphalt for a corner; South 59 degrees 46 minutes 03 seconds East, a distance of 234.85 feet to a 112 inch iron rod found with "Huitt-Zo@ars" cap fora comer; South 30 degrees 13 minutes 57 Seconds West, a distance of 873.37 feet to a 112 inch iron rod found with "Huitt-Zollars" cap for a comer and being on the aforementioned northerly right-of-way line of said Kirkwood Boulevard and beim the beginning of a non -tangent curve to the right having a central angle of 43 degrees 31 minutes 24 seconds, a radius of 772.00 feet and being subtended by a 572.43 foot chord which bears North 59 degrees 35 minutes 10 seconds West; THENCE, along said curve to the right and along the northerly right-of-way line of said Kirkwood Boulevard, an arc distance of 586.43 feet to a 112 inch iron rod found with "Huitt-Zollars" cap for a corner; THENCE, North 37 degrees 49 minutes 27 seconds West, along the northerly rigbt-of-way line of said Kirkwood Boulevard, a distance of 233.71 feet to a 112 inch iron rod found with "Hunt-Zollarfe , cap for the beginning of a curve to the left having a central angle of 05 degrees 27 minutes 51 seconds, a radius of 1428.00 feet and being subtended by a 136.13 foot chord which bears North 40 degrees 33 minutes 21 seconds West; THENCE, along said curve to the left and along the northerly right-of-way line of said Kirkwood Boulevard, an am distance of 136.18 feet to the POINT OF BEGINNING and containing 22.618 acres of land, more or less. 050405 000025 DAt IAS 1608808.1 t—WANER BEING a tract of land situated in the C. N. Tluoop Survey, Abstract No. 1510, the W. Medlin Survey, Abstract No. 1958, the William Pea Survey, Abstract No. 1246 and the Joseph Henry Survey, Abstract No. 742, Tarrant County, Texas and in the William Pea Survey, Abstract No. 1045, the W. Medlin Survey, Abstract No. 1588 and the Joseph Henry Survey, Abstract No. 529, Denton County, Texas and being a portion of that tract of land as dcscn'bed in the Special Warranty Deed to MP PARTNERS-SOLANA LIl1+ = PARTNERSHIP as recorded in Volume 13290, Page 0009 of the Deed Records of Tarrant County, Texas and being more particularly described as follows: COMMENCING at a 112 inch iron rod found with "Huitt-Zollars" cap at the Southeast comer of Lot 1, Block 3, WestlakeiSouddake Paris Addition No. 1, an addition to the Town of Westlake, Texas as recorded in Volume 388-214, Page 78 of the Plat Records of Tarrant County, Texas and also being on the Westerly right -of --way line of Sam School Road {68 foot right-of-way); THENCE, along the Southerly line of said Lot 1, Block 3 the fonowing courses; South 88 degrees 45 minutes 45 seconds West, a distatice of 375.57 feet to a 3/8 inch iron rod found in concrete; South 89 degrees 33 minutes 46 seconds West, a distance of 1466,76 feet to a steel fence comer post found; North 00 degrees 47 minutes 24 seconds East, a distance of 460.91 feet to a 5/8 inch iron rod found with "Carter & Burgess" cap; North 89 degrees 57 minutes 44 seconds West, a distance of 1774.98 feet to a 518 inch iron rod found with "Carter & Burgess" cap at the Southwest coiner of said Lot 1, Block 3, the same being the Southeast corner of said Maguire Partners -Solana Limited Partnership tract, the POINT OF BEGINNING; THENCE, North 89 degrees 57 minutes 44 seconds West, along the Southerly line of said Maguire Partners -Solana Limited Partnership tract, a distance of 200.93 feet to a point for a comer from which a t inch iron found bears North 59 degrees 11 minutes 44 seconds West, 0.35 feet; THENCE, North 00 degrees 20 minutes 49 seconds East, along the Southerly line of said Maguire Partners - Solana Limited Partnership tract, a distance of 45.01 feet to a 518 inch iron rod found with "Carter & Burgess" cap; THENCE, North 89 degrees 39 minutes 10 seconds West, along the Southerly line of said Maguire Partners -Solana Limited Partnership tract and along the Northerly right-of-way line of Roaaoak Dove Road (variable width right-of-way), a distance of 1346.51 feet to a 518 inch iron rod found with "Carter & Burgess" cap and being the beginning of a curve to the right having a central angle of 89 degrees 45 minutes 113 seconds, a radius of 154.38 feet and being subteuded by chord of 217,85 feet which bears North 44 degrees 46 minutes 35 seconds West; THENCE, along said curve to the right and along the Northeasterly right-of-way line of said Roanoak Dove Road in a Northwesterly direction, an are distance of 241,83 feet to a 518 inch iron rod found with "Carter & Burgess" cap at the end of said curve and also being on the Easterly right-of-way line of Precinct Line Road (variable width right-of-way); THENCE, along the Westerly Line of said Maguire Partners -Solana Limited Partnership tract and along the Easterly right-of-way line of Precinct Line Road the following: North 00 degrees 06 minutes 00 seconds East, a distance of 977.90 feet to a 5/8 inch iron rod found with' "Carter & Burgess" cap for a comer, 05005 000025 DALLAS 1608808.1 2 North 00 degrees 08 minutes 31 seconds West, a distance of 394.37 feet to a 518 inch iron rod found with "Carter & Burgess" cap for a corner; North 00 degrees 10 minutes 13 seconds West, a distance of 289.94 feet to a 518 inch iron rod set with "Huitt-Zollars" cap at the Southerly corner of the FMR Texas Limited Partnership tract as recorded in Volume 14146 Page 381 of the Deed Records of Tarrant County, Texas and also being the beginning of a curve to the right having a central angle of 43 degrees 29 minute 49 seconds, a radius of 1050.00 feet and being subtoaded by a 778.12 foot chord which bears North 22 degree& 58 minutes 18 seconds East; THENCE, along *a Easterly line of said FMR Texas Limited Partnership tract and the Westerly line of said Maguire Partners -Solara Limited Partnership tract the following courses; Along said curve to the right, an arc distance of 797.12 feet to a 518 inch iron rod found Nvith "Huitt- Zollars" cap at the end of said curve; North 44 degrees 42 minute 25 seconds East, a distance of 109.52 feet to a 518 inch iron rod set with "Huitt-Zolla&' cap at the beginning of a curve to the left having a central angle of 15 degrees 56 minutes 56 seconds, a radius of 1050.00 feet and being subtended by a 291.34 foot chord which bears North 36 degrees 45 minutes 01 second East; Along said curve to the left, an are distance of 292.28 feet to a 518 inch iron rod found with "Huitt-Zollars" cap at the end of said curve; North 28 degrees 45 minutes 43 seconds East, a distance of 595,41 feet to a 518 inch iron rod found with 'KIuitt-Zollars" cap at the beginning of a curve to the left having a central angle of 09 degirees 44 minutes 51 seconds, a radius of 1050.00 feet and being subtended by a 178.42 foot chord which bears North 23 degrees 53 minutes 17 seconds East; Along said curve to the left, an are distance of 178.63 feet to a 518 inch iron rod found with "Huitt Zollars" cap at the end of said curve; North 19 degrees 01 minute 54 seconds East, a distance of 335.03 feet to a 518 inch iron, rod found with "Huitt-Zollars" cap on the Southwesterly right-of-way line of State Highway No. 114 (variable width right- of-way) , as described in Donation Deed to the State of Texas as recorded in Volume 10591 Page 857 of the Deed Records of Tarrant County, Texas; THENCE, along the Southwesterly right-of-way line of State Highway No. 114 as described in said Donation Deed, the following courses. South 71 degrees 03 minutes 31 seconds East, a distance of 60.00 feet to an iron rod found in concrete; North 18 degrees 56 minutes 28 seconds East, a distance of 30.00 feet to a Texas Department of Transportation monument found; North 60 degrees 06 minutes 26 seconds East, a distance of 62.42 feet to a Texas Department of Transportation monument found; South 71 degrees 03 minutes 32 seconds East, a distance of 254.55 feet to a point for a comer from which a Texas Department of Transportation monument found bears North 10 degrees 48 minutes 28 seconds West, 0.43 feet; South 77 degrees 26 minutes 06 seconds East, a distance of 746.74 feet to a Texas Department of Transportation monument found; South 71 degrees 03 minutes 31 seconds East, a distance of 1443.85 feet to a Texas Department of Transportation monument found; 050405 GOW25 DALIAS 1609908.1 3 South 62 degrees 34 minutes 19 seconds East, a distance of 404.34 feet to a Texas Deparunent of Transportatioa monument found, at the beginning of a curve to the right having a radius of 2709.79 feet, a central angle of 08 degrees 19 minutes 09 seconds, and being subtended by a chard of 393.11 feet which been South 58 degrees 24 minutes 45 seconds East; Along said curve to the right in a Southeasterly direction, an are distance of 393.45 feet to a Texas Department of Transportation monument found at the end of said curve; South 54 degrees 15 minutes l l seconds East, a distance of 399.24 feet to a Texas Department of Transportation monument found; South 64 degrees 19 minutes 50 seconds East, a distance of 56.55 feet to a 518 inch iron rod set with "Huitt- ZoUW' cap at the beginning of a curve to the right.having a radius of 2754.79 feet, a central angle of 02 degrees 13 minutes 56 seconds, and being subtended by a chord of 107.32 feet which bears South 43 degrees 17 minute& 37 seconds East; Along said curve to the right, an arc distance of 107.33 feet to a 1/2 inch iron rod found with'Muin- Zollars" cap at the end of said curve and being the Northeast corner of Lot 1, Block 1, of the Aforementioned Westlake/Southlake Park Addition No. 1; THENCE, West departing the Southwesterly right-of-way line of said State Highway No. 114 and along the Northerly line of said Lot 1 and Lot 2, Block 1, Westlake/Southlake Park Addition No. 1, a distance of 2132.54 feet to a 5/8 inch iron rod found with "Carter & Burgess" cap at the Northwesterly corner of said Lot 2, Block 1, Wesdake/Southlake Park Addition No. 1; THENCE, South 52 degrees 00 minutes 00 seconds West, along the Westerly line of said Lot 2, Block 1, a distance of 1000.00 feet to a 518 inch iron rod found with "Carter & Burgess" cap for a corner; THENCE, South along the Westerly line. of said Lot 2, Block 1, and along the Westerly line of the aforementioned Lot 1, Block 3, a distance of 1882.23 feet to the POINT OF BEGINNING and Containing 184.32 acres of land, more or less. HEING $U MaTO—THE FOS L(3WIN%r_iTEMS: 1. Restrictive covenants described in instrument recorded in Volume 2793, Page 55, Deed Records of Tarrant County, Texas. And recorded in Volume 4558, Page 505, Deed Records, Tarrant County, Texas. (Affects Tracts 1 and 2) 2. Restrictive covenants described in instrument recorded in Volume 4888, Page 622, Deed Records of Tarrant County, Texas. (Affects Tracts 1 and 2) 3. Restrictive covenants described in instrument recorded in Volume 14007, Page 477, Deed Records of Tarrant County, Texas. As affected by confirmation Sled 04118/2001, recorded in Volume 14834, Page 12, Deed Records, Tarrant County, Texas. (Affects Tracts 1 and 2) 4. Restrictive covenants described in instrument recorded in Volume 2244, Page 669, Deed Records of Tarrant County, Texas. As amended in Volume 2487, Page 183, Official Public Records, Denton County, Texas. (Affects Tracts 1 and 2) 5. Terms and conditions of Ordinance No. 71-100, entitled Airport Zoning Ordinance of the Dallas - Fort Worth Regional Airport, filed September 1, 1982, recorded in Volume 7349, Page 1106, Deed Records of Tarrant County, Texas, 050405 000025 DALLAS 1608808.1 6. Non-exclusive easement granted by MaguhV17 Lomas Partners-Westlake/Southlake Partnership, et at to Tri --County Electric Cooperative, Inc., dated 12/10/1987, filed 02/09/1988, recorded. in Volume 9187, Page 1766, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02/0512003, last revised 06102/2003. (Affects Tract 1) 7. Easement to Dallas Pack & South Eastern Railway Co., filed 07/1211902, recorded in Volume 169, Page 119, Deed Records of Tarrant County, Texas, and, as drown on survey of Eric I Yahoudy, R.P I.S. 4862, dated 4210512003, last revised 46102/2003. (Affects Tract 2) 8. Easement granted by Maguire/Thomas Partners-Westlake/Southlake Partnership, et al to Tn- County Electric Cooperative, Inc., dated 09130/1987, filed 10/27/1987, recorded in Volume 9105, Page 190, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02/05/2003, last revised 06/02/2003. And recorded in Volume 2279, Page 15, Official Public Records, Denton County, Texas. As affected by Consent dated 08/2511997, recorded in Volume 12902, Page 333, Deed Records, Tarrant County, Texas, executed by Tn- County Electric Cooperative, Inc. (Affects Tracts 1 and 2) 9. Easement granted by Maguire/ihomas Partners-Westlake/Soutblake Partnership, et al to Southwestern Belt Telephone Company, dated 0913011987, filed 12/08/1987, recorded in Volume 9140, Page 532, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L,S. 4682, dated 02/05/2003, last revised 06102/2003. And recorded in Volume 2288, Page 135, Official Public Records, Denton County, Texas. As affected by Consent dated 08/25/1997, recorded in Volume 12902, Page 334, executed •by Southwestern Bell Telephone Company (Affects Tracts t and 2) 10. Easement granted by Maguirm Thomas PartnerspWestlake/Southlake Partnership, et al to Trophy Club Municipal Utility District No. 1, dated 12/15/1987, filed 12130/1987, recorded in Volume 9156, Page 776, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02105/2003, last revised 0510212003. And recorded in Volume 2300, Page 890, Real Property Records, Denton County, as affected by Consent dated 08/2211997, filed 09/10/1997, recorded in Volume 12902, Page 335, executed by Trophy Club Municipal Utility District No. 1; and as affected by Transfer. of Utility System executed by Maguire/Thomas Partners-Westiake/Southlake Partnership and MTP-iBM Phase 11 and IIT Joint Venture to Trophy Club Municipal Utility District No. 1, dated 09/19/1989, filed 10/2411989, accorded in Volurne 2670, Page 112, Real Property Records, Denton County, Texas. (Affects Tracts 1 and 2) 11. Easement.granted by Maguirenhomas Partners-Westl"Southlake Partnership, et at to Enserch Corporation, dated 09/30/1987, filed 0112011988, recorded in Volume 9172, Page 727, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02/05/2003, last revised 06/02/2003. Avid recorded in Volume 2312, Page 764, Official Public Records of Real Property, Denton County, Texas; as affected by Consent dated 08/2511997, recorded in Volume 12902, Page 336, Deed Records, Tarrant County, Texas, executed by Enserch Corporation, and as shown on Plat recorded in Volume 388-214, Pages 78 and 79, Map Records, Tarrant County, Texas (Affects Tracts I and 2) 12. Easement granted by Maguire Partners-Sotana Limited Partnership, a Texas limited partnership to Town of Westlake, Texas, filed 04/20!2001, recorded in Volume 14838, Paga 112, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02105/2003, last revised 06/02!2003. (Affects Tract 2) 13. Easement granted by Maguire/Thomas Partners-Westlalw9outhlake Partnership to Southwestern Bell Telephone Company, dated 0913011987, filed 1210811987, recorded in Volume 2288, Page 436, Deed Records of Tarrant County, Texas, and as noted on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 021051200.3, last revised 06/02/2003. Corrected in Volume 2.379, Page 740, Real Property Records, Denton County, Texas. (Affects Tract 2) 050405 000025 DALLAS 1608808.1 14. Easement granted by MTP -IBM Phase 11 and III Joint Venture to Southwestern Bell Telephone Company, dated 11/1111911, recorded in Volume 3146, Page 545, Real Property Records of Denton County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02/05/2003, last revised 0610212003. (Affects Tract 2) 15. Easement granted by Maguire Partners -Solana Limited Partnership to Tn-County Electric Corp., filed 12120/1999, recorded in Volume 14146, Page 378, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02/05/2003, last revised 06/0212003. And recorded in Volume 4505, Page 512, Real Property Records, Denton County, Texas. (Affects Tract 2) 16. 100' building fine along the South and Southwesterly as set forth on plat recorded in Volume 398- 214, Pages 78 and 79, Map Records, Tarrant County, Texas and as shown on survey Eric J. Yahoudy, R.P.L.S. 4962, dated 02/0512003, last revised 0610212003. (Affects Tract 1) IT Easement and Right-of-way (including Temporary Easement for Constructipn) dated 01/2511996, filed 02/26/1999, recorded in Volume 13679, Page 124, Deed Records, Tarrant County, Texas; and recorded in Volume 4285, Page 1377, Real Property Records, Denton County, Texas and as shown on survey of Eric J. Yaboudy, R.P.L.S. 4862, dated 02105/2003, last revised 06/0212003. Executed by MTP -IBM Phase II and M Joint Venture, as Grantor, to the City of Southlake, as Grantee. (Affects Tract 2) 18. Terms, provisions, conditions, easements, obligations, assessments and hens contained in instrument recorded in Volume 14007, Page 477, Deed Records of Tarrant County, Texas, which states that assessment liens are subordinate to purchase money liens. As affected by Confirmation recorded in Volume 14834, Page 12, Deed Records, Tarrant County, Texas. (Affects Tracts L and 2) 19. Terms, provisions, conditions, easements, obligations, assessments and liens contained in instrument recorded in, Volume 2244, Page 669, Deed Records of Tarrant County, Texas. As amended in Volume 2487, Page 183, Official Public Retards of Denton County, Texas. (ARcts Tracts I and 2) 20. Terms, conditions and stipulations of Memorandum of Cost Sharing and Reciprocal Easement Agreement executed by and between Maguire/Thomas Partners-Westlake/Southlalco Partnership and MTP -IBM Phase 11 and III Joint Venture dated 1011311988, recorded in Volume 9437, Page 1127, Deed Records, Tarrant County, Texas and recorded in Volume 2487, Page 210, Real Property Records, Denton County, Texas; as affected by Consent dated 09105/1997, recorded in Volume 12902, Page 338, Deed Records, Tanant County, Texas and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 0210512003, last revised 0610212003. (Affects Tracts 1 and 2) 21. Terns and provisions, including but not limited to, right of reverter, of Deed for Controlled Access Highway Facility executed by MTP -IBM Phase II and III Joint Venture to State of Texas, Sled 08/1811987, recorded in Volume 9006, Page 952, Deed Records, Tarrant County, Texas. And recorded in Volume 2222, Page 273, Real Property Records, Denton County, Texas, (Affects Tract 2) 22. Terms and provisions, including but not limited to, right of reverter, of Deed for Controlled Access Highway Facility executed by MTP MM Phase 11 and LII Joint Venture to State of Texas, dated 10/07/1991, filed 1211611991, recorded in Volume 3120, Page 294, Real Property Records, Denton County, Texas. (Affects Tract 2) 23. Easement rights, if any, relative to water and electric meters and fire hydrant located outside of easements as shown on survey of Eric I. Yahoudy, R-P,L,S. 4862, dated 02/0512003, last revised 06102/2003. (Affects Tract 2) OSO405 000025 DALLAS 1608808.1 24. That portion of subject property lying within Kirkwood Boulevard as shown an survey of Eric J. Yahoudy, R.P.L,S. 4862, dated 0210512003, last revised 06102/2003. (Affects 'Tract 2) AND THE FOLLOWING .ADDITIONAL TRACTS OF LAND TRACT 1: BEING a tract of land situated in the T. W. Mann Survey, Abstract No. 1107, Tarrant County, Texas, and being the saint tracts of land as described in instrument to Maguire Partners -Solana Limited Partnership as recorded in Volume 13290, Page 0009 in the Deed Records of Tarrant County, Texas, and being more particularly described as follows: BEGINNING at a 518 inch iron rod act with "Huitt-Zollars' cap at the intersection of the East right-of-way line of Sam School Road (County Road No.3088) , a variable width, right-of-way, with the North right-of- way ight-afway line of Roanoke -Dove Road (County Road No. 3080) , a variable width right-of-way; THENCE North 00 degrees 26 minutes 00 seconds East along the said East right-of-way line a distance of 527.80 feet to a 5/8 inch iron rod with "Carter & Burgess" cap found; THENCE South 88 degrees 25 minutes 30 seconds East a distance of 330.00 feet to a 518 inch iron rod set with "Huitt-Zollars" cap found; THENCE South 00 degrees 25 minutes 49 seconds West a distance of 532.42 feet to a 1/2 inch iron rod found on the aforementioned North right-of-way tine of Roanoke --Dove Road; THENCE North 87 degrees 37 minutes 22 seconds West along the North right-of-way line of Roanoke - Dove Road a distance of 330.15 feet to place of BEGINNING and Containing 4.015 acres of land, more or less. TRACT 2: BEING a tract of land situated in the T, W. Mann Survey, Abstract No. 1107, Tarrant County, Texas and being the same tract of land as described in instrument to Maguire Partners -Solana Limited Partnership as recorded. in Volume 13290, Page 0009 of the Deed Records, Tarrant County, Texas, and being more particularly described as follows: BEGINNING at a 5/8 inch iron rod found with "Huitt-Zollars" cap at the Northwest corner of a 4.0 acre tract as recorded on Volume 5151, Page 273 in the Deed Records of Tarrant County, Texas, and being by deed North a distance of 14.0 feet and North 00 degrees 28 minutes 50 seconds East a distance of 773.20 feet from the Southwest corner of said T. W. Mann Survey; THENCE North 00 degrees 28 minutes 50 seconds East a distance of 952.35 feet to a 518 inch iron rod found; THENCE North 79 degrees 55,minutes 40 seconds East a distance of 213.69 feet to a 112 inch iron rod found in the West line of Sam School Road, a variable width right - of -way; THENCE South 08 degrees 59 minutes 00 seconds East along the West tine of said Sara School Road a distance of 75.35 feet to a 1/2 inch iron rod found; THENCE South 40 degrees 23 minutes 30 seconds West along the West line of said Sam School Road a distance of 917.10 feet to a 1/2 inch iron: rod found with "Huitt-Zolla&' cap at the Northeast corner of said 4,0 acre tract; 050405 000025 DALLAS 1608808,1 THENCE North 89 degrees 32 minutes 08 seconds West along the North line of said 4.0 acre tract a distance of 223.89 feet to POINT OF BEGINNING and CONTAINING 4.973 acres or 216,645 square feet of land. Ire% -W BEING a tract of land situated in the 113. Martin Survey, Abstract No. 1134, and the T.W. Mann Survey, Abstract No. 1107, Tarrant County, Texas, said tract of land being all of those certain tracts of land as described in instruments to international Business Machines Corporation, herein atter referred to as IBM, as recorded in Volume 9212, Page 646, Volume 9487, Page 1748, Volume 9489, Page 1046, Volume 9706, Page 1203, Volume 8783, Page 40, Volume 8783, Page 1483, Volume 8775, Page 1863, Volume 8800, Page 1341, Volume 8794, Page 744, Volume 8799, Page 1462, Volume 8841, Page 1197, Volume 10131, Page 95, Volume 10131, Page 100, and being a portion of those certain tracts as described in instruments to International Business Machines Corporation as recorded in Volume 7422, Page 2157, Volume 8792, Page 1298, Volume 6094, Page 1911, Volumo 7402, Page 1150, Volume 8153, Page 481 of the Deed Records, Tarrant County, Texas, and being all of Lots 3, 4, 5 and 6 and part of Lot 7 of the RP. Estes Subdivision as recorded in Volume 1957, Page 324 of the Deed Records of Tarrant County, Texas, being more particularly described by mates and bounds as follows: BEGINNING at a point from which a standard Texas Highway Department concrete Monument found bears South 27 degrees 40 minutes 30 seconds But a distance of 0.32 feet and being on the Southwesterly right -of --way line of State Highway No, 114, said monument being the Northwest corner of that certain tract as described in instrument to the State of Texas as recorded in Volume 14056, Page 473, of said decd records, and being on the North line of said IBM tract as recorded in Volume 7422, Page 2157 of the Deed Records of Tarrant County, Texas, and being on the South line of Lot 11t, Block 2, of Westtake/Southlaka Addition No. 1, as recorded in Cabinet A, Slide 283 of the Plat Records of Tarrant County, 'Texas; THENCE, along said Southwesterly right-of-way line of State Highway No. 114 the following courses and distances: South 36 degrees 31 minutes 54 seconds East, a distance of 503.20 feet to a 5/8" iron rod set with "Huitt- ZollaW' cap from which a standard 'Texas Highway Department concrete monument found bears South 44 degrees 31 minutes 41 seconds West a distance of 0.60 feet; South 16 degrees 09 minutes 40 seconds East, a distance of 37.34 feet to a 5/8 iron rod set with "Huitt- Zollars" cap from which a standard Texas Highway Department concrete monument found bears South 44 degrees 18 minutes 29 seconds West a distance of 0.57 feet; South 36 degrees 32 minutes 15 seconds East, a distance of 369.30 feet to a 518" iron rod set with "Huitt- Zollars" cap, said point also being the beginning of a non -tangent curve to the right having a radius of 3,568.68 feet; Along said curve to the right through a central angle of 03 degrees 31 ,minutes 10 seconds, an arc distance of 219.21 feet, and being subtended by a chord which bears South 27 degrees 10 minutes 32 seconds East, a distance of 219.17 feet to the end of said curve and a standard Texas Highway Department concrete monument found; South 19 degrees 01 minute 57 seconds East, a distance of 376.33 feet to a standard Texas Highway Department concrete monument found; South 14 degrees 56 minutes 37 seconds East, a distance of 488.35 feet to a 5/8 inch iron rod set with "Huitt-ZollaW' cap from which standard Texas Highway Department concrete monument found bears South 53 degrees 09 minutes 33 seconds West a distance of 0.84 feet; 050405 0=5 DALLAS 1609908.1 South 12 degrees 31 minutes 39 seconds East, a distance of 244.91 feet to a 518 inch iron rod set with "Huitt-Zollars" cap from which a standard Texas Highway Department concrete monument found bears South 57 degrees i 1 minutes 22 seconds West a distance of 0,84 feet; South 37 degrees 34 minutes 34 seconds West, a distance of 75,32 feet to a 5/8 inch iron rod set with "Huitt-Zollars" cap and being on the North right way line of Dove Road, (variable width right-of-way) from which a standard Texas Highway Department concrete monument found bears South 67 degrees 18 minutes 36 seconds West a distance of 0.84 feet; THENCE, North 89 degrees 24 minutes 34 seconds West along said North line of Dove Road, a distance of 177.55 feet to a 518 inch iron rod set with "Huitt-Zollars" cap and being the most Southerly northwest corner of said State of Texas tract; THENCE, South 02 degrees 41 minutes 56 seconds East along a West line of the State of Texas tract a distance of 36.04 feet to a Nag Nail set in concrete at the Southwest corner of said State of Texas tract from which a standard Texas Highway Department concrete monument found bears South 72 degrees 43 minutes 33 seconds West a distance of 0.91 feet; THENCE, South 02 degrees 38 minutes 01 second East, a distance of 25.03 feet to a Mag nail found in asphalt at the Southeast corner of said IBM tract, (Volume 10131, Page 100) THENCE, North 89 degrees 30 minutes 18 seconds West at 381.57 feet passing the Southeast corner of said IBM tract as recorded in Volume 10131, Page 95, continuing along the South line of the IBM tract a total distance of 780.87 feet to a Nag nail found in asphalt at the Southwest corner of same, said comer also being the Southwest comer of the 1. B. Martin Survey and the Southeast corner of the T. W. Mann Survey; TACE, North 00 degrees 25 minutes 13 seconds West, along the common line between the L B, Martin Survey and the T. W. Mann Survey, a distance of 682,15 feet to a 3/4 inch iron rod found for the Southeast corner of a tract of land conveyed to rBM as recorded in Volume 8841, Page 1197, the same being the Northeast corner of Lot•2 and Southeast corner of tat 3, of said IL P. Estes Subdivision; THENCE, North 88 degrees 25 minutes 30 seconds West, along the common line between Lots 2 and 3, a distance of 1,310.98 feet to a 314 inch iron found at the Southwest corner of Lot 3 and being in the East line of Sam School Road, a variable width right-of-way; THENCE, along the East line of said Sam School Road and the West line of said R- F. Estes Subdivision the following courses and distances; North 00 degrees 36 minutes 55 seconds East, a distance of 329.00 feet to a one inch iron rod found at the Northwest corner of said Lot 3, the same being the Southwest corner of Lot 4 of the R. P. Estes Subdivision; North 00 degrees 36 minutes 51 seconds East, a distance of 333.42 feet to a 5/8 inch iron rod with cap stamped "Carter & Burgess" found; North 00 degrees 08 minutes 13 seconds East, a distance of 436,27 feet to a 112 inch iron rod found; North 17 degrees 41 minutes 47 seconds West, a distance of 71.75 feat to a 5/8 inch iron rod set with " Huitt ZollarB" cap; North 00 degrees 32 minutes 09 seconds East, a distance of 18.23 feet to a 5/8 inch iron rod set with "Huitt- Zollars" cap at the Southwest corner of said Lot 1R, Block 2, of said WestlakrJSouthlake Addition No. 1; THENCE, North 86 degrees 22 minutes 05 seconds East along the South line of said Lot IR a distance of 518.25 feet to a 518 inch iron rod found; 030405 0Ms DAUAS 1608808.1 9 THENCE, North 00 degrees 17 minutes 58 seconds East, along an East line of said Lot 1R a distance of 197.59 feet to a 518 inch iron rod found; THENCE, South 88 degrees 29 minutes 50 seconds East along; a South Line of said Lot 1R a distance 880.82 feet to the POINT OF BEGINNING and CONTAINING 72.64 acres of land, more or less. CT BEING a tract of land situated in the J. B. Martin Survey, Abstract No. 1134, Tarrant County, Texas, and being a portion of that tract of land as described in Special Warranty Deed to Maguire Partners -Solana Limited Pattnership as recorded in Volume 14641, Page 232 of the Deed Records of Tarrant County, Texas and being mare particularly described as follows: COMMENCING at a 518 inch iron rod set with "Huitt-Zollars" cap at the intersection of the Northerly right-of-way line of Dove Road (a variable width right-of-way) with the Westerly right-of-way line of Kirkwood Boulevard (a variable width right-of-way) , as established by the plat of Kirkwood hollow Phase 1, an addition to the City of Southlake as recorded in Cabinet A, Slide 4537 of the Plat Records of Tarrant County, Texas; THENCE, along the Westerly right-of-way line of said Kirkwood Boulevard the following courses: North 00 degrees 25 minutes 42 seconds East, a distance of 243.06 feet to a 518 inch iron rod set with "Huitt-Zollars" cap for a corner at the beginning of a carve to the left having a central angle of 33 degrees 59 minutes 40 seeands, a radius of 1778.00 feet and being subtended by a 1039.51 foot chord which bears North 16 degrees 34 minutes 08 seconds West; Along said curve to the left in a Northwesterly direction, an arc distance of 1054.91 feet to a 518 inch iron rod found with "Huitt Zollars" cap for a corner at the end of said curve; North 33 degrees 33 minutes 58 seconds West, a distance of 11.08 feet to a 518 inch iron rod set with "Huitt-Zollars" cap at the northeast corner of a tract of land as described in instrument to Cellco Partnership as recorded in Volume 14977, Page 213 of the Deed Records of Tarrant County, Texas, the POINT OF BEGINNING; THENCE, departing the Westerly right-of-way line of said Kirkwood Boulevard, along the northerly line of said Cellco Partnership Tract, South 66 degrees 10 minutes 55 seconds West, a distance of 1046.34 feet to 518 inch iron rod set with "Huitt-Zollars" cap for a corner on the Easterly right-of-way line of State Highway No. 114 (variable width right-of-way); THENCE, along the Easterly right-of-way line of said State highway No. 114 the following courses; North 23 degrees 48 minutes 03 seconds West, a distance of 105.93 feet to a Texas Department of Tramp ortation aluminum disk found in concrete for a corner, North 31 degrees 57 minutes 33 seconds West, a distance of 741.43 feet to a Texas Department of Transportation aluminum disk found fbr a comer from which a Texas Department of Transportation aluminum disk found in concrete bears South 44 degrees 42 minutes 25 seconds West, 0.52 feet; North 36 degrees 32 n bmtes 05 seconds West, a distance. of 208.43 feet to a point for a corner on the approximate centerline of the South fork of Kirkwood Branch from which a 518 inch iron rod set with "Huitt-Zollars" cap bears South 36 degrees 32 minutes 05 seconds East, 55.61 feet; THENCE, departing the Easterly right-of-way line of State Highway 114, and generally along the centerline of said Kirkwood Branch the following courses: 050405 OD0025 DALLAS 1608808.1 10 North 55 degrees 38 minutes 19 seconds East a distance of 11.38 feet to a point for corner; South 67 degrees 16 minutes 38 seconds Lust a distance of 56,75 feet to a point for corner; North 76 degrees 52 minutes 54 seconds East a distance of 39.96 feet to a point for corner, South 85 degrees 07 minutes 51 seconds East a distance of 53.55 feet to a point for conger, North 58 degrees 29 minutes 32 seconds East a distance of 5 1.5 1 feet to a point for comer; North 62 degrees 06 minutes 48 seconds East a distance of 87.11 feet to a point for corner, North 53 degrees 13 minutes 24 seconds East a distance of 99.78 feet to a point for comer; North 30 degrees 23 minutes 01 second But a distance of 72.88 feet to a point for comer; North 20 degrees 45 Minutes 22 seconds East a distance of 40.45 feet to a point for comer; North 76 degrees 54 minutes 57 seconds West a distance of 36.92 feet to a point for corner; North 45 degrees 09 minutes 44 seconds West a distance of 17.42 feet to a point for corner; North 66 degrees 26 minutes 53 seconds East a distance of 31.90 feet to a point for comer; North 53 degrees 10 minutes 04 seconds East a distance of 44.67 feet to a point for comer, North 32 degrees 44 minutes 12 seconds East a distance of 23.43 feet to a point for corner; North 51 degrees 22 minutes 17 seconds East a distance of 4I.55 feet to a point for corner, North 09 degrees 24 minutes 11 seconds East a distance of 8.82 feet to a point for comer; North 37 degrees 59 minutes 12 seconds East a distance of 30,91 feet to a point for corner; North 70 degrees 01 minute 26 seconds East a distance of I8.54 feet to a point for corner, South 57 degrees 28 minutes 08 seconds East a distance of 26.66 feet to a point for corner, South 47 degrees 33 minutes 51 seconds East a distance of 25.63 feet to a point for corner; South 03 degrees 15 minutes 56 seconds East a distance of 20.42 feet to a point for corner; South 62 degrees 48 minutes 05 seconds West a distance of 25.48 feet to a point for corner; South 43 degrees 26 minutes 30 seconds West a distance of 16.71 feet to a point for corner; South 76 degrees 53 minutes 30 seconds East a distance of 38,04 feet to a point for cornet; South 80 degrees 25 minutes 36 seconds East a distance o€16.87 feet to a point for comer; South 39 degrees 23 minutes 55 seconds East a distance of 28.52 feet to a point for corner; North 76 degrees 18 minutes 39 seconds East a distance of 54.62 feet to a point of comer; South 65 degrees 23 minutes 25 seconds East a distance of 50.64 feet to a point for corner, 0564©5000025 DALLAS 1608808,1 11 North 59 degrees 39 minutes 56 seconds East a distance of 33.26 feet to a point for comer; North 19 degrees 28 minutes 57 seconds Fast a distance of 14.92 feet to a point for comer; North 00 degrees 53 minutes 14 seconds West a distance of 31.56 feet to a point for corner, North 07 degrees 01 minute 26 seconds West a distance of 29.93 feet to a point for comer; North 25 degrees 06 minutes 35 seconds East a distance of 37.90 feet to a paint for comer; North 53 degrees 15 minutes 40 seconds East a distance of 22.56 feet to a point for corner; North 84 degrees 36 minutes 18 seconds East a distance of 26.95 feet to a point for comer, North 69 degrees 47 minutes 31 seconds East a distance of 22.44 feet to a point for comer, North 02 degrees 00 minutes 59 seconds East a distance of 29.72 feet to a point for comer; North 26 degrees 58 minutes 38 seconds East a distance of 25.77 feet to a point for corner, North 40 degrees 25 minutes 34 seconds East a distance of 38.09 feet to a point for corner, North 17 degrees 28 minutes 39 seconds Fast a distance of 13.61 feet to a point for comer, THENCE, departing the centerline of said creek North 56 degrees 24 minutes 01 second East a distance of 100.41 feet to a 519 'inch iron rod act with "Huitt-Zoilars" cap on the aforementioned westerly right-of-way line of said Kirkwood Boulevard, and being at the beginning of a non -tangent curve to the right having a central angle of 08 degrees 18 minutes 07 seconds, a radius of 1424.00 feet and being subtended by a 206, 15 foot chord which bears South 29 degrees 26 minutes 55 seconds East; THENCE, along said Westerly right-of-way line of said Kirkwood Boulevard the following courses: Along said curve to the right in a Southeasterly direction, an arc distance of 206.33 feet to a 518 inch iron rod found with "Huitt-Zollars" cap for a corner at the end of said curve; South 25 degrees 17 minutes 52 seconds East, a distance of 200.00 feet to a 518 inch iron rod found with "Huitt-ZoHW' cap at the beginning of a curve to the left having a central angle of 08 degrees 16 minutes 06 seconds, a radius of 2101.00 feet and being subtended by a 302.93 foot chord which bears South 29 degrees 25 minutes 55 seconds East; Along said curve to the left in a Southeasterly direction, an are distance of 303.19 feet to a 518 inch iron rod set with "Huitt-Zollars" cap for a corner at the end of said curve; South 33 degrees 33 minutes 58 seconds East, a distance of 470.25 feet to the POINT OF BEGINNING and Containing 25.12 acres of land, more or less. BEW—G- S[iBJEC'I; TO THE FOLLOWING ITEMS: 1. Restrictive covenants described in instrument recorded in Volume 4888, Page 622, Deed Records of Tarrant County, Texas. (Affects Tract 3) 2. Restrictive covenants described in instrument recorded in Volume 7435, Page 502, Deed Records of Tarrant County, Texas. (Affects Tract 3) 050405 000025 DALLAS 1608808.1 12 3. Restrictive covenants described in instrument recorded in Volume 14007, Page 477, Deed Records of Tarrant County, Texas. As affected by confirmation filed 0411812001, recorded in Volume 14834,Tage 12, Deed Records, Tarrant County, Texas. (Affects Tracts 1-4) 4. Restrictive covenants described in instrument recorded in Volume 7422, Page 2154, Deed Records of Tarrant County, Texas. (Affects Tract 3) 5. Restrictive covenants described in instrument recorded in Volume 8094, Page 1919, Deed Records of Tarrant County, Texas. (Affects Tract 3) 6. Restrictive covenants described in instrument recorded in Volume 8227, Page 2274, Deed Records of Tarrant County, Texas. (Affects Tract 3) 7. Restrictive covenants described in instrument recorded in Volume 2244, Page 669, Deed Records of Tarrant County, Texas. As amended in Volume 2487, Page 183, Official Public Records, Denton County, Texas. (Affects Tracts 1-4) S. Easement granted by Robert H: Lemke to Tu-CountyElectric Co-Operative, Inc., dated 10119/1987, recorded in Volume 9300, Page 975, Deed Records of Tarrant County, Texas, and as shown an survey of Eric 1. Yahoudy, R.P.L.S. 4862, dated 0210512043, last revised 06/0212003. (Affects Tract 1) 9. Easement granted by R E. Payton to Tarrant County, dated 09121/1942, filed 10/13/1942, recorded in Volume 1539, Page 480, Deed Records of Tarrant County, Texas, and as shown on survey of Eric 1. Yahoudy, R.P.L.S. 4862, dated 02/0512003, last revised 06102/2003. (Affects Tract 2) 10. Easement granted by International Business Machines Corporation to the City of Southlake, dated 0613011988, filed 0911411988, recorded is Volume 9379, Page 1784, Deed Records of Tarrant County, Texas, and as shown on survey of Erie J. Yahoudy, R.P.L.S. 4862, dated 02/05/2003, last revised 06102/2003. Refiled in Volume 9379, Page 1778, Deed. Records, Tarrant County, Texas. (Affects Tract 3) 11. Easement granted by Maguire Partners-Solana Limited Partnership to the City of Southlakc, dated 08110/1999, recorded in Volume 14056, Page 446, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02105/2003, last revised 0610212003. Conveyed to the State of Texas, in instrument dated 1011211999, recorded in Volume 14056, Page 468, Deed Records; Tarrant County, Testas. (Affects Tract 3) 12. Easement granted by Maguire Partners-Solana Limited Partnership - a Texas limited partnership to Tn-County Electric Cooperative Inc., filed 02/2512000, recorded in Volume 14228, Page 383, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02105/2003, last revised 0610212003. (Affects Tract 3) 13. Easement granted by Maguire Partners-Solana Limited Partnership, a Texas limited partnership to the City of Southlake, filed 05/1612000, recorded in Volume 14342, Page 406, Deed Records of Tarrant County, Texas, and as shown on survey of Erie J. Yahoudy, R.P.L.S. 4862, dated 02105/2003, last revised 06/02/2003. (Affects Tract 3) 14. Easement granted by International Business Machines Corporation and 300 Convent Street Corporation to the City of SoutWake, dated 09/0211997, filed 10/2411997, recorded in Volume 12954, Page 233, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02/05/2003, last revised 06/0212003. (Affects Tract 4) 15. Easement granted by Maguire Partners-Solana Holdings, L.P. to the City. of Southlake, dated 08110/1999, filed 09/2811999, recorded in Volume 14028, Page 265, Deed Records of Tarrant 05040s000025DALLAS 1606806.t 13 County, Texas, and as shown on survey of Eric J. Yaboudy, R.P.L.S. 4862, dated 02/0512003, last revised 0610212003. (Affects Tract 4) 16. Easement granted by 300 Convent Street Corporation to the City of Southlake, dated 06116/1999, filed 07/1511999, recorded in Volume 13914, Page 89, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J: Yahoudy, R P.L.S. 4862, dated 02/05/2003. (Affects Tract 4) 17. Tarns and conditions of Ordinance No. 71-100, entitled Airport Zoning Ordinance of the Dallas - Fort Worth Regional Airport, filed September 1, 1982, recorded in Volume 7349, rage 1106, Deed Records of Tarrant County, Texas. 18. Easement granted by Maguire Partners - Solana Limited Partnership to the City of Southlake, filed 12/2712002, recorded in Volume 16245, Page 349, Deed Records of Tarrant County, Texas, and as shown an survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 0210512003, last revised 0610212003. (Affects Tract 4) 19. Easement granted by Maguire Partners - Solana Limited Partnership to the City of Southlake, fled 12/2712002, accorded in Volume 16245, Page 350, Deed Records of Tarrant County, Texas, and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02/05/2003, last revised 06/02/2003. (Affects Tract 3) 20. Abutter's rights' of ingress and egress to Highway No. 114 from the property described herein, as released and relinquished by instrument executed by MTP -IBM Phase 11 and III Joint Venture to The State of Texas, dated 10/07/1991, recorded in Volume 10591, Page 857, Deed Records, Tarrant County, Texas. (Affects Tract 3) 21, Abutter's rights of ingress and egress to Highway 114 from the property described herein, as released and relinquished in instrument executed by Maguire Partners -Solana Limited Partnership to the City of Southlake, dated 08/10/1999, recorded in Volume 14056, Page 454 and from The City of Southlake to The State of Texas, in instrument dated 1011211999, recorded in Volume 14056, Page 473, Deed Records, Tarrant County, Texas. (Affects Tract 3) 22. Easement granted by International Business Machines Corporation to the City of Southlake, as evidenced by the instrument dated 0112611998, filed 02/11/1998, recorded in Volume 13077, Page 560, Deed Records, Tarrant County, Texas and as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02/0512003, last revised 06/02/2003. (Affects 3) 23. Easement granted by Interttational Business Machines Corporation to the City of Southlake., as evidenced by the instrument dated 01/26!1998, filed 02/11/1998, recorded in Volume 13077, Page 563, Deed Records, Tarrant County, Texas and as shown on survey of Eric 1. Yahoudy, KP.L.S. 4862, dated 02/05/2003, last revised 06/0212003. (Affects Tract 3) 24. Easement as set forth in a deed from A. M. Franks and wife, Elsie Theola Franks to Billy Jo Nelson and Linda Kay Nelson filed 06127/1985, recorded in Volume 8227, Page 2274, Deed Records, Tarrant County, Texas and as shown on survey of Eric I. Yahoudy, RY.L.S. 4862, dated 02/0512003, last revised 06/02/2003. (Affects Tract 3) 25. License Agreement by and between Maguire Partners -Solana Holdings, L.P. and 300 Convent Street Corporation, dated 06117/1999, filed 06/19/1999, recorded in Volume 13871, Page 9, Deed Records, Tarrant County, Texas. (Affects Tract 4) 26. Lack of access to State Highway 114, a limited or controlled access highway, as evidenced by Donation Deed executed by Maguire Partnera-Solana Holdings, L.P. to the City of Southlake, dated 08/10/1999, fled 09/28/1999, recorded in Volume 14028, Page 263, Deed Records, Tarrant County, Texas. (Affects Tract 4) 050405 600025 DALLAS 1608808.1 14 27. Easement as set forth in Certificate Copy of Final Judgment dated 08109/1954, recorded in Volume 2793, Page 55, Deed Records, Tarrant County, Texas. (Affects Tract 4) 28. Easement as act forth in Certificate Copy of Final Judgment dated 07/06/195I, recorded in Volume 4558, Page 505, Deed Records, Tarrant County, Texas. (Affects Tract 4) 29. Mineral estate and interest described in instrument recorded -in Volume 3628, Page 303, Deed Records of Tarrant County, Texas. (Affects Tract 4) 30. Terms, provisions, conditions, easements, obligations, assessments and liens contained in instrument recorded in Volume 14007, Page 477, Deed Records of Tarrant County, Taxes, which states that assessment liens are subordinate to purchase money liens. As affected by Confirmation recorded in Volume 14834, rage 12, Deed Records, Tarrant County, Texas. (Affects Tracts 1-4) 31. Terms, provisions, conditions, easemcnts, obligations, assessments and liens contained in instrument recorded in Volume 2244, Page 669, Deed Records of Tarrant County, Texas. As amended in Volume 2487, page 183, Official Public Records of Denton County, Texas. (Affects Tracts 1-4) 32. Terms and provisions for access to and from State Highway 114 as set fortis in Controlled Access Highway Facilities Deed acknowledge 07/01/1987, recorded in Volume 9006, Page 943, Deed Records, Tarrant County, Texas. (Affects Tract 3) 33. Terms and conditions of Utility Contract by and between Denton County Municipal Utility District No. One and International Business Machines Corporation, elated 07/3011982, filed 11/10/I982, as referenced in instrument recorded in Volume 7389, Page 1009, Deed Records, Tarrant County, Texas and in instrument dated 09112/1989, recorded in Volume 9704, Page 575, riled 09114/1989, Decd Records, Tarrant County, Texas. As amended by instrument recorded in Volume 16065, Page 251, Deed Records, Tarrant County, Texas. (Affects Tract 4) 34. Easement rights, if any, relative to telephone and overhead power lines extending into property from the South line not covered by easements as shown on survey of Erre J. Yaboudy, R.P.L.S. 4862, dated 02105/2003, last revised 06/0212003. (Affects Tract 3) 35. Transformer and electric meter located outside of casement in the Northeasterly portion of property as shown on survey of Eric J. Yahoudy, R.P.L.S. 4862, dated 02/05/2003, last revised 06102/2003. (Affects Tract 4) 36. Easement rights, if any, relative to an overhead electric line located upon the East line and in the Southwest corner as shown on survey of Eric J. Yahoudy, RP.L.S. 4862, dated 02/05/2003, last revised 06102/2003. (Affects Tract 2) 37. That portion of subject property lying within Dove Road along the most Southern property line as shown on survey of Eric I. Yahoudy, R.P.L.S. 4862, dated 02105/2003, last revised 06102/2003. (Affects Tract 3) 050405 040025 DAUAS 1608806.1 15 0.141601: FIRST AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP MAGUIRE PARTNERS-SOLANA LAND, L.P., A TEXAS LIMITED PARTNERSHIP THIS FIRST AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP MAGUIRE PARTNERS-SOLANA LAND, L.P., a Texas limited partnership (the "Amendment") is entered into as of October 1J, 2005, by and between MAGUIRE PARTNERS-SOLANA LAND GP LLC, a Delaware limited liability company ("General Partner") and MP-SOLANA HOLDINGS, LLC, a Delaware limited liability company ("MP - Solana", and together with the General Partner, the "Partner'), with reference to the following facts: RECITALS A. The Agreement of Limited Partnership of Maguire Partners -Solana Land, L.P., a Texas limited partnership (the "Partnership') was entered into effective as of June 3, 2003 (the "Partnership Agreement"). B. Pursuant to the terms and conditions of that certain Loan and Security Agreement entered into by and among the partnership and Fremont Investment & Loan, a California industrial bank C Lender") of even date herewith, the Lender will, subject to the terms and conditions of such Loan and Security Agreement provide financing to the Partnership in the form of a loan in the amount of $22,750,000.00 (the C. In consideration for the Lender's commitment to make the Loan to the Partnership, the Partnership has agreed to amend the Partnership Agreement and to take all actions necessary to become and remain a "special purpose entity" on the terms and conditions hereinafter set forth. AGREEMENT In consideration of the recitals, agreements and obligations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners hereby amend the Agreement as follows: 1. Lender. Section 1.10 "Lender" of the Agreement is hereby deleted in its entirety and the following is substituted in its place and stead: Lender shall mean Fremont Investment & Loan, a California industrial bank. 2. Loan. Section 1.12 "Loan" of the Agreement is hereby deleted in its entirety and the following is substituted in its place and stead: 050405000043 DALLAS 1445210.3 "Loan" shall mean that certain loan in the original principal amount of $22,750,000.00 made to the Partnership by the Lender. 3. Unit Certificates. Section 4.9, Certificated Partnershi Interests shall be added to the Partnership Agreement, and shall read as follows: 4.9 Certificated PgWership Interests, (a) Partnership Interests in the Partnership shall be represented by the Units (defined below) issued to the Partners by the Partnership. All of a Partner's Units, in the aggregate, represent such Partner's entire Partnership Interest, Each Partner hereby agrees that its interest in the Partnership and in its Units shall for all purposes be personal property. A Partner has no interest in specific Partnership property. "Unit" means a Partnership Interest held by a Partner. Each Partnership Interest shall constitute a "security" within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including Section 8-102(a)(I5) thereof) as in effect from time to time in the State of Texas and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995. Notwithstanding any provision of this Agreement to the contrary, to the extent that any provision of this Agreement is inconsistent with any non-waivablc provision of Article 8 of the Uniform Commercial Code as in effect in the State of Texas (the "UCC"), such provision of Article 8 of the UCC shall control. (h) (i) Upon the issuance of Units to a Partner in accordance with the provisions of this Agreement, the Partnership shall issue one or more Unit Certificates (defined below) in the name of such Partner. Each such Unit Certificate shall be denominated in terms of the number of Units evidenced by such Unit Certificate and shall be signed by the General Partner on behalf of the Partnership. "Unit Certificate" means a non-negotiable certificate issued and endorsed by the Partnership substantially in the form attached hereto, which evidences the ownership of one or more Units. Each Unit Certificate shall bear the following legend: "THE TRANSFER OF THIS UNIT CERTIFICATE AND THE UNITS REPRESENTED HEREBY 1S RESTRICTED AS DESCRIBED IN THE AGREEMENT OF LIMITED PARTNERSHIP" This provision shall not be amended, and no such purported amendment to this provision shall be effective until all outstanding Unit Certificates have been surrendered for cancellation. (ii) The Partnership shall issue a new Unit Certificate in place of any Unit Certificate previously issued if the holder of the Units represented by such Unit Certificate, as reflected on the books and records of the Partnership: (1) makes proof by affidavit, in form and substance satisfactory to the General Partner, that such previously issued Unit Certificate has been lost, stolen or destroyed; (2) requests the issuance of a new Unit Certificate before the Partnership has notice that such previously issued Unit Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse